CEO Message (Integrated Report 2026 -Annual Report-)

My name is Kazuya Oyama and I have recently been appointed Director, President & CEO of Sumitomo Mitsui Trust Group, Inc. Allow me to express my commitment and determination to all our stakeholders as I take on the responsibility of leading a trust bank group with a history spanning more than a century.

Since our founding in 1924, guided by our unwavering philosophy of “contributing to Japan’s economy by addressing social issues”, Sumitomo Mitsui Trust Group has boldly advanced new business domains in response to the changing needs of the times, contributing to Japan’s development. Our journey has truly been a history of “challenges and development”.

It is my mission and responsibility to faithfully carry on this history and spirit, and to ensure that our Group plays a central role in addressing Japan’s long-standing financial challenge of shifting from savings to investments. The reason we commit to this goal is clear. Rather than setting out a mere philosophy, we are determined to turn our Purpose— “Trust for a flourishing future: Creating new value with the power of trusts and let prosperous future for our clients and society bloom” —into meaningful social transformation.

My professional roots lie in Japan’s Financial Big Bang, launched in 1996.

In my early 30s at the time, I felt both excitement and a strong sense of mission to help realize this grand vision: to prepare for an aging society, to effectively utilize the nation’s assets, to channel capital into growth industries, and to revitalize Japan as an international financial center.

However, due to the financial crisis that followed, priority was given to resolving non-performing loans and stabilizing the financial system, and the challenges that should have been addressed were put on hold.

Despite the challenges already being clear back then, have we in the banking industry truly confronted the fundamental issues? This question continues to linger in my mind to this day.

As I witnessed the injection of public funds and the financial restructuring of 1999, I developed a firm conviction.

Japan’s trust banks need to come together and form a financial group built around trust banking, playing a central role in addressing Japan’s long-standing financial challenge of shifting from savings to investment. I believe this is precisely the social mission of trust banks, and at the same time it is a responsibility toward the future that our generation must shoulder.

During Japan’s period of high economic growth, trust banks channeled household funds into key industries through loan trusts, playing a pivotal role in capital circulation to support the development of the Japanese economy. I believe that returning to our roots and creating a new system of capital circulation suited to the current era is both an essential role of a trust bank and our responsibility for the future.

Ever since, I have consistently made it my personal creed to address Japan’s financial and social challenges. In 2009, I was given the opportunity to be involved in the management integration of The Sumitomo Trust and Banking and Chuo Mitsui Trust Holdings from the stage of the basic agreement. Then, in 2011, the two banks merged. While one of my long-held dreams had come true, the merger also reinforced my conviction that there was still much work to be done.

When I assumed the position of President of Sumitomo Mitsui Trust Bank in 2021, I placed this issue at the center of our management strategy and set out a goal of realizing “the virtuous circulation of funds, assets, and capital”. Furthermore, to clearly demonstrate this commitment both internally and externally, we announced a zero strategic shareholdings policy.

Unless we eliminated the factors hindering the flow of funds in the capital markets, we would not be able to achieve a robust virtuous circulation. I believed it was necessary to tackle the most challenging reforms first in order to clearly demonstrate our commitment and determination.

Although this decision was initially met with skepticism, it has served as a catalyst for uniting the organization and accelerating subsequent reforms. Furthermore, this initiative spread throughout the financial sector and helped drive corporate governance reforms across Japanese companies.

The zero strategic shareholdings policy is a symbolic initiative that embodies our commitment to playing a central role in realizing “the virtuous circulation of funds, assets, and capital”.

The growth through virtuous circulation of funds that Sumitomo Mitsui Trust Group aims to achieve refers to cycles through which institutional investors encourage the enhancement of corporate value at the companies they invest in, with the resulting benefits flowing back to society in the form of asset formation. This, in turn, supports the sustainable growth of the economy as a whole through increased investment and employment.

Within this circulation, Sumitomo Mitsui Trust Group—which operates as a bank, an institutional investor, and a real estate business—is in an extremely advantageous position. As an institutional investor, we do more than simply seek to enhance corporate value; we can also leverage our banking and real estate capabilities to provide concrete solutions that help to increase corporate value. Furthermore, by returning the benefits of these efforts back to households through pensions and investment trusts, we will create a virtuous circulation of asset formation.

Moreover, from a market perspective, our Group is involved in all markets where funds, assets, and capital circulate, including financial markets, asset markets such as real estate, and capital markets such as equity markets.

Precisely because we are involved in every aspect of the investment chain, we are able to leverage a wide range of trust functions and fulfill our role by providing financial infrastructure that supports “the virtuous circulation of funds, assets, and capital”.

Meanwhile, one of the factors causing stagnation in Japan’s capital circulation is the liquidity mismatch that exists between the funding requirement and actual deployment. Banks absorb the mismatch between their highly liquid short-term funds—such as deposits—and their long-term loans and other commitments, supported by stringent regulations and costly CET1 capital.

On the other hand, in the asset management industry, while firms raise long-term capital such as pension and insurance funds, they primarily invest in highly liquid public-market assets and are therefore unable to fully capture the liquidity premium that should otherwise be available.

As a bank, Sumitomo Mitsui Trust Group has a competitive advantage that asset management companies and institutional investors lack: we have access to corporate clients’ management information and can structure deals based on firsthand insights. Furthermore, the ability to use our own balance sheet and provide risk capital clearly differentiates us, particularly in the private assets sector. Another key strength lies in our high-quality investor base, comprising providers of stable, long-term capital, including pension funds, institutional investors, and high-net-worth individuals.

In Japan, the transition to an inflationary economy has sparked signs of change in the conventional financing model, which until now has relied heavily on bank deposits. With inflation remaining above 2%, households are facing a real decline in the value of their financial assets and are reevaluating their asset allocations. In fact, since 2025, the shift in household cash flows toward long-term funds—such as investment trusts, pensions, and insurance—has far outpaced the increase in cash and deposits, causing the ratio of cash and deposits in household financial assets to decline below 50%.

Against the backdrop of these environmental changes, the shift from savings to investments is gaining significant momentum.

We have defined our Aspiration for 2035 as becoming “a leading company addressing social challenges through business”. To achieve this, we have set extremely ambitious targets: ROTCE of 16% as an indicator of profitability, while pursuing net business profit before credit costs of 1 trillion yen as an indicator of our growth capability.

In order to truly become the “partner of choice” among global financial institutions, it is essential for us not only to improve capital efficiency but also to establish sufficient business scale and presence to earn strong recognition from investors.

We will avoid a balanced contraction and continue to pursue nonlinear growth rather than settling for business as usual— our targets demonstrate, both internally and externally, our strong commitment to achieving this goal.

The concept for our Medium-Term Management Plan (FY2026–FY2028), which is designed to chart a steady growth trajectory toward our “Aspiration”, is “Shaping the Future through Bold Challenges”.

We have not yet clearly mapped out the entire growth trajectory that will lead us to our “Aspiration”. However, it is clear that we cannot achieve this by simply continuing along the path of our existing growth strategy. For Sumitomo Mitsui Trust Group to truly become a “partner of choice”, a dramatic improvement in our profitability and growth capability is essential. Achieving this depends on whether we can establish a new growth model over the next three years.

The three key drivers of our earnings growth are “asset management business”, “balance sheet transformation”, and “wealth management business”. During the current Medium-Term Management Plan, we aim to increase substantial gross business profit by more than 200 billion yen, taking into account the growth in these areas as well as the impact of rising interest rates.

In the asset management business, we will directly address the challenge of the global decline in fee levels and achieve earnings growth by expanding assets under management in high-value-added areas, such as private assets.

As part of our balance sheet transformation, we will leverage our origination capabilities and long-term funding capacity as a trust bank to expand investment and financing in higher-return assets, primarily real assets such as infrastructure and real estate, that can be made available to investors. At the same time, we will accelerate the reduction of strategic shareholdings and low-profitability assets and further improve capital efficiency through the reallocation of risk assets.

In our wealth management business, with Sumitomo Mitsui Trust Bank at the core, we aim to achieve significant growth in assets under management and our client base by leveraging the strengths of our group companies, including UBS SuMi TRUST Wealth Management and SBI Sumishin Net Bank. To help our clients achieve financial well-being, we will build on our strong presence in “discretionary” services, which address the need for long-term, stable asset management, while achieving significant earnings growth.

Our concept for capital management is extremely simple. First, we pledge to return at least 50% of our profits to our shareholders, who support our Group’s sustained growth over the long term. We will also continue to ensure that our dividends per share are progressive. From the perspective of maintaining a stable dividend policy, during periods when significant gains are realized from the sale of strategic shareholdings, we will determine dividend payments based on adjusted net income, excluding such gains from net income. After clearly separating core business earnings from temporary gains arising from the sale of strategic shareholdings, we will set our total payout ratio (comprising dividends and share repurchases) at 50% or above, thereby steadily returning the fruits of profit growth to our shareholders.

With regard to surplus capital, we will first allocate this on a priority basis to growth investments that contribute to enhancing corporate value. As we work toward realizing our “Aspiration”, we will explore proactive ways to utilize capital, particularly in the asset management area; however, we do not intend to invest at high prices. We will make careful and selective decisions based on strict investment criteria, and if we are unable to identify suitable investment opportunities, we will flexibly implement share repurchases as a measure to enhance capital efficiency, with due consideration of our business performance, capital conditions, and the level of our share price.

At the investor meeting held in May 2026, I explained our Group’s growth strategy using three keywords. These keywords also represent the message I most want to convey to our employees.

The first of these keywords is “Ambition”. Innovation is essential to creating new value, and its source lies in the interaction of diversity. Our Group fosters an open corporate culture that encourages information sharing, cross-organizational collaboration, and bold challenges, even when such efforts do not lead to immediate success. By embracing failure and continuing to take on bold challenges, we pave the way for our next stage of growth.

Next comes “Execution”. Once we set a goal, it is important for each and every employee to maintain a strong determination to see it through to completion. Rather than simply carrying out the task, we must deliver results with speed and quality that exceed expectations, while remaining flexible enough to adapt to unexpected changes. We all need to remain fully committed to “Execution”.

Third is “Partnership”. “Win as One Team” is my credo as a leader. By pooling our wisdom and working together with colleagues who share the same goal, we can achieve great things that could never be accomplished on our own. This is precisely what makes working in an organization so rewarding—and it is the most enjoyable and fulfilling part of it. The role expected of a leader is to articulate a vision for the future that employees can truly relate to and find inspiring, and to communicate that vision through a clear and logical narrative.

What’s more, we will pursue a fundamental transformation of business processes to build a management foundation that supports our long-term growth strategies. In the field of I&T, Manatomo Yoneyama, the President of Sumitomo Mitsui Trust Bank, will oversee the entire Group. He has established a framework to drive productivity reforms focused on the in-house development of AI agents. While the added value of trust services lies in providing high-mix, low-volume products and services tailored to the needs of each individual client, the reality is that these services have remained difficult to digitize and still rely heavily on manual operations. To date, our Group has streamlined operations through the use of RPA. As a result, the business processes established in individual business lines are being rolled out across the Group, creating a virtuous cycle in which efficiency improvements are driven autonomously throughout the organization.

Going forward, we will extend this approach to AI. Each employee will leverage AI to design and evolve their own business processes. We are confident that these cumulative efforts will lead to the establishment of a new operational model that successfully balances high levels of trust with increased productivity.

I believe it was a desire to entrust what matters most to us with faith in the future that gave rise to trusts. While trusts serve a variety of functions, for me their key role is their “time conversion function”.

It is their unique power, typical examples of which are pensions and will trusts, to ensure that one’s wishes and aspirations are carried out even after one is gone.

Trusts have the power to shape the future. At the same time, precisely because we possess such power, we also bear a “responsibility for the future” —one that requires us to always consider future generations and act accordingly.

There is a saying: “Do your utmost and leave the rest to fate”. However, to speak candidly about how I feel today, rather than “leaving it to fate”, I am determined to confront that very “fate” —to take on the responsibility of creating a virtuous circulation of funds, and to do everything within our power to fulfill that mission.

Today, Japan’s financial industry stands at a major historical turning point, witnessing a shift from a prolonged deflationary economy to an inflationary one, the return to a world with interest rates, and the Nikkei Stock Average reaching new record highs. Furthermore, household financial assets totaling more than 2 quadrillion yen (\2,000 trillion) are poised to shift significantly from savings to investments.

We are now at a critical juncture—one that will decide whether “virtuous circulation of funds, assets, and capital” can be achieved. This will determine whether the Japanese economy can return to a sustainable growth path. And at this moment, the tide is clearly in our favor.

I am committed to facing this mission head-on and to fulfilling the mission entrusted to us with all our strength.

The fundamental mission that trusts are called to fulfill is none other than to create a circulation of capital that will bring new value and sustainable prosperity to society.

We will link people’s wishes across time and shape the future. Guided by this unwavering aspiration, we will continue to move forward.

We look forward to your continued support and interest in the future of Sumitomo Mitsui Trust Group.

July 2026