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## Retail Division 

In order to suit the varied investment styles and preferences of customers, the Retail Division offers two main courses for products and services. The “Daiwa Consulting” course allows customers to obtain high value-added services and products from experienced sales staff in face-to-face consultations, whereas the “Daiwa Direct” course allows customers to transact their investments conveniently, via the Internet or telephone call centers. In addition to offering a multitude of investment products covering stocks and bonds for domestic and overseas, mutual funds, pension insurance and wrap account services, the Retail Division also offers securities-backed loans and good interest rates for both ordinary deposits and fixed-term deposits. This portfolio of products and services allows the company to meet the varying needs of each individual customer. 

1. Establish a unique business model creating synergy between securities and banking services 

2. Strengthen wealth management businesses 

## Business Conditions and Earnings Results for FY2011 

A host of negative factors contributed to a harsh business climate in FY2011, from the earthquake-related electric power shortages in Japan and floods in Thailand to the debt crisis in Europe and the credit downgrade on US treasuries, which elevated the yen against other currencies. These factors caused Japanese stock prices to fall steadily from the summer onward. At the end of December the Nikkei 225 stood at a low 8,455. In early 2012, however, signs of improving economic conditions in the US, measures to address the debt crisis in Europe, and further monetary easing measures by the Bank of Japan calmed market fears and stock prices began to recover. By the end of FY2011 the Nikkei 225 had risen to 10,083. Reflecting these conditions, Retail Division revenues from both stocks and bonds declined steadily until the third quarter, although they recovered in the fourth quarter. Meanwhile, sales of mutual funds—a key product focused on by Daiwa Securities—increased 

## Sales and Distribution Amount by Product Category (Daiwa Securities) 

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## Action Plan for FY2012 

3. Strengthen service coverage of the middle markets 

4. Raise revenue level by improving earning capacity and productivity 

substantially. As a result, the company was able to limit the decline in net operating revenues for the period to 3.9% year on year, to ¥172.0 billion, while ordinary income fell by 7.2%, to ¥38.8 billion. 

## Key Events of FY2011 

The Retail Division has been concentrating its sales efforts on mutual funds, and expanding its lineup of monthly dividend-type funds, in order to address customers’ need for dividend income. Daiwa Securities aggressively develops and introduces new funds to reflect market trends and themes. Products such as the “Daiwa Harris Global Selected Stock Fund” and “Daiwa ASEAN Domestic Demand-Related Stock Fund” helped generate over ¥2 trillion in mutual fund sales during FY2011, increasing Daiwa Securities’ share of the market to 9.1%. Investment trust sales commissions rose 60% year on year, to ¥46.9 billion. 

## Net Inflow of Assets (Daiwa Securities) 

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