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## “New” Daiwa Securities and “New” Medium-Term Management Plan 

On April 1, 2012, Daiwa Securities Co. Ltd. merged with Daiwa Securities Capital Markets Co. Ltd., opening a new chapter in the Daiwa Securities Group’s history. This merger will reunite the Retail operations of Daiwa Securities with the Wholesale activities of Daiwa Securities Capital Markets for the first time since 1999, when the Group adopted a holding company structure. We have concluded that this re-unification is an essential step in our effort to “establish a robust business structure.” Indeed, we see it as one of the most important decisions in the 110-year history of the Daiwa Securities Group. Preparatory work to merge the two companies and a project to revise the Group’s organizational structure has been under way since early 2011. The consolidation and streamlining project aims to eliminate all the inefficiency and duplication that developed over the 13 years during which operations were managed separately, while aggressively cutting costs, especially in the Wholesale business, to address today’s highly competitive business environment. These efforts have already lowered break-even levels dramatically. In this way, we are laying a firm foundation on which the Daiwa Securities Group can write a new chapter in its history. As the “new” Daiwa Securities begins operations, we will strive to create the efficient manage- ment structure and powerful sales capabilities needed to succeed as a comprehensive, full-service securities company. 

In the year since I was appointed CEO, I have been constantly impressed by the vast management resources possessed by the Daiwa Securities Group. In the past, the qualities that have allowed the Group to thrive were not ambitious M&A-based strategies but, rather, the importance that Daiwa places on developing a corporate culture committed to excellence. The unity and reliability of this organization are the Group’s most valuable assets. 

Even when considering the broad sweep of its 110-year history, I believe that FY2012 will go down as a historic year for the Daiwa Securities Group. To guide the “new” Daiwa Securities as it enters the next phase of its evolution, we have formulated a “new” Medium- Term Management Plan—“Passion for the Best” 2014. This plan, which commenced in April 2012, contains the Group’s roadmap for the next three years. I take pride in having the opportunity to contribute to this important transition and I would like to thank all Daiwa Securities Group stakeholders for their support as we strive to build a sustainable corporate structure and pursue a new phase of growth. 

July 2012 

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