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## Wholesale Division 

The Wholesale Division consists of the “Global Markets” business, which provides high-quality financial services and products such as stocks, bonds, currencies and derivatives brokerage to institutional investors, and the “Global Investment Banking” business, which underwrites stock and bond issues for corporations and provides IPO and M&A advisory services. The Division has established a solid platform for operations including offices in the four main financial centers of Tokyo, Hong Kong, London and New York. Daiwa Securities has extensive experience and knowhow, and has earned a good reputation for providing financial solutions to global clients including corporations, other financial institutions and institutional investors. 

## Business Conditions and Earnings Results for FY2011 

The Wholesale Division was severely affected by harsh business conditions, as equity financing both in Japan and overseas con- tracted following the East Japan Earthquake, and as the debt crisis in Europe depressed trading profits. During FY2011 the Global Markets business experienced a 15.4% drop in net operating revenues, to ¥52.0 billion, and generated an ordinary loss of ¥54.4 billion. The Global Investment Banking business also saw net oper- ating revenues decline 13.6%, to ¥26.5 billion, and posted a ¥14.2 billion ordinary loss. In the fourth quarter, however, restructuring efforts and personnel reductions at overseas offices, domestic improvements in management efficiency and IT-related cost-cutting greatly improved the profit structure. As major global stock markets 

## Quarterly Earnings Trends in FY2011 

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1. Acquire IB deals by utilizing global network cored on Asia including Japan 

2. Provide timely products to link firm client base and markets environments 

## Action Plan for FY2012 

3. Develop business focused on client trading flows with priorities in capital efficiency and based on appropriate risk management system 

began to recover and interest and exchange rates stabilized, trad- ing profits improved and earnings improved dramatically compared with the start of the fiscal year. 

## Key Events of FY2011 

During FY2011, the Group took proactive steps to improve earnings in the Global Markets business including the transfer of Synthetic Prime Brokerage* operations and the downsizing or closure of other unprofitable businesses. On the other hand, in order to bolster stock trading capabilities in Asia, including Japan, the Group estab- lished a Pan-Asian research team that can offer comprehensive and effective coverage of Japanese and Asian equities. In prepara- tion for the merger of Daiwa Securities and Daiwa Securities Capital 

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