Daiwa Securities : FY2023 Management Strategy Presentation

Daiwa Securities Group

FY2023 Management Strategy Update

May 31, 2023

Seiji Nakata, President and CEO

Daiwa Securities Group Inc.

These materials were produced to provide information on results through the fourth quarter of FY2022 and the management's vision for the future. They are not intended as a solicitation for investment in securities issued by Daiwa Securities Group Inc. These materials were produced based on information that was disclosable as of May 31, 2023. The opinions, forecasts, and other forward-looking statements in these materials are based on the company's judgment at the time they were produced, and Daiwa Securities Group Inc. makes no guarantees in regard to the accuracy and completeness of the information contained herein. This information may also be revised without prior notice in the future.

Table of Contents

• - Overview of the Year 2 of

the Medium-Term Management Plan ・・・・3

• - Vision for the Future ・・・・ 9 Appendix ・・・・ 26

• - Overview of Year 2 of the Medium-Term Management Plan

Ⅰ - Overview of Year 2 of the Medium-Term Management Plan

Market Environment

Amidst a major turning point in the global economy, with the Russian invasion of Ukraine, ongoing worldwide inflation, a shift away from prolonged monetary easing, and the impact of Western-originated financial instability, the market has experienced intense volatility.

Equity Markets (Parenthesis shows FY2022 average forecast projected as of March 2021)

5,000	Nikkei Average	32,000
	(right)
4,600	￥30,916	30,000
（Forecast：￥34,000）
4,200		28,000

FX Markets

150

145

140

135

EUR/JPY(left)160 ¥150.8

150

140

130

USD/JPY(right)

3,800	26,000	130	¥140.6	120
	（Forecast： ¥110）
	S&P500(left)	125		110
	4,205pt
3,400	（Forecast：4,350pt）24,000	120		100
（pt）2021/04	2021/08 2021/12 2022/04 2022/08 2022/12 2023/04 （yen）（yen)2021/04 2021/08	2021/12 2022/04 2022/08 2022/12 2023/04	（yen）

Bond Markets

6	＜UST/JGB 10y yields＞	0.6	180	＜US/Japan bond price volatility＊1＞			9
160			8
5	U.S.(left)	0.5							U.S.
3.79％	140							7
								(left)
4	（Forecast：2.00%）	0.4	120									6
3		0.3	100									5
2	Japan(right)	0.2	80									4
60									3
1	0.43％	0.1								Japan
（Forecast：0.18%）	40								2
										(right)
0		0	20									1
（％）2021/04	2021/08 2021/12 2022/04 2022/08 2022/12 2023/04	（％）	2021/04	2021/08	2021/12	2022/04	2022/08	2022/12	2023/04	（pt）
（pt）
	*1 Japan：S&P/JPX JGB VIX US：MOVE（Source）Bloomberg All graphs use weekly data（period : April 2, 2021 to May 26, 2023）			4

Ⅰ - Overview of Year 2 of the Medium-Term Management Plan

Summary of Financial KPIs

Consolidated ordinary income for the fiscal year 2022 was ¥86.9 billion. Despite a challenging market environment, while Global Markets slowed down, the Retail, Asset Management, and Investment Division remained robust, ensuring a certain level of profitability.

Progress on Financial KPIs

Performance		Financial Base		Wealth Management Business		Hybrid Strategy
Ordinary			Consolidated total	Retail Division	FY22		Hybrid-related
ROE		Asset based revenues	4Q
Income						ordinary income
	capital ratio
（FY2022）		Revenues	Ratio		and income ratio
（FY2022）			（As of Dec 31, 2022）		（FY2022）

	¥86.9 billion	4.6％		21.28％		¥20.2 billion	51.2%		¥45.0 billion
	Target (FY2023)	Target (FY2023)		Target (FY2023)					52%
			Target (FY2023 4Q)	Target (FY2023.4Q)		Target (FY2023)
					Maintain at
	¥200 billion or more	10％ or higher			¥24 billion	50％ or higher		¥50 billion or more
					18％ or higher					Around 25％
	Consolidated Ordinary Income

（¥ billions）

FY15-17Mid-Term Plan

Previous Medium-Term Management Plan

Current Medium-Term Management Plan

50 43 43 43

30 25

10

1Q 2Q 3Q 4Q

FY2017

25 20 19 17 17

1Q	2Q	3Q	4Q	1Q
	FY2018

	22			23	34
9	20	21
2Q	3Q	4Q	1Q	2Q	3Q
FY2019			FY2020

35

4Q

34	36	40

1Q 2Q 3Q FY2021

23

4Q

18	23	30
14

1Q 2Q 3Q 4Q

FY2022

Retail Division

Wholesale Division

Asset Management Division

Investment Division

Other / Adjustment

Total Consolidated Ordinary income

5