Daiwa Securities Group Annual Report 2012 Q7  What are your plans for the Wholesale business? Q8  As part of the plan to expand “stable” revenue, what targets has Daiwa Securities Group set for  specific product segments and businesses? Targets for Increasing Stable Sources of Income A.  As noted in the medium-term plan, our fifth strategy is to  “revitalize the brokerage business.”  As financial  regulations are strengthened on a global scale, investment banks face a very challenging business environment.  This is likely to continue, and therefore the Daiwa Securities Group has to concentrate on customer-oriented  businesses that will allow us to elevate profitability and capital efficiency at the same time. The Global Markets business makes full use of our solid domestic customer base and global network to  provide a diverse range of products while also driving cohesive and efficient operations in the Asian region.  Specifically, we continue to efficiently provide value-added services that differentiate us from our competitors  through the enhancement of an integrated sales system in Asia with Japan as its core and a pan-Asian  research network. Furthermore, we are also working to  “provide investment banking solutions that accurately capture client  needs,”  which is our sixth individual strategy. Since our Global Investment Banking business is not tied to any of  Japan’s large corporate groupings, by cultivating the sales and proposal capabilities of investment bank personnel  we can precisely address the needs of a broad range of  clients without being limited by group affiliations, and  propose optimal solutions. Leveraging the Daiwa Securities Group’s global  network centered in Asia, including Japan, we will  concentrate on supporting the efforts of Japanese  companies to expand into Asia, and on offering investment  banking solutions to leading companies in Asia. We also  intend to improve cooperation between the four main  bases of our M&A business—Japan, Asia, Europe and the  Americas—in an effort to expand cross-border M&A  consulting income. We also aim to diversify and maximize  the earnings potential associated with M&A activities,  focusing on associated activities like financing and foreign  exchange trading. A.  We have identified the following revenue categories as “stable”: Asset management fees (including investment  advisory fees), investment trust agency commissions, Daiwa Next Bank profit margin on interest, Daiwa Real  Estate asset management fees, SMA / FW fees, interest from credit transactions, and LMS interest. To expand  these income sources, we hope to increase the balance of assets under management in Daiwa Securities’ mutual  funds by ¥800 billion, and the balance of assets under management of mutual funds at the two asset management  subsidiaries by ¥2.6 trillion. Figures in parentheses reflect market assumptions Net increase of mutual fund [3-year cumulative]:  +¥0.8 trillion (+¥1.7 trillion)  Increase in agency fees: +¥6 billion (+¥12 billion) Net increase of mutual fund [3-year cumulative]:  +¥2.6 trillion (+¥4.6 trillion) Increase in asset management fees: +¥7.8 billion  (+¥13.5 billion) Retail Division Asset Management Division Cross-border M&A  Daiwa Corporate Advisory  4 offices; 160 staff Sagent Advisors  4 offices; 90 staff Asia (ex-Japan) 90 staff Europe e Japan Jap Ja Asia As A 19