Daiwa Securities Group Annual Report 2012 Summary of the “New” Medium-Term Management Plan Consolidated Ordinary Income Management Targets [Initial FY] Return to Profitability [Final FY] Over ¥120.0 billion Wholesale Division  Retail Division  Asset Management Division Ordinary Income  ¥20.0 billion Ordinary Income  ¥88.0 billion Ordinary Income  ¥24.0 billion Business Strategies for Achieving Earnings Growth Strengthen coverage of  the middle market Strengthen earning capacity of  the asset management business Revitalize the brokerage business Enhance offerings for  high net worth individuals Provide investment banking solutions  that accurately capture client needs Daiwa Next Bank  Creating Synergy Between Securities  & Banking Services Environmental Assumptions for Medium-Term Management Plan Economy [Global] [Global economic growth rate: average of 3.9% for the duration of the plan / US: 2.3%; Euro-zone: 0.6%; Other: 4.8%] [Domestic] [Real GDP growth rate: 1.8% in FY2012; 1.8% in FY2013; and 1.4% in FY2014] Market  Conditions [Stock] [TOPIX: 910 for FY2012; 1,080 for FY2013; and 1,200 for FY2014] [Interest] [Long-term interest rate: 1.0% for FY2012; 1.6% for FY2013; and 2.0% for FY2014] [Currency] [Yen-dollar exchange rate: 85 yen for FY2012; 88 yen for FY2013; 90 yen for FY2014] 15 Outline of Medium-Term Management Plan “Passion for the Best” 2014 Establish a robust business structure immune to the external environment and aspire to achieve sound growth based on a new growth strategy Milestones FY2014 Expansion FY2013 Growth FY2012 Turnaround Daiwa Securities Group Management Vision To become Asia’s leading financial services firm possessing and leveraging a solid business platform in Japan  Daiwa Securities Group Basic Management Policy Basic Policies  for Medium-Term  Management Plan Management  Targets 1. Consolidated Ordinary Income [Initial FY] Return to Profitability [Final FY] Over ¥120.0 billion 2. Fixed Cost Coverage Ratio [Final FY] Over 50% Basic Policy I: Return to profitability by pursuing management efficiencies (Focus of execution in the first fiscal year)  Steadily implement the plan to reduce SG&A Realize greater organizational efficiencies by shifting personnel from  the middle- and back-offices to the front divisions Basic Policy II: Achieve client-based high-quality earnings growth Drastically expand our client base in Japan by investing management resources in the Retail and  Asset Management businesses – Expand stable earnings by increasing investment trusts and  deposit balances – Strengthen revenue capacity centered around the launch of the “new” Daiwa Securities – Step up  approaches to high net worth individuals and the middle market –  Rebuild our Wholesale business – Re-strengthen the brokerage business and build an efficient  global network – Establish a robust business structure capable of securing profit even under stressful economic conditions Achieve sustainable growth by linking Japan and the growth of Asia