SBI Holdings Fundamental Business Building Concepts, and the New - PowerPoint PPT Presentation

The Pharmaceutical Business is a Defensive Sector Business with a Lower Correlation to Economic Trends, but with Higher Profit Margin Expectations Among the 16 industry sectors of Manufacturing, operating profit margin for Pharmaceuticals is at a high level of 7.22% Operating profit margin by industry sector (FY2014) (%) 8 7.22 Manufacturing 6.06 (16 industries) 5.64 6 5.13 4 2 0 All-industry * Manufacturing Non-Manufacturing Foods Textiles & Apparels Pulp & Paper Chemicals Pharmaceutical Oil & Coal Products Rubber Products Glass & Ceramics Iron & Steel Nonferrous Metals Metal Products Machinery Electric Appliances Transportation Precision Instruments Other Products Equipment -2 Products * The aggregated number of all industries is 2,158 companies, which Source: JAPAN EXCHANGE GROUP “Summary of excludes 156 companies belonging to the financial business Earnings Digests by Listed Companies” 15

5th Stage: SBI Itself Entered the Biotechnology-related Business through the Establishment of Subsidiaries, to Effectuate Continued Stable Sustainable Growth Jan. 2007~ Apr. 2008~ Enters drug 5-ALA (5-aminolevulinic acid) creation business related businesses The world’s first Distributor of Joint drug creation pharmaceutical company cosmetics, health bio- venture firm with engaged in the foods using 5-ALA partners across Japan, development of drugs, and (Apr. 2012~) the U.S., China, South the manufacturing and Korea and Israel sales of cosmetics and health foods using 5-ALA. Clinical studies and trials with leading alliance partners both inside and outside of Japan have progressed. SBI Pharmaceuticals endeavors to provide pharmaceuticals that will satisfy the unmet medical needs of as many people as possible around the world. 16

The Principal Component ALA that the SBI Group is Advocating, has a Wide Range of Applications in Medical Drugs, Health Foods and Cosmetics 5-ALA = chemical name : “5-Amino Levulinic Acid” ATP(Adenosine Triphosphate): 5-ALA and energy generation in mitochondria A common energy source for all organisms 5- Production Heme ALA of ATP + Mitochondria continuously produces ATP, allowing cells to perform their normal activities without cell death  Impaired mitochondria function relates to an ATP Fe shortage, which increases the amount of active oxygen, since ATP is not normally produced. As a result, it causes various kinds of adverse physical conditions. 5-ALA, a natural amino acid, is contained in all organisms. It is a precursor of heme, which is very important for energy production, and a fundamental substance of life With reference to 5-ALA, while basic research on drugs to cure various diseases are proceeding, it is also being utilized in health foods and cosmetics. Also, with the elucidation of the physiological functions of 5-ALA, it is gaining attention for applications in a wide range of areas 17

6th Stage: Thorough Pursuit of Synergy between Biotechnology- related Business and Financial Services Business As the Biotechnology-related Business contributes to the health of the insurance policyholders , the insurance companies may reduce insurance payouts. Additionally, SBI will be able to create a possible win-win situation for both policyholders and the SBI Group Insurance- Biotechnology- related Business related Business Synergy SBI Insurance, SBI Pharmceuticals SBI Life Insurance, SBI SSI, SBI ALApromo SBI IKIIKI SSI Decrease in Contribute to health insurance claims maintenance and improvement Through the development of personalized insurance products, Insurance the creation of tailored products according to each policyholder’s Policyholders health condition and medical history may be effectuated At SBI Holdings and Morningstar Japan, health foods containing 5-ALA is presented as shareholder benefits 18

7th Stage: Promoting a Global Investment Structure Focusing on Asia in Order to Diversify the Group’s Risk and to Achieve Further Growth IFC Metropol Leading Russian Financial Group Russia SBI Investment Korea Shin Kong Group Bilateral private sector development bank South Korea Netherlands Major Financial Group in Taiwan China Israel Major U.S. securities company U.S. Taiwan Major venture capitals in Israel Hong Kong Leading IT company in Vietnam Vietnam Abu Dhabi India Cambodia Malaysia Subsidiary of Abu Dhabi Royal Group Thailand Singapore Governmental ADIC The largest conglomerate Brunei group in Cambodia Financial Group in Thailand Edelweiss Financial Services Diversified financial group company in India Brunei Darussalam Nirvana Venture Advisors Ministry of Finance PNB Equity Resource Corporation Asset management institution of Malaysia. An investee subsidiary of Strategic investment Large state-owned Industry group under Tsinghua University Group division under Beijing information company the aegis of University Group directly under the Fudan University Governmental asset management Shanghai Municipal company of Singapore Government 19

8th Stage: Through a Cooperation with Prominent Overseas Local Partners, Export the Domestically Accumulated Know-how and Expertise to Promote the Establishment of a Financial Ecosystem Overseas Bank Bank SBI SAVINGS BANK ( former YAR-Bank (formerly OBI BANK) Hyundai Swiss Savings Bank) (50.0% shareholding; invested in June 2011) (99.1% shareholding; initially Russia South Korea Commercial Bank under METROPOL invested in May 2002) China Through a business alliance with the Nonlife Insurance commercial bank under the umbrella Tianan Insurance Vietnam of the Yuchengco Group, a leading (1.7% shareholding; invested in July 2010) financial conglomerate in the Philippines Philippines, considering the provision Leasing Cambodia of a variety of online financial services, including banking, securities and INESA-SBI Leasing (Shanghai) Indonesia insurance for retail customers (35.0% shareholding; established in Oct. 2015) Thailand Securities Bank BNI Securities (25.0% shareholding; TPBank (formerly Tien Phong Bank) invested in July 2011) (19.9% shareholding; invested in Aug. 2009) Securities Securities Securities FPT Securities SBI Thai Online Securities (20.0% shareholding; invested in Apr. 2011) SBI Royal Securities (55.0% shareholding; (65.3% shareholding; established established in Oct. 2014) in Feb. 2010) (As of the end of Dec. 2015) * SBI’s shareholding percentage corresponds to a total percentage based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group 20

II. New Challenges for the SBI Group that has Entered a Rapid Growth Stage 21

[Factors why the Company regard the present time as a rapid growth stage] 1. The construction of the domestic Internet financial ecosystem and the asset management structure which complements the ecosystem, is nearly complete 2. With new technology developments in fields such as FinTech, mobile, IoT, AI, and big data accelerating, global interest is also rising 3. The Overseas Financial Services Business and overseas investments focused on Asia are steadily thriving, with progress toward monetization 4. In the Biotechnology-related Business, entering into a full- fledged growth stage SBI regards the current timing as the most rapid growth stage since its founding, therefore is promoting various new initiatives in all business fields 22

1. In the Financial Services Business, the establishment of a domestic Internet financial ecosystem and a complementary management structure is nearly complete, strengthening efforts towards higher growth (1) Securities-related Business centering on SBI SECURITIES is strongly promoting initiatives in order to compete with the major face-to-face securities companies (2) SBI Sumishin Net Bank is endeavoring to increase profitability of the current business, as well as transform its earnings structure by adopting new technology development in its business (3) Insurance business promoting measures to strengthen its profitability, such as the development of new products (4) Asset Management Services Business has almost completed development of business structure, which is owing to the increase in AUM of the SBI Group’s institutional investors, and promote further diversification of asset management products (5) Advancing the cooperation with external companies for a more sophisticated analysis and utilization (6) Will integrate FinTech companies within the SBI Group as SBI FinTech Solutions (tentative name) , to initiate IPO preparations as FinTech stocks 23

(1) Securities-related Business centering on SBI SECURITIES is strongly promoting initiatives in order to compete with the major face-to-face securities companies ① Initiating self-origination of structured bonds, to strengthen the high-net-worth customer business ② With the retail business as a base, endeavoring to expand the corporate business by continuing to expand the IPO and PO underwriting businesses ③ Implementing measures to adopt new technologies in the FinTech field, which has attracted the interest of financial institutions 24

(1) SBI SECURITIES: Conclusion of the Competition with Online Securities Companies ~ SBI SECURITIES became the No.1 in the share of individual stock trading value, number of accounts, deposits and profitability ~ [9M FY2015 results] Share of Individual Stock Number of Deposit Operating Trading Value (%) accounts assets income of which, (thousand) (JPY trillion) (JPY million) individual margin trading 41.3 45.3 3,487 9.6 30,205 SBI (cons.) Rakuten 16.5 16.7 1,951 3.7 16,926 (cons.) 13.5 17.2 1,045 2.2 17,176 Matsui 10.2 12.4 987 2.0 8,449 kabu.com Monex * 6.2 4.9 1,619 3.7 7,377 (cons.) * The amount of “Operating Income” is “The amount equivalent to operating income” disclosed by Monex 25 Source: Complied by SBIH from the information on websites of each company

(1) SBI SECURITIES: SBI SECURITIES is Chasing Major Face-to-face Securities in the Number of Accounts Is it possible to overtake Daiwa’s number of brokerage accounts within 2 years? Number of Accounts of SBI SECURITIES and CAGR: % (Thousand accounts) 3 Major Face-to-face Securities Companies 5,600 1.9 Nomura 5,200 5,384 4,800 4,400 4,000 3,808 2.5 Daiwa 3,487 3,600 SBI 10.1 3,200 2,712 2,800 SMBC Nikko 0.9 2,400 2,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q FY2011 FY2012 FY2013 FY2014 FY2015 26

(1)- ① Further strengthening the retail business: Initiating self-origination of structured bonds Initiating Self-origination of Structured Bonds  In order to establish a structure to originate structured bonds in a flexible and prompt manner, established a Hong Kong subsidiary in June 2015  Securities license acquired from the Hong Kong SFC on Nov. 13, 2015 Structured bonds totaling JPY 1.1bn were already originated and distributed in Dec. 2015 Further enhancing marketability through such measures as increasing the interest rate, and planning the origination and distribution of structured bonds equivalent to JPY25.0bn during 2016 [Structured bonds’ inherent operations from development to distribution] Development (Going forward) (Current) Toward the internal management of the External origination and development operations, Trading financial the expert know-how of Book Field institutions Capital, acquired in April 2015, will be Management fully utilized Synergy Distribution [SBI SECURITIES] [SBI MONEY PLAZA] 27

(1)- ② Expansion of the corporate business: Enhance IPO and PO underwriting business SBI SECURITIES is an Industry Leader in Terms of the Number of IPOs Underwritten, and will Continue to be Focused on Expanding the IPO Underwriting Business Number of IPOs Underwritten by IPO Underwriting Ranking (Apr.-Dec. 2015) (No. of SBI SECURITIES companies) 71 companies were listed during the period 73 Continuously focusing on No. of Underwriting Company name 70 IPO underwriting cases share (%) Underwrote 60 companies, 60 84.5 SBI 60 including 5 as lead manager, 60 during Apr.-Dec. 2015 55 Nikko 54 76.1 50 42 42 53 74.6 Mizuho 40 26 37 52.1 30 Nomura 35 49.3 20 Daiwa 14 11 10 35 49.3 Monex 0 Ace 35 49.3 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 (9M) SBI SECURITIES’ IPO & PO underwriting amount (simple total) Jan.-Dec. 2014 JPY 14.6bn Jan.-Dec. 2015 JPY 22.5bn * The above IPOs represent issues underwritten in Japan only and do not include additional secondary offerings or overseas issues. * The above figures do not include consignments. Based on listing date. The figures * The number of underwritten issues represents both lead managed underwritings and exclude brokerage sales and REITs. syndicate participation. 28 * The number of IPOs does not include issues listed on TOKYOAIM. * The data was compiled by SBIH based on each company’s published information.

(1)- ③ Measures to adopt new technologies in the FinTech field Blockchain Technology is Expected to become a Core FinTech Technology, and has Attracted the Attention of Financial Institutions as a New Transaction Infrastructure Effects by adopting blockchain technology Current core banking system Banking system utilizing blockchain • Must establish a robust system by • Blockchain allows the investing a substantial amount of simultaneous operation of money, in order to prevent the multiple terminals, a dispersed core system which processes all transaction processing where transactions, from crashing or processing can be continued being hacked even if one terminal crashes. As a result, system construction • Requires substantial operational cost and operational cost is cost, such as personnel for reduced troubleshooting 24 hours a day A significant reduction in system cost is expected 29

(1)- ③ Measures to adopt new technologies in the FinTech field Many Financial Institutions are Actively Promoting Initiatives to Utilize Blockchain Technology on a Global Basis Major financial institutions of the world have announced their participation a blockchain consortium led by the R3CEV  This consortium led by U.S. R3CEV currently has the participation of 42 of the world's major financial institutions  This represents the world’s largest working group that is endeavoring towards the optimization of the financial markets, utilizing blockchain technology  Currently, proactively incorporating into the operations and validating the technology, along with proceeding with demonstration tests Participating Institutions (Excerpt) Bank of America, Barclays, BBVA, BNP Paribas, Citi, Commerzbank, Credit Suisse, Deutsche Bank, J.P. Morgan, Goldman Sachs, HSBC, Morgan Stanley, Royal Bank of Scotland, UBS Domestically, only 4 of the major Japanese financial institutions are participating  Mitsubishi UFJ Financial  Sumitomo Mitsui Banking Group Corporation  Mizuho Financial Group  Nomura Holdings SBI also intends to participate in this consortium, as the world’s first financial group that utilizes the Internet as its primary sales channel, during this fiscal year 30

(1)- ③ Measures to adopt new technologies in the FinTech field Initiated Measures to Introduce Blockchain Technology in the Securities-related Business [SBI SECURITIES]  For SBI SECURITIES’ self-business efficiency and the adoption of blockchain technology for the securities business systems, discussions with major IT vendors and venture companies, as well as a test demonstration is being prepared  In order to examine the possibility of a shared-use of blockchain technology in the securities business, promoting collaboration efforts with industry participants  With the advent of a private equity trading system that utilizes blockchain technology, considering the early adoption of blockchain technology for Japannext PTS 31

(1)- ③ Measures to adopt new technologies in the FinTech field SBI Benefit Systems is Promoting the Development of a New Service related to Defined Contribution Pension Program through an Alliance with a FinTech Companies [Cooperation within the Group] Synergy  A one-click log-in for the subscriber into a website that lists operational information for assets under management [Collaboration with external FinTech companies] … etc.  Jointly promoting the development of a new 401k-related service for SMEs and sole proprietors, to effectuate a seamless subscription and visualization of the defined contribution pension program 32

(2) SBI Sumishin Net Bank is endeavoring to increase profitability of the current business, as well as transform its earnings structure by adopting new technology development in its business ① Preparing measures to improve the profitability of the card loan business, which has been steadily increasing its balance ② Developing the credit card business into a primary revenue source by achieving profitability within the next fiscal year ③ Through alliances with FinTech companies, embarking on the development of new financial services ④ Promoting efforts to enhance operational efficiency by utilizing blockchain technology and big data 33

(2)- ① Improving profitability of card loans business Preparing Measures to Improve the Profitability of the Card Loan Business, which has been Steadily Increasing Its Balance Card Loans Balance: JPY 103.3bn (as of the end of Dec. 2015) Increased 1.5 times YoY Service launched in Sept. 2010 In the card loans business, limiting the guarantee fees, and in order to improve the profitability, considering an in-house origination of guaranty Newly establishing guaranty company (subsidiary) Subsidiary within the SBI Group covers a part of guaranty 34

(2)- ② Endeavoring to achieve early profitability in the credit card business Developing the Credit Card Business into a Primary Revenue Source by Achieving Profitability within the Next Fiscal Year Development of products and services with high affinity for SBI Sumishin Net Bank’s card loans [SBI Card] (Acquired in Oct. 2015) Endeavoring to achieve profitability in the credit card business within the next fiscal year, by focusing the Group’s full-scale efforts Utilization promotion Acquisition of new customers measures • Started the service of accepting • Implement upgrade invitations applications for credit cards in to current credit card members conjunction with the opening of an • Improve card utilization rate account at SBI Sumishin Net Bank through the point addition • Promotion of marketing measures campaign such as campaigns directed at current SBI Sumishin Net Bank customers Improving the earnings structure through revised offerings, and fundamental overhaul of the business flow 35

(2)- ③ Starting to develop new financial services, through the alliance with FinTech companies Started the Development of an Accounting Transaction Based Loan Business for SMEs and Sole Proprietors, Utilizing the Cloud Accounting Service Offered by Partner FinTech Companies Accounting transaction based loan scheme Deposit and Payment withdrawal/ Financial SMEs and sole Balance data Clients institutions proprietors Request (Auto link) • Investigation based on the unified dynamic information relevant to transactions, such as B/S, P/L, C/S or information on suppliers • Able to monitor cash flow, in order to control Using above companies’ cloud the credit line and accounting services minimize bad debt risks, after financing Considering the development of a new credit line model which incorporates big data analysis and AI, based on user data of partner FinTech companies 36

(2)- ④ Promoting efforts to enhance operational efficiency by utilizing new technology Promoting Efforts to Enhance Operational Efficiency by Utilizing Blockchain Technology and Big Data Utilization of blockchain • Through an alliance with NRI and Dragonfly FinTech, initiated demonstration tests to examine the possibility of applying blockchain technology to in-house systems, such as bank account transactions • Will utilize the results of the demonstration tests to consider the development of a next generation accounting system It is capable to reduce system costs Big data analysis utilization In conjunction with another South Korean savings bank, a new credit evaluation model Synergy development project has already been implemented, which applies machine learning (Yello Financial Group company) algorithms to achieve a default rate decrease of approx. 3% In order to reduce the loan delinquency ratio, will deliberate the possibility of integrating Solidware’s big data analysis technology and know-how. The potential for introduction will be explored as well. 37

(3) Insurance business promoting measures to strengthen its profitability, such as the development of new products ① Areas of focus for the insurance business (i) SBI Insurance has embarked on the development of fire insurance products (ii) SBI Life selling whole life medical insurance and term insurance through the Internet, and through the face-to- face channels as well (iii) Strengthening the profitability of SBI Insurance, SBI Life and the Group insurance companies, through the entrance into the reinsurance business within this fiscal year ② Promoting the development of personal insurance products through the integration of the insurance business and IoT technology 38

① -(i) SBI Insurance embarks on the development of fire insurance products SBI Insurance Embarks on the Development of Direct Fire Insurance, to Initiate an Insurance Premium Revolution Distribution ratio of net premiums by line among the domestic non-life insurance companies 8.7% 12.1% 48.0% 15.3% 12.6% JPY JPY JPY 1,239.7bn JPY 3,876.8bn JPY1,020.3bn 701.4bn 979.0bn Voluntary Automobile Fire Compulsory Automobile Liability Personal Accident Miscellaneous Casualty Marine and Inland Transit Source: The General Insurance Association of Japan, “GENERAL INSURANCE IN JAPAN FACT BOOK 2015” Taking advantage of the features of a direct insurance company, developing a low-premium fire insurance, which will be distributed by fully utilizing the synergies with SBI Sumishin Net Bank and ARUHI (former SBI Mortgage) , both of which are materially involved in housing loans Synergy (SBI Group’s share holding*: Approx.10.32% ） * Ratio of voting rights for ARUHI Group Co., Ltd., the holding company of ARUHI. SBI Group's shareholding percentage corresponds to a total percentage based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group. (As of the end of Dec. 2015) 39

① -(ii) Launch of new products in SBI Life Insurance Considering the Features of Life Insurance, SBI Life Insurance’s Whole Life Medical Insurance and Term Insurance will be Sold Not Only through the Internet, but also through the Face-to-face Channels to Fully Leverage Group Synergies Synergy Synergy [SBI Life Insurance] [Internet channel] [Face-to-face channel] Insurance shop Comparison website SBI Holdings SBI MONEY PLAZA InsWeb Mitsubachihoken Group Number of customers: 7,544 thousand *2 (SBI’s shareholding percentage:25.0%*1) WebCrew inc. (operate “Hoken Minaoshi Honpo”) Agency within the SBI Group SBI SECURITIES Call center Number of Number of contracts: NEWTON FINANCIAL CONSULTING, Inc. Number of accounts: accounts: approx. 815 2,522 thousand *2 3,487 thousand *2 thousand *2 (SBI’s shareholding percentage:20.0%*1) SBI SS1 SBI IKIIKI SS1 Financial Agency Inc. Number of contracts: Number of contracts: approx. (SBI’s shareholding percentage:34.9%*1) approx. 16 thousand *2 45 thousand *2 *1: SBI’s shareholding percentage corresponds to a total percentage, which include dilutive shares, based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group (As of Dec. 31, 2015) 40 *2: Number is as of the end of Dec.2015.

① -(iii) Strengthening the profitability through entering into reinsurance business With the Establishment of a Reinsurance Company, the Business Structure of the Insurance Business is Nearly Complete Nonlife insurance business Life insurance business [SBI Life Insurance]  Commenced business in Jan. 2008  Consolidated in Feb. 2015  Number of contracts: Approx.815 thousand  Number of contracts: Approx.111 thousand Small-amount, short term insurance Reinsurance business business Newly establishing [SBI SSI] reinsurance company  Consolidated in Mar. 2012  Number of contracts: Approx. 16 thousand  Plan to commence its business within this fiscal year [SBI IKIIKI SSI]  Consolidated in Mar. 2013  Number of contracts: Approx. 45 thousand Considering further acquisitions of small-amount, short term insurance companies, and the establishment of an insurance holding company 41

② Development of the personalized insurance products through combination of IoT technology Promoting the Development of Personalized Insurance Products through the Combination of Insurance Business and IoT Technology × Insurance IoT Business Development of Personalized Insurance Product for Life and Nonlife Insurance Alliance companies × ZMP [SBI Life Insurance] KENKOU CORPORATION RIZAP Promoting the development of personalized insurance products, where premiums are tailored and calculated according to each policy holder’s risk and characteristics, by utilizing telematics technology and wearable devices, through the cooperation with ZMP, a robotic venture company 42

② Development of the personalized insurance products through combination of IoT technology In Cooperation with Investee Companies, Offering Advanced Cyber Security Solutions to Combat the Risk of Cyber Attacks in Conjunction with the Spread of IoT IoT Cyber Security SBI Investment’s Example: Technology Solution Example: Investee Company An Israeli company Developing automatic providing cyber security driving system solutions for automobiles Applying to auto insurance • With the spread of IoT technology, while everything, including automobiles, in the world is now being connected through the Internet, the risk of cyberattacks on those devices connected through the Internet increases at the same time • Auto insurance must respond to the increase in security risk, in addition to utilizing superior technology in the loT field such as telematics Considering the Development of a Business Cooperation with SBI Investment’s Investee Company Argus' Cyber Security Solution for Automobiles through the Domestic Auto Insurance Business 43

(4) Asset Management Services Business has almost completed development of business structure, which is owing to the increase in AUM of the SBI Group’s institutional investors, and promote further diversification of Asset Management Products 44

(4) Asset Management Services Business nearly complete development of business structure Along with the Increase in the AUM of the SBI Group’s Institutional Investors, the Asset Management Services Business has Developed its Business Structure to Meet the Various Asset Management Needs within and Outside of the Group  Started cooperation in May 2015  UK-based leading hedge fund manager established in 1989  Planning establishment of various funds with different risk/return targets for the SBI Group institutional investors, such as life/non-life insurance and bank, as well as for the International Asset Management retail customers  Established in Nov. 2015  Operating a power generation business utilizing alternative energy, including solar, small hydroelectric, biomass, and geothermal generation  Providing a new and attractive investment product, by offering an investment fund that gains returns from the sales  Established in Dec. 2015 of electric power from power generating facilities  Joint venture with US-based PIMCO  Plan to develop and provide simple and low-cost active bond fund etc.  Changed corporate name in Jan. 2016  Changed corporate name from CEM Corporation  Providing collateralized real estate loans primarily in the Tokyo area [SBI Estate Finance] 45

(4) Asset Management Services Business nearly complete development of business structure Asset Management Services Business has Nearly Completed the Construction of its Business Structure, to Further Promote the Diversification of Investment Products Domestic Equity Domestic Bond Renewable Real Absolute energy fund Estate Return Asset Overseas Equity Overseas Bond Hedge Fund types Derivatives Partner company International Asset Management [SBI Estate Finance] (outside partner) Individual Investors Institutional Investors 46

(5) Advancing the Cooperation with External Companies such as Google for a More Sophisticated Analysis and Utilization Establishment of “Group’s Big Data” The SBI Group’s various services • Customer analysis based on action history and attribute information Action history / Attribute information • Introducing Google’s “DoubleClick Campaign Manager,” which is an integration management platform for online advertisement • Aggregating and centrally managing the group’s Advertisement platform advertising data • Utilizing product development and targeted advertisement Link IDs / SBI Point • Inter-Group mutual customer referrals through the utilization of advertising and common ID platforms • ID linking among a number of companies will be Analysis platform initiated by year-end FY 2015, and will be extended throughout the first half of FY 2016 Customer loyalty program utilizing SBI Point • • Incorporating external companies’ analytical The Group’s Big Data techniques and know-how of big data analysis • Actualizing “network value” through the Extensive available data through the Group’s 19 extraction of valuable information and million customers and approx. 540 million page knowledge that leads to decision-making views per month (as of Dec. 2015) To strengthen big data analysis, negotiating investments and cooperation with major overseas big data analysis companies 47

(6) Will integrate FinTech companies within the SBI Group as SBI FinTech Solutions (tentative name), to initiate IPO preparations as FinTech stocks 48

(6) Integrally operating the FinTech Companies within the SBI Group as SBI FinTech Solutions (tentative name) IPO Preparations Initiated as a FinTech Stock, after Merging and Integrally Operating FinTech Companies within the SBI Group as SBI FinTech Solutions (tentative name) Synergies will be pursued between group companies having high affinity in areas such as “Client attributes,” “Product offerings” and “Providing means,” leading to the creation of a company that will become exchange listed, but may also consider alliances and/or M&A with external companies Synergy Synergy [SBI SECURITIES] [SBI Life Insurance] [SBI IKIIKI SSI] Synergy Synergy Synergy [InsWeb] [SBI SSI] Synergy Synergy [ALL FX Comparison] Alliance and M&A with external companies 49

(6) Integrally operating the FinTech Companies within the SBI Group as SBI FinTech Solutions (tentative name) Group Companies and Businesses that Compose SBI FinTech Solutions (Tentative Name) Group companies that can utilize virtual currency and blockchain technology • Providing international remittance service that can complete remittances in 10 minutes at shortest • Providing a service that ties borrowers and investors via the Internet • Providing operation and management service of defined contribution pension plans that uses its own record keeping system developed by SBI Benefit Systems Expected comparable companies: Lending Club (U.S.), Sakura Internet and Infoteria etc. Group companies providing other FinTech-related service • Providing cloud service for accounting and settlement of expenses • Account aggregation software corresponding to over 1,530 financial institutions Expected comparable companies: Money Forward etc. Group companies that can utilize big data technology • Providing research, comparison and application services for various loan products, from one of Japan's largest available loan data bases • One of the largest insurance marketplaces in Japan that provides services such as [InsWeb] quotes on multiple automobile insurance policies at once, and requests informational materials from multiple life insurance companies [ALL FX Comparison] • Comparison website of FX trading Expected comparable companies: Kakaku.com and Metaps etc. 50

(6) Integrally operating the FinTech Companies within the SBI Group as SBI FinTech Solutions (tentative name) Comparison with Domestic and Overeas FinTech-related Companies SBI FinTech Sakura Lending Club (JPY billion) Infoteria Kakaku.com Metaps Solutions (U.S.) Internet TSE Stock exchange - NYSE TSE Mothers TSE Mothers TSE Mothers 1 st Section 8.30 87.50 12.00 1.65 42.50 7.00 Revenue Profit before income 2.11 4.98 0.88 0.20 19.70 0.35 Income tax expense (Ordinary Profit) Profit for the - 3.67 0.59 0.10 13.13 0.35 period 3.52 695.28 16.16 3.39 34.16 11.61 Total Asset Asset 1.86 125.04 4.23 2.67 29.86 8.03 Equity - 387.12 60.43 21.38 444.34 23.69 Market Value Stock - 3.1 14.3 8.0 14.9 3.0 Price PBR(x) Index - 105.4 102.4 213.8 33.8 67.7 PER(x) • SBI FinTech Solutions: Profit and loss items are FY2015 planned by SBI Group and asset items are as of the end of Dec. 2015. Numbers are simple sum. • Lending Club: Profit and loss items are analyst consensus forecast of FY2016 by Bloomberg and asset items are as of the end of Dec. 2015. Currency is converted at 1 USD = JPY 120 • Sakura Internet: Profit and loss items are FY2015 planned by the Company and asset items are as of the end of Dec. 2015. • Infoteria: Profit and loss items are FY2015 forecasted by Toyo Keizai and asset items are as of the end of Dec.. 2015. • Kakaku.com: Profit and loss items are FY2015 planned by the Company and asset items are as of the end of Dec.. 2015. • Metaps: Profit and loss items are FY2016 forecasted by Toyo Keizai and asset items are as of the end of Nov. 2015. • As for the market value, Lending Club is based on closing price as of Feb. 24, 2016 and the other companies are based on closing price as of Feb. 25, 2016 51

2. In the Asset Management Business, with the acceleration in the technology developments in the fields of Fintech, mobile, IoT, AI, and big data, along with the heightening global interest, endeavoring to invest in and form alliances with promising companies in these fields (1) Established “FinTech Fund” targeting FinTech-related companies (2) Actively promoting investments in new technological innovation field such as FinTech, including blockchain technology, IoT and big data (3) Starting a capital alliance with the Yello Mobile Group that possesses the largest mobile platform in South Korea 52

(1) Establishment of “FinTech Fund” targeting FinTech-related companies Established “FinTech Fund” to Invest in FinTech-related Companies in Dec. 2015 FinTech Business Innovation LPS • Total commitment amount is planned to be JPY 30bn • Fund investor: Financial institutions such as regional banks, credit unions and companies familiar with FinTech technology • Investment destination: Venture companies with superior technology in the FinTech field  Invested in freee K.K. as the first investment in Dec. 2015, and have also invested in several other companies  Going forward, anticipating investing in 100 or more domestic and overseas venture companies  The financial institutions who have invested may jointly study the feasibility of the technology and services of some of the FinTech companies, which may lead to discussions of a potential reduction of an initial investment, or a consideration of an early adoption.  SBI Investment collaborates with IBM, one of its IT vendors, through “IBM FinTech Program” (announced Feb. 12, 2016) 53

(1) Establishment of “FinTech Fund” targeting FinTech-related companies Collaborating with IBM to Support Venture Companies, and to Strengthen the Assistance to Financial Institutions Considering the Acquirement of FinTech Open innovation Financial institutions Venture companies in the FinTech field FinTech Fund, etc. C D A B E ・・・ Capital Investment injection Cooperation Assisting in the introduction of Value up support FinTech services Through the support of open innovation by investee companies and fund investors, promoting the introduction and utilization of FinTech by investors, as well as the promotion of a value-up of the investee companies SBI Group supports the provision of more innovative financial services with higher customer satisfaction, by strengthening the wide range of cooperation between the financial institutions and the investee venture companies Example of a partner venture company: (One of the few design companies in Japan that is specialized Goodpatch, Inc. in the design of UI and UX) 54

(2) Actively promoting investment in new technological innovation field Promoting Investments in New Technology Innovation Fields, such as FinTech, including Blockchain Technology, IoT and Big Data ① Blockchain Technology Orb, Inc. (Japan) (Investment in Oct. 2015) • By adopting a proprietary authentication algorithm, resulting in an overwhelmingly low cost and short time authentication process • In Sept. 2015, released the first installment of a service using the “orb,” called “SmartCoin,” where anyone can easily issue and manage a virtual currency through the utilization of blockchain Ripple Labs Inc. (U.S.) (Investment planned in Mar. 2016) Promoting the introduction of transaction platform “Ripple Connect,” which was developed and operated as a • next-generation transaction system primarily for financial institutions. Also implementing issuance of virtual currency “XRP” • In addition to the investment into Ripple, the SBI Group newly organized “SBI Ripple Asia Business Planning Dept.” to establish the joint venture with Ripple, which will target the Asian region bitFlyer, Inc. (Japan) (Investment planned in Mar. 2016) • Operates a Bitcoin sales office and exchange, whose trading volume is the highest in Japan • Promoting the dissemination of Bitcoin through a remittance service, crowd funding and the development of a point business, all utilizing Bitcoin Payward, Inc. (U.S.) (Investment planned in Mar. 2016) • Operates a virtual currency exchange "Kraken" which ensures safety under a strict security management system Promote the development of a financial infrastructure that leverages blockchain technology • 55

(2) Actively promoting investment in new technological innovation field Promoting Investments in New Technology Innovation Fields, such as FinTech, including Blockchain Technology, IoT and Big Data ② Other FinTech Money Forward, Inc. (Japan) (Investment in Aug. 2015) • Operates “Money Forward,” an automatic household account and asset management service for customers, and “MF Cloud” series, a cloud service for SMEs freee K.K. (Japan) (Investment in Dec. 2015) • Providing services such as “freee cloud accounting software” for SMEs IoT (Internet of Things) Argus Cyber Security Ltd. (Israel) (Investment in Sept. 2015) • Providing cyber security solutions for automobiles to protect the core system of automobiles from cyber attacks Big data GiXo Ltd. (Investment in Feb. 2016) • Through the utilization of big data, providing analysis support services and consulting services to enhance client companies’ competitiveness 56

(2) Actively promoting investment in new technological innovation field Along with Investments in Companies Possessing Superior Blockchain Technology, Promoting the Establishment of Joint Ventures and Alliances with Those Companies Alliance and Investee SBI Group Companies Companies* [SBI SECURITIES] × (Provision of market infrastructure to FX Trading) (Proprietary Trading System (PTS)) (Defined contribution pension plans) Dragonfly Fintech (International remittance service) … etc. (SBI Group’s common point program) * Including the company that the SBI Group is currently planning to invest in 57

(3) Starting business alliance with Yello Mobile and its sister company Yello Financial Group Along with an Investment into Yello Mobile, which Owns the Largest Smartphone Platform in South Korea, Forming a Business Alliance with Yello Mobile and its Sister Company, Yello Financial Group Considering an investment into the Yello Financial Group Considering an Investment Investment Yello Mobile: Yello Financial Group: A Korean comprehensive mobile service A Korean digital financial service company, which company, which was established in 2012. was established in 2015. Provides new forms of Provides shopping, content and, and financial services, such as an asset management digital marketing solutions, focused on support service that utilizes Robo-advisor, as well mobile devices, with one of Korea's largest as big data solution for financial institutions, customer base of 25 million people through the utilization of machine learning Through a collaboration centered on SBI SAVINGS BANK of South Korea, considering the acquisition of companies in Southeast Asia, such as in Thailand, Indonesia and Vietnam, to realize the establishment of an economic zone, with the Yello Mobile Group 58

3. The Overseas Financial Services Business and overseas investments focused on Asia are steadily thriving, with progress toward monetization 59

Overseas Financial Services Business in Asia is Steadily Thriving (i) Cambodia: Phnom Penh Commercial Bank SBI Group’s shareholding: 47.6%* (As of the end of Dec. 2015) SBI Group’s shareholding, including dilutive shares: 91.0%  Invested in Phnom Penh Commercial Bank when it opened in Sept. 2008 Operates 10 branches throughout the country: 8 branches are in Phnom  Penh, one branch is in Siem Reap and another in Battambang  Preparing to establish a representative office in Yangon, Myanmar Rapid growth in both revenue and income  With a consortium led by Jeonbuk Bank of South Korea, have already signed an agreement to transfer the entire shares of Phnom Penh Commercial Bank for a total of USD 134m, and the sale is expected to be completed upon the authorizations from the relevant South Korean and Cambodian financial authorities  On the basis of the current estimation, will recover about JPY 10-11bn, which will have a positive effect of approx. JPY 3-4bn for profit before income tax expense in FY2016 (includes selling expenses and such at the time of sale) 60 * SBI’s shareholding percentage corresponds to a total percentage based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group

Overseas Financial Services Business in Asia is Steadily Thriving (ii) Vietnum TPBank SBI Group’s shareholding: 19.9% *1 (As of the end of Dec. 2015)  Acquired shares in Aug. 2009 Operates 44 branches throughout the country, including the central  branch in Hanoi  Rapid growth in both revenue and income ＜ Transition of financial results *2,3 ＞ (Unit: JPY billion) Ordinary Revenue Profit FY2013 FY2014 FY2015 6.57 3.03 6.22 2.89 Total 173.3 278.0 411.6 assets 4.80 2.06 Deposits 77.4 116.8 213.3 Loans 63.8 106.1 151.1 FY2013 FY2014 FY2015 FY2013 FY2014 FY2015 *1 SBI’s shareholding percentage corresponds to a total percentage based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group *2 Converted at VND 1 = JPY 0.0045 61 *3 The results for FY2015 is preliminary results, which are not subject to an audit by the auditor

Overseas Financial Services Business in Asia is Steadily Thriving (iii) South Korea: SBI SAVINGS BANK SBI Group’s shareholding: 99.1%* (As of the end of Dec. 2015) By eliminating the bad debt that it carried before becoming a subsidiary in the next fiscal year, SBI SAVINGS BANK of South Korea is forecasting a net income level of KRW 60-70bn in FY2017 The net income trend and forecast based on a K-GAAP (KRW billion) 80.0 60~70 Displaying in a doubled annualized figure, owing 60.0 to irregular financial results for six months 40.0 (34.4) 20.3 20.0 17.2 0.0 Fiscal year ended Fiscal year ended Fiscal year ended June 30, 2015 Dec. 31, 2015 Dec. 31, 2017 62 * SBI’s shareholding percentage corresponds to a total percentage based on the IFRS criteria for subsidiary companies and subsidiary funds of the Group

Overseas Venture Capital Business Steadily Establishing an Investment Track Record Since 2005, established venture capital funds in collaboration with prominent local partners Overseas funds (Taiwan) (China) (Brunei) New Horizon Fund SBI Islamic Fund (Brunei) SBI & Capital 22 JV (first fund) Limited Fund, L.P. Year of establishment: 2005 Year of establishment: 2010 Year of establishment: 2008 Commitment amount: Commitment amount: Commitment amount: USD 100m USD 59.5m USD 22.5m Investment yield * ： Investment yield * : Investment yield * : 6.9x 1.22x 1.55x *Investment yield=Return / Investment amount. As for pre-exit stocks of SBI Islamic Fund (Brunei) Limited and SBI & Capital 22 JV Fund, L.P., adds market value of the concerned stock to the amount of return. 63

4. In the Biotechnology-related Business, entering into a full-fledged growth stage (1) SBI Pharmaceuticals’ current state of drug development (2) In the 5-ALA business, nearly completing the establishment of a globally exclusive supply system that will integrate the development, manufacture and sales of the product, and will establish a business structure in SBI ALA Hong Kong to realize global synergies ① Global R&D ② Global Marketing ③ Global Alliances & Licensing-out (3) Enhancing product offerings including the initial launch of a food labeled with health benefits, and strengthening sales promotion activities 64

(1) SBI Pharmaceuticals’ current state of drug development: R&D Progress in the Pharmaceutical Field Sponsored by SBI Pharmaceuticals Phase I Phase II Phase III Marketing ① Diagnostic Agent for Cancer “ALAGLIO” (from Treatment (Brain tumor) *Designated as an orphan drug Sept. 2013) Conducting an SBI ② Diagnostic Agent for Cancer Endeavors to corporate trial at the Treatment (Carcinoma vesicae) increase the same five universities *Designated as an orphan drug indications conducting the physician-led trial ③ Diagnostic Agent for Cancer Treatment (peritoneal Investigator-led trial dissemination of gastric cancer) led by Osaka Univ. (Providing drugs) *Designated as an orphan drug <from Nov. 2015> ④ A Drug to Treat Cancer Chemotherapy-induced Anemia Investigator-led trial by (Saitama Medical University) Saitama Medical Univ., as the medical institution ARO: Kitasato Academic conducting the clinical trial Research Organization (Providing drugs and funds) ⑤ Preventing Cardiac Ischemia- reperfusion Injury Investigator-led trial by (University of Oxford) Professor Houman, the Univ. of Oxford, Planning to jointly submit a test (Providing drugs and Planning to complete plan to the Medicines and funds) by June 2018 and Healthcare Products Regulatory apply for approval in (Phase II clinical trial will be implemented in Agency (“MHRA”) soon Mar. 2019 Birmingham university hospital in the U.K.) ⑥ A Drug to Treat Mitochondrial Investigator-led trial led by Saitama Medical Univ. Diseases *Designated as an orphan drug (Providing drugs) (Saitama Medical University) 65

(1) SBI Pharmaceuticals’ current state of drug development: Patents Held by SBI Pharmaceuticals in Japan (Total of 26 Patents) The name of the invention Registration date Co-applicants Composition for peeling June 15, 2007 Single application External preparation for the skin July 27, 2007 Single application Antioxidation function improver Sept. 2, 2011 Cosmo Oil Health function improver Sept. 2, 2011 Cosmo Oil Immune function improver Sept. 2, 2011 Cosmo Oil Tumor diagnostic agent July 13, 2012 Single application Mitochondrial damage brain disorder treatment and diagnostic agent Oct. 5, 2012 Single application Urinary tract tumor determination system Mar. 22, 2013 Kochi University Photolesion alleviator June 21, 2013 Single application Automatic tumor identification device and automatic tumor location identification method Feb. 7, 2014 Single application Bladder cancer detection method Feb. 14, 2014 Kochi University Urothelial cancer detection method Feb. 21, 2014 Kochi University Male infertility treatment Mar. 14, 2014 Single application Tokyo University of Cancer thermotherapy action enhancer Apr. 18, 2014 Agriculture Okayama University/Kochi Mitochondrial fluorescence staining method July 11, 2014 University Antimalarial drug whose active ingredient is 5-aminolevulinic acid or a derivative thereof July 25, 2014 The University of Tokyo Cancer prophylactic and/or improving agent whose active ingredient is 5-aminolevulinic acid or a Sept. 12, 2014 Single application derivative thereof or a salt thereof Tokyo Institute of Alaremycin derivative Nov. 14, 2014 Technology Adult disease prophylactic and/or improving agent whose active ingredient is 5-aminolevulinic acid or a Dec. 19, 2014 Single application derivative thereof, or a salt thereof Tokyo Institute of Antimalarial drug whose active ingredient is alaremycin or a derivative thereof Dec. 26, 2014 Technology National Hospital Treatment for allergic rhinitis Mar. 20, 2015 Organization Agent for preventing and/or treating veisalgia Sept. 18, 2015 Single application Treatment agent and/or prophylactic agent for side effects of cancer drugs Oct. 9, 2015 Kochi University Erythropoietin production accelerator Oct. 9, 2015 Tohoku University Tumor diagnostic agent Nov. 13, 2015 Single application Tokyo Institute of Photodynamic therapy or diagnostic agent, using infrared-spectrum light Dec. 18, 2015 Technology 66

(1) SBI Pharmaceuticals’ current state of drug development: SBI Pharmaceuticals Also Obtaining Several Patents that Utilizes 5-ALA in Other Countries SBI Pharmaceuticals has already obtained 26 patents in Japan and is gradually obtaining patents overseas as well. Among the patents obtained in Japan, 10 patents has been obtained overseas so far (20 countries) Overseas patent registration: The name of the invention (Co-applicants) International registration (countries) 1 Composition for peeling (Single application) Canada, Germany and other 2 countries 2 External preparation for the skin (Single application) China, Korea and other 11 countries 3 Health function improver (Cosmo Oil) U.S., China and other 11 countries 4 Tumor diagnostic agent (Single application) China, Korea and other 2 countries Mitochondrial damage brain disorder treatment and 5 U.S., China and other 5 countries diagnostic agent (Single application) Bladder cancer detection method (Kochi University) 6 U.S. 7 Male infertility treatment (Single application) U.S., China and other 7 countries Cancer thermotherapy action enhancer (Tokyo University 8 U.S., U.K. and other 4 countries of Agriculture) Antimalarial drug whose active ingredient is 5- 9 aminolevulinic acid or a derivative thereof U.S., Canada and other 2 countries (The University of Tokyo) Adult disease prophylactic and/or improving agent 10 whose active ingredient is 5-aminolevulinic acid or a U.S. and Korea derivative thereof or a salt thereof (Single application) 67

(1) SBI Pharmaceuticals’ current state of drug development: Research Using 5-ALA is Advancing at 67 Universities and Hospitals Asahikawa Medical Univ. Yamagata Univ. Diagnostic agent Shimane Univ. Parkinson's disease (mesothelioma) Diabetic disease / Infertility Hokkaido Univ. PDT / Ultrasonic therapy Tottori Univ. Tohoku Univ. Alzheimer's disease Chronic nephropathy Hiroshima Univ. Diabetic disease Sideroblastic anemia Cancer chemotherapy-induced anemia Osaka Univ. Saitama Medical Diagnostic agent for cancer treatment Univ. of Occupational and Diagnostic agent for cancer treatment Univ. (carcinoma vesicae) Environmental Health, Japan (peritoneal dissemination of gastric cancer) Mitochondrial diseases Development of instruments for PDT Radiosensitizing effect Contrast enhancement in MRI Kyoto Prefectural Univ. Dyslipidemia Shinshu Univ. Anti-aging / Hyperanakinesia for brain tumor Kyoto Prefectural Diagnostic agent for cancer Kumamoto Univ. treatment (digestive cancer) / Univ. of Medicine Tokyo Institute of Diagnostic agent / PDT / Cancer screening / PDT Contrast enhancement in MRI Technology Chemotherapy for brain tumor Osaka City Univ. PDT (Skin ulcers) The Univ. of Tokyo Diabetic disease / Malaria Osaka Medical Center for Cancer Tokushima Univ. and Cardiovascular Diseases Ultrasonic therapy Keio Univ. Metabolic disease Kochi Univ. Diagnostic agent for cancer treatment (digestive cancer) Diagnostic agent Tokyo Univ. of Agriculture Thermotherapy Cancer screening for cancer treatment (carcinoma vesicae) National Center for Child Health and Development Acute nephropathy Organ Transplantation Preventing nephrotoxicity by an anticancer agent Hamamatsu Univ. Nihon Univ. Septicemia /Hyperanakinesia Yamaguchi Univ. Nara Medical Univ. School of Medicine. (As of the end of Jan. 2016) Diagnostic agent for cancer treatment (carcinoma vesicae) 68

(1) SBI Pharmaceuticals’ current state of drug development: Expanding Co-Researchers and Business Partners in the World Suzhou Yian Fudan University Biotech The University of Oxford, of China University Hospitals Birmingham (Shanghai) (Shanghai) Diabetic disease Cardiac ischemia- reperfusion injury Bahrain Defense Force Hospital Hawaii Univ. Diabetic disease Diabetic nephropathy Diabetic disease SBI Pharmaceuticals Sickle cell anemia SBI Pharmaceuticals engages in cooperative National Salmaniya research with overseas universities (medical Hospital departments) and national hospitals and obtains (Bahrain) clinical data by conducting 5-ALA intervention Screening for trials with a few dozen patients, mainly with colorectal cancer King Hamad metabolic diseases. Research data will be applied University Hospital in pharmaceuticals development. (Bahrain) Diabetic disease Arabian Gulf Univ. Royal College of Surgeons in Ireland - Medical University of Bahrain Diagnostic agent for cancer treatment (carcinoma. vesicae) 69

(2) In the 5-ALA business, nearly completing the establishment of a globally exclusive supply system that will integrate the development, manufacture and sales of the product, and will establish a business structure in SBI ALA Hong Kong to realize global synergies ① Global R&D • Enhancement of R&D pipeline and acceleration of global expansion by promoting cooperation ② Global Marketing • Strengthening overseas sales structure for drugs • Establishment of a production system for 5-ALA-related products in China • A first food intervention trial that complies with the GCP* was successfully completed in Bahrain ③ Global Alliances & Licensing-out • SBI Pharmaceuticals promotes the licensing-out of technology and business partnership in Japan and abroad *GCP: An abbreviation for Good Clinical Practice, which is a standard for performing clinical tests on pharmaceutical products. 70

With the Acquisition of photonamic, Establishing a Business Structure to Realize Global Synergies 5-ALA business structure within a year to a year-and-a-half (plan) SBI Holdings Division: ① Global R&D SBI ALA Hong Kong ② Global Marketing (Intermediate holding company in 5-ALA business) ③ Global Alliances & Licensing-out SBI Suzhou Yian photonamic SBI ALApromo Pharmaceuticals Biotech Development and Coordinating with the A pharmaceutical company engaged A sales company sale of diagnostic Chinese authority to in the research and development of for 5-ALA related and therapeutic obtain a product license pharmaceuticals, health foods and health foods and drugs using 5-ALA, for health foods cosmetics using 5-ALA, mainly in cosmetics in Japan mainly in Europe containing 5-ALA in China Japan and Bahrain SBI Group’s share: SBI Group’s share: SBI Group’s share: 40% SBI Group’s share: 100% (since Jan. 2016) 76.44% 100% Photonamic’s development items ： Diagnostic agent for brain tumors and drug for treating actinic keratosis  Obtained sales approval in Europe, etc. Additionally, photonamic maintains pipelines for the development of interoperative diagnostic drugs for various types of cancer and of photodynamic therapy (PDT) for brain tumors in Europe 71

① Global R&D (Cooperation in medicine business): Global Expansion Acceleration through the Integration of the Research System Reinforcement of the R&D foundation through collaboration between SBI Pharmaceuticals (Japan) and photonamic (Germany) to expand both companies’ pipelines as rapidly as possible Company name photonamic SBI Pharmaceuticals Developing drugs Received approval to sell it in Promote use in Japan Europe in 2009 as well as Drug for treating within the framework of recently in Australia under actinic keratosis the advanced medical the name of “Alacare” care system. Approved by the European Conducting an SBI Medicines Agency (EMA) in corporate trial at the Diagnostic agent for 2007 Phase III stage in Japan carcinoma vesicae An expand indication for carcinoma vesicae Photodynamic therapy SBI Pharmaceuticals and photonamic are planning a (PDT) for brain tumors clinical trial at Osaka Univ. and LMU Munich 72

② Global Marketing (Strengthening the pharmaceutical sales structure): Strengthening the Overseas Pharmaceutical Sales Structure through the Establishment of a Global Marketing Division Global sales of photonamic’s pharmaceutical products: • Diagnostic agent for brain tumors: Approved by the European Medicines Agency (EMA) in 2007. Today, under the name of “Gliolan,” it is sold in over 25 countries in Europe, including Germany and the U.K., with medac serving as photonamic’s sales partner. SBI Pharmaceuticals also has been selling the drug in Japan under the name of “ALAGLIO” since 2013 Preparation for submission of an application for production and marketing approval in the U.S. • Drug for treating actinic keratosis “Alacare”: Received approval to sell it in Europe in 2009 as well as recently in Australia Through the acquisition of photonamc, engaged in the development and sales of diagnostic and therapeutic drugs that use 5-ALA in Europe, Australia and the U.S., to establish an exclusive business structure for the 5-ALA-related drugs in Japan and abroad 73

② Global Marketing (Bahrain): In a Food Intervention Trial that Complied with GCP(*) Standards in Bahrain, the Safety of Administration of Highly Concentrated to Arab Patients with Type 2 Diabetes was Confirmed (*)GCP: An abbreviation for Good Clinical Practice, which is a standard for performing clinical tests on pharmaceutical products. In the food intervention trials at the Bahrain Defense Force Hospital, the safety of administration of highly concentrated 5-ALA to Arab patients with type 2 diabetes was confirmed, and it was confirmed that HbA1c (hemoglobin A1c), which is directly related to diabetes, decreased significantly at the time of ingestion of test meals after 12 weeks. Planning publication of an academic paper in related journals In Bahrain, the plan is to continue to conduct GCP- compliant food intervention trials in the fields of diabetic nephropathy, sickle cell anemia and photodynamic screening (PDS) in cancer diagnosis. (Japan-Bahrain joint research into PDS is planned) 74

③ Global Alliances & Licensing-out (Licensing-out of technology and business partnership ): SBI Pharmaceuticals Progresses the Licensing-out of Technology and Business Partnership in Japan and Abroad 1. In discussions for the out-licensing of technology in the pharmaceutical fields <In discussions for the out-licensing of technology by category> Company A: Diagnostic Agent for Cancer Treatment (Carcinoma vesicae) Company B: Mitochondrial diseases/Central Nervous System diseases including Parkinson's disease and Alzheimer's disease 2. Progressing with discussions for the licensing-out of technology and business partnership in the food fields 3. Promoting sales of health foods in Asia and Middle East Already on sale : Bahrain, Jordan, Philippine In discussions : Thailand, Indonesia, Malesia, UAE 4. Demonstration tests of livestock feeds initiated in Mexico Excellent interim results have been obtained in demonstration testing of livestock feed containing 5-ALA being conducted locally, and a commercialization plan will be implemented based on the results. 5. In Hong Kong, in preparation for the registration of a cosmetic ingredient Coordination with the regulatory authorities is underway to enable use of 5-ALA phosphate, a cosmetics raw material used in Japan, as a raw material in Hong Kong. 75

(3) Enhancing product offerings including the initial launch of a food labeled with health benefits, and strengthening sales promotion activities ① Enhancing product offerings ② Various measures for the sales increase of 5-ALA-related products 76

① Enhancing product offerings Initial Launch of “ALA Plus Tou (Sugar) Down,” a Food Labeled with Health Benefits, Containing 5-ALA, Increasing Monthly Orders Changes of SBI ALApromo’s Supports the normalization of high levels of monthly orders fasting blood glucose levels, and the moderation of the elevation of postprandial glucose levels * Monthly orders in Nov. = 1 4.8 5 “ALA Plus Tou (Sugar) Down,” (from Dec. 18, 2015) 4 3 New TV commercials featuring Hiromi Go 1.9 has been started since Feb. 23!! 2 1.7 1.0 1 The appearance of “Tou (Sugar) 0 Down” ver. Nov. Dec. Jan. Feb. 23  Of the 6,736 consulting pharmacies and drugstores that offer SBI ALApromo products, there already are 4,214 stores that offer “ALA Plus Tou (Sugar) Down” (As of the end of Feb. 2016)  The number of stores that offer “ALA Plus Tou (Sugar) Down” is expected to number over 6,000 stores by the end of Mar. 77

① Enhancing product offerings Enhancing SBI ALApromo’s Product Offerings  Launch of a sports supplement, “ALA Plus Sports High Performance,” for stamina athletes on the move for extended periods sports enthusiasts (Dec. 21, 2015) Available for sale on ALA Online, which is SBI Package design ALAPromo’s official online shop, and at sports shops  Launch of the renewed cosmetics containing 5-ALA, “ALA PLUS skincare series” with high moisture-retaining effects (Jan. 18, 2016) • Adopt uniformly designed packaging • Trial set launched to endeavor acquisition of new Moisturizing Skin ALApi users cream lotion Full-body moisturizing cream 78

② Various measures for the sales increase Various Measures for the Sales Increase of 5-ALA- related Products by SBI ALApromo (i) Development of food labeled with health benefits as a key strategy  First launch of “ALA Plus Tou (Sugar) Down,” a food labeled with health benefits, containing 5-ALA It will have a functional label indicating that: “The product contains 5- aminolevulinic acid phosphate and helps normalize high fasting glucose levels. It has a function to moderate the elevation of postprandial glucose level. It is suitable for people with high blood sugar levels.” A clinical trial, on which the application is based, was conducted at Hiroshima University on 212 patients with slightly high blood sugar levels, and a similar trial was also conducted at the University of Hawaii on 154 patients with evidence of prediabetes  In preparations for the development of new foods labeled with health benefits Development plan: Male fertility Improvement in the Measures for exercise capacity for hangovers improvement the elderly 79

② Various measures for the sales increase Various Measures for the Sales Increase of 5-ALA- related Products by SBI ALApromo (ii) Conducting a joint promotion with Kenkou Corporation Kenkou Corporation will absorb the majority of the promotion cost, to achieve a 70% awareness of 5-ALA Development and marketing of many hit Operation of fitness products among beauty center chain “RIZAP” and health products Joint promotion with Kenkou Corporation:  As a first step, promoting “ALA Plus Tou (Sugar) Down” through transit promotions Bus routes in Tokyo Rear panel (for 2 months in Feb. and Mar.) Keio Bus, Kanto Bus, Seibu Bus, Odakyu Bus JR East Door-side ads in three locations (for about a week from Feb. 22 to 28) Total 17 lines : Yamanote Line, Keihin-Tohoku Line, Yokohama Line, Sobu Line, Saikyo Line, Rinkai Line, Chuo Line, Shōnan -Shinjuku Line and others  Planning joint development of original products containing 5-ALA for RIZAP members from the next fiscal year 80

[FY2015 Shareholder Return Policy] 81

Shareholder Return for FY2015 ① ~Announced annual year-end dividend forecast for FY2015~ (on Feb. 25, 2016) Planning year-end dividend of JPY 25 per share for FY2015. As a result, full-year dividend is forecasted to be JPY 35 per share, including an interim dividend of JPY 10. [Dividend forecast (results) per share] End of 2Q Year-end Full-year JPY 10 JPY 25 JPY 35 FY2015 (forecast) (Ordinary dividend: 10) (Ordinary dividend: 25) (Ordinary dividend: 35) JPY 35 JPY 35 － FY2014 (results) (Ordinary dividend: 30) (Ordinary dividend: 30) (Commemorative (Commemorative dividend: 5) dividend: 5) Note: The dividend forecast shown above is an estimate made as of the current date. Actual dividend payments may differ from the forecast due to various reasons. 82

Shareholder Return for FY2015 ② ~Announced repurchase of SBIH shares, owing to an undervalued stock price level~ (on Feb. 25, 2016) [Details of SBIH share repurchase]  Number of shares to be repurchased Up to 5,500,000 shares *2.59% of total issued shares outstanding, excluding treasury stock  Total cost of shares to be repurchased Up to JPY 5.0bn  Period for share repurchase From Feb. 26, 2016 to Mar. 24, 2016 Planning to achieve a shareholder return ratio, as calculated by the sum of dividend payouts and share repurchase costs, of about 40% for the fiscal year-end 83

Shareholder Return for FY2015 ③ ~Further Strengthen Shareholder Benefits~ [Details of shareholder benefits] *Shareholders listed or recorded in the shareholder register as of Mar. 31, 2016 are eligible. Details ALAPlus ALAPlus GOLD ALAPlus Essential Lotion Qualified (priced at JPY 2,980 (priced at JPY 9,800 (priced at JPY 8,400 shareholders (incl. tax)) (incl. tax)) (incl. tax)) Shareholders who have held shares for more than 1 2 packs 2 packs 1 pack year and who hold 1,000 (10 units) or more shares as of Mar. 31, 2016 For shareholders other than the above, those who 2 packs － － hold 100 shares (1 unit) or more, as of Mar. 31, 2016 * In addition, all shareholders, including those who hold less than 1 unit (1–99 shares), will receive 1 discount coupon for a preferential discount of 50% from the regular prices of all SBI ALApromo dietary supplements and cosmetics. 84

[Reference] 85

Number of Companies and Consolidated Employees of the SBI Group Number of Group companies Mar. 31, 2015 Dec. 31, 2015 Consolidated subsidiaries 142 146 (companies) Consolidated partnerships 31 33 (partnerships) Total consolidated 173 179 subsidiaries (companies) Equity method companies 39 35 (companies) Total Group companies 212 214 (companies) Number of consolidated employees Mar. 31, 2015 Dec. 31, 2015 6,094 5,347* Total employees (persons) * Owing to a company that was temporarily consolidated because of a buy-out fund, but was later sold, so there was a decrease of 756 employees. 86

Assets Under Management of the SBI Group (As of the end of Dec. 2015) (Including JPY 88.5bn of both cash and commitment Private equity, etc. JPY 271.8bn amount to be paid in) (*3) Breakdown by region Amount Breakdown by Industry Amount IT/Internet 27.4 Japan 83.0 China 26.5 Biotechnology/Health/Medical 41.9 Services 16.3 Korea 25.8 Materials/Chemicals 2.6 Taiwan 1.7 Environmental/Energy 20.6 Southeast Asia 10.8 Retail/Food 13.8 India 4.0 Construction/Real estate 1.7 U.S. 27.8 Machine/Automobile 6.1 Others 3.7 Finance 40.2 Total 183.3 Others 12.7 Total 183.3 *1 Calculated by the exchange rate as of the end of Dec. 2015 Investment trusts, etc. JPY 275.2bn (*4) *2 Amounts are rounded to the nearest JPY 100m *3 Composed of cash in funds and unpaid capital which is to be paid Investment trusts 197.3 on a capital call. *4 For funds that SBI Asset Management provides investment Investment advisory 73.9 instruction to, if Morningstar Asset Management provides Investment companies 3.9 investment advisory services, assets are recorded in both "Investment trusts" and "Investment advisory," respectively, and such overlapping amounts totaled JPY 26.5bn 87

SBI Group’s medium- and long-term future vision 88

SBI’s Med- and Long-term Vision Topics ① [Financial Services Business] Since the commercialization of the Internet in 1992, the younger generation are becoming the mainstream consumers and investors familiar with the Internet. By endeavoring to be in front of the continued development of the Internet and the communications technology, will endeavor to realize a dramatic growth in the Internet financial sector  Established an overwhelmingly strong position in the rapidly growing online financial sector, through positive synergies and mutual evolution from the establishment of a financial ecosystem  Through alliances with companies specialized in new technologies related to FinTech, strengthening initiative toward the development of new services and the improvement of business efficiency, by the adoption of those new technologies [Asset Management Business] Domestically, investments into the new growth industries of the 21st century, IT/mobile and biotechnology fields, will be focused upon. Whereas the acceleration of the Internet financial services business overseas will be focused on rapidly growing Asia, in order to transit from “Japan's SBI” to the “World's SBI”  Along with focused investments into the Internet and mobile new technology fields of FinTech, AI, IoT, etc., promoting an alliance strategy for FinTech field investee companies, and actively seeking overseas investment opportunities into financial services businesses, primarily in Asia  In addition to aggressively investing into the financial services business overseas, centering on Asia, promoting the establishment of an online financial ecosystem overseas 89

SBI’s Med- and Long-term Vision Topics ② [Biotechnology-related Business] In addition to the health foods and cosmetics that utilize 5-ALA as its principal ingredient, in the pharmaceuticals area various basic research is being conducted, along with clinical studies, to realize profit maximization. With the acquisition of the German pharmaceutical company, photonamic, establishing a business ecosystem for the 5-ALA-related business, and advancing toward the globalization of R&D, marketing and out-licensing  While the pharmaceutical industry’s operating profit margin ranks high within the manufacturing sector, currently, the SBI Group is conducting basic research both domestically and overseas, on drugs that may cure a range of diseases, with the expectation of launching multiple drugs going forward. Additionally, progressing in the establishment of a production system that will significantly reduce manufacturing costs  SBI Pharmaceuticals has been acquiring patents for the use of 5-ALA both domestically and abroad (26 patents have already been obtained in Japan, of which 10 patents were also obtained in several countries outside of Japan), promoted the expansion of its distribution area, and has out-licensed its health food products, with the establishment of a globally exclusive supply system that will integrate the development, manufacture and sales of the product of 5-ALA  In the field of foods, including health foods, cosmetics and feeds, the development of a labeling system for foods with functional claims has been set as a priority, and are in preparations for clinical trials to expand its product offerings, as well as being in discussions for the out-licensing of technology and business partnerships to distribute its food products 90

SBI’s Med- and Long-term Vision ~SBI Group’s positioning in the next 5 and 10 year periods~ Depiction of possible composition (In 10 years) ratio of profit before income tax expense by segment in the next 5 and 10 year periods Biotechnology -related FS Business Business (In 5 years) Biotechnology- AM related Business FS Business Business (FY2014) AM Business FS Business JPY 67.3bn (Domestic financial services) AM Business JPY 8.1bn (Includes financial services overseas) Biotechnology -related JPY -7.3bn Business 91

[Appendix] The Company’s current stock price, and our method in calculating the estimated corporate value 92

Corporate Value by Business Segment Valuation Each Business Segment Valuation is Conservatively Estimated ■ Sum of the values by segment (as of Feb. 25, 2016) (JPY billion) Valuation of each segment (theoretical value) Financial Services 449.3 Asset Management 183.3 Biotechnology-related 75.3 707.8 (+) Subtotal External Debt -191.1 (SBIH’s non-consolidated-base borrowing recorded on the consolidated B/S as of Sept. 2015) 516.7 (+) * Sum Total - Business valuation per share: JPY 3,152 - Business valuation per share after deduction of external debt: JPY 2,301 Of the major Group companies, 11 are profitable companies that are not included in the above calculations (Total FY2014 Profit before Income Tax Expense: approx. JPY 4.0bn) * Since the figure is a simple sum of the values of each segment with interest-bearing liabilities of SBIH not taken into account 93 in the calculation, the abovementioned business valuation per share does not show the theoretical stock price of SBIH.

SBI Holding’s Recent Stock Price Market cap (based on the closing price on Feb. 25, 2016) : JPY 232.9bn (JPY) [Last 3 years] 2,000 Recent high: Apr. 24, 2013: 1,800 JPY 1,990 1,600 1,400 1,200 1,000 Closing price on Feb. 25, 2016: JPY 1,037 800 Expanded by 3.3x 600 400 Record low: Dec. 4, 2012: JPY 603 200 0 2012/12/3 2013/12/3 2014/12/3 2015/12/3 Source: Bloomberg 94

Change in PBR of SBI Holdings PBR = Closing price at the end of FY / Net assets per share at the end of FY (x) TOPIX: 1.1 SBI Banks: 0.5 3.0 Securities and commodities: 0.9 TSE 1st Section Other financials: 1.0 2.5 (As of Jan. 31, 2016) 2.0 (As of Feb. 25, 2016) 2.0 SBI Holdings’ The stock price of SBI PER based on Holdings: JPY 1,037 the EPS of 1H PBR: 0.6 1.5 1.0 1.1 1.3 1.1 FY2015 is 8.4 *2 1.4 (As of Feb. 25, 2016) 0.9 0.8 0.8 1.0 0.8 1.1 0.6 *1 0.9 0.8 0.8 0.5 0.5 0.4 0.6 0.5 0.0 End of End of End of End of End of Feb. 25, FY2006 FY2008 FY2012 FY2010 FY2014 2016 *1 PBR of SBI Holdings for Feb. 25, 2016 is calculated based on the BPS of the end of Dec. 2015. *2 EPS of 1H FY2015 (JPY 61.8) is used to calculate SBI Holdings’ PER. Source: TSE website 95 Note: PBR of SBI Holdings prior to FY2011 is calculated based on J-GAAP BPS.

PBR Comparison with Competitors PBR = Closing price at the end of FY / Net assets per share at the end of FY (As of Feb. 25, 2016) (x) 5.0 4.0 Matsui 2.8 3.0 kabu.com 2.7 2.0 Monex 1.0 Daiwa 0.9 1.0 Nomura 0.8 JAFCO 0.7 SBI 0.6 0.0 End of End of End of End of End of Feb. 25, FY2006 FY2008 FY2010 FY2012 FY2014 2016 Nomura Daiwa Matsui Monex kabu.com JAFCO SBI *PBR for Feb. 25, 2016 is calculated based on the BPS of the end of Dec. 2015. *PBR of Monex and SBI Holdings prior to FY2011 are calculated based on J-GAAP BPS. Source: Bloomberg 96

Valuation by Segment Estimated by SBI (1) Financial Services Business ① SBI SECURITIES -(i) ① SBI SECURITIES Valuation is conservatively estimated at JPY 324.5bn (based on the closing prices of Feb. 25, 2016) Estimation of the valuation is as follows: Calculated according to the Comparable Public Company Analysis Compares the market cap and profits of a comparable public company, Matsui Securities. Valuation of SBI SECURITIES is calculated as the mean of the two values [(A) and (B)] resulting from the equations below × SBI SECURITIES’s Net Income (FY2014) ... (A) Matsui’s PER (*1) × SBI SECURITIES’s Net Asset (*3) (as of Dec. 31, 2015) ... (B) Matsui’s PBR (*2) *1 PER of Matsui is calculated by its net income per share for FY2014. *2 PBR of Matsui is calculated by its BPS as of Dec. 31, 2015. *3 Represents SBI SECURITIES’ balance of net asset excluding short-term loans receivable from SBIH 97

Valuation by Segment Estimated by SBI (1) Financial Services Business ① SBI SECURITIES -(ii) Is SBI SECURITIES’ valuation reasonable? Comparison of SBI SECURITIES Matsui Securities *Calculated by the closing prices of Feb. 25, 2016 SBI SECURITIES Matsui Securities (9M FY2015) Valuation (market cap) * JPY 324.5bn JPY 261.2bn Deposit assets (Dec. 2015) No.1 JPY 9.6tn JPY 2.2tn Number of accounts No.1 3.49 million 1.05 million (As of the end of Dec. 2015) Share of individual stock brokerage No.1 41.3% 13.5% trading value JPY 30.2bn JPY 17.2bn Operating income No.1 (up 20.9% YoY ） (up 4.9% YoY) (JPY trillion) (thousand ) Customers’ Deposit Assets Customer account 4,000 12 3,487 SBI Matsui 9.6 SBI Matsui 10 3,000 8 6 2,000 4.5 2,210 4 1,000 2 0 0 Mar.2011 Mar.2012 Mar.2013 Mar.2014 Mar.2015 Dec. 2015 Mar.2011 Mar.2012 Mar.2013 Mar.2014 Mar.2015 Dec. 2015 98

Valuation by Segment Estimated by SBI (1) Financial Services Business ② SBI Sumishin Net Bank ② SBI Sumishin Net Bank Estimates the valuation of SBI Sumishin Net Bank with high growth potential in terms of profitability and scale at JPY 90.4bn  JPY 45.2bn (based on the closing prices of Feb. 25, 2016) (Shareholding of the SBI Group: 50.0%) Estimation of the valuation is as follows: Calculated according to the Comparable Public Company Analysis Compares the profits of comparable public companies of which the deposit balance exceeds JPY 3tn as of the end of Mar. 2015 Median value of estimated PERs of listed local banks SBI Sumishin Net Bank’s Net Income × of which the deposit balance exceeds JPY 3tn (*) (FY2014) * Compiled by the Company from the materials disclosed by the listed local banks of which the deposit balance exceeds JPY 3tn as of the end of Mar. 2015 [Reference] Valuation distribution based on the abovementioned pro forma calculation (Median Value) (Minimum) (Maximum) Estimated PER ◆ 90.4bn 131.0 48.4 (FY2015) 35 75 115 155 (JPY billion) 99