2023
Annual ReportMessage from the CEO

We sincerely appreciate your continuing support for The Nomura
Trust and Banking.

Name:

The Nomura Trust and Banking Co., Ltd.

Established:

August 24, 1993

Under these circumstances, we, as a member of the Nomura Group, have worked to strengthen
collaboration with other Group companies to oﬀer high-quality products and services, in order toachieve our strategy of expanding our business from “public” to “private.”

Paid-in Capital: 50 billion yen
Outstanding
Shares:1,400,000 shares

Shareholder:

Nomura Holdings, Inc. (Number of shares held: 1,400,000 shares, holding
ratio: 100%)

Head Oﬃce:

2-2-2, Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan+81 (3) 5202-1600

Message from the CEO

Corporate Data (As of July, 2023)

The economic markets this ﬁscal year were signiﬁcantly aﬀectedby policy changes, including austerity measures meant to control
inﬂation, particularly in Europe and North America, as well as asoftening stock market due to worries that higher interest rates
could cause an economic recession, and the abrupt collapses ofAmerican regional banks. Domestically, the Bank of Japan revised
its monetary easing measures at last Decemberʼs Monetary
Policy Meeting, expanding the permitted long-term yield range. The decade-long policy of “anotherdimension” monetary easing, intended to help put an end to deﬂation, is about to reach a turning
point.

The investment trust assets under custody totaled 31.6004 trillion yen at the end of March 2023,
due to efforts such as sales promotion targeting client expansion. In addition to “Wrap-Trust,” aproduct targeting individual customers, we have also seen an increase in the number of contracts
for trusts that meet the needs of corporate customers. Our total trust balance remains strong, at
39.3293 trillion yen at the end of March 2023. Due to our continued eﬀorts to strengthen sales
promotion and to further increase cooperation with Nomura Securities, which is our banking agent,
the outstanding loan balance was 798.2 billion yen at the end of March 2023. Additionally, thevolume of our inheritance-related services saw a steady increase and a record high. As a result of
these business activities, for the ﬁscal year ended March 2023, we reported an ordinary proﬁt of 2,245
million yen and a net income of 1,546 million yen.
In December of last year, we established our Sustainability Policy, with the goal of bringing abouta sustainable environment and society. Financial institutions promise to play an active role insustainability eﬀorts. We will continue to address issues such as climate change based on this policy.

Disclosure 2023

As a company, we value diversity and engagement, so that each of our employees can reach theirfull potential in terms of both productivity and creativity. When employees with various values work
together, we become able to provide greater-added-value services to meet our customersʼ needs,
while also moving forward with initiatives to achieve work styles that let employees grow as people.

■ Message from the CEO ............................... 1■ Directors, Senior Managing Directors and Employees ... 18■ Overview of Our Business .......................... 2■ Business Description................................. 19■ Internal Control System ............................. 6■ Company History ....................................... 20■ Organizational Chart ................................ 17■ Financial Data............................................. 21

This August, we celebrate the thirtieth anniversary of our founding. We wish to express our sincere
gratitude for the support and patronage we have received over the years. As a member of the
Nomura Group, we shall further strengthen our relationship with other Nomura Group companies,and contribute to the creation of a rich society by creating new value for our clients with a sense of
speed. We appreciate your continuing support.
July 2023

Shinichi Okada
Issued in August 2023 by the Corporate Planning Department, The Nomura Trust and Banking Co., Ltd.

President and Chief Executive Oﬃcer

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

1

Overview of Our Business
Key Management Indicators

1. Proﬁt Performance

Changes in Key Management Indicators
Item(Millions of yen)

FY2018FY2019FY2020

FY2021

FY2022

Profit and loss

Regarding the state of proﬁts, net fees and commissions increased by 1,480 million yen from the last ﬁscal year, net interest
income increased by 820 million yen from the last ﬁscal year, and net other operating income decreased by 5,049 million
yen from the last ﬁscal year; therefore, gross operating proﬁt decreased by 2,142 million yen from the last ﬁscal year, for a
total gross operating proﬁt of 18,810 million yen. Total net business proﬁt decreased to 2,393 million yen due to an increasein expenses.
As a result, ordinary proﬁt was 2,245 million yen, and net income was 1,546 million yen.

24,81024,12725,28927,946

31,400

2,093

580

845

5,019

2,393

Core net business profit

2,093

1,062

845

4,818

2,463

Table of Proﬁt PerformanceCore net business profit excluding
gains(losses) on bonds

1,691

1,439

△ 705

5,138

6,725

Item

Core net business profit excluding
gains(losses) on bonds andcancellation on investment trusts

1,728

1,438

△ 630

5,224

6,725

Ordinary profit

2,096

590

1,102

3,612

2,245

Net income

1,359

231

743

2,345

1,546

35,00035,00050,00050,00050,000

800

800

1,400

1,400

1,400

Net assets

61,57557,22890,46988,87889,556

Total assets

1,475,334

1,399,316

1,605,548

1,640,057

1,923,274

Balance of deposits

981,328

864,999

931,671

1,027,863

1,172,191

Balance of loans

601,520535,517604,302712,980

798,222

Balance of securities

489,558

489,779

432,409487,554

325,974

Assets, liabilities and capital
Capital stock
Issued stock (thousands)

Per share information

71,53564,62063,484

63,968

840

—

265

835

550

Net income per share (yen)

1,699

289

549

1,675

1,104

Dividend payout ratio (%)

49.43%—

49.90%

49.82%

49.80%

460

484

489

505

536

Non-consolidated capital
adequacy ratio (%)

16.99%

15.76%

19.00%

15.80%

19.92%

Return on equity (%)

2.22%

0.38%

1.00%

2.61%

1.73%

Annual dividends per share (yen)Number of employees

Trust accountTrust fees
Assets held in trust
Balance of loans and bills discounted
Balance of securities

FY2019FY2020

FY2021

16,367

16,545

16,90920,952

18,810(2,142)Trust fees

9,042

9,406

10,302

12,074

12,680605

Net interest income

6,986

6,375

3,542

3,929

4,750

820

Net fees and commissions

1,329

1,425

1,378

3,462

4,942

1,480

Net other operating income

(992)

(662)

1,685

1,485

(3,563)(5,049)Provision of general allowance forloan losses (deduction)

—

482

—

(200)

70

270

General and administrative expenses(excluding non-recurring expenses)

14,273

15,482

16,064

16,133

16,346213

Personnel expenses

5,236

5,623

5,969

6,228

6,410

182

Non-personnel expenses

8,466

9,100

9,124

9,041

9,088

47

570

758

970

863

846

(16)

2,093

580

845

5,019

2,393

(2,626)2

9257(1,406)

(147)

1,259

Gross operating profit

Taxes
Net business profit

9,042

9,406

10,302

12,074

12,68022,963,542

31,162,421

38,874,173

39,329,306

319,181289,761

305,881358,184

328,134

2,785,713

3,115,012

4,297,458

4,831,364

5,493,243

—

—

—

0

—

0

Gain and loss on loans sold

(1)

—

—

—

(164)

(164)

Gain and loss on sales ofstocks and other securities

—

—

—

4

—

(4)

Reversal of allowance
for loan losses (deduction)

142

—

292

—

—

—

—

—

—

1,373

(15)

(1,389)

2,096

590

1,102

3,612

2,245

(1,366)

38

11

20

35

19

(16)

38

11

20

35

19

(16)

Provision of specific allowance
for loan losses (deduction)

Extraordinary income
Other

65

64

7

280

0

(280)

Loss on disposal of chattel and real estate

65

55

7

0

0

0

Impairment loss

—

9

—

—

—

—

Other

—

—

—

279

—

(279)

2,068

536

1,116

3,368

2,265

(1,102)Extraordinary loss

Income before income taxes
Income taxes-current

583

775

1,882

4,481

2,673

(1,808)

Income taxes-deferred (deduction)

126

(470)

(1,509)(3,459)(1,953)

1,505

709

305

372

1,022

719

(302)

1,359

231

743

2,345

1,546

(799)

Total income taxes
Net income

2

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Net Increase(Decrease)

Writing-oﬀ loans

Ordinary profit

21,673,956

FY2022FY2018

Non-recurring profit (loss)

76,969Net assets per share (yen)(Millions of yen)

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Overview of Our Business

Overview of Our Business

Ordinary income
Net business profit

3

Overview of Our Business
2. Status of Trust Assets

3. Status of Capital Adequacy

Regarding the status of trust assets, the balance of speciﬁed money trusts under custody increased by 497.9 billion yen fromthe last ﬁscal year, for a total balance of speciﬁed money trusts under custody of 2,933 billion yen, and the balance of pecuniary
trusts other than money trusts under custody increased by 170.2 billion yen from the last fiscal year, for a total balance of
pecuniary trusts other than money trusts under custody of 709.2 billion yen.
The total trust balance increased by 455.1 billion yen compared to the end of the previous ﬁscal year, for a total of 39,329 billion
yen.

March 31,2020

March 31,2021

March 31,2022

March 31,2023

Designated Money Trusts

493,681

419,831424,416

448,912418,450

Specified Money Trusts

1,578,833

1,807,546

2,118,286

2,435,357

2,933,316

1,041

911

924

812

819

17,319,480

18,040,589

24,921,759

31,855,479

31,600,417

252,469

317,916

373,622538,971

709,239

1,064,651

1,404,928

2,344,634

2,530,131

2,599,658

3,719

3,061

2,288

1,579

1,519

960,077

968,757

976,488

1,062,929

1,065,884

21,673,956

22,963,542

31,162,421

38,874,173

39,329,306

Investment Trusts
Pecuniary Trusts other than Money Trusts
Securities Trusts
Monetary Claims Trusts
Composite Trusts
Total

Item
Core capital: instruments and reserves[A]Core capital: regulatory adjustments[B]

March 31,2020

March 31,2021

March 31,2022

March 31,2023

61,34462,05892,137

93,114

93,960

4,531

5,852

5,117

4,092

3,643

56,81356,20587,02089,02290,317On-balance sheet items

291,400

306,546

403,221503,339401,103

Oﬀ-balance sheet items

7,617

12,331

13,461

14,182

7,568

CVA risks(divided by multiplying the capital requirement by 8)

3,416

5,733

9,280

10,246

4,521

Operational risks(divided by multiplying the capital requirement by 8)

31,93531,96031,94135,57739,989[D]

334,370

356,571457,905

563,346

453,182

Capital adequacy ratio (domestic standard)(= [ C ] / [ D ] ×100 )16.99%

15.76%

19.00%

15.80%

19.92%

Risk assets

Total(Note) Capital adequacy ratios are calculated with the formula speciﬁed in Notiﬁcation No. 19 of the 2006 Financial Services Agency, based on theprovisions of Article 14:2 of the Banking Act.

Results of Main Business<Lending>

Ratio of Trust Assets
Composite Trusts 2.71%
Monetary Claims Trusts
0.00%

Designated Money Trusts 1.06%
Speciﬁed Money Trusts 7.45%
Pension Trusts 0.00%

Securities Trusts
6.60%
Pecuniary Trusts otherthan Money Trusts
1.80%(Millions of yen)March 31,2019

Overview of Our Business

Overview of Our Business(Millions of yen)March 31,2019

Pension Trusts

Capital Adequacy Ratio on Non-consolidated Basis (Domestic Standard)

Capital amount [C ](= [ A ] - [ B ] )Table of Balance of Trust Assets
Liabilities

The capital adequacy ratio at the end of March 2023 was 19.92% (domestic standard), maintaining a sound level.

In addition to loans to corporate customers, we also extend loans broadly
to individual customers through loans secured by securities called“Nomura Web Loan” which is oﬀered via “Banking Service.”
The balance of loans as of the end of the current ﬁscal year stood at 798.2
billion yen.

Loan balance(Millions of yen)
900,000

Corporate

Individual

800,000
700,000
600,000
500,000

297,164

154,438
179,452

400,000

361,183

225,006

300,000
200,000

447,081356,065

379,296

415,816

437,039

100,000
0(As ofMarch 31,2023)

March 31, March 31, March 31, March 31, March 31,
2019
2020
2021
2022
2023

(Note) Corporate includes loans to the trust account.

Investment Trusts
80.34%<Investment Trust Administration Business>

Balance of Investment trusts under custody(Billions of yen)

The total balance of investment trusts under custody stood at 31,600
billion yen.
We received an unqualified opinion in accordance with the Statementon Standards for Attestation Engagements No.18 (SSAE 18) in an audit
performance by an independent auditor, and we are working hard tofurther improve the quality of our administrative operations.

31,85533,00031,60031,00029,00027,00024,921

25,00023,00021,00019,00017,00017,31918,040March 31, March 31, March 31, March 31, March 31,
2019
2020
2021
2022
2023

4

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

5

Internal Control System – Management
Internal Audit System

As a trust bank of Nomura Group, we are operating our business guided by the integrated strategy of Nomura Holdings, Inc. We have built a management
structure which delivers eﬃcient business operations in conformity with the business line of Nomura Group. Furthermore, by ensuring that our directors
and employees comply with the “Nomura Group Code of Conduct”, we are promoting company management which is appropriate considering therelevant laws and regulations.
The Nomura Trust and Banking Co., Ltd. features a corporate structure with an audit and supervisory committee. We established the Board of Directors as
the body to decide on and to approve important management related matters. The Board of Directors makes decisions regarding our basic management
policy and the allotment of the duties and chain of command for the executive director. The Board entrusts decision-making related to business execution
to the president and representative director, who is also the executive director, in order to speed up the decision-making process. In addition, the Audit andSupervisory Committee, in which the majority of members are outside directors, performs audits of business execution, with the objective of strengthening
our management supervisory functions and improving our managerial transparency. Moreover, we regularly convene the Executive Management Board,chaired by the President and Representative Director, as a body to make decisions regarding, and to approve, important matters and proposals related tobusiness execution to facilitate the speedy execution of our business.
The Audit and Supervisory Committee audits the legality, validity, and eﬃciency of business operations and the execution of duties by the directors andsenior managing directors, by exercising its statutory authority and leveraging the external audit corporation as well as internal organizations. The methods,
progress, and results of audits are reported to the Board of Directors on a regular basis. Our Audit and Supervisory Committee also collaborates with the
Audit Committee of Nomura Holdings as necessary. Furthermore, we have established a Board of Directors Oﬃce, with staﬀ members independent ofbusiness execution, to assist the Audit and Supervisory Committee and non-executive directors in their duties, in order to further strengthen the auditing
and supervisory capabilities of the Audit and Supervisory Committee and Board of Directors over the executive division.
To enhance our internal control procedures, the following committees are established.

We have established the Internal Audit Department, which is independent of all other operational divisions, to review the eﬀectivenessand adequacy of the internal control systems in business execution and risk management systems and to make recommendations for
improvement.
In light of the guidelines set forth by the Institute of Internal Auditors for internal audits, the Internal Audit Department identiﬁes thetype and degree of risks, draws up an annual internal audit plan in consideration of the depth and frequency of audits, and performs
eﬀective audits in accordance with the “Nomura Group Internal Audit Charter” and our “Internal Audit Charter.”
The results of audits are promptly reported to company management and the Audit and Supervisory Committee. Any issues
identiﬁed in the audits are communicated to the relevant operational divisions, so that follow-up for the corresponding situation
actions can be taken, in an eﬀort to further enhance the internal control system.

● Risk Management
Committee:

Deliberates and decides on important matters related to integrated risk management, based on risk
appetite.

● ALM Committee:

Deliberates and decides on matters related to formulation and approval of the basic strategies for fundmanagement and procurement.

● New Products &Services Review
Committee:

Analyzes and evaluates the risks inherent in the provision of a new product or launch of a new businessand gives necessary information to the Executive Management Board when it is making decisions on
the provision of the new product or launch of the new business.

● Investment
Management
Committee:

In addition to deliberating and deciding on investment management policies for trust assets for which
the Bank has discretionary power, and the pros and cons of employing asset management companies
or incorporating investment products into the investment product lineup, as well as individual
management models, etc., also works to share data regarding performance and risk management
conditions of investment products, etc.

Internal Control System – Management

Internal Control System – Management

Management Structure● Asset Risk Management In order to ensure the appropriateness of the management of trust assets for which the Bank has
discretionary power, this Committee regularly veriﬁes the performance, risk management and status
Committee:
of interaction with customers. If necessary, it recommends and instructs the Investment Management
Committee to make improvements and keep all related parties informed about matters.
● DesignatedManagement Trust
Loan Transaction
Review Committee:

Deliberates and makes decisions to ensure that the execution of contracts, and the subsequent
operation and management of trust assets, are handled appropriately from the perspectives ofcustomer protection, conﬂict of interest management, separation of banking and trust operations, andthe management of sensitive corporate information.

● Compliance Committee: Deliberates and makes decisions on compliance with laws and other compliance-related corporate matters.
● Business Improvement Carries out measures to improve overall quality of administration, such as departmental selfinspections, as part of eﬀorts to build a highly eﬀective internal control system, toward businessand Business Quality
improvements and improving the quality of business activities.
Improvement
Committee:

6● Crisis Management
Committee:

Deliberates and makes decisions on the companyʼs crisis management measures.

● Operational Risk
Committee:

Deliberates and coordinates matters related to operational risks to facilitate appropriate and smooth
control of operational risks.

● CS Improvement andCustomer Protection
Committee:

In order to protect legitimate interests, improve customer convenience, and increased customer satisfaction,
we continue to enhance our customer explanation management, customer support management, customer
information management, outsourcing management, conﬂicts of interest management, and CS improvement.

● Sustainability
Committee:

Provides support for the development of a sustainability promotion system and for ongoing eﬀorts,
and reports to the Executive Management Board on progress toward sustainability.

● Speciﬁc Transaction
Committee:

It is composed of members other than current or ex-members of Nomura Group and including external experts. It veriﬁes thatthe independence of bank management is secured when the Company management makes important decisions regarding
its business operations and submits the ﬁndings to the person authorized to make a decision regarding related matters.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

7

Internal Control System – Compliance
Compliance Management System

Compliance Policy
As a member of Nomura Group, we strive to foster a corporate culture and build corporate ethics
focusing on compliance in conformity with the Nomura Group Code of Conduct, and perform honest
and fair corporate activities without violating social norms.
1. Basic Stance Regarding Compliance
Constantly aware of the significance of our social responsibilities and public mission as a financial
institution, we regard the enhancement and establishment of a compliance system as one of ourforemost priority tasks for securing the soundness and appropriateness of operations, and we takeproactive steps to complete this task.
2. Individual Eﬀorts for ComplianceDirectors, senior managing directors and employees of the Company constantly strive to acquire
extensive knowledge, not only of laws and regulations required in business, but also social norms, andact in conformity with a higher level of corporate ethics.
3. Establishment of Social Credibility
We demonstrate our intention to perform honest and fair corporate activities focusing on compliancethrough our accountability to stakeholders, thereby establishing credibility as a member of society.
In accordance with the “Compliance Regulations,” we have formed the Compliance Committee which, chaired by the president
and vice-chaired by the Compliance Oﬃcer appointed by the Executive Management Board, deliberates and makes decisions
regarding compliance related matters in the company. The details of discussions are regularly reported by the Chairman to
the Board of Directors, the Executive Management Board and the Audit and Supervisory Committee members. We draw up
the “Compliance Program” setting out objectives and various measures as an annual compliance action plan. This plan is thendeliberated and reviewed by the Compliance Committee and ﬁnally approved by Executive Managing Board. The progress andachievement status of the measures deﬁned in the “Compliance Program” are regularly reported to the Compliance Committee
and are also reported by the Chairman to the Audit and Supervisory Committee members.
In addition, the Compliance Officer convenes a compliance meeting, etc. for each division to review the progress andachievement status of compliance action plans drawn up by each department and discusses compliance-related issues with the
responsible executive oﬃcer and the heads of departments.
The Compliance Oﬃcer and the Compliance Control Department collaborate to control and manage compliance-related mattersof the Company, and each department appoints a Compliance Manager who promotes compliance activities. The ComplianceManager ensures that all employees pursue operations based on a compliance sprit and common sense and also monitors
compliance activities of the department in charge and makes regular reports to the Compliance Oﬃcer.
Furthermore, we work to improve the level of conduct risk management by promoting the Nomura Group Code of Conduct, andthrough ongoing activities that contribute to enhancing professional ethics and developing a sound, open corporate culture.

Regarding anti-money-laundering/combating the financing of terrorism (AML/CFT), the Nomura Group Code of Conduct
states that our basic policy is to employ a high-level control system to prevent the inﬂux of criminal proceeds into ﬁnancial andcapital markets, and to prevent the ﬁnancing of terrorists.
We have also established Anti-Money-Laundering and Combating the Financing of Terrorism Rules as part of our AML/CFT
policy, which lays out the AML/CFT system that we are to create. Additionally, for especially important areas, such as customer
due diligence and responding to economic sanctions, we have established administrative regulations and speciﬁc frameworks
for each of these.
Furthermore, in addition to compliance with domestic and international laws and rules related to our business, we are working
to strengthen our AML/CFT management system, by closely monitoring international regulatory developments, such as
the guidance set forth by the Financial Action Task Force (FATF). We have appointed a Chief AML/CFT Oﬃcer to take on the
responsibility of ensuring the eﬀectiveness of our AML/CFT management system. We have also established the Anti-Money
Laundering Oﬃce within the Compliance Control Department to assist the Chief AML/CFT Oﬃcer, toward the development
and maintenance of an eﬀective AML/CFT management system.

Speciﬁc Measures to Prevent Money Laundering

Internal Control System – ComplianceInternal Control System – Compliance

Constantly aware of the signiﬁcance of our social responsibilities and public mission as a ﬁnancial institution, we are determined
to provide high quality ﬁnancial services to customers in strict compliance with social norms as well as laws and regulations.
We regard compliance as one of the foremost priority management tasks and the Board of Directors has established the“Compliance Policy,” laying out our basic stance regarding compliance.
Furthermore, based on the above policy, the Executive Management Board established the “Compliance Regulations,” setting
initiatives for speciﬁc actions taken to put compliance into action.

Measures to Prevent Money Laundering and Combating the Financing of Terrorism

We have established a number of measures to prevent money laundering and other illegal activities, based on a risk-based
approach, as described below:
Customer Due DiligenceDue diligence when customers open banking accounts, maintaining up-to-date customer information, etc;

Transaction Monitoring
Introduction of a system to monitor abnormal transactions;
Policy, Procedure, Drawing Up Plans, Implementation, Verification, Reconsideration
Veriﬁcation and check of the status of AML/CFT, and review and improvement of the AML/CFT management systems, etc;
Three Lines of Defense
Our first line of defense (Sales Department, etc.) implements risk reduction measures. Our second line of defense(Compliance-related Departments) provides a check control function. Our third line of defense (Internal Audit
Department) performs independent veriﬁcations; andIn addition to these measures, we conduct regular training and education on AML/CFT, to foster awareness with this
topic throughout the company. We also hold training sessions for all employees of Nomura Trust and Banking and for
employees of Group companies, as well as more specialized training for specific departments, or based on specifictopics.

Policy on Antisocial Forces (Organized Crime)
Based on the Nomura Group Code of Conduct, we at the Nomura Group have built a high-level administrative structure for the
purpose of refusing to deal with any antisocial force or group.
We comply with this policy and have created a structure to eliminate antisocial forces. We promote eﬀorts to block dealings withthese forces.

8

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

9

Internal Control System – Risk Management
Risk Management Framework

Risk Management System

Risk Appetite
Appropriate risks to take and risk management are discussed by the Board of Directors and the Executive Management Board, andqualitative and quantitative risk appetites are determined, based upon which business strategies are drawn up.
In addition, we share Nomura Group's basic philosophy of “placing clients at the heart of everything we do,” and always work to operate
our business by putting our customer-oriented perspective (ﬁduciary duty) into practice.

Top Risk Management
The main types of risks that are considered highly inﬂuential in our business operations include
・Credit deterioration of large borrowers,
・Sharp decline in the value of assets held, and collateral due to ﬁnancial market turmoil,・Destabilization of currency funding,・Circumstances that hinder the sound execution of aﬀairs,
・Cyberattacks and system failures,・Financial crimes such as money laundering,・Legal and compliance irregularities,
・Epidemics of serious infectious diseases, and・Large-scale disasters such as major earthquakes etc,
among others.
These risks are discussed by the Executive Management Board and the Risk Management Committee, in order to perform appropriate risk
management.

Integrated Risk Management
The Board of Directors has formulated the “Integrated Risk Management Policy” as our basic risk management policy to establish
a proper management system of all risks. Based on this policy, the Executive Management Board has speciﬁed the “Regulations
on Integrated Risk Management” to clearly define and classify various risks and also determined various risk management
methodologies, thereby ensuring the eﬀectiveness of the rules.
To monitor risks, the Corporate Risk Management Department is established as a division responsible for integrated risk management
independent of the business promotion division. It is engaged in day-to-day integrated risk management activities under the guidance
and approval of the manager of the integrated risk management division. The integrated risk management division regularly reports
the status of risk management to the Executive Management Board, the Risk Management Committee and the Audit and Supervisory
Committee members. In addition, the Internal Audit Department reviews the appropriateness, validity and eﬃciency of risk management.
The risks deﬁned by the company consist of credit risk, market risk, operational risk, liquidity risk and the banking account interest rate risk.

Credit Risk
Credit risk is deﬁned as the risk of incurring losses due to a decline or loss of the value of assets (including oﬀ-balance sheet
assets) as a result of deterioration of the ﬁnancial condition of debtors, etc. It also includes the risk of incurring losses due
to a serious decline or loss of the value of assets (including oﬀ-balance sheet assets) as a result of a series of deteriorationsof the ﬁnancial conditions of debtors, etc., owing to a heavy concentration of credit on a certain debtor or a certain groupwhich has close ﬁnancial ties with a certain debtor in comparison to our equity or management strength. This is called
credit concentration risk.
We have procedures and standards in place for controlling credit risks using risk diversiﬁcation and portfolio management
theories in accordance with the “Credit Risk Management Policy” and the “Credit Risk Management Regulations.” The
Corporate Risk Management Department centrally controls credit risk management activities and regularly reports thestatus of credit risk management to the Risk Management Committee.

Credit Rating System
Credit ratings are determined not only by conducting scoring based on a rating model using the ﬁnancial information of
debtors, but also by utilizing the latest important information available including qualitative information on managerial risk,
legal risk etc. which may aﬀect the conditions of debtors and external credit ratings or the credit standing of associatedcompanies . These ratings are classiﬁed into 20 levels.

Stress Tests

Screening of Credit Proposals

We perform comprehensive stress tests based on scenarios built around the impacts of possible signiﬁcant events, allowing us to perform
integrated risk evaluations, informing the Risk Management Committee, etc. Additionally, we also perform stress tests as necessary using
individual scenarios built around credit risk, market risk, and liquidity risk, in order to enhance our stress test-based risk management system.

Screening of each credit proposal is performed by the Credit and Trust Risk Management Department, which makes
accurate and rigorous credit decisions based on the credit ratings, fully taking account of our public and social missions as aﬁnancial institution to maintain soundness of the bankʼs assets.

Risk Management Classiﬁcation
Risk Classification
Credit Risk
Interest rate risk
Foreign exchange risk
Price fluctuation risk
Administrative risk
System risk
Information security risk
Legal and compliance risk
Operational Risk
Outsourcing risk
Human Risk
Tangible Risk
Other operational risks
Funding risk
Liquidity Risk
Market liquidity risk
Interest Rate Risk of Banking AccountMarket Risk
Integrated Risk
Management
Risk Control
Department

10Compliance Committee
Business Improvement and Business Quality Improvement Committee
Crisis Management Committee
Operational Risk Committee
CS Improvement and Customer Protection Committee

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Responsible Department
Corporate Risk Management Department
Corporate Risk Management Department
Operations Planning Department
IT Planning & Control Department
Compliance Control Department・IT Planning & Control Department
Compliance Control Department
Operations Planning Department
Human Resource and General Aﬀairs Department
Human Resource and General Aﬀairs Department
Operations Planning Department

Internal Control System – Risk Management

Internal Control System – Risk Management

We position enhancement of risk management as an important pillar of our management goals in order to ensure that ourmanagement is sound and appropriate.
By making disclosures in compliance with Basel Ⅲ and building an integrated risk management system, we comprehensively
look at various risks of the company and compare them against our management strength, thereby securing profits
commensurate with risks and appropriate allocation of management resources.

Exposure (Credit Amount) Management
With the identification of exposure for each debtor or each group of debtors positioned as the core of credit risk
management, we centrally and comprehensively control not only loans but also other on-balance and oﬀ-balance items.
Oﬀ-balance sheet transactions are managed using the current exposure method. Based on the above, we measure andmonitor credit risk.

Self-Assessment
As for self-assessment of assets involving credits, we implement self-assessments through strict classiﬁcation of credits based on
debtor categorization linked to credit ratings, in accordance with the “Asset Assessment Standard,” and carry out proper write-oﬀs ofcredits and provide allowances using the accumulated default ratio for each credit rating, etc.

Corporate Risk Management Department
Corporate Risk Management Department
The Nomura Trust and Banking Co., Ltd. Disclosure 2023

11

Internal Control System – Risk Management
Market Risk

Foreign Exchange Transactions
We operate our business guided by a policy of, whenever possible, avoiding taking market risks. Accordingly, we set theminimum required position limits and VaR limits.

Fund Transactions
For general banking transactions, we also measure the positions and VaR and monitor proﬁt and loss on a daily basis.

Operational Risk
Operational risk is defined as a risk of incurring losses owing to inadequate business processes, activities of directors
and employees or systems, or external events. As the department responsible for management of operational risks, theOperations Planning Department plays a central role in defining the risk categories to be managed and conducting
operational risk management through the Risk and Control Self Assessment (RCSA) activities and collection and analysis ofloss data, etc.

Legal and compliance risk is defined as the risk of incurring losses due to our failure to comply with required laws andregulations, internal rules, bylaws on business activities etc. and as the risk of incurring losses due to execution of business
inappropriate for the protection of customers.
We have established the Compliance Control Department that specializes in management of legal and compliance risksetc. to ensure compliance with laws and regulations. The ﬁnancial business has been becoming increasingly sophisticatedand complicated in recent years. Accordingly, the risks to be dealt with by ﬁnancial institutions are also becoming morediversiﬁed.
Amid such circumstances, confirming not only laws but also other regulations and social demands has come to play asigniﬁcant role. At The Nomura Trust and Banking, potential legal issues that may arise in the course of business are dealt
with properly, mainly by the Compliance Control Department.

Outsourcing Risk
Outsourcing risk, which exists when part of a companyʼs businesses is outsourced, is deﬁned as the risk of incurring losses
by non-performance of outsourced companies from the viewpoint of customer protection and appropriate operation, suchas not complying with the local legal requirements, etc. We have set standards for making decisions on whether or not
to outsource our operations and the selection of outsourcing companies and have a system in place for ensuring proper
management by regularly monitoring the status of business execution at the outsourcing companies.

Internal Control System – Risk Management

Internal Control System – Risk Management

Market risk is defined as a risk of incurring losses due to fluctuation of the value of assets and liabilities (including offbalance assets and liabilities) as a result of changes in market risk factors such as interest rates, foreign exchange rates andsecurity prices. Market risks consist of interest rate risk, foreign exchange risk and price ﬂuctuation risk.
To properly control market risks, the Risk Management Committee clariﬁes the basic concept of market risk management,
and we set position limits, VaR limits, loss-cut rule etc. accordingly. In addition, we have established the Corporate Risk
Management Department which, as an independent department responsible for company-wide market risk management,
monitors the positions and proﬁt and loss on a daily basis and reports the compliance status of limits etc.

Legal and Compliance Risk

Human Risk
We define human risk as the possibility of causing disadvantage through unequal, unfair, or discriminatory personnel
management behavior. To manage human risks, our Human Resource and General Aﬀairs Department takes a leading rolein performing proper management and administration of human resources for matters such as employment status, as wellas in providing education, training, and guidance in the workplace.

Tangible Asset Risk
Administrative Risk
Administrative risk is deﬁned as the risk of incurring losses owing to directors or employees failing to perform accurate
administration or committing errors or fraud. Both directors and employees of the company understand that administrativerisk is present in all business activities, recognize the importance of mitigating administrative risks and take measuresappropriate to mitigate this risk. Specifically, the Operations Planning Department plays a leadership role in ensuringconsistent enhancement of the administrative procedures and systems, and each department provides guidance andtraining on administration to ensure proper administrative procedures.
In addition, the Business Improvement and Business Quality Improvement Committee, which is comprised of members
from each department, promotes eﬀective self-inspections and deliberates on and proposes actions to enhance businessactivities in general.

System Risk
System risk is defined as the risk of incurring losses due to system troubles such as a computer system breakdown
or malfunction and the risk of incurring losses due to an unauthorized use of computers. The IT Planning & Control
Department assumes the responsibility for managing and controlling systems. Fully aware that risks arising from system
troubles and cyber attacks etc. may aﬀect not only our company but the entire market, we establish operational procedures
and deﬁne the actions to be taken in an emergency.
Also, to secure continuous operation of business even in a time of emergency such as a disaster, we have built the BusinessContinuity Site (*) as an alternative oﬃce, and the Disaster Recovery Center (*) in a remote location, and have conducted
drills on a regular basis. (* Refer to Page 12.)

We deﬁne tangible asset risk as the possibility of causing damage or loss of tangible assets through disasters or other phenomena.
To manage tangible asset risks, our Human Resource and General Aﬀairs Department takes a leading role in ascertaining thecurrent states of the companyʼs tangible assets, and works to prevent damage or loss caused by disasters or illegal conduct.

Other Operational Risks
Operational risks other than those listed above are categorized as other operational risks, and the operations planningdepartment responsible for management of operational risks is considering necessary actions.

Liquidity Risk
Liquidity risk is deﬁned as the risk of incurring losses when we have diﬃculty securing necessary funds or are forced toraise funds at an interest rate much higher than the usual rates due to a mismatch between investment and procurement
periods or unexpected cash outﬂow, and as the risk of incurring losses when we are unable to execute trades due to amarket disruption or forced to accept trades at an extremely unfavorable price.
We try to reinforce our liquidity management framework and upgrade our management approach, and at the same time, we
operate business by paying adequate attention to liquidity. For example, the monthly Risk Management Committee and the ALM
Committee checks the fund positions and the market trend etc. for each product we oﬀer and then sets a policy for the future.
We also monitor the fund-raising status of both yen and foreign currencies and report to Risk Management Committee and
ALM Committee which meet on a monthly basis. Furthermore, we set modes according to the market liquidity etc. andspecify management standards for each mode, and manage fund positions accordingly.

Information Security Risk
Information security risk is deﬁned as the risk of incurring losses due to a failure to maintain the conﬁdentiality, integrity andavailability of information assets and the environments for retaining and using information assets. We have established the“Information Security Management Regulations ” to set clear policies on handling of information assets and information
security as the guiding principles to be followed by directors and employees in their day-to-day activities. We try to reducethe information security risk by conducting proper management of information assets, taking actions according to the levelof importance of information assets, imposing limits on the right of access to information assets and giving regular training
etc. to both directors and employees.

12

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Interest Rate Risk of Banking Accounts
Interest rate risk of banking accounts is defined as the risk of incurring losses owing to changes in asset values in thebanking accounts as a result of interest rate fluctuations. We perform appropriate monitoring and management byreporting the risk status to the Risk Management Committee , etc.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

13

Internal Control System – Customer Protection Management

Business Continuity

Customer Protection Management

Internal Control System – Risk Management

We believe that to ensure sustainable development of the company, it is essential to deal appropriately with various
disasters that may have a signiﬁcant impact on company management.
Our mission is “to ﬁrmly protect assets entrusted by customers” and to continue to be a trust bank that earns the conﬁdence
and trust of customers.
To attain this purpose, we are making the following eﬀorts to prepare for contingencies guided by the concept, “developing
a business continuity plan for sustaining day-to-day operations and securing necessary data (market information andinformation on transactions and trades, settlement of funds and securities, social and economic condition, etc.)”.

Organizational Structure
We have established the Crisis Management Committee to review various measures for emergencies including natural
disasters, cyberterrorism, serious accidents, infection and give suggestions and make reports to the Executive Management
Board.
The Crisis Management Committee discusses actions to be taken in a case where the oﬃces or systems are not available foruse due to a disaster or other events, and in the event of an emergency, the Committee is expected to play a central role as
an emergency headquarters.

Formulation of a Business Continuity Plan
We have formulated a Business Continuity Plan to ensure the smooth implementation of measures when a natural disaster or acyberterrorism has occurred.
In addition to a basic policy on disasters, deﬁnition of damage and disaster scenarios, the plan stipulates an organization to deal
with emergencies, measures of securing safety of personnel and assets, and measures of securing communication tools, etc. toprepare for an emergency.
Each department defines priorities and alternative means for continuing business in an emergency, creates a checklist andreviews its eﬀectiveness in a business resumption drill.

Conﬂicts of Interest Management Policy
We have formulated the “Conﬂicts of Interest Management Policy” to properly manage transactions which may unduly undermine
customersʼ interests. The “Conflicts of Interest Management Policy” specifies and categorizes transactions involving conflictsof interest that need to be managed and provides rules on the conﬂicts of interest management system including methods ofmanaging conﬂicts of interest.
For our “Conﬂicts of Interest Management Policy,” please visit our company Website at https://www.nomura-trust.co.jp/.
(Japanese version only)

Solicitation Policy
We have established the “Act on the Provision of Financial Services” in accordance with the “Law on Sales of Financial
Products” and other applicable laws, and appropriately solicit customers for our ﬁnancial products based on this Policy.
For details of the “Solicitation Policy,” please visit our website at https://www.nomura-trust.co.jp/. (Japanese version only)

Enhancement of Infrastructure
We take the following actions to enhance facilities in accordance with the Business Continuity Plan:
Establishment of a Business Continuity Site (BCS)
We built a BCS for sustaining the core businesses in a case where we are unable to continue operations at the Head Oﬃceof The Nomura Trust and Banking.
The location of the site was selected after taking into account a number of conditions including ﬁrmness of the ground,
distance from the Head Oﬃce and being within a residential urban area.
Establishment of a Disaster Recovery Center (DRC)
The servers in the Data Center used in daily operation are made duplex, so if any server fails, it can be immediately switchedwithin the Data Center. We established a DRC at a location suﬃciently far from the Data Center as to back up the data incase the Data Center was aﬀected by wide-scale disaster.

Normal time :Head Office

We have established the Management Policy for Customer Protection and the Management Policy for Conflicts ofInterests as basic policies concerning customer protection in order to protect legitimate interests and improve customer
convenience, and we strive to enhance and reinforce our customer protection management system. The manager incharge will be assigned for customer explanation management, customer support management, customer information
management, outsourcing management, and conflict of interest management to ensure the effectiveness of internal
procedure concerning customer protection.
We have also established the CS Improvement and Customer Protection Committee, which reports the situation and
CS improvements to the Board of Executive Officers regularly or as needed. The Board verifies the effectiveness of thecustomer protection management system of the company and reviews it if necessary.

Internal Control System – Customer Protection Management

Internal Control System – Risk Management

Data Center

When the Head Office isaffected by a disaster :When the Data Center isaffected by a disaster :

BCS

DRC

Business Continuity Site

Disaster Recovery
CenterBusiness Resumption Drill Based on the Business Continuity Plan
We regularly conduct an evacuation drill to the BCS and a business resumption drill based on a disaster scenario createdfrom the viewpoints of time, location and scope of the disaster. We also perform a drill of the process of switching functions
to the DRC at least once a year.

Personal Information Protection Policy
We have established the “Personal Information Protection Policy” in accordance with the Act on the Protection of Personal
Information, and based on this policy, we take various steps necessary to prevent leakage of personal information and tosafely control personal information to pursue appropriate personal information management.
For details of the “Personal Information Protection Policy,” please visit our website at https://www.nomura-trust.co.jp/.
(Japanese version only)

Basic Policy for the Handling of Speciﬁc Personal Information
We have established the Basic Policy for the Handling of Speciﬁc Personal Information in accordance with the Act on the
Use of Number to Identify a Speciﬁc Individual in Administrative Procedures. We take various steps as necessary to preventthe leakage of personal information, and to safely control speciﬁc personal information to pursue appropriate personal
information management.
For details on the Basic Policy for the Handling of Speciﬁc Personal Information, please visit our website at https://www.
nomura-trust.co.jp/. (Japanese version only)Best Execution Policy
When we have received an order for securities listed on domestic ﬁnancial instruments exchanges as part of operations of aregistered ﬁnancial institution stipulated in the Article 33-2 of the Financial Instruments and Exchange Act, we make eﬀorts
to mediate the execution of trades in accordance with the “Best Execution Policy” in cases where no instruction regarding
execution of trades is given by our customer.
For details of the “Best Execution Policy,” please visit our website at https://www.nomura-trust.co.jp/. (Japanese version only)

Policy on Customer-Oriented Business Conduct
We have established the Policy on Customer-Oriented Business Conduct, and, as a trust bank of Nomura Group, we strive toprovide services that truly satisfy our customers, based on the dynamism generated through the fusion of banking, trust, andsecurities operations, and which are in accord with our basic philosophy of “placing clients at the heart of everything we do.”For details of our Policy on Customer-Oriented Business Conduct, please visit our website at https://www.nomura-trust.co.jp/. (Japanese version only)

14

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

15

Internal Control System – Finance Facilitation

Organizational Chart

Status of efforts to improve management of small and medium-sized enterprises(SMEs) and to revitalize regional communities■ Organizational Chart (As of August 1, 2023)
Business Strategy Management
Department

Both Our directors and employees are aware of the public nature and social responsibility inherent in our operations andare committed to fully performing our ﬁnancial intermediary function properly and actively while giving consideration tosecuring sound and appropriate operation of our business. When we receive applications for a new loan and a change interms and conditions of loans etc. from SME customers, we examine them based on the ﬁnancial condition etc. of theseenterprises and give proper and adequate explanations to the customers. If necessary, we properly offer management
consulting and guidance services and support their eﬀorts to improve management.
In addition, we promote financing that is not dependent on personal guarantees of company presidents. When we
do require personal guarantees of company presidents, we follow the Guidelines for Personal Guarantees of Company
Presidents, formulated by the Japanese Bankers Association and a study group with a secretariat at the Japan Chamber ofCommerce and Industry: we explain to the client which criteria are considered insuﬃcient of the three criteria required for
personal guarantees (1. separate and detached relationship between the corporation and the company president, 2. soundﬁnancial base, and 3. timely and appropriate ﬁnancial disclosures), and what improvements could be made to increase thelikelihood of the personal guarantee being modiﬁed or rendered unnecessary.

(2) Enhancement of internal systems to support management of SMEs
We have appointed the Finance Facilitation Manager who centrally controls our finance facilitation management
system. The Finance Facilitation Manager offers management consultation and guidance services to SME customers incollaboration with the sales promotion division and the credit examination division to support their businesses and also
assists in the preparation of management reorganization plans. As we support the management of SME customers, weproperly collaborate with certiﬁed tax accountants, lawyers, certiﬁed public accountants and other outside experts andorganizations while paying attention to our conﬁdentiality obligation.

Marketing and Solution Department

Asset Management Business Promotion
Department
Sales Operating and Management
Department
Inheritance Services Department

Investment Trust Business Promotion
Department
Audit andSupervisory
Committee

Office of
Non-Executive
Directors andAudit
Committee

Trust Business Promotion Department

Organizational Chart

Internal Control System – Finance Facilitation

Prime Banking Department(1) Our policy regarding eﬀorts to support management of SMEs

Trust Administration Department

Asset Management Department

Investment Trust Planning Department

Investment Trust Operating andManagement Department
Strategic Finance Department

Operations Department(3) Status of eﬀorts to support management of SMEs and to revitalize regional communities
We deal with customer inquiries and consultations sincerely and honestly, and we contribute to revitalizing regional
communities by oﬀering the best possible solutions after assessing their life stages and the degree of sustainability of theirbusinesses etc. both appropriately and carefully, actively leveraging our professional expertise as well as our network withoutside experts and organizations as necessary.

Corporate Risk Management Department

Compliance Control Department

IT Planning & Control Department

Credit Department

Operations Planning Department

Treasury Department

Corporate Planning Department

Human Resource and General Affairs
Department
Banking System Project Department

Internal Audit Department

Compliance Officer

16

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

17

Business Description■ Directors and Executive Oﬃcers (as of August 1, 2023)■ Trust Business■ Inheritance BusinessDirectors● Specified Money Trusts and Specified Pecuniary
Trusts Other Than Money Trusts
Trust in which the funds are managed and invested,mainly in securities, according to the instructions
provided by the trustors.

● Testamentary Trust BusinessWe p e r f o r m m a n a g e m e nt o f n o t a r i z e d w i l ls
produced by testators, conﬁrmation of inheritors andproduction of property inventories after executionof inheritance, execution of wills (changes in nameregistrations, cash conversion, etc.), and related tasks.

Chairman of the Board of Directors

Takehisa Yanai

Representative Director

Shinichi Okada

Director

Kimimori Yano

Director

Atsuko Yamakawa

Director

Masato Kono

● Individually Operated Designated Money Trusts(“Shiteitan”) and Individually Operated DesignatedPecuniary Trusts Other Than Money Trusts (“Fund Trust”).
Trust in which the funds are managed and invested
at the discretion of the trustees within the scopein which the type of investment assets and theinvestment method are designated by the trustors.
● Jointly Operated Designated Money Trusts
Money trusts in which the trust funds are managed
and invested jointly with other trust funds on thebasis of the same contract and provisions.

Senior Managing Directors
President & CEO

Shinichi Okada

Executive Vice President

Masayuki Yamada

Marketing & Business Strategy

Senior Corporate Managing Director

Yuzuru Yanagawa

Business Strategy

Senior Managing Director

Koji Hagiwara

Marketing & Client Relations, Trust Business

Senior Managing Director

Masayuki Usui

Corporate

Senior Managing Director

Hideto Matsuno

Corporate

Senior Managing Director

Masaharu Uematsu

Marketing & Client Relations

Senior Managing Director

Hayato Sasaki

Asset Management and Human Resources

Senior Managing Director

Hiroyuki Muromachi

Corporate Planning, Treasury and IT

Senior Managing Director

Takazo Nishihara

Investment Trust Business● Composite Trusts
Trust undertaken as a set of assets comprised of anumber of properties including securities and money.

■ Employees
March 31, 2019

March 31, 2020

Number of employees

460

484

Average length of service

7 years and 5 months

7 years and 7 months

560

575

Average monthly salary (thousand yen)March 31, 2021

March 31, 2022

March 31, 2023

489

505

536

8 years and 0 months 8 years and 2 months 8 years and 2 months
585

588

571

■ Rating Information (as of August 1, 2022)
S&P

JCR

R&I

Long Term

Short Term

Long-Term Issuer Rating

Long-Term Debt

Short-Term Debt

A-

A-2

AA-

A+

a-1

● Investment Trusts
Trust in which funds are invested in securities, realestate etc. based on the instructions provided by thetrustors (investment trust management companies),with the beneficiar y rights being divided andsold to investors. Investment trust administration
service / business based on instructions given by
the investment trust management companies, we
conduct settlement by delivery and payment of
securities, rights handling, custody and compute thedaily net asset value and unit price of each fund.
We follow the instruc tions of investment trust
management companies in conducting delivery
settlements for marketable securities, rights handlingand custody operations. We also verify net asset value
and unit price of each fund.
● Securities Trusts
Trust in which securities are used to set up atrust. There are three t ypes of securities trusts
depending on the purpose of the trustors; (1)securities administration trusts which are designed
to administer securities, (2) securities management
trusts for the purpose of management, and (3)securities disposition trusts for the purpose of
securities disposition.

● Inheritance Arrangement Business
After confirming inheritors, we provide support inproducing property inventories and agreementson division of inheritance, as well as inheritancearrangements (changes in name registrations, cash
conversion, etc.), after being entrusted by all inheritors
to perform inheritance arrangement matters.

■ Banking Business● Deposit BusinessWe handle ordinary deposits, current deposits, time
deposits, foreign currency deposits, negotiablecertiﬁcate of deposits, etc.

Business Description

Directors, Senior Managing Directors and Employees

Directors, Senior Managing Directors and Employees● Lending BusinessWe handle loans on deed, overdrafts, etc.
● Domestic Exchange BusinessWe handle remittance, money transfer, etc.
● Foreign Exchange BusinessWe handle foreign remittances and various operations
concerning other foreign exchange transactions.

■ Securities Business● Investment Trust Over-the-Counter Sales and Account
Administration Business
Investment trust over-the-counter sales: we sell
primarily private placement investment funds which
are incorporated into fund-of-funds and/or prepared
for a ﬁnancial institution or a pension plan.
Account administration business: we provide accountadministration services for transferred investment
trusts, playing the role of supporter for investment
trust over-the - counter sales made by regional
financial institutions, including regional banks andsecond-tier regional banks.
● Corporate Bond Administration Business and Fiscal
Agent for Corporate Bond
Co r p o r ate b o n d a dminis t r atio n b usin e ss: weprovide services as a corporate bond administrator,
which must be designated from the viewpoint ofinvestor protection at the time of bond issue by theCompanies Act of Japan.
Fiscal agent for corporate bond: we handle fiscal
matters as an agent of an issuer company for bonds
without administrator, including issuance, prematureredemption and redemption at maturity of bonds(disbursement of principal and interest).
● Investment Advisor y and Agency Business andInvestment Management Business
We, based on trust agreements and /or discretionary
investment contracts, provide asset management
services to clients.

18

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

19

Company History■ History
August 1993
OctoberJune 1994
September 1995
November
October 1997
November 1999

Started business with 71 executives and employees. <October 1>
Designated as a bond registered organization.
Served as a Fiscal Agent for corporate bonds for the rst time in Japan.
Joined Domestic funds transfer system.
Obtained business approval of specied money trusts and designated money trusts.
Obtained business approval of pension trusts and jointly operated designated money trusts.

Company History

October 2001

Nomura Securities Group (currently called “Nomura Group”) moved to a holding company system.

January 2002

Accepted entrustment of asset management institution operations in dened contribution pension plan.

February

Obtained business approval of real estate trusts stock transfer agency and various agency operations.

June 2003

Moved to a “company with committees” management system.

July 2004

Financial Data
Contents
Financial Statements

22

Moved Head Oѝce in Tokyo from Nihonbashi, Chuo-Ward, Tokyo to Otemachi, Chiyoda-Ward, Tokyo.

Status of Main Business

42

Started business by designating Nomura Securities as a trust contract agent.

Domestic and Foreign Exchange Transactions 45

Handled security interest trust and intellectual property right trust. Obtained approval for business including
execution of wills and settlements of inheritance.

Deposits

46

Started marketing and handling “Mochi-loan” (employee stock-ownership plans tie-up loan).

Loans

49

Obtained approval for the discretionary investment contract related business.

Securities

53

Started business by designating Nomura Securities as a bank agent.

Fair Value of Securities

56

Started “Banking Service (internet banking)” services.

Derivatives Transaction

58

April 2007

Balance of investment trust assets exceeded 10 trillion yen.

May

Opened Osaka representative oѝce (Closed in July 2016).

Trust Business

60

Management Indices64

March 2005
June
February 2006
July
SeptemberAugustJuly 2008

Started marketing and handling “E-Ship” (trust-type employee stock-ownership incentive plan).
Started servicing “Nomura Web Loan” (loans secured by securities) via “Banking Service .”October 2009

Made NikkoCiti Trust and Banking Corporation (trade name changed to NCT Trust and Banking Corporation in
March 2010) a subsidiary.

July 2010

The Nomura Trust and Banking merged with NCT Trust and Banking Corporation (surviving company: The
Nomura Trust and Banking Co., Ltd.) .

May 2011

Established the East Japan Restoration Support Fund jointly with Nomura Securities and Nomura AssetManagement. (Redemption in May 2016)

October 2012

“Banking Service” systems totally renewed.

October 2013

20th anniversary since starting business.

April 2015

Started inheritance services using Nomura Securities as an agent.

April 2016

Started a connection between “Banking Service” and “Nomura Net & Call ,” which is oќered by Nomura
Securities

January 2018
April 2019

Disclosure based on Pillar III of Basel III ‒ Composition of Capital 66
Disclosure based on Pillar III of Basel III ‒ Qualitative Disclosure 68
Disclosure based on Pillar III of Basel III ‒ Quantitative Disclosure 74

Started marketing and handling “Wrap-Trust” (living trust as a will substitute) using Nomura Securities as anagent.
Changeover to new company structure as a company with an audit and supervisory committee.

August 2020

Balance of investment trust assets exceeded 20 trillion yen.

SeptemberStarted marketing and handling “Wrap-Trust” (living trust as a will substitute) by designating The San-in Godo
Bank as a trust contract agent.

April 2021

Started marketing and handling “Wrap-Trust” (living trust as a will substitute) by designating The Awa Bank, Ltd.
as a trust contract agent.

November

Balance of investment trust assets exceeded 30 trillion yen.

December 2022

20

Established as The Nomura Trust and Banking Co., Ltd. (paid-in capital: 30 billion yen). <August 24>

Establishment of Nomura Trust and Banking Sustainability Policy

March 2023

Started marketing and handling “Wrap-Trust” (living trust as a will substitute) by designating The Oita Bank, Ltd.
as a trust contract agent.

May

Started marketing and handling “Wrap-Trust” (living trust as a will substitute) by designating The Fukui Bank, Ltd.
as a trust contract agent.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

21

Financial Statements
Balance Sheets(Millions of yen)

Item

March 31,2022

Balance Sheets

March 31,2023(Millions of yen)

Item

Assets:March 31,2023

Liabilities:

315,449

696,405

315,449

696,405

Current deposits

13,322

12,676

487,554

325,974

Ordinary deposits

424,984

489,042Government bonds

69,84853,488Time deposits

497,777

579,066

Local government bonds

144,047

86,348Other deposits

91,77991,404

Cash and due from banks
Due from banks
Securities

1,027,863

Deposits

1,172,191

56,83541,842

Negotiable certificates of deposit

158,456

250,556

Other securities

216,822

144,294

Call money

90,11945,309712,980

798,222

Payables under repurchase agreements

17,812—Loans on deeds

156,082

146,665

Borrowed money

53,00081,500Overdrafts

556,897

651,556

53,00081,500

2,069

2,872

Due to Trust Accounts

143,138

235,430

2,069

2,872

Other liabilities

58,06845,915

109,431

84,933

Income taxes payable

1,081

343

—

1,089

Accrued expenses

5,900

5,939

Unearned revenue

Loans

Foreign exchanges
Due from foreign banks (our accounts)
Income taxes refund receivable

Borrowings from others

Prepaid expenses

164

210

310

268

Accrued income

5,492

5,291

Derivatives other than for trading-liabilities

46,06235,318Derivatives other than for trading-assets

43,592

38,135

Cash collateral received for financial instruments

2,252

1,855

Cash collateral paid for financial instruments

43,276

23,617

Asset retirement obligations

374

375

Other

16,906

16,589

Other

2,086

1,815

Tangible fixed assets

613

434

Provision for bonuses

1,315

1,308

Buildings

262

198

Provision for retirement benefits

1,403

1,506

Total Liabilities

1,551,178

1,833,717

350

236

Intangible fixed assets

5,930

5,280

Software

5,838

4,314

Net assets:

90

964

Capital stock

50,00050,0001

1Capital surplus

28,27028,2708,771

10,59020,00020,000Other

Software in progress
Other
Deferred tax assets
Allowance for loan losses
Total assets(2,742)(1,439)1,640,057

1,923,274

Legal capital surplus
Other capital surplus
Retained earnings

8,270
15,310Legal retained earnings

1,637

1,871

Other retained earnings

13,295

13,43913,295

13,439Total shareholders' equity

93,20393,580

Valuation diﬀerence on available-for-sale securities(4,477)(5,905)Retained earnings brought forward

Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

8,270
14,933153

1,880(4,324)(4,024)

88,87889,556

1,640,057

1,923,274

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Financial Statements

Financial Statements

Corporate bonds

Other assets

22

March 31,2022

23

Financial Statements
Statements of Income(Millions of yen)

Item
Ordinary Income

Item

FY2022

27,946

31,400(Millions of yen)

FY2021

Extraordinary Income

FY2022

35

19

35

19

280

0

12,074

12,680Interest income

8,402

10,335Extraordinary Loss

4,849

6,102

Loss on disposal of noncurrent assets

3,807

4,331

Other

(9)

2

(176)

(324)

Income taxes-current

4,481

2,673

(3,459)(1,953)

Interest and dividends on securities
Interest on call loans
Interest on due from banks

Income before income taxes

0

0

279

—

3,368

2,265

Financial Statements

Interest on interest swaps

(65)

227

Income taxes-deferred (deduction)

Other interest income

(1)

(3)

Total income taxes

1,022

719

4,545

5,934

Net income

2,345

1,546

397

359

4,148

5,575

2,918

2,415

2,821

—

Gains on sales of bonds

96

133

Income from derivatives other than for trading or hedging

—

2,221

Other

—

60

Other income

5

34

4

—

Fees and commissions
Fees and commissions on domestic and foreign exchanges
Other fees and commissions
Other operating income
Gains on foreign exchange transactions

Gains on securities

034

Ordinary expenses

24,33429,154

Interest expenses

4,472

5,584

2,435

4,219

Interest on negotiable certificates of deposit

48

79

Interest on call money

147

1,095

Interest on payables under repurchase agreements

20

52Interest on borrowings

(29)

24

1,850

111

Other

Interest on deposits

Interest on interest swaps

0

0

1,083

992

Fees and commissions on domestic and foreign exchanges

203

146

Other fees and commissions

880

845

Other interest expenses
Fees and commissions payments

1,432

5,979

—

1,583

416

2,223

Loss on redemption of bonds

—

2,172

Loss on devaluation of bonds

—

0

966

—

Other operating expenses
Loss on foreign exchange transactions
Loss on sales of bonds

Expenses on derivatives other than for trading or hedging

49—

General and administrative expenses

16,167

16,378Other expenses

1,178

220

1,173

54

0

—

Other

Provision of allowance for loan losses write-oﬀ of loan
Depreciation on loan losses
Other
Ordinary profit

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

4

165

3,612

2,245

Statements of Changes in Net Assets
Item
Shareholders' equity:
Capital stock:
Balance at the beginning of the period
Changes of items during the period
Issuance of capital stock
Total changes of items during the period
Balance at the end of the current period
Capital surplus:
Legal capital surplus
Balance at the beginning of the period
Changes of items during the period
Issuance of capital stock
Total changes of items during the period
Balance at the end of the current period
Other capital surplus
Balance at the beginning of the period
Changes of items during the period
Total changes of items during the period
Balance at the end of the current period
Total capital surplus
Balance at the beginning of the year
Changes of items during the period
Issuance of capital stock
Total changes of items during the period
Balance at the end of the current period
Retained earnings:
Legal retained earnings:
Balance at the beginning of the period
Changes of items during the period
Dividends from surplus
Total changes of items during the period
Balance at the end of the current period(Millions of yen)

FY2021

Financial Statements

Trust fees

Other

Interest on loans

24

FY2021

Statements of Income (Continued)

FY202250,00050,000——50,000——50,00020,00020,000——20,000——20,000

8,270

8,270

—
8,270

—
8,270

28,27028,720——28,270——28,720

1,563

1,637

74
74
1,637

233
233
1,871

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

25

Financial Statements
Statements of Changes in Net Assets (Continued)
Item

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

FY2021

FY2022

Statements of Cash Flows (Non-Consolidated, Indirect Method)
Item

11,395

13,295

(445)
2,345
1,900
13,295(1,402)
1,546
143
13,43912,95814,933

(371)
2,345
1,974
14,933(1,169)1,546
377
15,310

—

—

—
—

—
—

91,22893,203

—
(371)
2,345
1,974
93,203—(1,169)1,546
377
93,5802,566(4,477)(7,044)(7,044)(4,477)(1,427)(1,427)(5,905)(3,326)

153

3,479
3,479
153

1,727
1,727
1,880

(759)

(4,324)(3,565)(3,565)(4,324)300
300(4,024)90,46988,878

—
(371)
2,345
(3,565)(1,590)88,878—(1,169)
1,546
300
677
89,556ⅠNet cash provided by (used in) operating activities:
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for loan losses
Increase (decrease) in provision for bonuses
Increase in provision for retirement benefits
Other extraordinary income
Interest income
Interest expenses
Loss (gain) related to securities
Foreign exchange losses (gains)
Gains (loss) on disposal of tangible fixed assets
Net decrease (increase) in derivative assets
Net increase (decrease) in derivative liabilities
Decrease (increase) in deferred losses on hedge
Increase (decrease) in deferred profits on hedge
Net decrease (increase) in loans
Net increase (decrease) in deposit
Net increase (decrease) in negotiable certificates of deposit
Net increase (decrease) in borrowed money (excluding
subordinated borrowings)
Net decrease (increase) in due from banks (excluding deposit
paid to Bank of Japan)
Net decrease (increase) in cash collateral
Net increase (decrease) in call money
Net increase (decrease) in foreign exchanges-assets
Net increase (decrease) in due to trust accounts
Actual interest income
Actual interest expenses
Net decrease (increase) in temporary payment
Net decrease (increase) in temporary receipt
Other
Sub total
Income taxes paid
Net cash provided by (used in) operating activities
Ⅱ Net cash provided by (used in) investment activities:
Purchase of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Purchase of tangible fixed assets
Purchase of intangible fixed assets
Net cash provided by (used in) investing activities
Ⅲ Net cash provided by (used in) financing activities:
Proceeds from issuance of stocks
Payment of subordinated borrowings
Cash dividends paid
Net cash provided by (used in) financing activities
Ⅳ Eﬀect of exchange rate change on cash and cash equivalents
Ⅴ Net increase (decrease) in cash and cash equivalents
Ⅵ Cash and cash equivalent at the beginning of the period
Ⅶ Cash and cash equivalents at the end of the period(Millions of yen)

FY2021

FY2022

3,368
2,740
1,173
57
94
(35)
(8,402)
4,472
364(17,338)0(21,046)
18,112
4,191
836(108,678)
96,19242,4402,265
2,605(1,303)
(6)
103
(19)
(10,335)
5,584
4,204
(16,322)
0
5,456(10,744)941
1,650(85,241)
144,327
92,100800

28,5000(8)(22,771)
25,3795(151,688)
8,631(4,541)
4,179
52
(419)
(121,828)(1,827)(123,656)

19,236(62,622)(803)
92,291
14,201(9,268)
426
(318)
56
216,958(4,707)212,251(107,233)
13,751
44,613(42)(980)(49,891)(46,262)
111,041
106,852(47)(1,717)
169,865

—
—
(371)
(371)

—
—
(1,169)(1,169)—(173,918)
489,351
315,432—
380,948
315,432
696,380

Financial Statements

Financial Statements
26

Other retained earnings
Legal retained earnings brought forward
Balance at the beginning of the period
Changes of items during the period
Dividends from surplus
Net income
Total changes of items during the period
Balance at the end of the current period
Total retained earnings
Balance at the beginning of the period
Changes of items during the period
Dividends from surplus
Net income
Total changes of items during the period
Balance at the end of the current period
Treasury stock:
Balance at the beginning of the period
Changes of items during the period
Total changes of items during the period
Balance at the end of the current period
Total shareholders' equity:
Balance at the beginning of the period
Changes of items during the period
Issuance of capital stock
Dividends from surplus
Net income
Total changes of items during the period
Balance at the end of the current period
Valuation and translation adjustments:
Valuation diﬀerence on available-for-sale securities:
Balance at the beginning of the period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of the current period
Deferred gains or losses on hedges:
Balance at the beginning of the period
Changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of the current period
Total valuation and translation adjustments:
Balance at the beginning of the period
Total changes of items during the period
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of the current period
Total net assets:
Balance at the beginning of the period
Total changes of items during the period
Issuance of capital stock
Dividends from surplus
Net income
Net changes of items other than shareholders' equity
Total changes of items during the period
Balance at the end of the current period(Millions of yen)

[Scope of Cash and Cash Equivalents]
Cash and cash equivalents consist of cash and due from the Bank of Japan included in “Cash and dues from banks” on thebalance sheets.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

27

Financial Statements■ Notes to Financial Statements
The amounts less than one million yen are rounded down.

Signiﬁcant Accounting Policies
1. Trading Assets & Liabilities and Trading Income & Expenses

2. Evaluation for Securities
Held-to-maturity debt securities are stated at amortized cost determined by the moving average method (the straightline method), and other available-for-sale securities are stated at the market value (with selling costs being calculated
mainly by the moving average method). However, securities whose fair values cannot be reliably determined are statedat cost determined by the moving average method.
Unrealized gains and losses on other securities available for sale are included in net assets.
3. Basis and Methods of Derivatives
Derivatives are stated at fair value (excluding those for Trading Purposes).
4. Depreciation Method for Fixed Assets(1) Tangible Fixed Assets
Tangible ﬁxed assets are computed using the declining balance method (while the straight-line method is applied
to buildings (except for facilities attached to the buildings) acquired on April 1, 1998 or later, as well as structures andfacilities attached to the buildings acquired on April 1, 2016 or later).
Principal useful lives are as follows:
Buildings: 3 years to 15 years
Furniture and ﬁxtures: 3 years to 20 years(2) Intangible Fixed Assets
Depreciation for intangible ﬁxed assets is computed using the straight-line method. Especially, depreciation for capitalized
software for internal-use is computed using the straight-line method based on useful life determined by us (5 years).
5. Allowances(1) Allowance for Loan Losses
Allowance for loan losses is provided as below, in accordance with the internally established standards for write-oﬀs
and provisions.
Claims to debtors in special mention and ordinary category, which are prescribed in the “Guideline for Practice Related
to the Veriﬁcation of Internal Control with respect to the Self-Assessment of the Assets of Banks and Other Financial
Institutions as well as the Audit of the Bad Debt Written Oﬀ and Allowance for Doubtful Accounts” (Report No. 4 of the
Ad Hoc Committee for the Audit of Banks etc. of JICPA)< April 14, 2022>, are classiﬁed into speciﬁc categories, and theallowance is provided on the basis of the accumulated default ratio released immediately before the assessment day
by the external rating agency deﬁned in the Companyʼs guidelines. Additionally, for some debtors, rating evaluations
are made using internal rating models, and expected losses are recorded based on macroeconomic scenarios. For
claims to debtors who are possibly bankrupt, an allowance is provided in the amount deemed necessary, net of the28

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

6. Translation of Foreign Currencies
Assets and liabilities denominated in foreign currencies are translated into Japanese yen primarily at the exchange rateon the balance sheet date.
7. Recognition of Revenues

Financial Statements

Financial Statements

Trading transactions intended to capitalize on short-term fluctuations and arbitrage opportunities in interest rates,
currency exchange rates, market prices of ﬁnancial instruments markets and related indices (hereinafter called “Trading
Purposes”) are recognized on a trade-date basis and recorded in “Trading assets” or “Trading liabilities” on the balance
sheets. Income or expenses generated by the relevant trading transactions are recorded in “Trading income” or “Trading
expenses” on the statements of income.
Trading assets and trading liabilities are stated at fair value on the balance sheet date, and derivatives, such as swaps,
futures and options, are stated at their fair values, assuming that such transactions were terminated and settled on thebalance sheet date.
Trading income and trading expenses include interests received and paid during the ﬁscal year, gains or losses resulting
from any change in the value of securities and other monetary claims between the end of the preceding ﬁscal year andthe end of the current ﬁscal year and gains or losses resulting from any change in the value of derivatives between the endof the preceding ﬁscal year and the end of the current ﬁscal year, assuming they were settled at the end of the ﬁscal year.

expected amount of disposable collateral and the estimated amount of recoveries from guarantees. For claims to
debtors who are legally bankrupt or virtually bankrupt, an allowance is provided for the full amount of such claims, netof the expected amount of disposable collateral and the estimated amount of recoveries from guarantees. There wereno loans to restructuring countries.
All claims are assessed by asset assessment divisions, in cooperation with the operating divisions, in accordance withthe guidelines for the self-assessment of asset quality.
(2) Provision for Bonuses
Provision for bonuses, which is provided for future bonus payments to employees, is maintained at the amountaccrued at the end of the ﬁscal year, based on the estimated future payments.
(3) Provision for Retirement Beneﬁts
Provision for retirement beneﬁts, which are provided to ensure future beneﬁt payments to employees, is recorded as
the required amount based on the projected obligation at the end of the ﬁscal year.

Revenue is recognized in accordance with the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020; hereinafter called the “Revenue Recognition Accounting Standard”) and the Implementation Guidanceon Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 26, 2021), except for transactions related
to ﬁnancial instruments included in the scope of the Accounting Standards for Financial Instruments, and based on thefollowing ﬁve-step approach:
Step 1 : Identify the contract with a customer
Step 2 : Identify the performance obligation in the contract
Step 3 : Determine the transaction price
Step 4 : Allocate the transaction price to the performance obligation in the contract
Step 5 : Recognize revenue when (or as) the entity satisﬁes a performance obligation
Major obligations under contracts with customers in the main business, and the ordinary points in time for revenue
recognition:① Regarding trust fees, we are obligated to administer and manage the funds and other assets entrusted to us in accordancewith the trust agreements.
Trust fees are recognized as revenue in accordance with fund trust contracts, based primarily on the following methods:• Set percentage of daily total net assets• Set percentage of average principal balance during the ﬁscal year
• Fees based on number of beneﬁciaries• Fixed fees as determined in initial contract
These fees are recognized as revenue over the trust period of the fund, as fulﬁllment obligations are met over time.
② Regarding other commission fees, we cooperate with other Group companies in order to expand our customer base,transactions, and assets under custody, and we are obligated to utilize our business infrastructure to provide operational
support to Group companies.
Other commission fees are recognized as revenue in accordance with the contract terms, based on the following:• Set percentage of increase in assets under custody• Set percentage of maintenance and operational costs related to oﬀering services③ Inheritance-related commission fees received are consideration for services rendered, for both preparation support
for and preparation of notarized documents at the initial contract stage, and as the executor of wills after execution of
inheritance.
For inheritance-related commission fees received, the fulfillment obligations are met at the time of completion of
preparation support for or preparation of notarized documents, and at the time of completion of service as executor ofwills, and the amount thereof at each stage is recognized in accordance with the contract terms.
The Nomura Trust and Banking Co., Ltd. Disclosure 2023

29

Financial Statements
8. Hedge Accounting

9. Consumption Taxes
Consumption tax and municipal consumption tax (hereinafter called “Consumption Taxes and Other”) are accounted forusing the tax-excluded method. However, non-deductible Consumption Taxes and Other related to tangible ﬁxed assets
are recorded in expenses for the current ﬁscal year.

(2) Key Assumptions
The key assumptions are “expected changes in future creditworthiness of borrowers in determination of debtor
classiﬁcation.” These “expected changes in future creditworthiness of borrowers in determination of debtor
classiﬁcation” are set by individually evaluating the details of each debtorʼs earning revenue.
(3) Eﬀects on Financial Statements for the Following Fiscal YearIf the assumptions used in the initial estimates change, due to factors such as changes in the performance ofindividual borrowers, the allowance for loan losses in financial statements for the following fiscal year may besigniﬁcantly aﬀected.
(Changes to Accounting Estimates)
The Company has categorized claims equivalent to normal claims and claims requiring caution based on certain types,
and has recorded an allowance for loan losses based on the cumulative default rate published immediately prior to thebase date of an assessment by an external rating agency, as stipulated in the Company standards. Eﬀective as of the endof the current ﬁscal year, we perform rating evaluations for some debtors using internal rating models, in accordance with
our parent company (Nomura Holdings, Inc.) groupʼs recording standards for allowance for loan losses, and expected
losses are recorded based on macroeconomic scenarios, etc. Any eﬀects this change may have on the allowance for loan
losses for this ﬁscal year are negligible.
Additional Information

Financial Statements

Financial Statements(1) Hedges of Interest Rate Risk
As for the hedge accounting method applied to hedging transactions for interest rate risk arising from ﬁnancial assets
and liabilities, we, as a general rule, apply deferral hedge accounting using portfolio hedges or individual hedges
as stipulated in the “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial
Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24) <March 17, 2022>.
As for the method to assess hedge eﬀectiveness, the eﬀectiveness of portfolio hedges oﬀsetting market ﬂuctuations
is assessed for each identiﬁed (i) group of hedged instruments and (ii) corresponding group of hedging instrumentsin the same time-to-maturity bucket. Individual hedges oﬀsetting market ﬂuctuations are deemed as highly eﬀective
due to being arranged in a manner that makes hedged and hedging instruments identical to each other in important
requirements. For this reason, we have omitted an assessment of the eﬀectiveness of such hedges.
In addition, the exceptional accrual method for interest rate swaps is applied in order to hedge interest rate risks
arising from certain ﬁnancial assets.
Additionally, for all hedging relationships of the above that fall under the Practical Solution on the Treatment ofHedge Accounting for Financial Instruments that Reference LIBOR (ASBJ PITF No. 40, March 17, 2022), the exceptional
treatment set forth in the PITF is applied.
(2) Hedges of Foreign Currency Fluctuation Risk
As for the hedge accounting method applied to hedging transactions for foreign currency ﬂuctuation risk arisingfrom foreign-currency-denominated ﬁnancial assets and liabilities, we apply the deferral hedge accounting stipulated
in the “Treatment for Accounting and Auditing of Concerning Accounting for Foreign Currency Transactions in the
Banking Industry” (JICPA Industry Audit Committee Report No. 25)<October 8,2020>.
As for the method of assessing the eﬀectiveness of hedging activities, we designate currency swap transactions andforeign exchange swap transactions as hedges against ﬂuctuation in foreign currency exchange rates arising frommonetary claims and liabilities denominated in foreign currencies, and assesses the eﬀectiveness of such hedges byverifying that we hold the foreign currency positions of the hedging instruments corresponding to hedged monetaryclaims and liabilities denominated in foreign currency.

Eﬀective starting this ﬁscal year, the Company has transitioned from the consolidated taxation system to the group relief
system. Consequently, the accounting treatment and disclosure of corporation tax and local corporation tax shall be inaccordance with “Practical Solution on the Accounting and Disclosure Under the Group Relief System” (ASBJ PITF No. 42,
August 12, 2021; hereinafter called “PITF No. 42”). Based on Paragraph 32 (1) of PITF No. 42, the Company presumes noeﬀects from the changes to accounting policies due to the application of PITF No.42.

Notes to the Financial Statements(Notes to the Balance Sheet)
1. Claims in accordance with the Banking Act and the Act on Emergency Measures for the Revitalization of the Financial Functions
are as follows. Claims are stated on the balance sheet as “loans,” “foreign exchanges,” and “other assets” (accrued interest andtemporary payments).
There are no applicable claims against bankrupt and substantially bankrupt debtors, doubtful claims, loans past due forthree months or more, nor restructured loans.

Changes to Accounting Policies(Adoption of Implementation Guidance for the Accounting Standard for Fair Value Measurement)
Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31, June 17, 2021;
hereinafter called the “Fair Value Measurement Standard Implementation Guidance”) applies as of this ﬁscal year, andthe new accounting policies stipulated in the Fair Value Measurement Accounting Standard Implementation Guidanceshall apply into the future, in accordance with the transitional handling stipulated in Paragraph 27-2 of the Fair Value
Measurement Standard Implementation Guidance. Consequently, some investment trusts, which had previously beenstated on the balance sheet as available-for-sale securities at acquisition cost due to the extreme diﬃculty of determining
their fair value, have been changed to now be stated on the balance sheet at their net asset value. Any effects thischange may have on ﬁnancial statements for this ﬁscal year are negligible.
Signiﬁcant Accounting Estimates
Items for which the amount has been recorded in the financial statements for this fiscal year, based on accounting
estimates, and that may have a signiﬁcant impact on the ﬁnancial statements for the following ﬁscal year, are as follows.
Allowance for Loan Losses
1. Amount Recorded in Financial Statements for This Fiscal Year
Allowance for loan losses: 1,439 million yen
2. Information that Contributes to Understanding the Details of Signiﬁcant Accounting Estimates for Identiﬁed Items(1) Calculation Methods
The calculation methods for allowance for loan losses are shown under “Significant Accounting Policies,” “5.
Allowance,” and “(1) Allowance for Loan Losses.”

30

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

“Claims against bankrupt and substantially bankrupt debtors” are claims against debtors who have fallen into businessfailure due to such causes as the commencement of bankruptcy proceedings, the commencement of reorganization
proceedings, or petition for the commencement of reorganization proceedings, and similar claims.
“Doubtful claims” are claims against debtors who have not reached a state of business failure, but whose financial
condition and business results have worsened, and for whom there is a strong likelihood that we will be unable to collectthe principal of the claim and receive interest in accordance with the contract, but exclude claims against bankrupt andsubstantially bankrupt debtors.
Claims past due for three months or more are loans on which the principal and/or interest is three months or more past
due but exclude claims to debtors who are legally bankrupt or non-accrual delinquent claims.
“Restructured loans” are loans on which contracts were amended in favor of debtors (e.g., the reduction of or exemption
from stated interest, the deferral of interest payments, the extension of maturity dates, or renunciation of claims) inorder to assist or facilitate the restructuring of debtors in financial difficulties, excluding claims against bankrupt andsubstantially bankrupt debtors, doubtful claims, or loans past due for three months or more.
2. With regard to participation loans, the principal amount of participation loans treated and presented in the balance sheet as
loans to original debtors in accordance with the “Loan Participation Accounting Treatment and Representation” Report No. 3
issued on Nov 28, 2014 by the Accounting System Council of JICPA was 7,946 million yen. The principal amount of participationloans treated as sold to other banks was 7,705 million yen.
3. The following assets were pledged as collateral.
Assets pledged as collateral
Securities: 106,294 million yen
The Nomura Trust and Banking Co., Ltd. Disclosure 2023

31

Financial Statements
Liabilities collateralized by the above assets
Borrowings from others: 15,000 million yen
In addition to the above-mentioned assets, securities of 1,477 million yen were pledged as margin for transactions suchas derivatives, as business guarantee deposits for trust services, and for other purposes.
Other assets included guarantee deposits of 16,066 million yen.

5. Accumulated depreciation on tangible ﬁxed assets

2,539 million yen

6. There were no liabilities for guarantees on corporate bonds included in “Securities,” which are issued by private
placement (Article 2, Paragraph 3 of the Financial Instruments and Exchange Law).

1. Class of stock and number of shares issued and outstanding, and class of treasury stock and number of shares(Thousands of shares)

Number of Shares
Outstanding at the
Beginning of the Period

Increase

Decrease

Number of Shares
Outstanding at the End of
Current Period

1,400

—

—

1,400

1,400

—

—

1,400

Issued shares
Common stock

9. Total amount of monetary claims for the aﬃliated companies
10. Total amount of monetary liabilities for the aﬃliated companies

50 million yen
3,274 million yen

11. We are subject to restrictions on the payment of dividends of surplus, pursuant to the provision of Article 18 of the
Banking Act of Japan.
Notwithstanding the provision of Article 445, Paragraph 4 (Amounts of Capital and Amounts of Reserves) of theCompanies Act of Japan, in the case where we pay dividends of surplus, it shall record the amount equivalent to onefifth of the amount of the deduction from surplus as a result of the payments of such dividends of surplus as legal
capital surplus or legal retained earnings.
The allocated legal retained earnings arising from payment of dividend of surplus for the current ﬁscal year were 233
million yen.
(Notes to Statements of Income)
1. Income from transactions with a parent company, subsidiaries, and associated companies
Interest income:̶million yen

Fees and commissions:

4 million yen

Other operating income:̶million yen

Other income:̶million yen

Expenses from transactions with a parent company, subsidiaries, and associated companies
Interest expenses:
Fees and commissions payments :Other operating expenses:
Other expenses:

0 million yen
̶million yen
942 million yen
̶million yen—

There were no treasury stocks.
2. There were no stock acquisition rights or treasury stock acquisition rights.
3. Matters relating to cash dividends(1) A dividend with a reference date that belongs to the current business year
Resolution

Type of stock

Total amount of cash
dividends paid
(Millions of Yen)

Per share amount(Yen)

Record dateEﬀectivedate

Board of directors
held on May 18, 2022

Ordinary

1,169

835

March 31, 2022

June 1, 2022

(2) A dividend with a reference date that belongs to the current business year and with an eﬀective date that will be after
the last day of the current business year
Resolution

Type of stock

Total amount of cash
dividends paid
(Millions of Yen)

Per share amount(Yen)

Record dateEﬀectivedate

Board of directors
held on May 12, 2023

Ordinary

770

550

March 31, 2023

June 1, 2023

7. There were no monetary claims for the directors arising from transactions with the directors.
8. There were no monetary liabilities for the directors arising from transactions with the directors.

Remarks

Financial Statements

Financial Statements

4. Contracts of overdraft and loan commitment limits are the contracts that we loan to customers up to the prescribed
limits in response to customersʼ application for loans as long as there is no violation of any condition in the contracts.
The unused amount within the limits related to these contracts total 16,135 million yen. Of these, the amount forcontracts whose original terms expire within one year is 9,400 million yen.
Since many of these commitments expire without being drawn down, the unused amount does not necessarily aﬀect
our future cash ﬂows. Most of these contracts have conditions that allow us to refuse the customersʼ application for aloan or decrease the contract limits with proper reasons such as changes in ﬁnancial conditions, preservation of credit
and other reasons. At the inception of contracts, we obtain real estate, securities as collaterals if considered necessary.
Subsequently, we conduct periodic reviews of the customersʼ business results based on internal rules and reconsider
conditions in contracts and/or take necessary measures to preserve credit when it is necessary.

(Notes to Statements of Changes in net assets)(Notes to Financial Instruments)
1. The Condition of Financial Instruments(1) Policy on Financial Instruments
We engage in the following three business areas as a trust bank of Nomura Group: “Banking business” which deals
with deposits, loans, and foreign exchange; “Trust business” which involves managing the assets entrusted by ourcustomers; and “Securities and asset management business” which includes securities transactions. Our agency
business, which designates Nomura Securities as our bank agent and trust contract agent, provides deposits forindividual customers through “Banking Service,” an internet banking service, and yen-denominated derivative
deposits for corporate customers. Our sources of ﬁnance include negotiable certiﬁcates of deposits and borrowed
money in addition to deposits channeled through the agents.
By taking advantage of the competitive edge of Nomuraʼs domestic sales infrastructure, we use the funds procured
to provide loans to wealthy people, loan products with securities pledged as collateral such as “Nomura Web Loan”
through our agency services, and loan products repackaged with securities, credit linked loan and to invest in
securities focusing on JGB, local government bonds, agency bonds, and corporate bonds.
Market risk and liquidity risk arising from these financial assets and liabilities are comprehensively managed by,in addition to the front office, the independent middle office, the ALM Committee, and the Risk Management
Committee.
(2) Nature and Extent of Risks Arising from Financial Instruments
We primarily invest in securities and loans, which are exposed to customer credit risk and issuer default risk,
respectively. Loans secured by securities which account for some 90% of loan balance oﬀer good security and have alimited credit risk. On the other hand, loans other than loans secured by securities are extended mainly to customers
with high ratings on a short-term basis, but due to changes in the economic environment, it may be impossible for
debtors to implement performance of obligations in accordance with the terms and conditions.

2. “Interest on due from banks” and “Other interest expenses” include negative-interest-rate transactions.

32

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

33

Financial Statements

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

2. Matters Relating to Fair Value of Financial Instruments
The following are the balance sheet amounts, fair values and diﬀerences between them as of March 31, 2023. Unlisted
stocks and others, the fair values of which are extremely diﬃcult to determine, are excluded from the table below. (Refer
to Note 1) Notes are omitted for cash and due from banks, foreign exchanges (assets and liabilities), call money, anddue to trust accounts, because their fair values approximate book values due to settlements within a short period oftime.
(Millions of yen)Book Value

Fair ValueDiﬀerence

Held-to-maturity debt securities

25,163

26,983

1,819

Available-for-sale securities (*1)

299,354299,354—796,966(106)(1) Securities

798,222(2) Loans(1,150)Allowance for loan losses (*2)

797,072
Total assets

1,121,591

1,123,304

1,712(1) Deposits

1,172,191

1,172,191—

250,556

250,556—(2) Negotiable certificates of deposit(3) Borrowed money
Total liabilities

81,50081,500—1,504,247

11,504,247

—

226

226

—

2,591

1,089

(1,501)

2,817

1,316

(1,501)

Financial Statements

Financial Statements
34

Securities mainly consist of government bonds, local government bonds, agency bonds and ancorporate bonds, mostof which are classiﬁed as “Available-for-sale securities.” In addition, interest rate swaps are used to hedge interest raterisks for certain securities and hedge accounting is applied to these transactions.
Funding from the ﬁnancial market such as call money is subject to possible diﬃculties preventing smooth funding due
to shrinking market aﬀected by ﬁnancial environment, however, we hold securities deemed eligible collateral to keepliquidity risk at a certain level.
(3) Risk Management Framework for Financial Instruments① Credit risk management
At The Nomura Trust and Banking, the Credit Department conducts credit risk assessment of loans and securities
for each individual transaction and individual issuer in order to prevent a credit event as a result of deterioration ofan obligorʼs ﬁnancial position. In addition, we conduct daily exposure management for each individual obligor andindividual obligor group and utilize statistical methods to periodically measure credit risk.
In loan products, we take initiative in promoting pricing management based on credit ratings and enhancing thesophistication of credit portfolio management including the introduction of guidelines for each industry to control
credit concentration risk. In addition, we monitor the trading conditions of marketable securities of collateralizedloans regularly in order to maintain collecting risks under a certain level.
② Market risk management
1) Market risk management framework
At The Nomura Trust and Banking, the Executive Management Board identiﬁes the basic market risk management
policy, accordingly, position limits, VaR limits and loss-cut rules are properly set to manage market risk. Foreignexchange transactions are, based on the policy of taking the least market risk, managed with the minimum
necessary position limits and VaR limits. For loans, deposits, funds and securities transactions, we set position
limits for each product and use interest rate swaps for hedge transactions to control risks arising from interest rate
ﬂuctuations within acceptable limits. These management plans in the banking account are discussed semiannuallyby the ALM Committee and the Risk Management Committee. The Corporate Risk Management Department
reports daily position and proﬁt-and-loss status to the responsible executive oﬃcers and related departments eachbusiness day.
2) Quantitative information related to market risk
We use VaR with historical simulation model (confidence interval of 99% and holding period of 10 days for
trading and 20 days for banking) to measure the market risk equivalent, wherein we define market risk as
the risk of incurring losses due to fluctuations in interest rates, exchange rates, securities prices, etc. As ofthe end of March 2023, our market risk equivalent (estimated losses) of trading activities (foreign exchangetransactions) was 14 million yen, whereas that of our banking activities was 1,555 billion yen.
We conduct back-testing on trading activities, comparing VaR calculated by the model with actual proﬁt andloss. The back-testing conducted in FY 2022 showed that VaR was exceeded by actual profit and loss fourtimes, which indicates that the model we use captures the market risk with satisfactory accuracy. However,since VaR measures the amount of market risk by certain occurrence probabilities which are statisticallycalculated based on historical market ﬂuctuation data, there are cases in which VaR cannot capture risk underdrastically changing conditions.
③ Liquidity risk management
Our fundamental policy of liquidity risk management is to comprehensively grasp the nature of assets andliabilities, management plans, and ﬂuctuations in the market, to ensure the required smooth cash ﬂow, and prevent
unexpected losses. The fund position and the market trend for each type of financial product are confirmed
monthly at the ALM Committee which determines future policies.
Reports on the daily cash flow situation are submitted to the responsible executive officers and related
departments each trading day. We have established classiﬁcations for cash ﬂow conditions, ranging from “normal,”“caution” to “risky” and “critical,” and have constructed a framework under which appropriate procedures for
dealing with each case are taken in a timely manner.
(4) Supplementary Explanation of Fair Value of Financial Instruments
Fair values of financial instruments include the values based on market prices, and the values deemed as market
prices obtained by reasonable estimates when the financial instruments do not have market prices. Since certain
assumptions and others are adopted to calculate such values, they may diﬀer when adopting diﬀerent assumptions
and others.

Derivatives (*3)
Derivative transactions not qualifying for hedge accounting
Derivative transactions qualifying for hedge accounting (*4)
Total derivatives(*1) Available-for-sale securities include investment trusts applicable under Paragraph 24-9 of the “Accounting Standard for Fair
Value Measurement” (ASBJ Guidance No. 31, June 17, 2021), where the net asset value is considered the fair value.
(*2) General and specific allowances for possible losses on loans are excluded.
(*3) Net claims and debts that arose from derivatives are presented on a net basis and items which are net debts in total arepresented in brackets.
(*4) For all hedging relationships that fall under the Practical Solution on the Treatment of Hedge Accounting for Financial Instrumentsthat Reference LIBOR (ASBJ PITF No. 40, March 17, 2022), the exceptional treatment set forth in the PITF is applied.

(Note 1) Book values of other securities for which there are no market prices and of investments in partnerships
are indicated below, and are not included under “assets (1) available-for-sale securities” in the fair value
information of ﬁnancial instruments.
(Millions of yen)

ItemBook Value① Other securities (*1)
② Investments in Partnerships (*2)

13
1,441

(*1) For other securities, we do not treat unlisted stocks as being subject to disclosure of fair values, in accordance with Paragraph
5 of the Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19, March 31,2020).
(*2) We do not treat investments in partnerships as being subject to disclosure of fair values, in accordance with Paragraph 24-16 of
the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, June 17, 2021).

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

35

Financial Statements(Note 2) The amount of monetary claims and securities with contractual maturities to be redeemed after the balance
sheet date(1) Financial instruments recorded at fair value in the balance sheet(Millions of yen)

(Millions of yen)

Due after
Due after
Due after
Due after
Due in1 Year through 3 Years through 5 Years through 7 Years through1 Year or Less
10 Years
7 Years
3 Years
5 Years

Due after
10 Years

Securities
Held-to-maturity debt securities
Available-for-sale securities

Level 3

Total

5,000

20,000———55,30886,348—

141,656

137,438

52,194

1,424

6,678

33,148

Corporate bonds—

41,842—

41,842————

31,551

108,954246

140,751

Government and Local Government bonds

657,199

60,37240,595

18,59814,243

7,212

RMBS bonds

202,810

112,790

20,022

20,92240,361Others( * ) No money is expected to be recovered, such as claims to debtors who are legally bankrupt, virtually bankrupt, or possibly
bankrupt.

(Note 3) The amount of borrowed money and other interest bearing debts to be repaid after the balance sheet date

Derivatives
Interest rate related—

27,444—27,444Currency related—

10,691—

10,69186,859275,280246

362,386

Interest rate related—

25,092—25,092Currency related—

10,225—

10,225—35,318—35,318

Total assets(Millions of yen)

Due after
Due after
Due after
Due after
Due in1 Year through 3 Years through 5 Years through 7 Years through1 Year or Less
10 Years
7 Years
3 Years
5 Years

Due after
10 Years

Deposits ( * )946,178

22,5137,700—

15,400180,400

Negotiable certificates of deposit

250,556

—

—

—

—

—

Call money

45,309

—

—

—

—

—

—

—

15,000—2,500

64,000235,430

—

—

—

—

—

1,477,474

22,51322,700—17,900244,400( * ) Of the deposits, demand deposits are included “Due in 1 year or less.” There are no bonds payable.

Derivatives

Total liabilities

Financial Statements

Financial Statements—
74,629731,829

Total

Level 2

Securities

Loans ( * )Due to trust accounts

Level 1Other Securities ( * )Total

Borrowed money

Fair ValueClassification( * ) Available-for-sale securities do not include investment trusts applicable under Paragraph 24-9 of the “Accounting Standard for Fair
Value Measurement” (ASBJ Guidance No. 31, June 17, 2021), where the net asset value is considered the fair value. The amount ofinvestment trust funds to which the treatment in Paragraph 24-9 applies, stated on the balance sheet, is 2,058 million yen.

Reconciliations of Balances at Start and End of Period, of Investment Trusts to Which the Treatment in Paragraph 24-9
Applies(Millions of yen)

3. Disclosures Regarding the Fair Value of Financial Instruments by Level within the Fair Value Hierarchy
Fair values for these financial instruments are classified into the following three-level hierarchy, according to theobservability and signiﬁcance of inputs used in calculating fair values.
Fair values of Level 1 : Fair values measured by quoted prices of the assets or liabilities being measured which are givenin active markets among observable valuation inputs
Fair values of Level 2 : Fair values measured by inputs other than inputs included within Level1 among observablevaluation inputs
Fair values of Level 3 : Fair values measured by unobservable valuation inputs
If multiple inputs which have a significant impact on market value calculation are used, a financial instrumentʼscategorization within the fair value hierarchy is based upon the lowest level of input that is signiﬁcant to the fair value
measurement.

Balance at Start
of Period

Profit/Loss for
PeriodRecorded asProfit/Loss (*1)

2,884

Purchases, Sales& Redemptions

19△ 1,042

Amount ofAmount ofInvestment Trust Investment Trust
Net Asset Value Net Asset Value
Not Deemed Fair
Deemed Fair
Value
Value

2,086

Balance at End
of Period

Valuation Gains/
Losses on
Investment Trusts
Held as of Balance
Sheet Date (*2)

2,086

225

—

(*1) Included under “gains on sales of bonds” on the statements of income.
(*2) Included under both “valuation diﬀerence on available-for-sale securities” and “deferred tax liabilities” on the balance sheet.

(2) Financial instruments other than ﬁnancial instruments recorded at fair value in the balance sheet(Millions of yen)Classification

Fair Value
Level 1

Level 2

Level 3

Total

Securities
Held-to-maturity debt securities
Government and Local Government bonds
Loans

26,983——

26,983——796,966

796,966

26,983—796,966

823,949

Deposits—

1,172,191—

1,172,191

Negotiable certificates of deposits—

250,556—

250,556

Borrowed money—

81,500—81,500—1,504,247—

1,504,247

Total assets

Total liabilities(Note) Calculation Methods and Inputs for the Fair Value of Financial Instruments are as follows

36

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

37

Financial Statements
AssetsLoans
Of the loans, for those with variable rates, as long as the credit quality of the customer has not changed considerably
since the loan was extended, because interest rates are reﬂected over a short period and fair values are expected
to approximate book values, we deem book values to be fair values. Fair values of loans with ﬁxed rates are, basedon categories according to the types, internal ratings and terms of the loans, calculated by discounting the total
amount of the principal and interest by the interest rates considered to be applicable to similar new loans. As forloans whose contractual terms are short (i.e., within one year), we deem the book values to be fair values as fair valuesof these items approximate book values. In addition, regarding claims to debtors who are legally bankrupt, virtuallybankrupt and possibly bankrupt, since the estimated amount of bad debts is calculated based on the present valueof the expected future cash ﬂows or the estimated amounts that we would be able to collect through the disposal ofcollateral or execution of guarantees, fair values approximate the value of the claims to debtors on the balance sheet
as of the balance sheet date minus the amount of allowance for loan losses, and we thus deem such amount to be fairvalues. For loans, fair values are primarily categorized as Level 3.

“Government bonds,” “local government bonds,” “corporate bonds,” and “other securities” on the balance sheet are included.
Trading securities, subsidiary shares and subsidiary company shares, and aﬃliated company shares are not included.
1. Held-to-Maturity Debt Securities (as of March 31, 2023)(Millions of yen)

Type
Securities for which thefair value exceeds thebook value
Total

Derivatives
Interest rate-related transactions (interest rate swaps and others) and currency-related transactions (forward exchanges,
currency options, currency swaps, and others) are considered over-the-counter transactions; because no quoted priceis publicly disclosed, fair values are calculated using discounted present value and option pricing models, based on thetype of transaction and the maturity period. The interest rate, currency rate, and volatility are among the main inputs
used for these evaluation techniques. The fair values are categorized as Level 2 if no unobservable inputs are used, orif the unobservable inputs used have no signiﬁcant eﬀect; this primarily includes “plain vanilla” interest rate swaps andforward exchange contracts.
38

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Diﬀerence

25,163

26,983

1,819

25,163

26,983

1,819(Millions of yen)

Type

Book Value

Acquisition Cost

10,872

10,866

5———

Local government bonds

9,169

9,166

3

Corporate bonds

1,702

1,700

2

Other securities

25,84425,588255

Foreign bonds

23,751

23,721

29

Others

2,093

1,867

226

Bonds
Government bonds
Securities for which thebook value exceeds theacquisition cost

Securities for which thebook value does notexceed the acquisition
cost

Diﬀerence

Subtotal

36,71636,455

261

Bonds

145,643

147,770(2,126)

Government bonds

28,32530,180(1,855)

Local government bonds

77,17877,276(97)

40,14040,314(173)

Other securities

116,994

123,687(6,693)Foreign bonds

Corporate bonds

116,983

123,676(6,692)Others10110Subtotal

262,638

271,457(8,819)299,354

307,912(8,558)

Total

Borrowed money
Of borrowed money, for those with variable rates, as interest rates are reﬂected over a short period and our credit
quality has not been considerably changed since the implementation, fair values are thought to approximate bookvalues, so we deem book values to be fair values. Fair values of those with ﬁxed rates are calculated by discounting
the total amount of principal and interest of the borrowed money which is classiﬁed based on its terms (for those towhich the exceptional accrual method for interest rate swaps are applied, the total amount of principal and interestof the borrowed money based on the rates as used in such interest rate swaps) by the interest rates used in swap
transactions on the balance sheet date. Since fair values of those whose contractual terms are short (i.e., within oneyear) approximate book values, we mainly deem the book values to be fair values. These are classiﬁed under Level 2 ofthe fair value hierarchy.

Fair Value

2. Available-for-Sale Securities (as of March 31, 2023)

Liabilities
Deposits and Negotiable certiﬁcates of deposit
For demand deposits, we deem the payment amounts required on the balance sheet date (i.e., book values) to be
fair values. In addition, fair values of long-term time deposits are calculated by classifying them based on their terms
and by discounting the future cash ﬂows. The discount rates for such calculations are the interest rates used in swap
transactions on the balance sheet date. Since fair values of those whose deposit terms are short (i.e., within one year)
approximate book values, we mainly deem the book values to be fair values. These are classiﬁed under Level 2 of thefair value hierarchy.

Government bonds

Book Value

3. Available-for-Sale Securities Sold during the Fiscal Year (from April 1, 2022 to March 31, 2023)
Type(Millions of yen)Amount Sold

Gain

Loss

75,409114(709)

Government bonds

14,888—(230)

Local government bonds

46,972—(365)

Corporate bonds

13,548

114(113)

Other securities

35,63219(1,513)Foreign bonds

29,172

—

(628)

Bonds

Other securities
Total

Financial Statements

Financial Statements

Securities
For securities for which unadjusted quoted prices in active markets are available, fair values are categorized as Level 1.
This primarily includes government bonds.
For non-active markets, fair values are categorized as Level 2, regardless of whether publicly disclosed quoted prices
were used. This primarily includes local government bonds, corporate bonds, and residential mortgage-backed
securities (RMBS). For investment trusts with no existing market transaction price, if there are no signiﬁcant restrictions
on cancellations or purchase requests that would necessitate compensation for the risk from market participants, thenet asset values are used as the fair values, and categorized as Level 2.
When quoted prices are unavailable, fair values are calculated using such evaluation techniques as the present valueof future cash ﬂows technique. For evaluations, observable inputs are maximally utilized, and inputs include TIBOR,
government bond yields, prepayment rates, credit spread, default rates, and loss given default. Their fair values are
categorized as Level 3 when signiﬁcant unobservable inputs are utilized in calculation.

(Note to Securities)

6,459

19

(884)

111,041

133(2,223)

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

39

Financial Statements
3. Information for Understanding Amount of Revenue for the Fiscal Year under Review Onward(Millions of yen)

Beginning of FY 2022

End of FY 2022

3,720

3,614

93

99

Receivables from Contracts with Customers
Contract Liabilities

On the balance sheet, receivables from contracts with customers are included under “accrued income,” and contract
liabilities are included under “unearned revenue.”(Related party transactions)(Notes to Money Held in Trust)

1. Notes to a parent company or major aﬃliated companies
Description omitted for lack of importance
2. Subsidiaries and aﬃliated companies, etc.
Not applicable
3. Transactions between our sister companies

There is no money held in trust.
(Deferred Tax Accounting)
The deferred tax assets and liabilities are broken down by reason as follows:
Deferred tax assets:
Allowance for loan losses
Provision for retirement beneﬁts
Provision for bonuses
Impairment loss
Accrued business tax
Derivative valuation adjustments
Deferred consumption tax
Valuation diﬀerence on available-for-sale securities
Excess of depreciation
OthersSubtotal
Valuation allowance
Deferred tax assets
Deferred tax liabilities:
Deferred gain or loss on hedges
OthersDeferred tax liabilities(Millions of yen)

446 million yen
467 million yen
370 million yen
11 million yen
95 million yen
7,097 million yen
33 million yen
2,653 million yen
163 million yen
240 million yen
11,578 million yen(100) million yen
11,477 million yen

Relationshipto the Company

Sister company

845 million yen
42 million yen
887 million yen

Net deferred tax assets

Name

Percentage
Ownership ofVoting Rights

NomuraSecurities
Co., Ltd.

—

Relationship toRelated Party

Trustees of Trust
Agreements
and Service
Transaction
Relationships

Transaction
Details

Transaction
AmountAccounting Title

Year-End
Balance

Trust fees

1,184

Accruedincome166

Fees andcommissions

3,074

Accruedincome950

Accruedexpenses

87

Other liabilities

80

Fees andcommissions
payments

Financial Statements

Financial Statements

4. Securities Subjected to Impairment Recognition
Among securities other than trading securities (excluding shares of stock for which there are no market prices andinvestments in partnerships), securities for which the market value has declined markedly in comparison to theacquisition cost, and for which the market value is not deemed as likely to recover to the acquisition price, are statedat the market value on the balance sheet, and the valuation difference was recorded as a loss for the current period(“impairment recognition”).
The impairment recognition for the period amounted to 0 million yen.
Market value is deemed to “have declined markedly” if it has declined 50% or more from the acquisition cost; it is also
deemed to have done so if it has declined by more than 30% but less than 50% from the acquisition cost, with the market
price remaining at or below a certain level. In consideration of this and the business performance of the issuer company,
among other factors, impairment is recognized for securities other than those judged as likely to recover.

453(Note) Descriptions may be omitted for lack of importance

4. Major individual shareholders, etc.

Not applicable

10,590 million yen（Per Share Information）(Note to Revenue Recognition)

Net assets per share
Net income per share

1. Breakdown of Revenue Arising from Contracts with Customers
Current ﬁscal year (April 1, 2022 to March 31, 2023)

63,968.68 yen
1,104.34 yen(Millions of yen)

Fees and Commissions
Trust Fees

Services Rendered at a Single Pointin TimeServices Rendered over a Period ofTime
Revenue Recognized from Contracts
with Customers

O th e r C o m m i s s i o n s (O p e rati o n a l
support using business infrastructure,etc.)

Inheritance-Related
Commissions

Other

17

—

1,655

399

12,663

2,552

—

1,283

12,680

2,552

1,655

1,683

2. Basic Information for Understanding Revenue
In accordance with 7. Recognition of Revenues in the Signiﬁcant Accounting Policies.
40

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

41

Status of Main Business
Breakdown of Proﬁts and Losses by Division
Type(Millions of yen)

FY2021

FY2022(Note) Domestic operations are yen denominated transactions and international operations are foreign currency denominated transactions. Yen
denominated transactions with non-residents and oﬀshore accounts are included in international operations.

Breakdown of Net Interest Income
Type

FY2021

FY2022Average balance
Interest rates
Yield
Average balance

International operations

Total

Interest rates
Yield
Average balance
Interest rates
Yield

1,376,799
5,294
0.38%
265,519(13,230)
5,070
(29)
1.91%
1,629,088
10,3350.63%

1,205,363(7,164)
2,087
(12)
0.17%
175,601
2,398
1.37%
1,373,800
4,472
0.33%

1,506,103(13,230)
3,059
(29)
0.20%
141,150
2,554
1.81%
1,634,023
5,584
0.34%

0.24%
0.06%
0.27%

0.18%
0.10%
0.29%

Breakdown of funding
Average balance
Domestic operations

International operations

Total
Profit margin
Domestic operations
International operations
Total

Interest rates
Yield
Average balance
Interest rates
Yield
Average balance
Interest rates
Yield

Domestic operations(decrease)
International operations(decrease)

FY2022

Change due to balance
Change due to interest rates
Net change
Change due to balance
Change due to interest rates
Net change

599
(700)
(101)
(259)
4
(255)
(357)

888
(247)
640
44
1,264
1,308
1,949

Change due to balance
Change due to interest rates
Net change
Change due to balance
Change due to interest rates
Net change

237
(688)
(451)
251
(545)
(293)
(744)
387

610
361
971
(470)
626
156
1,128
820

SubtotalInterest expenses
Domestic operations(decrease)
International operations(decrease)
Subtotal
Total(Note) Regarding the reasons for change in the balance and the interest rates, when there is an overlap between the two, it is included in the reasonsfor "change due to balance".

Breakdown of Fees and Commissions
Type
Fees and commissions

1,145,829
4,653
0.41%
263,194(7,164)
3,761
(12)
1.43%
1,401,859
8,402
0.60%

FY2021

Interest income(Millions of yen)

Breakdown of investment
Domestic operations

Type(Millions of yen)

Status of Main Business

Status of Main Business

12,198481
12,680
2,234
2,515
4,750
4,755
186
4,942
—
—
—
(2,810)(752)(3,563)
16,3782,431
18,81070
16,346
2,393
(147)
2,245

11,628445
12,074
2,566
1,363
3,929
3,283
178
3,462
—
—
—
42
1,442
1,485
17,521
3,430
20,952(200)
16,133
5,019(1,406)
3,612

Domestic operations
Trust fees
International operations
Total
Domestic operations
Net interest income
International operations
Total
Domestic operations
Net fees and commissions
International operations
Total
Domestic operations
Net trading income (loss)
International operations
Total
Domestic operations
Net other operating income
International operations(loss)
Total
Domestic operations
Gross operating profits
International operations
Total
Provision of general allowance for loan losses (deduction)
General and administrative expenses (excluding non-recurring expenses)
Net business profit
Non-recurring profit (loss)
Ordinary profits

Changes in Interest Income and Interest Expenses

Deposits and loans related
business
Exchange business

Securities related businessAgency business

Investment advisory business
Fees and commissions
payments
Exchange business(Millions of yen)

FY2021
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total

FY2022

4,323
222
4,545
1,206
11
1,218
312
84
397
423
1
424
604
—
604
1
—
1
1,039
44
1,083
173
29
203

5,698
236
5,934
1,984
8
1,993
267
91
359
367
0
368
712
—
712
1
—
1
942
49
992
106
39
146

(Note) 1. The ﬁgures in brackets ([ ]) are the average balance and interest (net) of fund transfers between domestic operations and international operations.
2. The avarage balance of foreign currency denominated transactions in international operations is calculated by the daily current method(whereby the T.T.M rate of the day is applied to the non-exchange transactions of the day).
3. The average balance and interest of fund transfers between domestic operations and international operations are oﬀ set against eachother in the total number.

42

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

43

Status of Main Business

Domestic and Foreign Exchange Transactions
Foreign Exchange Transactions

Breakdown of Trading Income and Expenses(Millions of U.S. dollars)

FY2021
Outgoing remittance

Breakdown of Other Operating Income and Expenses
Type

Status of Main Business

Gains (losses) on foreign exchangetransactions(Millions of yen)

FY2021

International operations
Total
Domestic operations

Gains (losses) on bonds such as JGB

International operations
Total
Domestic operations

Gains (losses) on financial derivatives

International operations
Total
Domestic operations

Other (losses)

International operations
Total
Domestic operations

Total (losses)—(1,583)(1,583)(2,779)(1,482)(4,262)
(91)
2,312
2,221
60
—
60
(2,810)(752)(3,563)

International operations
Total

Foreign bills payable
Foreign bills receivable

Foreign Currency Denominated Assets

Domestic Exchange Transactions

Type
Salaries and allowances
Welfare expenses
Depreciation and amortization
Rent expenses on buildings and machinery
Supplies expenses
Communication expenses
Taxes and dues
Other
Subtotal
Non-recurring expenses
Total

44

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

(Millions of yen)

FY2021

Collection

FY2022

5,290
951
2,740
582
38
599
863
5,067
16,13333
16,167

Paid to

5,459
963
2,605
584
39
662
846
5,184
16,34632
16,378

Received from

1,119(Billions of yen, thousands of units)

FY2021

Received fromMarch 31,2023

1,692

Balance of foreign-currency denominated assets

Remittance

Breakdown of General and Administrative Expenses(Millions of U.S. dollars)

March 31,2022

Paid to14,345—
15,294029,641

11,977—
13,135
1
25,114Foreign bills sold
Foreign bills bought

Total

FY2022

—
2,821
2,821
92
(412)
(320)
—
(966)
(966)
(49)
—
(49)
42
1,442
1,485

Domestic operations

Incoming remittance

FY2022

Domestic and Foreign Exchange Transactions

Not applicable.

AmountUnit
AmountUnit
AmountUnit
AmountUnit

10,000.7
1,499
15,348.0
258
—
—
—
—

FY2022

9,982.4
1,477
14,927.0
268
—
—
—
—

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

45

Deposits
Balance by Type of Deposits(Millions of yen, proportion in brackets)

Type

March 31,2022

International operations
Total
Domestic operations
International operations
Total

International operations
Total
Domestic operations

Fixed-rate time deposits

International operations
Total
Domestic operations

Variable-rate time deposits

International operations
Total
Domestic operations

Other

International operations
Total
Domestic operations

Total

International operations
Total
Domestic operations

Negotiable certificates of deposits

International operations
Total
Domestic operations

Grand total

International operations
Total

46

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

FY2021

FY2022

438,306(36.9%)—(—)
438,306(36.9%)
328,606(27.6%)—(—)
328,606(27.6%)
497,777(41.9%)—(—)
497,777(41.9%)
443,877(37.4%)—(—)
443,877(37.4%)
53,900(4.5%)—(—)
53,900(4.5%)
1,259(0.1%)
90,519(7.6%)
91,779(7.7%)
937,344(79.0%)
90,519(7.6%)
1,027,863(86.6%)
158,456(13.3%)—(—)
158,456(13.3%)
1,095,800(92.3%)
90,519(7.6%)
1,186,320(100.0%)501,719(35.2%)—(—)
501,719(35.2%)
364,818(25.6%)—(—)
364,818(25.6%)
579,066(40.7%)—(—)
579,066(40.7%)
497,466(34.9%)—(—)
497,466(34.9%)
81,600(5.7%)—(—)
81,600(5.7%)
1,849(0.1%)
89,554(6.2%)
91,404(6.4%)
1,082,636(76.0%)
89,554(6.2%)
1,172,191(82.3%)
250,556(17.6%)—(—)
250,556(17.6%)
1,333,192(93.7%)
89,554(6.2%)
1,422,747(100.0%)

Domestic operations
Liquid deposits

International operations
Total
Domestic operations

Interest-bearing deposits

International operations
Total
Domestic operations

Time deposits

International operations
Total
Domestic operations

Fixed-rate time deposits

International operations
Total
Domestic operations

Variable-rate time deposits

International operations
Total
Domestic operations

Other

International operations
Total
Domestic operations

Total

International operations
Total
Domestic operations

Negotiable certificates of deposits

International operations
Total
Domestic operations

Grand total

International operations
Total

367,727(33.1%)—(—)
367,727(33.1%)
299,894(27.0%)—(—)
299,894(27.0%)
474,367(42.8%)—(—)
474,367(42.8%)
420,745(37.9%)—(—)
420,745(37.9%)
53,621(4.8%)—(—)
53,621(4.8%)
5,208(0.4%)
109,766(9.9%)
114,975(10.3%)
847,303(76.4%)
109,766(9.9%)
957,070(86.3%)
151,027(13.6%)—(—)
151,027(13.6%)
998,330(90.0%)
109,766(9.9%)
1,108,097(100.0%)422,667(32.0%)—(—)
422,667(32.0%)
346,402(26.2%)—(—)
346,402(26.2%)
583,704(44.2%)—(—)
583,704(44.2%)
511,162(38.7%)—(—)
511,162(38.7%)
72,541(5.5%)—(—)
72,541(5.5%)
4,082(0.3%)
91,344(6.9%)
95,426(7.2%)
1,010,455(76.6%)
91,344(6.9%)
1,101,799(83.5%)
216,682(16.4%)—(—)
216,682(16.4%)
1,227,137(93.0%)
91,344(6.9%)
1,318,481(100.0%)

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Deposits

Deposits

Domestic operations
Time deposits(Millions of yen, proportion in brackets)

Deposits
Domestic operations

Interest-bearing deposits

Type

March 31,2023

Deposits

Liquid deposits

Average Balance by Type of Deposits

47

Deposits

Loans

Time Deposits Balance by Remaining Period
Classification

PeriodLess than 3 months

Fixed-rate time deposits

Variable-rate time deposits

March 31,2022

164,638

149,044

79,372

63,525

From 6 months to less than 1 year

132,457

140,484

From 1 year to less than 2 years

9,636

18,325

From 2 years to less than 3 years

4,072

3,587

3 years or more

53,700122,500

Subtotal

443,877

497,466

Less than 3 months——

From 3 months to less than 6 months——

From 6 months to less than 1 year——

From 1 year to less than 2 years——

From 2 years to less than 3 years—

600

3 years or more

53,90081,000Subtotal

53,90081,600Less than 3 months——

From 3 months to less than 6 months——

From 6 months to less than 1 year——

From 1 year to less than 2 years——

From 2 years to less than 3 years——

3 years or more

—

—

—

—

497,777

579,066

Subtotal

Loans on bills

Loans on deeds

Overdrafts

Bills discounted

Total

Individual
Corporate
Other
Total

AmountMarch 31,2022

478,305

March 31,2023

Loans on bills

Loans on deeds

Bills discounted

490,155(%)(46.5%)(41.8%)

Amount

449,652

549,486(%)(43.7%)(46.8%)

Amount99,906

132,548(%)(9.7%)(11.3%)

Amount

1,027,863

1,172,191(%)(100.0%)(100.0%)Total

FY2021

Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total

PeriodFixed interest rates

Variable interest rates

Total

The Nomura Trust and Banking Co., Ltd. Disclosure 2023———
119,347
27,318
146,665
633,956
17,600651,556———
753,304
44,918798,222(Millions of yen)

FY2022———
121,958
40,804
162,762
456,113
17,273473,386———
578,072
58,077636,149

Balance of Loans by Type and Remaining Period(Note) Negotiable certiﬁcates of deposits are not included.

48

March 31,2023———
117,895
38,186
156,082
538,824
18,073556,897———
656,720
56,260712,980

Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total
Domestic operations
International operations
Total

Type

(Millions of yen, proportion in brackets)

Classification

March 31,2022

Average Balance by Type of Loans

Overdrafts

Balance by Depositor(Millions of yen)Type

March 31,2023

From 3 months to less than 6 months

Total

Balance by Type of Loans

Loans

Deposits
Other time deposits(Millions of yen)

1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years
With no maturity
SubtotalMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years
With no maturity
Subtotal———
115,20336,693
151,896
581,960
17,684
599,645———
697,164
54,377
751,542(Millions of yen)March 31,2022

591,476
11,333
16,6788,070
23,762—
59,84523,652
25,532
3,800
8,672
—
61,658712,980

March 31,2023

657,199
28,10025,372
16,447
14,728—84,64832,271
15,222
2,151
6,728
—
56,374
798,222

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

49

LoansBalance of Loans by Type of Collateral
Type
Securities(Millions of yen)March 31,2022

Type659,476

—

—

—

—

21,64625,109Commodities
Real estate

March 31,2023

566,216

ClaimsOther

11,387

21,433

Subtotal

599,251

706,019

Guarantees

18,11815,219Unsecured

95,611

76,984

Total

712,980

798,222(—)(—)(Subordinated loans)

Breakdown of Loans by Industry

Manufacturing
Construction

Total

129,640(%)(18.1%)(16.3%)

Amount583,340

667,973(%)(81.8%)(83.6%)

Amount712,980

798,222(%)(100.0%)(100.0%)

—

549

(%)

(—)

(0.0%)
3,829

Communication andinformation services

Amount15,00015,000(%)(2.1%)(1.8%)

Amount

3,620

2,253

(%)

(0.5%)(0.2%)

Amount7,449

10,610(%)(1.0%)(1.3%)

Amount37,83235,532

Transport

Other

March 31,2023

130,249

AmountTotal(%)(5.3%)(4.4%)

Amount63,78463,523(%)(8.9%)(7.9%)

Amount13,96013,080(1.9%)(1.6%)

Amount210,218

248,968(%)(%)(29.4%)(31.1%)

Amount347,125

400,090(%)(48.6%)(50.1%)

Amount712,980

798,222(%)(100.0%)(100.0%)

Balance of Loans Regarding Small and Medium-Sized Enterprises(Number of loans, millions of yen)March 31,2022
Total loan balance (A)Balance of loans to SMEs (B)Ratio (%) (B/A)

Loans

Loans

Working capital

Amount

(0.5%)(0.4%)

Various services

Equipment fund

4,784

(1.4%)

3,936

Real estate

March 31,2022

10,052(%)(0.5%)

Goods rental andleasingType

Amount(%)

Finance and insurance(Millions of yen, proportion in brackets)

March 31,2023

AmountBalance of Customers' liabilities for acceptances and guarantees by Type of Collateral

Balance of Loans by Purpose of Use

March 31,2022

Electricity, gas, heat supply
and water

Wholesale and retail

There are no customers' liabilities for acceptances and guarantees.

(Millions of yen, proportion in brackets)

March 31,2023

Number of loans made10,844

11,978Amount712,980

798,222

Number of loans made10,818

11,958Amount658,693752,908

Number of loans made

99.7%

99.8%

Amount

92.3%

94.3%

(Note) Small and medium-sized enterprises means companies capitalized at 300 million yen or less (100 million yen or less for the wholesale industry
and 50 million yen or less for the retail, food, service industries), or companies with full-time employees 300 or fewer (100 or fewer for the wholesaleand service industries and 50 or fewer for the retail, food, service industry) and individuals.

50

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

51

LoansSecurities

Statement of Claims and Preservation Based on the Banking Act and the Financial Reconstruction Act
March 31,2022(Millions of yen)

Doubtful claims

Type

March 31,2023——

Claims against bankrupt and substantially bankrupt debtors

1,962

—

—

—

—

—

Substandard claims
Claims past due three months or more——

Normal claims (B)714,453

802,221

Total (A+B)

716,415802,221——

Specific allowance for loan losses

1,373

—

Total amount of coverage (C)

1,373

—

Coverage ratio (C/A)

70%—

Coverage amount by collateral and guarantees

Government bonds

Local government bonds

Loans
Short-term corporate
bonds

Allowance for Loan Losses and Their Changes during the Fiscal Year

(Millions of yen)March 31,2022
General allowance for loan losses
Change from the previous year-end (decrease)
Specific allowance for loan losses
Change from the previous year-end (decrease)

March 31,2023

1,080

1,150

(200)

70

1,662

288

1,373

(1,373)

Allowance for specific overseas loans——

Change from the previous year-end

(—)

(—)

2,742

1,439

Total

Corporate bonds

StocksWritten-Oﬀ of Loans(Millions of yen)

FY2022
Written-Oﬀ of Loans

Foreign bonds

FY20230—Foreign stocks

Other securities

Total

52

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Remaining Period
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal
1 year or lessMore than 1 year but less than 3 years
More than 3 years but less than 5 years
More than 5 years but less than 7 years
More than 7 years but less than 10 years
More than 10 years
With no maturity
Subtotal(Millions of yen)March 31,2022——
25,213—
9,958
34,677—
69,848
11,59149,48070,50911,662803——
144,047
—
—
—
—
—
—
—
—
—
3,017
32,1748,189—
13,454—56,835
—
—
—
—
—
—
—
—
44,06970,05875,198
—
5,317
279
—
194,923
—
—
—
—
—
—
13
13
2
54
4
2
7,465
0
14,354
21,885487,554

March 31,2023—
5,056
20,107——28,325—53,48819,64250,135
15,163
1,407———
86,348
—
—
—
—
—
—
—
—
800
17,81820,331——
2,892—
41,842
—
—
—
—
—
—
—
—
53,83065,97815,237
—
5,442
246
—
140,735
—
—
—
—
—
—
13
13
1
2
3
1
2
0
3,533
3,544
325,974

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Securities

—
1,962

Restructured claims
Subtotal (A)Balance of Securities by Type and Remaining Period

53Securities
Balance of Securities by Type(Millions of yen, proportion in brackets)

Type

March 31,2022
Domestic operations

Government bonds

International operations
Total
Domestic operations

Local government bonds

International operations
Total

Short-term corporate bonds

International operations
Total
Domestic operations

Corporate bonds

International operations
Total
Domestic operations

StocksInternational operations
Total
Domestic operations

Foreign bonds

International operations
Total
Domestic operations

Foreign stocks

International operations
Total
Domestic operations

Other securities

International operations
Total
Domestic operations

Total

International operations
Total

54

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Type

March 31,2023

53,488(16.4%)—(—)
53,488(16.4%)
86,348(26.4%)—(—)
86,348(26.4%)
—
(—)
—
(—)
—
(—)
41,842(12.8%)—(—)
41,842(12.8%)
—
(—)
—
(—)
—
(—)
—
(—)
140,735(43.1%)
140,735(43.1%)—(—)
13(0.0%)
13(0.0%)
3,544(1.0%)—(—)
3,544(1.0%)
185,224(56.8%)
140,749(43.1%)
325,974(100.0%)

FY2021
Domestic operations

Government bonds

International operations
Total
Domestic operations

Local government bonds

International operations
Total
Domestic operations

Short-term corporate bonds

International operations
Total
Domestic operations

Corporate bonds

International operations
Total
Domestic operations

StocksInternational operations
Total
Domestic operations

Foreign bonds

International operations
Total
Domestic operations

Foreign stocks

International operations
Total
Domestic operations

Other securities

International operations
Total
Domestic operations

Total(Millions of yen, proportion in brackets)

International operations
Total

70,838(15.6%)—(—)
70,838(15.6%)
119,066(26.3%)—(—)
119,066(26.3%)
—
(—)
—
(—)
—
(—)
50,269(11.1%)—(—)
50,269(11.1%)
—
(—)
—
(—)
—
(—)
—
(—)
187,805(41.6%)
187,805(41.6%)—(—)
12(0.0%)
12(0.0%)
18,948(4.1%)
4,490(0.9%)
23,439
(5.1%)
259,123(57.4%)
192,308(42.5%)
451,432(100.0%)

FY202257,005(13.4%)—(—)
57,005(13.4%)
123,433(29.1%)—(—)
123,433(29.1%)
—
(—)
—
(—)
—
(—)
48,040(11.3%)—(—)
48,040(11.3%)
—
(—)
—
(—)
—
(—)
—
(—)
183,397(43.3%)
183,397(43.3%)—(—)
13(0.0%)
13(0.0%)
8,660(2.0%)
2,479(0.5%)
11,139
(2.6%)
237,139(56.0%)
185,890(43.9%)
423,030(100.0%)

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Securities

Securities

Domestic operations

69,848(14.3%)—(—)
69,848(14.3%)
144,047(29.5%)—(—)
144,047(29.5%)
—
(—)
—
(—)
—
(—)
56,835(11.6%)—(—)
56,835(11.6%)
—
(—)
—
(—)
—
(—)
—
(—)
194,923(39.9%)
194,923(39.9%)—(—)
13(0.0%)
13(0.0%)
17,419
(3.5%)
4,465(0.9%)
21,885(4.4%)
288,151(59.1%)
199,402(40.8%)
487,554(100.0%)

Average Balance of Securities by Type55

Fair Value of Securities
Trading Securities

Available-for-Sale Securities with Fair Value

Not applicable.

Type

StocksBreakdown of Securities without Fair Value and Their Book Value
Type(Millions of yen)March 31,2022

March 31,2023

13

13

4,849

1,441

Unlisted foreign securities
Others

Held-to-Maturity Debt Securities with Fair ValueType

Government bonds(Millions of yen)March 31,2022

March 31,2023

Book value

25,21325,163

Fair value

27,50526,983

Diﬀerence

2,292

1,819

Gain

2,292

1,819

Loss

—

—

Corporate bonds——

Book value——

Valuation diﬀerence——

Acquisition cost

45,31130,180Book value

44,63528,325

Valuation diﬀerence(676)(1,855)

Unrealized gain

337

—

1,013

1,855

Acquisition cost

144,366

86,442

Book value

144,047

86,348

(319)

(94)

Valuation diﬀerence
Unrealized gain

83

Unrealized loss

327

97

Acquisition cost

56,79642,014

Book value

56,83541,842

Valuation diﬀerence

39

(171)

Unrealized gain

206

2

167

173

Acquisition cost

246,475

158,637

Book value

245,518

156,516(956)(2,121)

Unrealized loss

Sub total(Note) 1. Fair values are based on the market prices at the end of the ﬁscal year.
2. Not applicable except for Government bonds.

Other securities

Valuation diﬀerence
Unrealized gain

552

5

Unrealized loss

1,508

2,126

Acquisition cost

217,493

149,275

Book value

211,960

142,838

Valuation diﬀerence(5,533)(6,437)

Unrealized gain

684

255

6,217

6,693

Acquisition cost

463,968

307,912Book value

457,478

299,354

Valuation diﬀerence(6,489)(8,558)

Unrealized gain

1,236

261

Unrealized loss

7,726

8,819

Unrealized loss

Total

March 31,2023

Acquisition cost

Unrealized loss

Local government
bonds

March 31,2022

Fair Value of Securities

Available-for-sale securities

Bonds

Fair Value of Securities

Government
bonds

—

—

Held-to-maturity debt securities(Millions of yen)

(Note) Amounts on balance sheet are recorded at fair values based on the market prices at the end of the ﬁscal year.

56

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

57

Derivatives Transaction
1. Derivatives Transactions Not Qualifying for Hedge Accounting
As for derivatives transactions not qualifying for hedge accounting, the contract amounts or notional principal, fair values
and unrealized gains or losses as well as calculation method of fair values for each type of transactions as of the balance
sheet date are as follows:
Note that contract value amounts do not indicate the market risk related to derivatives transactions.
Interest Rate-Related Transactions(Millions of yen)March 31,2022

75,10075,100(5,092)(5,092)————85,60085,600(9,140)(9,140)————(14,233)(14,233)

157,300
157,300(10,162)(10,162)————
113,300
113,300(14,665)(14,665)————(24,828)(24,828)(Note) 1. Transactions above are marked to market, and unrealized gains (losses) are included in the statements of income.
2. Calculation of fair value
Fair values are based on the discounted present value.
3. Interest rate-related transactions
In addition to the abovementioned, the appraisal profit based on separate accounting of embedded derivatives of hybrid financial
instruments was 24,828 million yen at the end of March, 2023, and 14,233 million yen at the end of March, 2022.

Currency-Related Transactions(Millions of yen)March 31,2022

Swaps

Sold

Forwards
BoughtOver-thecounter

Sold

Options
BoughtTotal fair value (losses)
Total unrealized gains (losses)

Contract amountOver one year
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Fair value (losses)
Unrealized gains (losses)

44,40130,082(233)(233)
596,705
7,692(25,948)(25,948)566,992
7,695
24,031
24,03154,791
—
1,138
(676)
5,074
—
284
270
(728)
(2,556)

March 31,2023

31,091
25,616
1,952
1,952
442,411
8,349(4,760)(4,760)402,228
8,349
3,309
3,309
29,499—330
230
12,127
—
211
(108)
1,043
623

Not applicable.
Bond-Related Transactions
Not applicable.
Commodity-Related Transactions
Not applicable.
Credit Derivative Transactions
Not applicable.
OthersNot applicable.
2.Derivatives Transactions Qualifying for Hedge Accounting
As for derivatives transactions qualifying for hedge accounting, the contract amounts or notional principal, fair values
and unrealized gains or losses as well as calculation method of fair values for each type of hedged transactions and byrespective hedge accounting method as of the balance sheet date are as follows:
Note that contract value amounts do not indicate the market risk related to derivatives transactions.
Interest Rate-Related Transactions
Hedge accounting
methodPrimarymethodType(Millions of yen)March 31,2022
Primary
hedged item Contract amount Over one year Fair value

Deposits,
loans,availableReceive-floating interest rate for-salesecurities(bonds)
Pay-fixed interest rate

Interest rate swaps

Interest rate swaps
Exceptional
Securities
method for Interest
Receive-floating interest rate
rate swaps
Pay-fixed interest rate
Total

Derivatives Transaction

Interest rate swaps

Derivatives Transaction

Contract amountOver one year
Receive-fixed interest rate
Pay-floating interest rate
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Receive-floating interest rate
Pay-fixed interest rate
Fair value (losses)
Unrealized gains (losses)
Over-thecounter
Contract amountOver one year
Receive-floating interest rate
Pay-floating interest rate
Fair value (losses)
Unrealized gains (losses)
Contract amountOver one year
Receive-fixed interest rate
Pay-fixed interest rate
Fair value (losses)
Unrealized gains (losses)
Total fair value (losses)
Total unrealized gains (losses)

March 31,2023

Stock-Related Transactions

March 31,2023
Contract amount Over one year
Fair value

177,039

160,865(410)

147,291

98,9382,591

177,039

160,865(410)

147,291

98,9382,591

25,00025,000(2,033)25,00025,000(1,501)

25,00025,000(2,033)25,00025,000(1,501)——(2,444)

—

—

1,089

(Note) 1. Primarily, the deferred hedge method using individual hedges, or, in certain cases, portfolio hedges, is applied under "Accounting and
Auditing Treatment Relating to Adoption of Accounting Standards for Financial Instruments for Banks"(JICPA Industry Committee Practical
Guideline No.24).
2. Calculation of fair value
Fair values are based on the discounted present value.

Currency-Related Transactions
Not applicable.
Stock-Related Transactions
Not applicable.
Bond-Related Transactions
Not applicable.

(Note) 1. Transactions above are marked to market, and unrealized gains (losses) are included in the statements of income.
2. Calculation of fair value: Fair values are based on the discounted present value.
3. Currency-Related transactions
In addition to the abovementioned, the appraisal loss based on separate accounting of embedded derivatives of hybrid financial
instruments was 53 million yen at the end of March, 2023, and appraisal proﬁt was 507 million yen at the end of March, 2022.

58

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

59

Trust BusinessStatement of Trust Account(Millions of yen)March 31,2022

Balance of Securities (by Type) Held in Money Trusts and Pension Trusts by TypeType

March 31,2023

328,134
328,134
5,493,243
1,637,315
100,434
614,753434,538
1,463,046
1,243,155
19,762,948
10,131,972—
1,210,581
77,12010,712
66,407498,160
1,316,652
235,430
275,063
275,063
39,329,306

Liabilities:
Designated money trusts
Specified money trusts
Pension trusts
Investment trusts
Pecuniary trusts other than money trusts
Securities trusts
Money claims trusts
Composite trusts
Total

448,9122,435,357
812
31,855,479
538,971
2,530,131
1,579
1,062,929
38,874,173

418,450
2,933,316
819
31,600,417
709,2392,599,658
1,519
1,065,884
39,329,306

Local government bonds
Corporate bonds

366,637

5,166

7,204

—

—

332,102358,906

40,35938,802Other securities

1,645,277

2,006,524

Balance of assets under management at the end of period

2,291,964

2,778,075

Government bonds——

Local government bonds——

Short-term corporate bonds——

Corporate bonds——

Stocks——Other securities

650

650

Balance of assets under management at the end of period

650

650

269,058

366,637

5,166

7,204

—

—

Corporate bonds

332,102358,906

Stocks40,35938,802Other securities

1,645,927

2,007,174

Balance of assets under management at the end of period

2,292,614

2,778,725

StocksPension trusts

Government bonds
Local government bonds
Short-term corporate bonds
Total(Note) We do not handle employees' property formation beneﬁt trusts or loan trusts.

Balance of Principal of Money Trusts by Trust Period
Period(Millions of yen)March 31,2022

Money trusts

1,199,554

From 1 year to less than 2 years

1,003

1,213

From 2 years to less than 5 years

3,397

3,773

495,426

529,050

5 years or more——

1,499,530

1,733,591

Others
Total

Breakdown of Trusts in Which Repayments of the Principal Are Guaranteed
Jointly Operated Designated Money Trusts

March 31,2023

999,703

Less than 1 year

(Note) 1. We do not handle employees' property formation beneﬁt trusts or loan trusts.
2. No trust assets are entrusted to other trust banks for asset administration.

Balance of Loans Related to Money Trusts and Pension Trusts (by Category)(Millions of yen, proportion in brackets)(Millions of yen)March 31,2022

Liabilities:
Principal
Reserve for possible impairment of principal
Other
Total

269,058

Short-term corporate bonds
Money trusts

March 31,2023

Trust Business

Trust Business

358,184
358,184
4,831,364
1,321,889
78,880573,534
436,385
1,343,552
1,077,121
19,938,145
10,320,805
170
1,167,304
65,005
10,141
54,864
399,806
1,399,861
143,138
250,387
250,387
38,874,173

Assets:
Loans
Securities
Due from banking account
Other
Total

March 31,2022

Government bonds

Assets:
Loans
Loans on deeds
Securities
Government bonds
Local government bonds
Corporate bonds
StocksForeign securities
Other securities
Securities held for investment trusts
Foreign investments held for investment trusts
Beneficiary rights
Securities held in custody accounts
Money claims
Money claims on life insurance policies
Other money claims
Other claims
Call loans
Due from banking accountCash and due from banks
Due from banks
Total(Millions of yen)Type

March 31,2023

Loans on deeds——
34,289—34,289——145,313—145,313Loans on bills
Bills discounted
Total

34,289—034,289145,313—0145,313

March 31,2022

March 31,2023

344,634

324,031(100.0%)(100.0%)

—

—

(—)

(—)

—

—

(—)

(—)

344,634

324,031(100.0%)(100.0%)(Note) This is the balance of loans under trust account related to money trusts and pension trusts. The same applies to the tables of balance of loans(by Category), (by Contract Term), (by Type of Collateral), (by Industry) and (by Purpose of Use) and the tables for Loans to Small and Medium-Sized
Enterprises.

(Note) All claims to trusts with agreements for compensation of principal are classiﬁed as performing loans; none are classiﬁed as claims against
bankrupt and substantially bankrupt debtors, doubtful claims, loans past due for three months or more, nor restructured loans.

60

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

61

Trust Business
Balance of Loans Related to Money Trusts and Pension Trusts (by Contract Term)
Period(Millions of yen)March 31,2022

March 31,2023

March 31,2022

334,100

314,400

More than 1 year but less than 3 years—

More than 3 years but less than 5 years—

More than 5 years but less than 7 years——

7 years or more

10,534

9,631

Total

344,634

324,031

1 year or less

Balance of Loans Related to Money Trusts and Pension Trusts (by Type of Collateral)
March 31,2022

344,634

324,031—

Balance of loans to SMEs (B)29,00032,400—

Ratio (%) (B/A)

8.4%

10.0%

(Millions of yen)

Balance of Loans, Securities and Crypto assets (by Type) Held in Money Trusts and Pension Trusts by Type(Millions of yen)Type

Claims——Commodities——

Real estate——

Subtotal(Note) Small and medium-sized enterprises means companies capitalized at 300 million yen or less (100 million yen or less for the wholesale industry
and 50 million yen or less for the retail, food, service industries), or companies with full-time employees 300 or fewer (100 or fewer for the wholesaleand service industries and 50 or fewer for the retail, food, service industry) and individuals.

March 31,2023

282,000——

305,100

282,000

Other
Guarantees——

Unsecured

39,53442,031

Total

344,634

324,031

March 31,2022
Loans

Money trusts

Securities
Crypto Assets
Total
Loans

Pension trusts

Securities
Crypto Assets
Total

Total loans
Total securities
Total crypto assets

Balance of Loans Related to Money Trusts and Pension Trusts (by Industry)Type
Communication andinformation services
Finance and insurance
Local governments
Total(Millions of yen, proportion in brackets)

March 31,2022

Type

62

344,634

324,0312,291,964

2,778,075——

2,636,599

3,102,107

—

—

650

650

—

—

650

650

344,634

324,0312,292,614

2,778,725——

2,637,249

3,102,757

32,400

Amount29,000(%)(8.4%)(9.9%)

Amount305,100

282,000(%)(88.5%)(87.0%)

Amount10,5349,631(%)(3.0%)(2.9%)

Amount344,634

324,031(%)(100.0%)(100.0%)(Millions of yen)March 31,2022

March 31,2023

Equipment fund——Working capital

344,634

324,031

Total

344,634

324,031

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Total loans, securities and crypto assets

March 31,2023(Note) We do not handle employees' property formation beneﬁt trusts or loan trusts.

March 31,2023

Balance of Loans Related to Money Trusts and Pension Trusts (by Purpose of Use)March 31,2023

Total loan balance (A)305,100

Securities(Millions of yen)

Trust Business

Trust Business

Type

Loans to Small and Medium-Sized Enterprises Related to Money Trusts and Pension Trusts

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

63

Management Indices
Overall Proﬁt Margin(%)

FY2021

Yield on investments

Funding cost

FY2022

March 31,2022

Domestic operations

0.41

0.38

Deposits

International operations

1.43

1.91

Loans

Total

0.60

0.63

Amount of funds in trust accountDomestic operations

1.43

1.22

International operations

1.93

2.51

Total

1.50

1.34

Domestic operations(1.02)(0.84)

International operations(0.50)(0.60)

Total(0.90)(0.71)

Proﬁt Ratio

1,422,747

712,980

798,2222,885,082

3,352,586

Deposits, Loans and Trust Assets per Employee(Millions of yen)March 31,2022

FY2022

March 31,2023

Deposits

2,349

2,654

Loans

1,411

1,489

Amount of funds in trust account

5,713

6,254

(Note) Deposits include negotiable certiﬁcates of deposit.

Return on assets (ROA)

Return on equity (ROE)

Net business profit to assets ratio

0.33

0.13

Ordinary profit to assets ratio

0.24

0.12

Net income to assets ratio

0.15

0.08

Net business profit to equity ratio

5.50

2.72

Ordinary profit to equity ratio

3.96

2.55

Net income to equity ratio

2.57

1.75

Gross Operating Proﬁt Ratio(%)

FY2021Gross operating profit ratio

FY2022

Domestic operations

1.52

1.18

International operations

1.30

0.91

Total

1.49

1.15

Loan-To-Deposit Ratio(%)

FY2021
Balance at the end of
the period
Average balance during theperiodFY2022

Domestic operations

59.9

56.5

International operations

62.1

50.1

Total

60.1

56.1

Domestic operations

57.9

56.8

International operations

52.9

59.5

Total

57.4

57.0

Security-To-Deposit Ratio(%)

FY2021
Balance at the end of
the period
Average balance during theperiod64

1,186,320

March 31,2023(Note) Deposits include negotiable certiﬁcates of deposit.

(%)

FY2021(Millions of yen)Management IndicesManagement Indices

Overall profit margin

Deposits, Loans and Trust Assets per Branch

FY2022

Domestic operations

26.2

13.8

International operations

220.2

157.1

Total

41.0

22.9

Domestic operations

25.9

19.3

International operations

175.1

203.5

Total

40.7

32.0

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

65

Disclosure based on Pillar III of Basel III – Composition of Capital(Millions of yen)

Items

This section describes the information such as the capital adequacy situation specified by the Financial Services Agency
Commissioner, based on Article 19-2,Paragraph 1, Item 5, Subsection 2, etc., of the Ordinance for Enforcement of Banking Act.

Composition of Capital Disclosure
Items(Millions of yen)March 31,2022

March 31,2023

Core capital: instruments and reserves
Directly issued qualifying common share capital or preferred share capital with acompulsory conversion clause plus related capital surplus and retained earnings

92,810of which: capital and capital surplus

78,27078,270of which: retained earnings

14,933

15,310of which: treasury stockof which: earning to be distributedof which: other than above
Stock acquisition right to common shares and preferred shares with acompulsory conversion clause

—

—

1,169

770

—

—

—

—

—

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions——of which: mortgage servicing rights——of which: deferred tax assets arising from temporary diﬀerences(net of related tax liability)

—

—

—

—

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions——of which: mortgage servicing rights——of which: deferred tax assets arising from temporary diﬀerences(net of related tax liability)

—

—

4,092

3,643

89,02290,317527,768

413,192——

Core capital: regulatory adjustments(B)

Regulatory capital
Regulatory capital ( (A) – (B) )

(C)

1,080

1,150

Risk-weighted assets

1,080

1,150

Total amount of credit risk-weighted assets——

Eligible noncumulative perpetual preferred shares subject to transitional arrangements(amount allowed to be included in Core capital: instruments and reserves)

—

—

—

—

Eligible capital instruments subject to transitional arrangements(amount allowed to be included in Core capital: instruments and reserves)of which: significant investments in the common stock of Other Financial
Institutions (net of eligible short positions)——of which: other than above——

Capital instruments issued through measures for capital enhancement by public institutions(amount allowed to be included in Core capital: instruments and reserves)——

Land revaluation excess after 55% discount(amount allowed to be included in Core capital: instruments and reserves)——

93,114

93,960Total of reserves included in Core capital: instruments and reservesof which: general allowance for loan losses included in Core capitalof which: eligible provision included in Core capitalCore capital: instruments and reserves(A)

Total amount of intangible assets (excluding those relating to mortgage servicing rights)
of which: goodwill (including those equivalent)——

35,57739,989Credit risk adjustments——

Operational risk adjustments——

563,346

453,182

15.80%

19.92%

Operational risk (divided by multiplying the capital requirement by 12.5)

Total amount of Risk-weighted assets(D)

Capital adequacy ratio

4,092

3,643

—

—

of which: other intangibles other than goodwill and mortgage servicing rights

4,092

3,643

Deferred tax assets that rely on future profitability excluding those arising from
temporary diﬀerences (net of related tax liability)——

Shortfall of eligible provisions to expected losses——

Gain on sale of securitization——

Gains and losses due to changes in own credit risk on fair valued liabilities——

Prepaid pension cost——

Investments in own shares (excluding those reported in the net assets section)——

Reciprocal cross-holdings in common equity——

Investments in the capital banking, financial and insurance entities that areoutside the scope of regulatory consolidation (“Other Financial Institutions”),
net of eligible short positions, where the bank does not own more than 10% of
the issued share capital (amount above the 10% threshold)——

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

of which: total amount included in risk-weighted assets by transitionalarrangements

Market risk (divided by multiplying the capital requirement by 12.5)

Core capital: regulatory adjustments

66

March 31,2023—

Amount exceeding the 10% threshold on specific items

Amount exceeding the 15% threshold on specific items

92,034

March 31,2022

Disclosure based on Pillar III of Basel III – Composition of Capital

Disclosure based on Pillar III of Basel III – Composition of Capital

Disclosure based on Pillar III of Basel III

Capital adequacy ratio ( (C) / (D) )The Nomura Trust and Banking Co., Ltd. Disclosure 2023

67

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Ⅱ.

Summary of method of raising capital (refers to the method of raising capital where all or part of the amount isincluded in the amount of basic items related to the core capital speciﬁed in the formula in the Notiﬁcation about
capital adequacy No. 37).

B. Matters Relating to Portfolios to Which the Standardized Approach Is Applied

At The Nomura Trust and Banking, we aim to maintain suﬃcient capital, mainly common stock, which is stipulated in
Article 40 of the Financial Services Agency Notiﬁcation No. 19 (Notiﬁcation on Capital Adequacy), “the standard forwhich banks determine whether they hold adequate capital in light of assets they hold based upon Article 14-2 of the
Banking Act of Japan.” Other than raising capital by issuing common stock, we reserve a portion of annual earnings aslegally retained earnings or other retained earnings.

1. Names of qualiﬁed rating agencies, etc. (deﬁned as qualiﬁed rating agencies, OECD, and export credit agencies; the same
deﬁnition applies below.) used to determine the risk weight (including reasons if qualiﬁed rating agencies were changed)
In order to determine the risk weight, we use the following four rating agencies as qualiﬁed rating agencies for all exposures.
Rating and Investment Information, Inc. (R&I), Japan Credit Rating Agency, Ltd. (JCR), Moody's Investors Service, Inc.
(Moodyʼs), and S&P Global Ratings (S&P)

Outlines of the Capital Adequacy Assessment Method

2. Names of qualiﬁed rating agencies used to determine the risk weight of each type of exposures
In order to determine the risk weight of each type of exposure, we use the following four rating agencies as
qualiﬁed rating agencies for all exposures.
Rating and Investment Information, Inc. (R&I), Japan Credit Rating Agency, Ltd. (JCR), Moody's Investors Service, Inc.
(Moodyʼs), and S&P Global Ratings (S&P)

As for credit risks and operational risks, we evaluate capital adequacy by comparing the amount equivalent to 8% of risk
assets with the amount of capital, as stipulated in the Notiﬁcation on Capital Adequacy.
We evaluate credit risks using the Standardized Approach, a method of calculating the non-consolidated capital
adequacy ratio in accordance with the Basel requirements based on the Notiﬁcation on Capital Adequacy. Also, we haveadopted the Standardized Approach to measure the operational risk amount.
As for risk capital, we set a planned amount compared with the regulatory capital (core capital), and then monitor theactual amount of risk capital and give monthly reports accompanied by a comparison with the regulatory capital (corecapital) to the Risk Management Committee. We recognize the current capital level as adequate.
Matters Relating to Credit Risk Management
A. Outlines of Credit Risk Management Policies and Procedures
The Nomura Trust and Banking strictly reviews and manages credit risks based on the Credit Risk Management Policy, theCredit Risk Management Regulations, the Credit Authorization Management Regulations, and the Collaterals Regulations
and the like. At the same time, we carefully pay attention to diversiﬁcation of risks and portfolios, and comprehensively
manage both on- and oﬀ -balance sheet transactions in pursuit of appropriate management of credit risks. The state of
portfolio diversiﬁcation is reported to the Risk Management Committee and then reviewed on a monthly basis.
1.

Credit rating system
Credit ratings are determined not only by conducting scoring based on a rating model using the financial
information of debtors but also by utilizing the latest important information available including qualitative
information on managerial risk, legal risk etc. which may aﬀect the certainty of debt assumption, external credit
ratings or the credit standing of associated companies . These ratings are classiﬁed into 20 levels.
To perform credit screening, we strictly manage credit risks based on credit ratings to maintain soundness of thebankʼs assets, fully taking into account our public and social missions as a ﬁnancial institution.

2.

Exposure (credit amount) management
With the identification of exposure for each debtor or each group of debtors positioned as the core of credit risk
management, we centrally control not only loans but also other on-balance and oﬀ -balance items in a comprehensive
manner. Oﬀ -balance sheet transactions are managed by the current exposure method. Based on the above, we performmeasurement and monitoring of credit risk quantity by quantitatively analyzing past default rates by credit rating.

Ⅳ.

Outlines of Credit Risk Mitigation Techniques
From the standpoint of risk management, we take measures to provide coverage for credit exposure by collateral andguarantees to mitigate counterparty credit risk.
In accordance with the Notiﬁcation on Capital Adequacy, we use (1) eligible ﬁnancial asset collateral, (2) guarantees or
credit derivatives, and (3) netting of loans and deposits held at our bank.
To treat financial assets as collateral against credit such as loans, the credit risk mitigation effect is reflected in acomprehensive approach, calculating credit risk exposure after making adjustments to portions covered by collateraland deducting them from the credit amount. Eligible ﬁnancial assets include cash, deposits held at our bank, debt
securities issued by the sovereigns (governments, central banks, public sector entities), bonds rated BBB- and above byexternal rating bodies, listed stocks, investment trusts, and other items.
In the case of guarantees and credit derivatives, the credit risk mitigation eﬀect is reﬂected in the replacement approach
whereby the risk weight of exposures to the obligor is replaced with the risk weight of the guarantee or the protection
provider. Eligible guarantors and protection providers include central governments, Japanese local authorities andgovernment related organizations, foreign non-central government public sector entities, multilateral development banks,
banks and securities companies with a lower risk weight than the original obligors, and companies which are rated by theappropriate rating agencies.
A netting of loans and deposits held at our bank shall be required to meet the following conditions; netting of loans
and deposits held at our bank is legally valid, loans and deposits under netting contracts with the same counterparty
are always identifiable, the possibility that deposits may not be further maintained at our bank is monitored andmanaged, and the netted amount is monitored and controlled.

Ⅴ . Outlines of Policies and Procedures for Counterparties of Derivatives and Transactions with a Long-Horizon
Settlement Period
In the case of derivatives, we calculate the amount of credit risk assets of counterparties by multiplying the creditequivalent amount by the risk weight. We employ the current exposure method to calculate the credit-equivalent amount.

3.

Self-assessment
To make a self-assessment of assets involving credits, we implement self-assessments through strict classiﬁcationof credits based on obligor categorization linked to credit ratings, in accordance with the “Asset Assessment
Regulations” which are based on the former Financial Inspection Manual (abolished December 18, 2019) from the
Financial Services Agency.

1.

Policies regarding measures to secure transactions by collateral and allowance calculations
We take appropriate credit enhancement measures according to the creditworthiness of counterparties. We
have entered into the ISDA Credit Support Annex (CSA) and the like with some counterparties. As for allowances,
we calculate the credit reserves according to the amount of claims, depending on the creditworthiness ofcounterparties.

4.

Allowance for loan losses
Allowance for loan losses is provided as follows, pursuant to the rules regarding write-oﬀ s/allowances for loan losses:
Claims to normal debtors and debtors requiring caution are classiﬁed into speciﬁc categories, and the allowance
is provided on the basis of the accumulated default ratio released immediately before the assessment day by theexternal rating agency deﬁned in the Companyʼs guidelines. Additionally, for some debtors, rating evaluations are
made using internal rating models, and expected losses are recorded based on macroeconomic scenarios.
For claims to possibly bankrupt debtors, an allowance is provided in the amount deemed necessary, net of the2.

Possibility providing additional collaterals due to deterioration of our creditworthiness
As for the transactions with ISDA Credit Support Annex (CSA) and the like, an obligation to provide additional
collaterals may arise due to deterioration of our creditworthiness, such as a downgrade of our credit rating.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Ⅰ.

Ⅲ.

68

expected amount of disposable collateral and the estimated amount of recoveries from guarantees.
For claims to virtually bankrupt debtors and bankrupt debtors, an allowance is provided for the full amount of suchclaims, net of the expected amount of disposable collateral and the estimated amount of recoveries from guarantees.

Qualitative Disclosure

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

69

Disclosure based on Pillar III of Basel III – Qualitative Disclosure
Matters Relating to Securitization Exposures
A. Outlines of Risk Management Polices and Procedure
The Nomura Trust and Banking acts as an “investor” in securitization products, but we do not act as an “originator”
or as a“servicers.”
When we engage in securitization transaction as an “investor,” the Risk Management Committee must analyze
the investment, assessing the investment policy as well as the associated risks of the investment products and set
investment limit. Also reviewing in new investment products or new investment techniques, we will consult with
the New Products & Services Review Committee and the Risk Management Committee.
We invest in securitized products with underlying assets such as loan claims and claims on lease payments. The
securitized products we held carries credit risk and interest rate risk, but this risk is no diﬀerent from the risk fromloan and securities trading. Also there is risk in changing fair value by changes in credit rating and default ratio.
B.

C.

Ⅷ.

Matters Relating to Operational Risk
A.

Matters relating to management system and operation status stipulated in the Provision of article No. 248-1-1 to 4of the Notiﬁcation on Capital Adequacy including cases of mutatis mutandis application in accordance with article
No. 302-2-2 of the Notiﬁcation on Capital Adequacy
We analyze and evaluate the underlying assets, degree of dispersion and the scheme etc. and make a prudent
investment decisions when investing in individual securitization products. After the investment the rating agency
we appointed will continue monitoring, checking fair value and report to the Risk Management Committee
regularly.

■ Departments in Charge of Each Operational Risk（as of March 31, 2023）
Administrative risk
System risk
Information security risk
Operational
Risk

Policy for securitization transaction used as credit risk mitigation techniques
Not applicable

D. Calculation methods for determining the amount of credit risk asset with regard to securitization exposure
In accordance with the Notiﬁcation on Capital Adequacy, we evaluate credit risk asset with regard to securitization
exposure using an external ratings-based approach.
If we are unable to use the above-mentioned method, we apply a risk weight of 1,250%.
E.

Calculation methods for determining the amount of market risk with regard to securitization exposure
We apply exceptional accrual method into the market risk equivalentF.

If conducting securitization transaction relating to a third partyʼs assets by using a special purpose entity by bank, the typeof the special purpose entity and whether the bank possesses securitization exposures by such securitization transactions.
Not applicableG.

Names of Bankʼs subsidiary companies (excluding consolidated subsidiary) or aﬃliate companies possessing securitization
exposures executed by the Bank (including securitization transaction carried out using special purpose entity)
Not applicable

H.

Accounting Policies for Securitization Transactions
Each ﬁnancial asset is treated according to the Accounting Standards for Financial Instruments.

I.

Names of eligible external credit assessment institutions used to determine the risk weight by each type of
securitization exposure (including reasons if eligible external credit assessment institutions were changed)
In order to determine the risk weight, we use the following four rating agencies as eligible external credit
assessment institutions.
Rating and Investment Information, Inc (R&I), Japan Credit Rating Agency (JCR), Moodyʼs Investor Service, Inc(Moodyʼs), and S&P Global Ratings (S&P)

J.

Summary of internal valuation method for securitization
The bank is not using the internal valuation method for securitization

B.

Ⅶ.

70

Any signiﬁcant changes to the quantitative information
Not applicable

Matters Relating to Market Risk
Not applicable

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Legal and compliance risk
Outsourcing risk
Human Risk
Tangible Risk
Other operational risk

Operations Planning Department
IT Planning & Control Department
Compliance Control Department and IT Planning & Control
Department
Compliance Control Department
Operations Planning Department
Human Resource and General Aﬀairs Department
Human Resource and General Aﬀairs Department
Operations Planning Department

Methods Used to Calculate the Operational Risk AmountTo measure the operational risk amount under Basel requirements, we have used the Standardized Approachsince the beginning of the period ended March 2011. Under this approach, in accordance with the Notiﬁcation
on Capital Adequacy, we measure the amount of operational risk by ﬁrst allocating annual gross proﬁt (calculated
as “gross operating proﬁt” minus “gains on sales of bonds” and “gains on redemption of bonds,” and plus “loss on
sales of bonds” and “loss on redemption of bonds,” “loss on devaluation of bonds,” and “fees and commissions
payments”) into eight categories, and then multiplying gross income for each category by the ratio designatedto each operational category (ranging from 12% to 18%) accordingly (gross profit of business that cannot beallocated to one of the eight categories will be multiplied by an 18% ratio), and the amounts as a result for all
the categories are aggregated for a year. The average of the aggregated amounts for the last three years is theoperational risk amount.

Ⅸ . Outlines of Risk Management Policies and Methods Regarding Investments and Other Related Exposures (“Investments”)
or Equity Exposures in Banking Account as Stipulated in the Article 4-6-3 of the Order for Enforcement of Banking Act(Order No. 40 of 1982)
Decisions to hold investments and equities exposures are made after approved by Risk Management Committee oranother equivalent committee, depending on their purpose and amount, etc., based on the Approval Authorization
Regulations, the Credit Authorization Management Regulations and the like.
As for an individual investment, we recognize and manage its risk using the VaR Approach, Net Asset Approach or the
like, depending on the investment attributes and the style.
In the accounting procedures, we follow the Companies Act, the Banking Act of Japan, the Corporate Accounting
Principles, “Ordinance on Accounting of Companies,” “Accounting Guidelines for Banks” announced by the Japanese
Bankers Association, and other generally-accepted standards.
Since we adopt the Standardized Approach to measure the amount of credit risks under Basel requirements, a risk
weight of 100% is applied to equity exposures of the stocks, etc. which are not material investments.
Ⅹ . Matters Relating to interest Rate Risks in the Banking Book
A.

K.

Outlines of Risk Management Policies and Procedures
Operational risk is defined as the risk of incurring losses owing to inadequate business processes, activities of
directors and employees or systems, or external events. Based on the Integrated Risk Management Regulations,
we manage administrative risk, system risk, information security risk, legal and compliance risk, outsourcing risk,
human risk and tangible risk and in association with these risks, set out the Administrative Risk Management
Regulations, the System Risk Management Regulations, the Basic Policies for Information Security, the Legal andCompliance Risk Management Regulations, the Outsourcing Risk Management Regulations, the Human Risk
Management Regulations, the Tangible Risk Management Regulations.
Furthermore, the Corporate Risk Management Department manages operational risk comprehensively, while eachspecialized department manages speciﬁc risks in its jurisdiction.

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Ⅵ.

Outlines of Risk Management Policies and Procedures
As for the interest rate risk, we calculate this based on the Notification on Capital Adequacy, in accordance with
the Capital Management Regulations and the Market Risk Management Regulations. As for the risk management
procedures for interest-sensitive assets and liabilities in the banking account, the status of interest risk and the like arereported to the Risk Management Committee and the future management policies for assets and liabilities as well asother related issues are reviewed and determined.

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

71

Disclosure based on Pillar III of Basel III – Qualitative Disclosure
Outlines of Methods Used to Calculate Interest Rate Risks(1) Outlines of Risk Management Policies and Procedures(vi) Assumptions for Spreads
We include spreads in the interest for statements of cash ﬂows prepared. Conversely, a risk-free rate is usedas the discount interest rate.

(a) Deﬁnition of Interest Rate Risk and Subject of Risk Management and Measurement
Interest rate risk is deﬁned as: “The risk of loss resulting from changes in interest rates. As a result of a mismatch(vii) Other Assumptions Having Signiﬁcant Eﬀects on ⊿ EVE and ⊿ NII, such as Use of Internal Models

of interest rates on its assets and liabilities and/or timing differences in the maturity thereof, a financial

Not applicableinstitution may suﬀer a loss or a decline in proﬁt due to changes in interest rates.”
At the Nomura Trust and Banking, rate sensitive assets and liabilities, and oﬀ-balance-sheet transactions are(viii) Explanation Regarding Changes from Disclosure at the End of the Previous Fiscal Yearsubject to risk management and measurement.
(b) Risk Management and Mitigation Policies⊿EVE decreased due to a decrease in the amount of interest rate risk in securities.
(ix) Explanation Regarding the Interpretation and Importance of Values Measured

As for the risk management procedures for interest-sensitive assets and liabilities in the banking account andWe think our ⊿ EVE is appropriate for interest risk management purposes.

for off-balance-sheet transactions, the status of interest risk is properly reported to the Risk Management
Committee and other relevant organizations, and the future management policies for assets, liabilities, and oﬀbalance-sheet transactions, as well as other related issues are reviewed and determined.

(b) Following Matters Relating to Interest Rate Risk Measured by Bank for the Purpose of Capital Adequacy
Evaluation, Stress Testing, Risk Management, Income Management, Business Decision-Making or Other
Purpose Other Than Changes in Economic Value of Equity ( ⊿ EVE) and Net Interest Income ( ⊿ NII) Subject to(c) Interest Rate Risk Measurement Frequency

Quantitative Disclosures under Disclosure Notiﬁcation

Interest rate risk is measured daily with the previous business day as the base date.
(i)(d) Interest Rate Risk Mitigation Techniques Including Hedging

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

Disclosure based on Pillar III of Basel III – Qualitative Disclosure

B.

Explanation Regarding Interest Rate ShockWe use VaR to calculate the quantity of market price change risk from interest rates. In calculating VaR, we

For the purpose of managing the risk of changes in market values, we use interest rate swaps to hedge

use, as interest rate shock, the expected maximum change calculated with interest rate data from the past

securities and loans. As for the accounting treatment of hedging instruments, we apply hedge accounting

two years.

(deferral hedge using portfolio hedges or individual hedges). The exceptional accrual method for interest rate
swaps is applied for certain individual hedges.

(ii)Interest Rate Risk Measurement Assumptions and their Meaning
For VaR, we apply the historical method and use an index volume-weighted average to assign weights(2) Outlines of Methods Used to Calculate Interest Rate Risks

to changes calculated with data from the past two years. We then use the 1st percentile value as interest
rate shock. We apply a holding period of 20 days.

(a) Matters Relating to Changes in Economic Value of Equity ( ⊿ EVE) and Net Interest Income ( ⊿ NII) Subject toQuantitative Disclosures under Disclosure Notiﬁcation, and Relating to Interest Rate Risks to be Disclosed by
Banks in Addition Thereto(i)Average Maturity of Interest Rate Revision Assigned to Liquid Deposits
The average maturity of the interest rate revision assigned to all liquid deposits was 1.765 years as of March
31, 2023.

(ii)

The Longest Maturity of Interest Rate Revision Assigned to Liquid Deposits
The longest maturity of interest rate revision assigned to all liquid deposits was 4.5 years.

(iii) Method and Assumptions for Maturity Assignment for Liquid Deposits
We use an internal model for estimating the balances and holding periods of core deposits.
(iv) Assumptions for Prepayments of Fixed Interest Rate Loans and Cancellations of Time Deposits before
Maturity
As for the ratios of prepayments of loans and cancellations of time deposits before maturity, we use
values specified by the Financial Services Agency.
(v)

Aggregation Method and Assumptions for Multiple Currencies
In calculating interest risk, we target all applicable currencies and use a conservative method for
aggregation without taking into account the correlations between currencies. From an importanceperspective, we calculate the interest rate risk for certain currencies by translating them into othercurrencies for aggregation.

72

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

73

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

Under the Notiﬁcation of the Financial Services Agency, The Nomura Trust and Banking calculates the non-consolidated
capital adequacy ratio based on the domestic standard. We use the Standardized Approach to measure credit risks. To
measure the operational risk amount we use the Standardized Approach.
Ⅰ.

E. Amount of Required Capital against Operational Risk
(Millions of yen)

Required Capital (Standardized Approach)

Matters Relating to Capital Adequacy
A.

Amount of Required Capital against Credit Risk and Breakdown by Portfolio to Which the Standardized Approach Is
Applied

The
Standardized
Approach

Claims on foreign central governments and central banks
Claims on foreign non-central government public sector
entities
Claims on multilateral development banks
Claims on Japan Finance Organization for Municipalities
Claims on Japanese government-aﬃliated organizations
Claims on financial institutions and Type I financial
instruments business operators
Claims on corporations
Claims on small and medium enterprises and individuals
Claims on projects including acquisition of real estate
properties
Other
Securitization
Exposures to Which Regarded Calculation of Risk Weightis Applied

B.

Non-Consolidated Total Required Capital

Ⅱ.

—

17
57
173

19
61
137

616

307

14,767
2,666

10,8293,226■ Balances of Exposures Related to Credit Risk
(By area, industry, and duration)

946

833

Securities
10,742
1,300
9,261
—
23,0686,186
31,067
2,870
3,204
—
172,968
1,441
262,110
72,159334,269
74,542
142,832
72,528
1,422
39,6273,317
334,269

817
23

352

8

819
21,520361
16,708Amount of Required Capital against Credit Risk Concerning Equity Exposures to Which the IRB Approach Is Applied
and the Breakdown by Category
Not applicable as of March 31, 2022 and 2023

A.

Balance of Exposures Related to Credit Risk and Breakdown by TypeB.

Breakdown of Amount by Category and Breakdown of Exposure by Type

C. Amount of Required Capital for Diﬀerent Exposure Categories against Credit Risk Concerning Exposures to Which
Regarded Calculation of Risk Weight is Applied(Millions of yen)

Exposure Categories

Amount of Required Capital
March 31, 2022
March 31, 2023

315

—

—

—

—

—

—

—

36

8

By duration

Exposures for which ratios calculated in accordance with Article 76-5,
Section 2 of the Notification on Capital Adequacy are used as the risk
weights
Exposures for which ratios calculated in accordance with Article 76-5,
Section 6 of the Notification on Capital Adequacy are used as the risk
weights
Exposures for which ratios stipulated in Article 76-5, Section 9, Item 1of the Notification on Capital Adequacy are used as the risk weights
Exposures for which ratios stipulated in Article 76-5, Section 9, Item 2of the Notification on Capital Adequacy are used as the risk weights
Exposures for which risk weights in Article 76-5, Section 10 of the
Notification on Capital Adequacy are used

March 31, 2023
18,127

Matters Relating to Credit Risk (Excluding Exposures to which Regarded Calculation of Risk Weight is Applied andSecuritization Exposures)

48

889
37

March 31, 2022
22,533(Millions of yen)

By area and industry

CVA risk
Total

Amount of Required Capital
March 31, 2022
March 31, 2023
126
84

March 31, 2023
3,199

F. Non-Consolidated Total Required Capital (Domestic Standard)(Millions of yen)

Breakdown by Portfolio

March 31, 2022
2,846

Manufacturing
Construction
Electricity, gas, heat supply and waterCommunication and information services
Transport
Wholesale and retail
Finance and insurance
Real estate
Goods rental and leasing
Various services
Government and local authorities
Other
Domestic
Overseas
Total
Due in 1 year or lessDue over 1 year to 3 years
Due over 3 years to 5 years
Due over 5 years to 7 years
Due over 7 years
With no maturity
Total

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

D. Amount of Required Capital against Market Risk and Breakdown by Approach
Not applicable as of March 31, 2022 and 2023

Quantitative Disclosure(Millions of yen)March 31, 2023
Loans
4,784
549
3,829
15,0002,253
10,61032,99963,52313,080248,968—
357,966
753,565
42,123795,689
657,192
60,37240,47017,196
20,456—795,689

Derivatives
—
—
—
—
—
—
9,009
—
—
—
—
—
9,009
1,640
10,650
7,827
768
726
102
1,225
—
10,650

Others
17
1
18
21
743
44
174,64125
632
114
696,548
31,599904,408
5,461
909,870
905,851
2,617
750
—
—
651
909,870

Total
15,544
1,850
13,10915,021
26,065
16,841
247,717
66,41916,916
249,083
869,516
391,007
1,929,094
121,385
2,050,479
1,645,413
206,591
114,475
18,721
61,3093,968
2,050,479

Amount of Required Capital against Credit Risk Concerning Exposures to Which the Related-Method Are Applied
Not applicable as of March 31, 2022 and 2023

74

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

75

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

By area and industry
By duration

Manufacturing
Construction
Electricity, gas, heat supply and waterCommunication and information services
Transport
Wholesale and retail
Finance and insurance
Real estate
Goods rental and leasing
Various services
Government and local authorities
Other
Domestic
Overseas
Total
Due in 1 year or lessDue over 1 year to 3 years
Due over 3 years to 5 years
Due over 5 years to 7 years
Due over 7 years
With no maturity
Total(Millions of yen)March 31, 2022
Loans
10,052—
3,936
15,0003,620
7,449
33,45863,784
13,960210,218—
294,632
656,11252,493
708,606
591,476
34,42038,401
11,871
32,435—
708,606

Securities
9,934
1,300
11,472368
22,775
8,925
44,217
5,747
2,970
2,678
251,753
1,964
364,108
111,487475,595
55,562
123,310
205,933
19,981
65,3985,410
475,595

Derivatives
—
—
—
—
—
—
27,723—————27,723
5,645
33,36930,241
1,108
685
343
989
—
33,369Others
37
0
20
0
686
47
60,415
424
1,119
114
315,667
31,301
409,834
28,565438,399
430,837
4,664
8
—
—
2,889
438,399F.

Total
20,0241,300
15,42915,36827,082
16,422
165,815
69,956
18,049213,010567,420
327,898
1,457,779
198,191
1,655,971
1,108,118
163,504
245,028
32,196
98,8238,299
1,655,971

Balance of Exposures, Subject to Application of a Standard Method, after Consideration of the Eﬀects from Credit Risk
Reduction Methods for Different Risk Weight Categories, and the Amounts of These Exposures to Which 1,250% of
Risk Weight is Applied in Accordance with Financial Services Agency Notiﬁcation No. 19 (Hereinafter the “Notiﬁcation
on Capital Adequacy”): Article 79, Section 5, Item 2-2; Article 177, Section 2, Item 2-2; and Article 248 of the Notiﬁcation
on Capital Adequacy (Limited to Cases of Mutatis Mutandis Application in Accordance with Article 125 and Article 127of the Notiﬁcation on Capital Adequacy), as Well as Article 248, Section 4, Item 1-1 and Article 248, Section 4, Item 1-2(Limited to Cases of Mutatis Mutandis Application in Accordance with Article 125 and Article 127 of the Notiﬁcation on
Capital Adequacy)(Millions of yen)

Risk Weight

0%
10%
20%
40%
50%
70%
75%
100%
120%
1250%
Other than the above

March 31, 2022
Rating Available
Rating Not Available
569,123
79,796
34,716—113,656
2,065
2,448
—
84,028—2,430——
88,891
48,694336,281
1,000
—
—
73
279
16,615

March 31, 2023
Rating Available
Rating Not Available
999,72065,00425,369—75,527———73,755—
1,331——
107,539
45,115
226,642
—
—
—
16
252
—

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

Disclosure based on Pillar III of Basel III – Quantitative Disclosure(By area, industry, and duration)※ In accordance with the Notiﬁ cation on Capital Adequacy and “Questions and Answers on Basel requirements”
issued by the FSA on March 31, 2006, the risk weight above represents the sum of risk weight of exposures toC.

original debtors and original creditors in “loan participations.” In the above table, the columns corresponding

Balances of Exposure Overdue for More Than Three Months or at Default and Breakdown by Category
Not applicable as of March 31, 2022and 2023

to the risk weights of 40%, 70% and 120% are the results of combining risk weight of 20% with that of 20%,
50% and 100%, respectively.
※

D.

General Allowance for Credit Losses, Specific Allowance for Credit Losses and Allowance for Loans to Specific
Foreign Borrowers■ Balances of General Allowance for Loan Losses(Millions of yen)

1,080

March 31, 2022
Against March 31, 2021
(200)

1,150

■ Balances of Speciﬁc Allowance for Loan Losses（By area and industry）

By area and industry

Manifacturing
Other
Domestic subtotal
Overseas
Total

Allowance for loans to speciﬁc foreign borrowers is not applicable.
E. Amount of Written-Oﬀ of Loans by Industry or Counterparty

method.

G.

March 31, 2023
Against March 31, 2022
70

(Millions of yen)March 31, 2022
AgainstMarch 31, 2021
1,373
1,373
288
—
1,662
1,373
—
—
1,662
1,373

March 31, 2023
AgainstMarch 31, 2022—
(1,373)288—
288(1,373)——288(1,373)“Other than the above” partly includes funds with which we measure credit risk assets using the look-throughAmong the Exposures to Which the IRB Approach Is Applied, Balances of Specialized Lending Exposures Subject toSupervisory Slotting Criteria and Equity Exposures Subject to the Market-Based Simpliﬁed Approach by Risk Weight
Category in the Case Where the Risk Weight as Stipulated in the Article 153-3, Article 153-5, and Article 166-4 of theNotiﬁcation on Capital Adequacy Is Applied
Not applicable as of March 31, 2022 and 2023

H. Matters Relating to Portfolio to Which the IRB Approach Is Applied
Not applicable as of March 31, 2022and 2023
I.

Actual Credit Losses in the Current Period and Year On Year Change and Its Factors by Corporate，Sovereign andBank Exposures under the IRB Approach and Equity, Residential Mortgage, Qualiﬁed Revolving Retail and other
Retail Exposures under the PD/LGD Approach
Not applicable as of March 31, 2022 and 2023

J.

Estimated and actual Credit losses over Long Periods by Corporate, Sovereign and Bank Exposures under the IRB
Approach and Equity, Residential Mortgage, Qualiﬁed Revolving Retail and other Retail Exposures under the PD/LGD
Approach
Not applicable as of March 31, 2022 and 2023

(Millions of yen)

Other
Domestic subtotal
Overseas
Total
76

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

FY20210
0—
0

FY2022————The Nomura Trust and Banking Co., Ltd. Disclosure 2023

77

Disclosure based on Pillar III of Basel III – Quantitative Disclosure
Matters Relating to Credit Risk Mitigation TechniquesA.

Ⅴ.

For a Portfolio under the Standardized Approach, Amount of Exposures to Which Credit Risk Mitigation Techniques
by Eligible Financial Asset Collaterals Are Applied (Limited to the portion for which credit risk reduction methods
are taken into account.)(Millions of yen)March 31, 2022
259,409

Matters Relating to Securitization Transactions
A. Matters Relating to Securitization Exposures Originated by the Bank
Not applicable as of March 31, 2022 and 2023
B. Matters Relating to Securitization Exposures in Which the Bank Invests

March 31, 2023
409,853

1. Amount of securitization exposures held and breakdown of major underlying assets by type(Millions of yen)Amounts of Exposures

B.

Type of Underlying Assets

For a Portfolio under the Standardized Approach or the IRB Approach, Amount of Exposures to Which the
Guarantees or Credit Derivatives Are Applied (Limited to the portion for which credit risk reduction methods aretaken into account.)

March 31, 2022
Re-Securitization
3,441
—
1,000
—
212
—
4,654
—

Loan claims
Claims on credit and credit card
Claims on lease payments
Total

For a portfolio under the Standardized Approach, amounts of exposures to which the guarantees wereapplied were 16,548 miillion yen as of the end of March 2023, and 30,553 miillion yen as of the end of March
2022. These amounts were calculated based on the replacement approach.

March 31, 2023
Re-Securitization
1,772
—
1,000
—
6
—
2,779
—

2. Balance and amount of required capital of securitization exposures held by appropriate risk weight category

Ⅳ . Items Pertaining to Counterparty Risk on Derivative Transactions and Long-Settlement Transactions(Millions of yen)

(Millions of yen)March 31, 2023

March 31, 2022
March 31, 2023
Gross
Credit-EquivalentGrossCredit-Equivalent
Gross Add-On
Gross Add-On
Replacement Cost
AmountReplacement Cost
AmountGross Credit-Equivalent Amount(Before Credit Risk Mitigating Eﬀect is Recognized)

28,50016,33644,837

13,07914,20527,284

Derivative Transactions

28,50016,33644,837

13,07914,20527,284Forex and Gold-Related

27,233

12,447

39,681

10,241

9,156

19,397

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

Disclosure based on Pillar III of Basel III – Quantitative Disclosure

Ⅲ.

Risk Weight
15%
20%
30%
Total

6
2,526
246
2,779

Balance
Re-Securitization————

Required Capital
Re-Securitization
0
—
20
—
2
—
23
—
(Millions of yen)March 31, 2022
Interest Rate-RelatedLong-Settlement Transactions
Credit-Equivalent Amount Reduction Eﬀect
Through Close-Out Netting Agreement

1,267

3,889

5,156

2,838

5,049

7,887

—

—

—

—

—

—

(4,772)(6,695)(11,467)(9,596)(7,037)(16,634)

Net Credit-Equivalent Amount(Before Credit Risk Mitigating Eﬀect is Recognized)

33,36910,650Eligible Financial Collateral Associated

11,5281,304

Cash and own bank deposits

1,975

981

Bonds

9,553

322

Net Credit-Equivalent Amount(After Credit Risk Mitigating Eﬀect is Recognized)

21,841

9,345(Note) 1. The credit-equivalent amount is calculated by applying the current- exposure method.
2. Does not apply to credit derivatives trading as of March 31, 2022 and 2023

78

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

Risk Weight
16.25%
17.50%
20%
30%
Total

479
86
3,808
279
4,654

Balance
Re-Securitization
—
—
—
—
—

Required Capital
Re-Securitization
3
—
0
—
30
—
3
—
37
—

3.

A breakdown of the amount of securitization exposures, for which 1,250% of risk weight is applied inaccordance with Article 248, as well as Article 248, Section 4, Item 1-1 and Article 248, Section 4, Item
1-2, of the Notification on Capital Adequacy, and by types of categories of original asset
Not applicable as of March 31,2022 and 2023

4.

Breakdown of re-securitization exposure to apply for credit risk mitigation technique and to apply for
Guarantor or appropriate guarantor
Not applicable as of March 31, 2022 and 2023

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

79

Disclosure based on Pillar III of Basel III – Quantitative Disclosure
Disclosure based on Pillar III of Basel III – Quantitative Disclosure

C.

Matters relating to calculate the market risk amount regard to securitization exposure in which the Bank
originates
Not applicable as of March 31, 2022 and 2023

D.

Matters relating to calculate the market risk amount regard to securitization exposure in which the Bank
invests
Not applicable as of March 31, 2022 and 2023

Ⅵ.

Matters Relating to Market Risk
Not applicable as of March 31, 2022 and 2023

Ⅶ.

Matters Relating to Capital Subscriptions or Equity Exposures
Not applicable as of March 31, 2022 and 2023

VIII. Amounts of Exposures to which Regarded Calculation of risk weights are Applied as Shown for Diﬀerent Exposure Categories(Millions of yen)

Exposure Categories
Exposures for which ratios calculated in accordance with Article 76-5,
Section 2 of the Notication on Capital Adequacy are used as the risk weights
Exposures for which ratios calculated in accordance with Article 76-5,
Section 6 of the Notication on Capital Adequacy are used as the risk weights
Exposures for which ratios stipulated in Article 76-5, Section 9, Item 1 of theNotication on Capital Adequacy are used as the risk weights
Exposures for which ratios stipulated in Article 76-5, Section 9, Item 2 of theNotication on Capital Adequacy are used as the risk weights
Exposures for which risk weights in Article 76-5, Section 10 of the Notication
on Capital Adequacy are used

Amount as ofMarch 31, 2022

Amount as ofMarch 31, 2023

18,095

—

—

—

—

—

—

—

73

16

Amount of exposures to which regarded calculation of risk assets used is applied
Not applicable

IX.

Matters Relating to Interest Rate Risk

(Millions of yen)Interest Rate Risk
A

Order

C

D

March 31, 2022

March 31, 2023

March 31, 2022

March 31, 2023

⊿NII

1

Upward parallel shift

8,672

4,123

3,186

5,385

2

D ow nwa rd p a r a l l e l
shift

0

5,942

360

(2,150)3

Steepening

3,426

3

4

Flattening

792

1,663

3,296

2,639

629

2,220

8,672

5,942

3,186

5,385

5
6
7

8

80

B

⊿EVE

Shor t-term interest
rate rise
Shor t-term interest
rate decline
Maximum value

Regulatory capital

The Nomura Trust and Banking Co., Ltd. Disclosure 2023

E
End of March 2022

F
End of March 2023

89,02290,317