SMBC Nikko Medium-term Management Plan
(FY2013-FY2015)
April 5, 2013
SMBC Nikko Securities Inc.

Review of FY2010-FY2012 －Structural realignment－Since becoming a member of the Sumitomo Mitsui Financial Group in October 2009, SMBC Nikko
has made steady progress enhancing its corporate structure with a focus on ideals of “Full-linesecurities company,” “Global,” and “Banking-securities collaboration”

Full-line securities company
 Commence equity/bond underwriting
business and establish structure topromote underwriting and distributionof global offerings
 Commence sales and trading businessfor institutional investors and establish
research, sales, IR, and trading functions
GlobalBanking-securities collaboration

 Set up six overseas offices (London, NewYork, Hong Kong, Shanghai, Sydney andSingapore) Collaborate in areas such as intermediaryand banking agency services and referrals
from SMBC for corporate and/or individual
clients

 Enter into alliances with major global
financial institutions in M&A and/or otherbusinesses1 Commence offering “Bank & Trade”, joint
services for banking and securities
accounts via the internet
 Promote human resources exchange withSMBCReview of FY2010-FY2012 －Performance－
Amid a tough market environment in which trends deviated from our initial forecast range, weachieved stable profit growth by absorbing the increased costs related to the launch of thewholesale business through a build up in revenues mainly in the retail business

Performance (*1)
(JPY bn)
300(JPY bn)300

Net operating revenue

250

250

200200(JPY bn)50

SG&A

Ordinary income

4030

150

150

100

100

50

50

200

100
FY2010FY2011FY2012 (*2)

0FY2010FY2012 (*2)

FY2011FY2010FY2011MarketNikkei 225(¥)(¥)

16,000USD/JPY forex market

12011014,000

Forecast range

100

Forecast range

12,00090
10,0008,000
2010/0480

2010/10

2011/04

2011/10

2012/04

2012/1070
2010/04

Notes: 1. Total for SMBC Nikko (non consolidated) + overseas (securities business in London, New York, Hong Kong and Singapore)

2 2. For FY2012, the cumulative total for 1Q-3Q was converted into an annual basis

2010/10

2011/04

2011/10

2012/04

2012/10FY2012 (*2)

Management vision
Toward our goal to realize our vision as a full-line securities company, we are making ourtransition to the “growth” stage for the next three years from the “establishment” stage carriedout during the past three years
VisionLeading Japanese full-line securities company capable of offeringhigh quality financial products and services globally

Basic concepts of the Medium-term Management Plan

“Speed & Scale”
Rapidly and fundamentally improve our presence in financial and securities
markets globally by promoting growth strategies
Pursue high level securities expertise
Create an innovative banking-securities collaboration model
Establish a solid market presence and be highly evaluated by our valued clients3

Major initiatives
Develop and implement the following major initiatives to fulfill the basic concepts in the Mediumterm Management Plan and work to become the leading Japanese full-line securities company
Major Initiatives
Retail Expand client base and sustain earnings strength by actively injecting resourcesand enhancing banking-securities collaboration

Wholesale Establish a competitive front office structure by improving quality of coverageand further promoting banking-securities collaboration
 Improve earnings from sales and trading businesses by enhancing order flow andposition control
 Globally expand business selectively and effectively, by leveraging SMBC’smarketing base and alliances

Headquarters/
management
departments Create a more sophisticated management infrastructure and strengthen theheadquarters / management departments

All departments

 Strategically inject systems and human resources and accelerate employee
training to achieve growth strategies

System investment

Headcount (*1)

Approx. ¥50.0bn(total for 3 years)(JPY bn)
20

Approx.
8,000
Approx.
7,000

10Approx.
8,600

+600
employees+1,000employees

0FY2010

4FY2011

FY2012FY2013

FY2014FY2015

10/03/31

12/12/31

1. Total for SMBC Nikko + overseas offices, excluding executive officers,
temporary staff, and secondees to Japanese entities

16/03/31 e

Steps for achieving major initiatives: Retail business
Actively inject resources SMBC Nikko Securities
 Increase sales staff, mainly through hiring new
graduates

Operating assets via the retail business¥30tn

 Increase branch offices based on medium/longterm strategies+¥7tn Build sales structure that meets client attributes
 Proactively pursue enhancement of the sales
infrastructure and strategic products capturingmarket trends

¥23tn
¥21tn

Expand clientbase¥21tn

Banking-securities integration strategy
SMBC Nikko Securities & SMBC

 Integrate banking and securities services
SMFG wide, to best meet changing client needs
over the client’s stages in life, and to maximize
our value for client– Expand securities intermediary services byenriching product lineup, etc.
– Promote client referrals with SMBC and offer
products and services that take advantage ofthe strengths of each entity

5FY2010 FY2011 FY2012

FY2015

Steps for achieving major initiatives: Wholesale business
Coverage/investment banking

Build a competitive
coverage/solutions
structure Strengthen our capabilities to support large-scale and global deals by injecting resources
intensively
 Enhance our business structure and promote the strategic exchange of humanresources to strengthen the banking-securities collaboration to provide optimal value tothe SMBC client base
 Reinforce our business structure for IPO business and investment managementbusiness for regional financial institutions, etc. through measures such as increased
staffing

Sales & Trading

Improve earnings
strength by actively
injecting resources

Bonds Increase dealing revenues mainly from products with high liquidity, by increasing
dealers and enhancing our middle/back office function
 Further expand order flow mainly in derivatives by prompt introduction of new
product line and enhancing our sales support structure
Equities Strengthen our business by injecting resources into research, sales, IR, andtrading, and become one of the top three brokers in Japanese equities
 Improve our capabilities to meet diverse client needs in the solutions business

Overseas
Selective/effective
business expansion

6

 Enhance strategic business areas through strategic resource injection
 Expand new business by leveraging the banking-securities collaboration andalliances Establish necessary infrastructure for global business expansion

Earnings goals
Earnings goals (FY2015) (*1)

SMBC Nikko Securities
Net operating revenue:¥330.0 billion(JPY bn)
300

Retail business Net operating revenue trends

Ordinary income:¥100.0 billion(JPY bn)Wholesale business120

Net operating revenue trends¥100.0 bn¥230.0 bn

250

100

200

80

15060

1004050

2000
FY2010FY2011FY2012 (*2)

FY2015FY2010Notes: 1. Total for SMBC Nikko (non consolidated) + overseas (securities business in London, New York, Hong Kong and Singapore)

7 2. For FY2012, the cumulative total for 1Q-3Q was converted into an annual basis

FY2011FY2012 (*2)

FY2015