Sumitomo Mitsui : Explanatory Material for FY2015

Table of Contents

Summary of FY2015 financial results

1.

Financial results

---------

Summary 1-3

2.

Financial conditions

---------

Summary 3-5

3.

Forecast for FY2016

---------

Summary 5

Financial figures

1.

Status of profit and loss

---------

1-2

2.

Breakdown of profit by business group

---------

3-4

3.

Major subsidiaries

---------

5

4.

Yields and margins

---------

6

5.

Net gains on securities

---------

6

6.

Unrealized gains/ losses on investment securities

---------

7-8

7.

Maturity ladder of securities

---------

9

8.

Shareholdings

---------

9

9.

Deferred unrealized gains/ losses of derivative transactions qualified for hedge accounting

---------

9

10.

BIS capital adequacy ratio (Basel III, international standard)

---------

10-11

11.

Return on equity (ROE)

---------

11

12.

Loans and Deposits (Banking a/c and principal guaranteed trust a/c combined)

---------

12

13.

Loans (Banking a/c and principal guaranteed trust a/c combined)

---------

13

14.

Problem assets based on the Financial Reconstruction Act

---------

14-15

(Banking a/c and principal guaranteed trust a/c combined)

15.

Self-Assessment and problem assets based on the Financial Reconstruction Act

---------

15

(Banking a/c and principal guaranteed trust a/c combined)

16.

Allowance for loan losses

---------

16

17.

Final disposal of non-performing loans (Banking a/c and principal guaranteed trust a/c combined)

---------

17

18.

Retirement benefits

---------

18

19.

Deferred tax assets

---------

19

---------

20-22

Sumitomo MitsuiTrust Holdings (Consolidated): "SuMi TRUST Holdings"or"Consolidated" Sumitomo Mitsui Trust Bank (Non-consolidated): "SuMi TRUST Bank" or "Non-Consolidated"

Legal Disclaimer

Regarding forward-looking Statements contained in this material

This presentation material contains information that constitutes forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors including but not limited to changes in managerial circumstances. By virtue of the aforementioned reasons, Sumitomo Mitsui Trust Holdings, Inc. hereby cautions against sole reliance on such forward-looking statements in making investment decisions.

Summary of FY2015 financial results

1. Financial Results

1. "Net business profit before credit costs" increased by 1.5 billion yen from FY2014 to 318.3 billion yen due to increase in "Net fees and commissions and related profit" mainly in subsidiaries engaging in asset management and real estate brokerage, whereas "Net interest income and related profit" decreased in SuMi TRUST Bank.
2. "Ordinary profit" decreased by 14.4 billion yen from FY2014 to 278.0 billion yen due primarily to increase in "Total credit costs" which was attributable to non-recurrence of profit from credit cost recovery posted in FY2014 in SuMi TRUST Bank, whereas "Net gains on stocks" increased.
3. "Net income attributable to owners of the parent" increased by 7.2 billion yen from FY2014 to 166.9 billion yen due primarily to non-recurrence of extraordinary losses posted in FY2014 in SuMi TRUST Bank.

[Consolidated]

(Billions of Yen)

FY2015

FY2014

Change

Net business profit before credit costs (*1)

1

318.3

316.7

1.5

Ordinary profit

2

278.0

292.4

(14.4)

Net income attributable to owners of the parent

3

166.9

159.6

7.2

Total credit costs

4

(25.9)

19.3

(45.2)

Net gains on stocks

5

29.6

(2.1)

31.8

Return (Net income) on shareholders' equity

6

8.72%

8.62%

0.10%

(Difference from non-consolidated financial results) (*2)

Net business profit before credit costs

7

69.1

71.0

(1.9)

Net income attributable to owners of the parent (*3)

8

23.7

29.1

(5.3)

Total credit costs

9

(11.7)

1.2

(12.9)

Net gains on stocks

10

10.9

(4.2)

15.1

(*1) Consolidated net business profit before credit costs = Non-consolidated net business profit before credit costs + Ordinary profits of Other subsidiary companies

(non-recurring effect adjusted) + Ordinary profits of Affiliates (non-recurring effect adjusted) x Ratio of equity holdings - Intra-group transaction (dividends, etc.)

(*2) Differences between "Consolidated (SuMi TRUST Holdings)" and "Non-Consolidated (SuMi TRUST Bank")

1. "Net business profit before credit costs" increased by 3.4 billion yen from FY2014 to 249.1 billion yen due to decrease in "General and administrative expenses" mainly in non-personnel expenses, whereas "Net interest income and related profit" decreased mainly attributable to increased foreign currencies funding costs.
2. "Ordinary profit" decreased by 11.1 billion yen from FY2014 to 218.8 billion yen due to increase in "Total credit costs" which was attributable to non-recurrence of profit from credit cost recovery posted in FY2014 and increase in allowance, whereas "Net gains on stocks"
3. "Net income" increased by 12.6 billion yen from FY2014 to 143.1 billion yen due primarily to non-recurrence of extraordinary losses related to IT system integration posted in FY2014.

[Non-consolidated]

(Billions of Yen)

FY2015

FY2014

Change

Gross business profit

11

485.3

494.2

(8.8)

Net interest income and related profit

12

223.9

233.4

(9.4)

Net fees and commissions and related profit

13

199.9

201.0

(1.1)

Net trading profit

14

15.5

32.4

(16.8)

Net other operating profit

15

45.9

27.2

18.6

Net gains on bonds

16

51.7

63.4

(11.6)

Net gains from derivatives other than for trading or hedging

17

(22.8)

(36.7)

13.9

General and administrative expenses

18

(236.1)

(248.5)

12.3

Net business profit before credit costs

19

249.1

245.7

3.4

Net non-recurring profit

20

(23.9)

(15.6)

(8.2)

Banking a/c credit costs

21

(9.6)

(0.4)

(9.2)

Reversal of allowance for loan losses, etc.

22

1.8

18.5

(16.6)

Net gains on stocks

23

18.7

2.0

16.6

Others

24

(34.8)

(35.8)

0.9

Ordinary profit

25

218.8

230.0

(11.1)

Extraordinary profit/ losses

26

(3.6)

(60.0)

56.3

IT system integration costs

27

-

(55.8)

55.8

Income before income taxes

28

215.1

169.9

45.2

Total income taxes

29

(72.0)

(39.4)

(32.6)

Net income

30

143.1

130.5

12.6

Total credit costs

31

(14.1)

18.1

(32.2)

Overhead ratio (-18 / 11)

32

48.66%

50.29%

(1.63%)

(For reference) Overview of the business operation

(1) Balance of major accounts (Banking a/c and Principal guaranteed trust a/c combined)

[Non-consolidated]

(Billions of Yen)

Mar. 2016 (FY2015)

Mar. 2015 (FY2014)

Change

1

27,100.2

25,894.3

1,205.9

(Average balance)

2

25,748.1

24,498.7

1,249.3

3

33,422.4

26,469.5

6,952.8

(Average balance)

4

27,145.9

25,572.4

1,573.4

(*) Deposits: Excluding NCD

(2) Yields and margins (Domestic Banking a/c)

[Non-consolidated]

(%)

FY2015

FY2014 (B)

Change

(A) - (B)

Full (A)

2H

1H

Loan deposit margin

5

0.64

0.63

0.65

0.68

(0.04)

Loans and bills discounted

6

0.84

0.82

0.86

0.93

(0.09)

Deposits and trust principal

7

0.20

0.19

0.21

0.25

(0.05)

(3) Status of loans (Banking a/c and Principal guaranteed trust a/c combined)

[Non-consolidated]

(Billions of Yen)

Mar. 2016

Mar. 2015

Change

Loans to individuals

8

7,932.1

7,564.2

367.9

Residential mortgage loans

9

7,422.1

7,076.2

345.9

Loans to corporations

10

19,168.1

18,330.1

837.9

Overseas Japanese borrowers

11

3,035.7

2,979.6

56.1

Non-Japanese borrowers

12

3,461.4

2,924.7

536.6

(1) Sales volume and sales balance of investment trust/ insurance

[Non-consolidated]

(Billions of Yen)

FY2015

FY2014

Change

Total

13

1,783.4

2,227.2

(443.7)

Investment trust

14

1,078.7

1,508.2

(429.5)

Fund wrap, SMA

15

300.8

391.1

(90.2)

Insurance

16

403.8

327.8

76.0

(Billions of Yen)

Mar. 2016

Mar. 2015

Change

Total

17

5,803.8

5,837.3

(33.5)

Investment trust

18

2,649.7

2,814.0

(164.3)

Fund wrap, SMA

19

848.3

741.2

107.1

Insurance

20

2,305.7

2,282.0

23.7

(2) Fees and commissions

[Non-consolidated]

(Billions of Yen)

FY2015

FY2014

Change

Total

21

67.6

66.9

0.7

Sales fees of investment trust/ insurance

22

37.0

42.0

(4.9)

Administration fees

23

30.6

24.9

5.6