Daiwa Securities Group Inc. Q4 FY2026 earnings call

• Wealth Management division: Focus on total asset consulting led to record highs in contract amount and net inflow for wrap account services, net asset inflows expanded; assets under management in Securities Asset Management and real estate asset management grew steadily. • Global Markets: Accurately captured customer flows amid market fluctuations, resulting in increased revenues in both equity and FICC. • Global Investment Banking: Domestic M&A remained strong. • FY 2025 base profit grew steadily to JPY 182.7 billion, up 32.9% year-on-year, exceeding the JPY 150 billion target for the final year of the medium-term management plan in the second year. • Year-end dividend is JPY 35 per share, combined with interim dividend of JPY 29, annual dividend reaches record high of JPY 64, dividend payout ratio 50.8%. • Daiwa Next Bank: NII totaled JPY 11.2 billion, up 11.2%; ordinary profit reached JPY 6.2 billion, up 30.2%; deposit balance surpassed JPY 5 trillion due to promotion of total asset consulting and competitive deposit interest rates. • Acquisition of ORIX Bank: Primary objective is to continuously expand stable revenues of Daiwa Securities Group and improve ROE and EPS through strengthening Wealth Management division; 3 pillars of strategy: deepening total asset consulting tailored to client life stages, establishing sustainable growth model through deposit and lending expansion virtuous cycle, maximizing synergy effects through future merger

Wealth Management division: Net operating revenues were JPY 81 billion, up 5.2%; ordinary income was JPY 33.1 billion, up 12.1%. Equity revenue increased due to increased trading in Japanese equities; fixed income revenues increased as investment needs were captured; sales of fund wrap increased significantly with wrap-related revenues reaching a record high of JPY 18 billion; asset-based revenues reached a new record high of JPY 33.4 billion. Asset Management segment: Securities Asset Management: Net operating revenues JPY 19.7 billion, up 5.9%; ordinary income JPY 11.4 billion, up 11.6%; Daiwa Asset Management publicly offered securities investment trust AUM topped JPY 37 trillion. Real estate asset management: Net operating revenues JPY [9.9] billion, down 10.6%; ordinary income JPY 9.8 billion, down 5.6%; AUM at Daiwa Real Estate Asset Management surpassed JPY 1.6 trillion. Alternative Asset Management: Net operating revenues negative JPY 2.6 billion; ordinary income negative JPY 4.8 billion due to provisions and impairments from revaluation of certain portfolio investments. Global Markets and Investment Banking division: Global Markets: Net operating revenues JPY 51.3 billion, up 13.4%; ordinary income JPY 17.7 billion, up 48.6%; both equities and FICC performed strongly. Global Investment Banking: Net operating revenues JPY 24.1 billion, down 7.4%; ordinary income 2.1 billion, down 60.5%; domestic M&A remained strong, and revenues increased in Europe within overseas operations

• FY 2025 base profit grew to JPY 182.7 billion, up 32.9% year-on-year, exceeding the JPY 150 billion target for the final year of the medium-term management plan in the second year. • Aim to accumulate JPY 2 trillion in deposits over the next 5 years as a synergy effect through provision of competitive deposit rates. • Plan to invest a total of JPY 3.5 trillion in real estate investment loans and securities-backed loans to improve net interest income. • Expect to improve net interest income by potentially JPY 35 billion assuming 1% interest rate margin improvement. • Dividend policy: Payout ratio at 50% or higher, annual dividend floor of JPY 40 to be maintained

• Volatile market environment could impact financial performance. • Impact of amortization of goodwill from acquisition of ORIX Bank is uncertain. • Uncertainty in market conditions may affect ability to capture customer flow and maintain position management. • Potential impact of private credit turmoil on the group is limited but needs to be monitored; alternative assets with low liquidity require proper client communication and compliance

Q: Regarding ORIX Bank's acquisition, question about JPY 2 trillion deposit increase outlook and loan growth breakdown, also capital strategy and share buybacks.

A: Confident of achieving JPY 2 trillion deposit increase, feasible to achieve JPY 3.5 trillion loan, capital adequacy ratio will be down but financial soundness ensured, no change in basic capital policy, AT1 bonds issuance to be considered, comprehensive approach to capital allocation.

Q: Related to ORIX Bank acquisition, question about goodwill amortization scale and dividend policy.

A: Amortization details to be discussed later, no change in dividend payout ratio.

Q: About FICC sustainability, how recent performance is and trend.

A: FICC captured customer flow in volatile market, customer flow active, but market changes require continuous effort to capture flow and strengthen position management system.

Q: About wealth management asset inflow and ORIX Bank acquisition key men retention and real estate finance sourcing.

A: Asset inflow net inflow increased despite AUM decline due to factors like US and domestic stock price drops; key men retention details not disclosed, ORIX Bank's real estate finance sourcing mainly from its own network.

Q: About wealth management asset inflow reasons and ORIX Bank focus on client life stages.

A: Asset inflow reasons include fund wraps and Daiwa Next Bank deposits, ORIX Bank focuses on different life stages' asset and liability balances, aiming to expand loan products for various clients.

Q: About acquisition background, interest margin realism, and impact of US private credit turmoil.

A: Acquisition background is complementarity between banks and positive interest rate environment, 1% interest margin is a test scenario, US private credit turmoil has limited exposure and impact on group, monitored for client cancellation requests