Message from the President and CEO

June 2009 

During fiscal year 2008, the Sumitomo Trust Group faced extremely harsh conditions in the wake of the international financial crisis and global recession.

Under such circumstances, we strived to move beyond the boundaries of traditional banking business to make use of our Group's "on-balance financial brokerage" and "off-balance financial brokerage" functions, and evolve into an "asset-management type financial solution group" providing individual as well as corporate clients with the most appropriate investment opportunities and fund raising methods. For that purpose, we strengthened business strategies in all businesses and combined specialized functions across the group to expand into a "hybrid-type business enterprise" offering total solutions, while at the same time solidifying our management and business infrastructure through such steps as further consolidation of our credit management stance and capital base structure.

As for the results over fiscal year 2008 under review, a substantial increase in market-related profits helped offset the decrease of fees and commissions from sales of investment trusts and real-estate brokerage, so that our consolidated net business profit before credit costs increased by 24.2 billion yen over the previous fiscal year, reaching 244.1 billion yen. On the other hand, the impairment losses on overseas credit investments as well as worsening domestic corporate results forced us to post substantial total credit costs exceeding our initial expectations, which combined with losses due to declining stock prices, resulted in our consolidated net income for the fiscal year to drop by 74.3 billion yen to 7.9 billion yen. To our great regret, we had to reduce our year-end dividend to 1.50 yen per share (The annual dividend stood at 10 yen per share when combined with the interim dividend).

The outlook in the fiscal year that began in April this year remains as unpredictable and opaque as ever, but in order to meet increasingly sophisticated and advanced client needs, we are offering total solutions by putting to optimal use our functions as a trust bank combining banking, trust and real estate businesses. Directors and employees alike, all of us at Sumitomo Trust stand united in aiming to further secure the trust and support of our clients and promote our corporate value.

In concluding, I would like to solicit hereby the continued favorable consideration of our valued shareholders.