This is Kotaro Yoshida from Daiwa Securities Group Inc. Thank you very much for taking the time to participate in our conference call today.

I will now explain the financial results for the fourth quarter of FY2025 announced today, following the presentation materials available on our website. First, please turn to page 4.

I will begin with a summary of our consolidated financial results. Percentage changes are in comparison to the third quarter of FY2025.

In Q4 FY2025, despite the continued highly volatile market environment, our profit base, primarily driven by asset-based revenues, functioned steadily, allowing us to maintain a high level of consolidated profit. Net operating revenues were 197.8 billion yen, up 1.7%, ordinary income was 67 billion yen, down 3.6%, and profit attributable to owners of parent was 49.8 billion yen, up 7.3%.

Looking at the results by division, in the Wealth Management Division, as a result of our focus on total asset consulting, both the contract amount and net inflow for wrap account services reached record highs, and net asset inflows also expanded. In Securities Asset Management and Real Estate Asset Management, assets under management grew steadily, continuing to expand our revenue base.

Global Markets accurately captured customer flows amid market fluctuations, resulting in increased revenues in both Equity and FICC. In Global Investment Banking, domestic M&A remained strong.

As a result of these factors, the annualized ROE was 11.5%. The year-end dividend is 35 yen per share.

Combined with the interim dividend of 29 yen, the annual dividend will reach a record high of 64 yen, resulting in a dividend payout ratio of 50.8%. Please turn to page 8.

This page shows base profit, our KPI for stable earnings as outlined in the Medium-Term Management Plan. FY2025 base profit grew steadily to 182.7 billion yen, up 32.9% year-on-year.

We have achieved a level that significantly exceeds the 150 billion yen target set for the final year of the Medium-Term Management Plan, doing so in just the second year of the plan. Please turn to page 11.

I will now explain the statement of income. Commissions received was 131.2 billion yen, up 2.0%.

A breakdown of commission received is provided on page 26. Brokerage commissions increased significantly to 31.9 billion yen, driven by an increase in customer flow.

Please turn to page 12. Selling, general and administrative expenses were 138.3 billion yen, plus 4.1%.

Personnel expenses increased due to an increase in performance-linked bonuses. Please turn to page 14.

This slide shows the annual trends in revenues and SG&A expenses. While performance-linked costs and strategic expenses such as IT investments have increased in tandem with business expansion, the increase in fixed costs has been constrained, keeping overall costs at a well-controlled level.

Please turn to page 15. Total ordinary income from overseas operations was 6.9 billion yen, down 17.6% quarter-on-quarter.

By region, Asia and Oceania saw an increase in profit, supported by equity-related revenues driven primarily by Asian equities. On the other hand, the Americas recorded a decrease in profit due to a decline in M&A revenues.

Next, I will explain the financial results by segment. Please turn to page 16.

First is the Wealth Management Division. Net operating revenues were 81 billion yen, plus 5.2%, and ordinary income was 33.1 billion yen, plus 12.1%.

We believe that the results of our ongoing efforts in the asset management type business have manifested in our sales performance, despite the persistent high volatility in the market environment. By product, equity saw a revenue increase of 1.1 billion yen due to increased trading in Japanese equities.

Fixed income revenues also increased by 500 million yen as we accurately captured investment needs. Sales of Fund Wrap increased significantly, driven by growing demand for long-term diversified investments and portfolio management, in addition to inflation hedging.

Wrap-related revenues reached a record high of 18 billion yen. Asset-based revenues reached a new record high of 33.4 billion yen, driven by increase in agency fees for investment trusts and wrap-related revenues.

The fixed cost coverage ratio based on asset-based revenue in the Wealth Management Division was 120%, and the total cost coverage ratio was 76.5%. Please turn to page 17.

This slide shows the status of sales and distribution amounts by product within our Domestic Wealth Management Division. Our wrap account service reached a record high level, with total contract AUM rising to 6.4046 trillion yen.

New contract amounted to 386.2 billion, and net inflows came to 276.2 billion yen, both marking all-time highs. Our Fund Wrap also continued to grow strongly.

Its characteristics have been well received by clients in both favorable market conditions and during periods of adjustment, resulting in a significant expansion in asset under contract. In addition, collaboration with external partners, such as Japan Post Bank and Aozora Bank, has been progressing steadily, contributing further to the growth in new contracts.

Please turn to page 18. This section outlines the progress of our Wealth Management business model.

Cumulative balance-based revenues for fiscal 2025 increased to 123.2 billion yen. Net inflow of assets also remained high, totaling 1.6342 trillion yen.

In line with our group's fundamental management policy of maximizing clients' asset value, we will continue to provide optimal portfolio proposals based on each client's total assets, while working to build a revenue base which is less susceptible to market fluctuations. Please turn to page 19.

Here we show the status of Daiwa Next Bank. NII, net interest income, totaled 11.2 billion yen, up 11.2%, and ordinary profit reached 6.2 billion yen, up 30.2%.

The increase in policy rates contributed to an expansion in net interest margins. The promotion of total asset consulting, together with initiatives such as competitive deposit interest rates, including a 1.2% year-on- 1-year yen time deposit for retail customers, proved effective, and deposit balance surpassed 5 trillion yen.

Now turning to page 20, let me explain the Asset Management segment, beginning with Securities Asset Management. Net operating revenues were 19.7 billion yen, up 5.9%, and ordinary income was 11.4 billion yen, up 11.6%.

Daiwa Asset Management publicly offered securities investment trust AUM topped 37 trillion yen, hitting record high. Then moving on to page 21 for Real Estate Asset Management.

Net operating revenues were 9 billion yen, down 10.6%, and ordinary income was 9.8 billion, down 5.6%. While revenues and profits declined on a quarterly basis, mainly due to the absence of property sales gains recorded in the previous quarter, Real Estate Asset Management is a business in which the profit grow in line with AUM.

AUM at Daiwa Real Estate Asset Management surpassed 1.6 trillion yen, and we expect stable medium-term growth in line with continued AUM accumulation. In addition, equity method investment gains from Samty Holdings contributed to maintaining a high level of profit.

On page 22 is Alternative Asset Management. Net operating revenues were -2.6 billion yen, and ordinary income was -4.8 billion yen.

In the renewable energy, we recorded provisions and impairments due to the re- revaluation of certain portfolio investments. On page 23, lastly, let me explain the Global Markets and Investment Banking Division.

First, Global Markets, net operating revenues were 51.3 billion yen, up 13.4%, and ordinary income was 17.7 billion yen, up 48.6%. Both equities and FICC performed strongly, resulting in a significant increase in revenues and profits.

In equities, trading flows in Japanese stocks increased substantially, particularly among overseas investors, leading to a 6.2% rise in revenues. By offering a diverse range of execution methods, we successfully captured large-scale trading mandates, contributing to revenue growth.

In FICC, revenues increased 20%, driven by strong performance in JGBs and credits. We effectively captured customer order flows in both domestic and foreign bonds, and our position management remained solid, even in a highly volatile market environment.

Now turning the page to 24. In Global Investment Banking, net operating revenues were 24.1 billion yen, down 7.4%, and ordinary income was 2.1 billion yen, down 60.5%.

M&A advisory remained strong in Japan, and the revenues increased in Europe within our overseas operations. That concludes the explanation of our financial results for the fourth quarter of fiscal 2025.

Fiscal 2025, on a full-year basis, experienced high volatility in stock price and the interest rates, but the year itself was quite active overall. The entire business portfolio had higher stability, so that income was stable, and the market response capability also improved.

We were able to benefit from both of them. As a result, the second year of this midterm plan hit record high in terms of the profit, and the ordinary income was hitting the highest in the last 20 years.

Towards the end of the midterm plan, we think that we have a very good, strong result. Now we'd like to move on to the announcement that we have made about the subsidiary of the ORIX Bank, as we have explained on our website.

I will explain the overview, objectives, and financial impact in accordance with the materials published on our website. Please turn to page 2 of the the document entitled Regarding the Acquisition of ORIX Bank as a Subsidiary.

This is a transaction summary. In this transaction, Daiwa Next Bank will make ORIX Bank a wholly owned subsidiary.

We also plan a merger of the two banks in the future. The acquisition price is 370 billion yen.

The final acquisition price will be determined after price adjustments stipulated in the share transfer agreement. The acquisition will be funded entirely by our own funds, strategically utilizing the capital buffer we have accumulated to date.

Next, the primary objective of this transaction is to continuously expand the stable revenues of the Daiwa Securities Group, and improve ROE and EPS through the strengthening of the Wealth Management Division. By integrating Daiwa Next Bank and ORIX Bank, which have different strengths, we aim to enhance our ability to provide solutions for clients' challenges regarding both assets and liabilities, thereby significantly improving the corporate value of both banks.

Specifically, we will realize sustainable growth by combining the outstanding lending and trust capabilities cultivated by ORIX Bank with the deposit-gathering capabilities backed by our group's solid customer base and sales network. There are three pillars to this strategy: first, deepening the total asset consulting tailored to the life stages of each individual client; second, establishing a sustainable growth model through a virtuous cycle of deposit and lending expansion; third, maximizing synergy effects through functional integration via a future merger.

I will explain each of these in turn. Please turn to page 3.

The post-integration bank will have total assets of 9 trillion yen and approximately 400 billion yen in equity capital, evolving into a comprehensive bank combining advanced lending and trust functions with strong deposit-gathering capabilities. By offering competitive deposit rates backed by ORIX Bank's high investment capabilities, we aim to establish a sustainable growth model through a virtuous cycle of deposit and lending expansion.

Regarding the impact on consolidated financial results, there is a potential to improve net interest income as a synergy effect. In addition to the over 1.5 trillion yen of drawable funds from Daiwa Next Bank's current account at the Bank of Japan, we aim to accumulate 2 trillion yen in deposits over the next 5 years as a synergy effect, separate from the standalone deposit growth of both banks, through the provision of competitive deposit rates.

We plan to invest this total of 3.5 trillion yen in real estate investment loans and securities-backed loans to improve net interest income. Assuming we can secure a 1% interest rate margin improvement, our estimates indicate a potential improvement of 35 billion yen in net interest income.

In addition to these synergy effects, ORIX Bank's standalone performance will be consolidated into our financial results. The bank's average ordinary income over the past 5 years is approximately 30 billion yen, with a net income of approximately 20 billion yen.

On the other hand, we expect to incur amortization expenses for goodwill associated with the acquisition. Next, regarding capital and regulatory aspects, we will maintain financial soundness while effectively utilizing our capital buffer.

While the implementation of this transaction will lower the consolidated total capital adequacy ratio by 5 percentage points, it will still exceed 14% on a fully loaded Basel III finalization basis, securing a certain level of capital buffer. However, to expand our capacity for future growth investment and shareholder returns, we will also consider issuing perpetual subordinated bonds.

Please note that we are not considering equity financing. Now moving on to slide 4.

Let me say the strengths of Daiwa Next Bank, that is a strong deposit-gathering capability. In the meanwhile, it has a challenge, which is the limited lending and the trust functions.

Against that, the ORIX Bank has a strong lending and trust functions. That's their strength.

While their challenge is the deposit-gathering capability. While we are complementing, or we are able to complement each other with the strength and the challenge, we think this is an ideal match between the two.

Moving on to slide 5, I may be repeating myself, but the objective of making them a subsidiary is to strengthen the Wealth Management Division and also a great leap in terms of the stability of the income as a result of that. A stronger Wealth Management Division is not coming from one point.

It comes from some pillars: the deepening total asset consulting, virtuous cycle of deposit and loan expansion, and accelerating growth through collaboration with the Asset Management Division. Those are going to be the three pillars to enhance the Wealth Management Division and the stability of the income.

Then moving on to slide 6, we are trying to see the deeper total asset consulting capability for the clients. The assets and liabilities of our customers will change from life stage to life stage.

That's the reason why not only the asset, but the liabilities all included, it's quite important to have the total asset consulting capability to optimize our capability of designing the balance sheet of the customers. By utilizing the ORIX strength, which is the lending and the trust, we are going to be providing the solutions for the pain the for the the pains of the customers depending upon their life life stage.

Then moving on to the slide 7, we're thinking about accelerating the growth spiral by leveraging the strength of both banks. When we look at those banks alone, the balance is going to be accumulated, but as a result, in addition to the growth of each bank's deposit balance, we aim to expand the deposit by over 2 trillion yen in the next 5 years as a synergy effect.

The loan asset of the ORIX is quite competitive, based upon which, we're going to offer the Daiwa Securities customers a competitive deposit interest, so that we're able to get acquire the sticky deposit, and then eventually, that is going to increase the deposit balance. That is going to be a great spiral of the growth of the banks overall.

Then, on slide 8, this shows the changes of the balance sheet structure as a result of the integration of the two. On the asset side, the lending and securities, and on the liability side, the ordinary deposit and the time deposit are going to be all balancing, so that the balance sheet is going to have a good risk diversification.

That explanation is over with that. The details is going to be explained by our CEO, Okino, at the management strategy meeting, which is scheduled to be held next month.

By responding flexibly to the variety of needs by the customers, we're going to be capturing the changes in the market environment, and as a leader of the financial and the capital markets, we're going to pursue sustainable growth. We sincerely appreciate your continued support, and thank you very much for your kind attention.