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This presentation may contain forward-looking statements about the Daiwa Securities Group. You can identify these statements by the fact that they do not relate strictly to historic or current facts. These statements discuss future expectations, identify strategies, contain projections of results of operations or of financial condition or state other “forward-looking” information. These statements are based on currently available information and represent the beliefs of the management of the Daiwa Securities Group. These statements are subject to numerous risks and uncertainties that could cause the Daiwa Securities Group’s actual results, performance, achievements or financial condition to differ materially from those described or implied in the forward-looking statements. The Daiwa Securities Group undertakes no obligation to publicly update any forward-looking statements after the date of this presentation. These potential risks and uncertainties include, but are not limited to: competition within the financial services industries in Japan and overseas, our ability to adjust our business focus and to maintain profitable strategic alliances, volatile and sudden movements in the international securities markets, foreign exchange and global economic situations affecting the Daiwa Securities Group.

Daiwa Securities Group Inc.Daiwa Investment Conference Tokyo 2016Presented on Tuesday, March 1, 2016 at “The Prince Park Tower Tokyo”

Takashi Hibino, President and CEODaiwa Securities Group Inc.

2

Ⅰ - Business Environment ・・・・ 3

Ⅱ - Achievements in the Medium Term Management Plan ・・・・ 7

Ⅲ - Progress of Individual Strategies for Basic Policies ・・・・ 13

Ⅳ - Basic Group Strategies ・・・・ 23

Appendix ・・・・ 28

Contents

Daiwa Investment Conference Tokyo 2016

3

Ⅰ- Business Environment

Changes to the Economic Environment

4


Real GDP (Jan. 2007 - Dec. 2015)

Note: Adjustment of consumption tax conducted by the Bank of Japan.

Source: Cabinet Office; compiled by DIR based on the Bank of Japan statistics

(YoY, %)

(QoQ, %)

Consumer Price Index (Jan. 2007 - Dec. 2015)

2015

-4.5

-3.0

-1.5

0.0

1.5

3.0

4.5

2007 2008 2009 2010 2011 2012 2013 2014 2015

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

CPI (less fresh food)

CPI (less fresh food and energy)

-2.0

-1.0

0.0

1.0

2.0

Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct-Dec.

Imports

Exports

Publ. Demand

Priv.InventoriesPriv. Non-Resi.Invt.Priv. Resi. Invt.

Priv.ConsumptionReal GDP

Start of the second Abe administration

Jan. 2016: Introduction of

negative interest rates

Introduction of QQE

Consumption tax increase

Expansion of QQE

110

115

120

125

130

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16

Nikkei 225 (left)

JPY/USD Rate (right)

70

80

90

100

110

120

130

6,000

10,000

14,000

18,000

22,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nikkei 225 (left) JPY/USD Rate (right)

Changes to the Market Environment

5

Nikkei 225 and JPY/USD Rate (Jan. 2007 – Feb. 2016)

Pre-Lehman Crisis From Post-Lehman Crisis to Start of the Second Abe Administration Second Abe Administration

(JPY/USD)Peak in 2015:20,952yen

Global stocks fall on China worries

Fed raises interest

rate

BOJ introduces negative interest

rates

(Yen)


(Yen) (JPY/USD)

RecentPBR 1.07X

(Feb. 24, 2016)Post-Lehman low

PBR 0.81X (Oct. 27, 2008)

Start of the second Abe administrationPBR 1.02X (Dec. 26, 2012)

122.4 130.1

140.2 139.3 154.6

123.5 124.7

0

40

80

120

160

1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2014 FY2015

39.7 44.2

51.0 49.5

63.1

35.4 37.9

0

20

40

60

80

1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2014 FY2015

1416

17

0

5

10

15

20

Interim FY end Interim

FY2014 FY2015

34.3 37.0 38.5 38.5 44.8

24.3 26.3

0

20

40

60

80

1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2014 FY2015

Net Operating Revenues (Y bil) Ordinary Income (Y bil) Profit Attributable to Owners of Parent Company (Y bil) Dividend (Y)

6

Consolidated net operating revenues: Y403 bil; Ordinary income: Y136.5 bil; Profit attributable to owners of parent company: Y95.5 bil for 1Q-3Q FY2015.

Consolidated net operating revenues: Y403 bil; Ordinary income: Y136.5 bil; Profit attributable to owners of parent company: Y95.5 bil for 1Q-3Q FY2015.


Consolidated Results of 3Q FY2015

FY2014 FY20151Q 2Q 3Q 1Q-3Q 1Q-3Q154,663 123,579 124,799 1.0% 392,903 403,042 2.6% 532,220

95,574 91,281 89,331 -2.1% 268,462 276,187 2.9% 361,380

63,113 35,456 37,950 7.0% 135,000 136,519 1.1% 184,578

44,836 24,347 26,354 8.2% 109,968 95,537 -13.1% 148,490

1,272,263 1,258,269 1,261,870 1,196,309 1,261,870 1,238,657

744.30 732.15 734.13 700.85 734.13 725.27

SG&A

Ordinary IncomeProfit (loss) attributable to owners of parent

Shareholders' Equity

BPS (Y)

FY2015 % Changevs

2Q/15

% Changevs

1Q-3Q/14FY2014

Net Operating Revenues

(Y mil)

7

Ⅱ- Achievements in the Medium Term Management Plan

8

Medium Term Management Plan (“Passion for the Best” 2017)

In response to the full-fledged start of an era of transition from savings to investment,attract customers with the industry’s top quality, and become their best partner

Provide investment services to lead the era of transition from savings to investmentBasic Policy 1: Pursue best quality Establish product and service platforms in response to the needs of a wide range of

investors Strengthen asset management abilities Expand the pool of talented personnel with advanced expertise

Basic Policy 2: Dramatically expand the customer base and revenue Strengthen approach to a wide range of investors by leveraging product and service

platforms Dramatically expand the customer base and revenue by responding to growing

investment needs

Basic Policy 3: Support the sustainable growth of companies and the development of new industries Identify and develop next-generation growth companies and help them to raise capital for growth Provide solutions in response to corporate globalization and M&A needs

Numerical targets

FY 2017FY 2016FY 2015

Provide solutions that contribute to the improvement in corporate value

1. ROE: 10% or more 2. Fixed cost coverage ratio :75% or more in the final fiscal year

Positive cycle of “transition from savings to

investment”

and “improvem

ent of corporate value”


6.3%

12.8%

9.7%10.2%

8.6%

17.0%

12.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY2012 FY2013 FY2014 3Q FY2015

45%

56%

62%68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

50

100

150

200

250

FY2012 FY2013 FY2014 3Q FY2015(Annualized)

Fixed Cost Coverage Ratio: 75% or more in the final fiscal year (FY2017)ROE: 10% or more


Progress of Medium Term Management Plan (Numerical Targets)

Fixed cost （Y bil）

Stable revenues （Y bil）

Fixed cost coverage ratio

Shareholders’ equity （Y bil） ROE

ROE（excl. effect of losses carried forward belonging to Daiwa Securities）

Profit attributable to owners of parent company （Y 100mil）

*Stable revenues consist of :AM Management fees（including investment advisory fees）, agency fees, Daiwa Next Bank profit margins, Daiwa Office Investment net operating revenues, Daiwa Real Estate AM management fees, management fees on SMA/Fund Wrap, interest fees on margin, interest fees on LMS etc.

9

（Annualized）

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

10

20

30

40

50

60

70

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Fixed Cost (left) Stable Revenues (left) Fixed Cost Coverage Ratio (right)

Trend of Fixed Cost Coverage Ratio

10


Trend of Stable Revenues, Fixed Cost, and Fixed Cost Coverage Ratio

(Y bil)

The Group will aim to further strengthen its robust business structure through disciplinary cost control and steady expansion of stable revenues.

The Group will aim to further strengthen its robust business structure through disciplinary cost control and steady expansion of stable revenues.

Passion for the Best “2014” （FY2012-FY2014）

Passion for the Best “2017”

（FY2015-FY2017）

Expansion of Stable Revenues

11

Factors for Changes in 3Q FY2015 Stable Revenues (Annualized)

（Y bil）

+10%Stable Revenues

Wrap-related fees

Agency feesfor investment

trusts

Daiwa AM/Daiwa SB management fees

Daiwa Next Bank profit margins

Others(including real estate AM,

interest fees on margin, etc.)

The Group’s stable revenues for 3Q FY2015 (annualized) have increased approximately 10% from FY2014, mainly due to expansion of AUM for wrap accounts.

The Group will continue to focus on expanding stable revenues centered on wrap accounts and asset management business, while also enhancing the foreign currency deposit business at Daiwa Next Bank.

The Group’s stable revenues for 3Q FY2015 (annualized) have increased approximately 10% from FY2014, mainly due to expansion of AUM for wrap accounts.

The Group will continue to focus on expanding stable revenues centered on wrap accounts and asset management business, while also enhancing the foreign currency deposit business at Daiwa Next Bank.


0

12

Business Opportunities and Basic Policies

Business opportunities expected over the medium term: full-fledged start of an era of transition from savings to investment

Expected demandIncrease in securities investment needs among all citizens

and householdsIncrease in funding demand among growing companiesIncrease in corporate activities including M&As aimed

at improving ROE

Basic policies aimed at achieving the positive cycle of “the transition from savings to investment” and “the improvement in corporate value”

Provide investment services that lead the era of transition from savings to investment

Provide solutions that contribute to the improvement in corporate value

Move away from deflation Spread of successful investment experiences

Government support on policies and systems

Enhancement of companies’ earnings power

Dramatically expand the customer base and revenue

Identify and develop next generation growthcompanies and help them raise capital to growPursue best quality

Basic Group Strategies

Finance and Risk management Finance and Risk management Human resourcesHuman resources ITIT

Establish product and service platformsin response to the needs

of a wide range of investors

Strengthen asset management abilities

Identify and develop next generation growth companies and help them

raise capital to grow

Provide solutions in response to corporate globalization and M&A needs

Promote alliance strategy actively, mainly in Asia

Basic

policiesK

ey Themes


13

Ⅲ- Progress of Individual Strategies for Basic Policies

0

20

40

60

80

100

120

140

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1H 2H 1H 2H 1H 2H 3Q

FY2012 FY2013 FY2014 FY2015

Contract AUM (left) Number of Contract (right)

Expansion of Fee-based Products and Services (Wrap Account Services)

14

Future of Daiwa’s Wrap Account ServicesChange in AUM of Wrap Accounts

AUM for wrap account services (SMA and fund wraps) at Daiwa Securities were Y1.5 tri. (as at the end of Dec. 2015). Respond to a wide range of customer needs through various product line-up and by expanding sales channels. AUM for wrap account services (SMA and fund wraps) at Daiwa Securities were Y1.5 tri. (as at the end of Dec. 2015). Respond to a wide range of customer needs through various product line-up and by expanding sales channels.

Value Added

Minim

um investm

ent

Advancedfund wraps

Wrap services for asset forming generation

Large

SmallLow High

Existing service

New service

Low-cost wrap services using

the Internet

SMA

Fund wraps

Wrap account market

U.S.≈ Y581 tri.

Individual financial assets

JapanY5.1 tri.

※ U.S. figures are calculated at $1＝119.88 yen (end of Sept. 2015)* Japan and U.S. assets are as of the end of Sept. 2015

93xU.S.

≈ Y8,260 tri.

4.9x

Ⅲ- Progress of Individual Strategies

Y1.5 tri.

Wrap services for the wealthy

Wrap services for wealthy individuals, with wealth planning

services added

Increase value of existing fund

wraps

Establish product and service platforms in response to the needs of a wide range of investors

(Y bil)（thousands）

Highly customizablefund wraps for wealthy

individuals and corporate clients

JapanY1,684 tri.

Respond to the Expanding Inheritance Business

15

Responding to the Shift of Assets through Inheritance

By placing inheritance consultants and increasing the number of application for “Inheritance Total Service”, we prepare to respond to the shift of assets through inheritance.

By placing inheritance consultants and increasing the number of application for “Inheritance Total Service”, we prepare to respond to the shift of assets through inheritance.

Placement of Inheritance Consultants

(Dec. 2014 - )

Inheritance Total Service*(Jan. 2012 - ）

Expansion of inheritance market(Approx. Y50 tri./yr.,

increasing trend)

Increase in inheritance tax rate (Jan. 2015 - )

Shift of assets through inheritance

Enhance capability to tailor to the needs of customers

Prevent cash out(Bring in new assets)

Ⅲ- Progress of Individual Strategies Establish product and service platforms in response to the needs of a wide range of investors

Number of Staff Involved in Inheritance Business*

Application for Inheritance Total Service*

* Mar. 2013 is indexed as 100

※Placed at 40 branches (Dec. 2015)

* Mar. 2013 is indexed as 100

* Provide one-stop service from before to after inheritance (including connecting customers to outside specialists).

100

198

Mar. 2013 Dec. 2015

Number of Staff at Wealth Management Dept.

Number of Inheritance Consultants

100

303

Mar. 2013 Dec. 2015

Total Number of Application forInheritance Total Service

16

Further develop the securities-banking business model to serve as a gateway from savings to investments and as a platform for comprehensive financial services.

Further develop the securities-banking business model to serve as a gateway from savings to investments and as a platform for comprehensive financial services.

Daiwa Next Bank: Deposit Balance and Number of Accounts

Y3.3 tri.

(Y bil）（thousands）

Cross-selling Ratio and Purchased Products (Total)

Fund wraps

Stock investment trusts

Equity

Foreign bonds

Domestic bonds

Overseas ATM

Shopping

Expansion of Foreign Currency Deposits～Introduction of Tie-up Prepaid Card～

Daiwa Next Bank Money Partners

【Card holder account】

Foreign currency deposits

Top up(foreign

currency)

Repayment(foreign

currency)

Overseas prepaid card

Launch event to be held on Mar. 23, 2016【Foreign currency

deposit account】


Further Develop the Combined Securities-Banking Business Model

0

200

400

600

800

1,000

1,200

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Mar. 2013 Mar. 2014 Mar. 2015 Dec. 2015

Foreign Currency Deposit (left)

Yen Deposit (left)

Number of Accounts (right)

Newly-opened time deposits: yen denominated time deposits that have been placed within three months of opening time deposit accounts * Cross-selling ratio: accumulated total accounts of cross-selling / accumulated total accounts of newly-opened time deposits

Improve Consulting Services in Quality and Quantity - Increase Interaction with Clients -

17


Aim to enhance the quality and quantity of proposals to customers by continuing to expand our domestic branch network, and increasing capacity and staff at Contact Centers.

Aim to enhance the quality and quantity of proposals to customers by continuing to expand our domestic branch network, and increasing capacity and staff at Contact Centers.

Monthly Average of Proposals Made by Sales Reps

※ Monthly average proposals for FY2013 are indexed as 100.

Domestic Branch Network Number of Seats at Contact Centers

100 106

110

FY2013Monthly Average

FY2014Monthly Average

Apr. 2015 - Jan. 2016Monthly Average

480 510620

Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016

5 14 22 26123132

140 144

2013.3 2014.3 2015.3 2016.1

Sales OfficeBranch

25

100

0

40

80

120

2Q FY2014 3Q FY2015

No. of Registered NISA Incremental Account

Acquired 9.6%

Expand New Client Base Centered on Inbound-Type Clients

18

Continue making multidimensional efforts in order to expand new client base. Continue making multidimensional efforts in order to expand new client base.

Number of NISA Accounts with Accumulative Services Business Collaboration with GMO Click Holdings

Number of NISA accounts with accumulative services was 100,000, total amount purchased was Y16.1 bil, expanding significantly compared to 2Q FY2014

Currently discussing the specifics for business collaboration agreement.

Daiwa Securities

Group

GMOClick HDGroup

Capability to provide products and information globally

System development capabilityYoung customer base

（thousand）

≈ 16x≈ 4x


（Y bil）

Funds Dedicated to Direct Course Service

Set up no-load index funds, which are popular with a wide range of investors, including those with modest experience in investing.

Dec. 2015: Started sale of “Daiwa No-Load Nikkei 225 Fund” and “Daiwa No-Load J-REIT Fund”

Mar. 2016: Plan to expand product line-up

1

16.1

0

5

10

15

20

2Q FY2014 3Q FY2015

Amount Purchased through NISA Incremental Account

19

Total AUM of stock investment trusts (excluding ETFs) for the two asset management companies (Daiwa Asset Management and Daiwa SB Investments) have maintained the largest share in the industry.

Daiwa Asset Management, together with Mirae Asset Global Investments in Korea, has launched a new equity fund. Fund with the same scheme is also being distributed in Korea (distributed by Mirae Asset Securities, etc.).

Total AUM of stock investment trusts (excluding ETFs) for the two asset management companies (Daiwa Asset Management and Daiwa SB Investments) have maintained the largest share in the industry.

Daiwa Asset Management, together with Mirae Asset Global Investments in Korea, has launched a new equity fund. Fund with the same scheme is also being distributed in Korea (distributed by Mirae Asset Securities, etc.).

Daiwa AM +Daiwa SB

Company A

Daiwa AM

Company B

Company C

Daiwa SB

Apr. 2005 to Jan. 2016AUM of Investment Trusts (excluding ETF)

（Y tri）


New Fund Launched by Mirae Asset* and Daiwa Asset Management～Diversifying Asset Management and Distribution Channels～

Daiwa ／Mirae Asset Asia Equity Fund

At monthly fund committee which consists of 「Mirae Asset Global Investments」 and 「Daiwa Asset Management」, the allocation between Asia/Oceania and Japan equity is discussed and determined through both quantitative and qualitative analysis (launched on Jan. 21, 2016).

Candidate stocks

Potential stocks

Quantitative analysis

Qualitative Analysis

Asia / Oceania equity

≈ 40 stocks

Candidate stocks

Potential stocks

Quantitative analysis

Qualitative Analysis

Japan equity

≈ 40 stocks

Image of model portfolio

* Established in 1997, Mirae Asset Global Investments Group is one of the largest asset management companies in Korea. It manages an AUM of 77.6 billion USD (approx. Y9.4 tri.) globally and is strong in emerging markets.


Strengthen Asset Management Abilities（Investment Trusts）

0

2

4

6

8

10

12

1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H Jan.

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Expansion of Asset Management Business- Real Estate and Infrastructure -

20

Since the asset management company of Japan Rental Housing Investments, Mi-Casa Asset Management, has been made a consolidated subsidiary, assets under management for the 4 real estate investment trusts have exceeded Y760 bil.

In light of negative interest rates, demand for products with stable returns, such as J-REITs and infrastructure funds, is expected to increase. Made IDI infrastructures Inc., a fund management company specializing in infrastructure, a subsidiary.

Since the asset management company of Japan Rental Housing Investments, Mi-Casa Asset Management, has been made a consolidated subsidiary, assets under management for the 4 real estate investment trusts have exceeded Y760 bil.

In light of negative interest rates, demand for products with stable returns, such as J-REITs and infrastructure funds, is expected to increase. Made IDI infrastructures Inc., a fund management company specializing in infrastructure, a subsidiary.

（Y bil）

AUM of Real Estate Asset Management

J-REIT Market Size

Current （Jan. 2016）

Market Cap Y10.7 tri. （3.7x）Asset Size Y14.1 tri. （1.8x）

Daiwa’s entry into real estate AM business （Jul 2009）

Market Cap Y2.9 tri.Asset Size Y7.7 tri.

（Source）Association for Real Estate Securitization, Bloomberg


Increasing Business Opportunities

Introduction of negative interest ratesIntroduction of negative interest rates

Expansion of investor basefor J-REITs

Infrastructure Fund Management Company as a Subsidiary

Increased difficulties in money managementMore need for investment into products with stable returns

Increased difficulties in money managementMore need for investment into products with stable returns

Infrastructure funds, as they areless susceptible to economic

fluctuations become more appealing

Power retailers

Infrastructure Funds

Environment, etc.

Management

Investment

Subsidiary

Thermal power plants

Renewable energy plants


355 418

477

761

0

100

200

300

400

500

600

700

800

900

Mar. 2013 Mar. 2014 Mar. 2015 Dec. 2015

Japan Rental Housing Inv (residential)

Nippon Healthcare Investment Corp (healthcare facilities)

Daiwa Residential Private Investment Corp (residential)

Daiwa Office Investment Corp (offices)

21

Selected Cross-border Deals (FY2015 1Q-3Q）Global M&A Quadri-Polar Structure

Amount/Number of M&As Involved by Japanese Companies

Europe (DCA)

Japan

U.S. (Sagent Advisors)

Asia / Oceania（DCM & alliance partners）

Share acquisition of DeLclima (Italy) by Mitsubishi Electric Corporation

Acquisition of TGE Marine AG （Germany） by Mitsui Engineering & Shipbuilding Co. Ltd.

Acquisition of MIMS Group （Singapore） by SMS Co., Ltd. and Mitsui & Co., Ltd.

Acquisition of VTN Beteiligungsgesellschaft mbH(Germany) by IHI Corporation

（Y tri）

Promote support for providing cross border M&A solutions utilizing a quadri-polar structure spanning Japan, Asia, Europe (Daiwa Corporate Advisory) and the U.S. (Sagent Advisors).

Promote support for providing cross border M&A solutions utilizing a quadri-polar structure spanning Japan, Asia, Europe (Daiwa Corporate Advisory) and the U.S. (Sagent Advisors).

（Source）Compiled by Daiwa Securities based on Recof M&A database. Amount is calculated based on available figures.

Provide solutions in response to corporate globalization and M&A needsⅢ- Progress of Individual Strategies

Provide Solutions to M&A Needs with Quadri-Polar Structure

0

500

1,000

1,500

2,000

2,500

3,000

0

2

4

6

8

10

12

14

16

18

2009 2010 2011 2012 2013 2014 2015

OUT-ININ-OUTIN-INNumber of Deals (right)

Enhance business network in Asia through expanding alliance network with leading Asian financial institutions. Enhance business network in Asia through expanding alliance network with leading Asian financial institutions.

Bahana Securities

Sept. 2013, business alliance(Indonesian equity research / IB)

Proactive Promotion of Alliance Strategy with a Focus on Asia

22


AustraliaNew Zealand

Indonesia

Malaysia

Thailand

Vietnam

Philippines

Australia and New ZealandBanking Group

Feb. 2014, business alliance(M&A covering Australia, NZ)

China Securities

Nov. 2014, business alliance(IB/GM covering China)

Saigon Securities

Jun. 2008, business alliance(comprehensive business covering Vietnam)

Thanachart Securities

Feb. 2013, business alliance(Thai equity research)

Affin Hwang Investment Bank

Dec. 2013, business alliance(Malaysia equity research)

Development Bank of Philippines

Mar. 1995, joint venture

China

Proactive promotion of alliance with a focus on Asia

Nov. 2015 business alliance(IB covering the Philippines)

Increase stake in 2016Plans to become equity method affiliateFeb. 2016: Application for minority stake

Plans to become equity method affiliate

* Application already submitted to Bank Negara Malaysia

23

Ⅳ- Basic Group Strategies

24

Capital Policy Aimed at the Sustainable Improvement of Corporate Value

Secure capital and liquidity capable of responding to tighter international financial regulations

Establish a financial base for maintaining and improving credit rating

Secure financial flexibility that enables agile investments for growth under any environment

Continue strict risk control

Maintenance of FinancialSoundness

Strengthen Shareholder Returns

Improvement of Capital Efficiency

Invest management resources appropriately in business areas with high growth and profit potential in Japan and overseas with a focus on capital efficiency (ROE)

Aim to reduce capital cost by diversifying risks through expansion of the business portfolio

Aim for stable dividend growth by continuously improving earning power

Feasibility of share buyback will be reviewed by taking a comprehensive look at factors including the business environment, financial conditions, regulatory requirements, and level of stock price

Accumulate profits

FY2014 FY2015onwards

Improve Daiwa’s sustainable corporate value

Image of Capital

Strengthen shareholder returns

Invest in growth areas

Ⅳ - Basic Group Strategies

Strive for an optimum balance between “maintenance of financial soundness”, “improvement of capital efficiency” and “strengthening of shareholder returns”, and ultimately aim for sustainable corporate value.

25

Raised dividendpay-out ratio

Raised dividendpay-out ratio

In order to strengthen shareholder returns, we raised our dividend pay-out ratio from 30% to 40% beginning this fiscal year.

Aim to maintain an upward trend of dividends by continuously improving our earnings power.

In order to strengthen shareholder returns, we raised our dividend pay-out ratio from 30% to 40% beginning this fiscal year.

Aim to maintain an upward trend of dividends by continuously improving our earnings power.

Share repurchaseprogram

Share repurchaseprogram

Aim to strengthen shareholder returns through increased capital efficiency. Date of resolution： Jan. 28, 2016 Total numbers of shares to be repurchased：up to 27 mil shares, 1.57% of total shares

outstanding (excluding treasury stock). Total amount to be paid for repurchase： up to Y20 bil

Aim to strengthen shareholder returns through increased capital efficiency. Date of resolution： Jan. 28, 2016 Total numbers of shares to be repurchased：up to 27 mil shares, 1.57% of total shares

outstanding (excluding treasury stock). Total amount to be paid for repurchase： up to Y20 bil


12

17 1714 16

50.5%

32.4% 31.1%37.8%

33.4% 35.5%

42.1%

3

17

FY2012 FY2013 FY2014

Interim Year-endFY2015InterimInterim Year-endInterim Year-end

Passion for the Best “2014” （FY2012-FY2014）

Passion for the Best “2017”Passion for the Best “2017”（FY2015-FY2017）

Dividend per share（JPY）

Pay-out ratio（Actual）（％）

Pay-out ratio（％）

40%

30%

Strengthen Shareholder Returns

Maintenance of Financial Soundness

26

Financial SoundnessFinancial Soundness Consolidated total capital ratio was 21.8% (provisional) at the end of December 2015, but we

aim to secure sufficient level of capital and liquidity to give leeway in case of extreme market downturn and to respond to the tightening global financial regulations.

Consolidated total capital ratio was 21.8% (provisional) at the end of December 2015, but we aim to secure sufficient level of capital and liquidity to give leeway in case of extreme market downturn and to respond to the tightening global financial regulations.

Consolidated Total Capital RatioConsolidated Total Capital Ratio

Capital

Risk Asset

D-SIBs buffer

Capital conservationbuffer

＋0.5％

＋2.5％

Countercyclicalbuffer

Up to＋2.5％

Review of the CVArisk framework

Fundamental review of the trading book

Upwardfactor

Upwardfactor

Increase of risk asset at times of stress

Upwardfactor

Required level of capital 8.0％

Damage to capital at times of stress

Downward factor

≪Factors to Increase Qualifying Capital ≫

≪Factors to DecreaseCapital Adequacy Ratio≫


3

21

0

20

40

2005.03 2015.12

HR Strategy

27

In order to become the “customers’ first choice” securities group, employees are the most valuable asset for the Group. By strategic placement of human resources and planned training, we aim to strengthen organizational capabilities.

Supporting the Success of“Young Employees”

Improve internal education system to nurture professionals with high loyalty and to retain young employees.

Improve “Daiwa Basic Program”(Basic education for the first two

years)

Supporting the Engagement of “Veteran Employees”

『Advanced Skill-building Program（ASP）』

Expanded programs for improving skills to continue succeeding as professionals.

Establish “License Certification System”

Established an incentive system to create a corporate culture in which employees are eager to continue developing as professionals regardless of age.

Promoting Health Management

Supporting the Success of “Female Employees”

Selected as “Health and Productivity Companies”, “Nadeshiko Brand”

40 companies selected25 companies selected

Increase in number of female branch managers andmanagers (Daiwa Securities)

Appointment of CHO（Chief Health Officer)

Branch managers

Managers

（14 companies have been selected for two consecutive years）

60

239

0

100

200

300

2005.03 2015.12

Organizational structure to carry out health management

“Health Management Promotion Meetings” are being held regularly, and “Health Management Promotion Section” was established within HR Dept.

Establish an incentive system for employees

Points will be given to employees that participate in health promotion related events and training programs.


Expand Education and Training Program

Significantly expanded our education and training program by implementing new e-learning programs including online universities, sending employees to overseas business schools, and providing support to obtain certifications.

28

Appendix

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

07/1 07/7 08/1 08/7 09/1 09/7 10/1 10/7 11/1 11/7 12/1 12/7 13/1 13/7 14/1 14/7 15/1 15/7 16/1 年/月

PBR（東証1部上場企業）

0102030405060708090

100

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

%

PBR1倍割れ企業比率（東証1部上場企業）

PBR and % of Companies with PBR Below 1x for TSE 1st Listed Companies

29

Total no. of TSE 1 listed companies： 1,935Of which no. of companies with PBR below 1x： 1,079

pre-Lehman high2.04 （2007/2/26）

Peak after start of Abenomics1.44 （2015/6/24）

post-Lehman low0.81 （2008/10/27）

start of the second Abe administration1.02 （2012/12/26） Recent

1.07 （2016/2/24）

日次データ

月次データstart of the second Abe administration

64.8% （2012/12）post-Lehman high77.6%（2009/2）

Lowest ratio after start of Abenomics40.7% （2015/5）pre-Lehman low

24.5% （2007/1）

PBR level of 1.0x

50%

Most recent55.8% （2016/2/24）

Appendix

PBR (TSE1 Listed Companies) daily data

% of Companies with PBR Below 1x (TSE1 Listed Companies) monthly data

(Source) Compiled by Daiwa Securities based on Factset and Quick data

30

Appendix

Corporate Earnings (Daiwa 200*)

Estimated FY2015 Dividend Yield for TSE 1 Listed Companies and 10-year JGB Yield

Corporate Earnings, Estimated Dividend Yield for TSE 1st Listed Companies and 10-year JGB Yield

2.19%

-0.055%

※As of Feb. 24, 2016 (Source) Compiled by Daiwa Securities based on Factset data

* Earnings estimation by Daiwa Securities consists of 199 major listed companies, excluding financials institutions.

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

0

5

10

15

20

25

30

35

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015E FY2016E FY2017E

Ordinary Income of Daiwa 200 Companies (left) % Change in Ordinary Income (right)（Y tri）

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Dividend Yield－10-year JGB Yield Dividend Yield 10-year JGB Yield

2.14%

31

Management Vision for 2020

“Be the First Choice”Lead the development of capital markets in Japan and Asia,

and be the customer’s first choice securities group

Management Vision

Basic Management Policy

Achieve sustainable growth by linking Japan

to the growth of Asia

Leverage the industry's top quality and dramatically expand our customer base

Contribute to the development of society and economy through financial and capital markets

Appendix

32

Daiwa Securities Group Inc.Investors Relations

TEL: +81-3-5555-1300 FAX: +81-3-5555-0661E-mail: [email protected]

URL: http://www.daiwa-grp.jp/ir/english

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