Performance Results Fiscal Year Ended March 31, 2006 April 27, 2006 - - PowerPoint PPT Presentation

The items in this document are provided as information related to the business strategy of SBI Group companies and not as an invitation to invest in the stock or securities issued by each company. None of the Group companies guarantees the completeness of this document in terms

• f information and future business strategy. The content of this document is subject to revision or cancellation without warning.

April 27, 2006

Performance Results Fiscal Year Ended March 31, 2006

• 1. Consolidated Financial Performance

Consolidated Performance Highlights

Note: For the part of a fund that involves self-investment by a subsidiary, the subsidiary's profit on sale of its subscription in the fund now appears in a different accounting indication division. The operating profit based on sales and cost of sales related to business investment in negotiable securities changes to extraordinary gains in the sale of negotiable securities. For the current term, the effect of this accounting change is 2.8 billion yen.

① All business units are operating very smoothly, with sales, operating profit,

• rdinary profit, and net profit for the current term all recording the highest

levels ever. ② Sales easily surpassed 100 billion yen. In spite of a change in accounting indication divisionNote, ordinary profit topped 50 billion yen. ③ A positive impact was felt from internal restructuring and synergies with leading companies with whom we have cross-share holding arrangements. The number of issued shares at the end of the term increased to 12.22 million (1.4 times the previous term). Consolidated net profit per share for the current term increased by 1.4 times compared to the previous term. Consolidated shareholders' equity increased by 1.5 times compared to the previous term. So shareholder value is increasing and the future growth path of the SBI Group is firmly set. ④ Given these favorable conditions, we plan to increase the per-share dividend to 600 yen (including a 100-yen merger commemorative dividend), which is nearly double the 350-yen dividend of the previous term.

FY 2005 Consolidated Financial Performance

(Unit: Million yen)

Sales Operating profit Ordinary profit Current net profit ８１，５１１ １３７，２４７2 ４９，５９５2 ５１，３６５ ２７，２９１ ２５，６３１3

FY 2005 Full term1

４５，８８４3

FY 2004 Full term

２４，８６９

Compared to same Compared to same period in previous period in previous year (%) year (%)

+ 68.4 + 99.4 + 88.2 + 79.0

Note 1: Figures for SBI Partners from 2005/9 to 2006/2 (before merger) are added to the consolidated performance results. Note 2: Cost of sales of 366 million yen are subtracted from total sales of 3.196 billion yen from the former accounting indication

• division. The difference of 2.83 billion yen is taken as an equivalent extraordinary gain in operating profit.

Note 3: The dilution gain from changes in equity interest principally consist of stock issuance by E*TRADE Securities include an extraordinary gain of 13.3 billion yen in FY 2004 (ended 2005/3/31) and an extraordinary gain of 23 billion yen in FY 2005 (ended 2006/3/31).

Performance and Financial Trends

Current net profit per share Net assets per share

(Yen) (Yen)

Sales Ordinary profit Total assets

(100 million yen) (100 million yen)

Revenue growth rate: 68.4%

Shareholder equity

Revenue growth rate: 76.4% Revenue growth rate: 107.2%

(100 million yen) (100 million yen)

The aim is to raise per share value and to rapidly grow to the next stage.

650 3,579 4,957 6th 7th 8th 6,794 15,125 22,016 6th 7th 8th 6th 7th 8th 6th 7th 8th 6th 7th 8th 38.5% gain 45.5% gain 6th 7th 8th 353 815 1,372 90 272 513

3,966 7,550 13,316

474 1,294 2,681

Revenue growth rate: 88.2%

Regulatory Capital Ratio (FY Year 2005, ended 2006/3/31)

Current assets Current liabilities Stock capitalization 268.1 billion yen Fixed assets Fixed liabilities Securities accountsNote

Total assets: 1.3316 trillion yen

Stock capitalization 268.1 billion yen Fixed liabilities Current liabilities Fixed assets Current assets

Total assets: 550.8 billion yen Regulatory capital ratio: 20.1%

48.7％

Regulatory capital ratio excluding securities accounts

48.7%

Note:

• Margin trading liabilities
• Securities mortgage loan
• Guarantee money

received

• Customer margin

deposits received

• Customer deposits

PER and PBR Trends

Price-earnings ratio (PER)1

(Times)

13.4 11.1 62.0

6th 7th 8th

Price-book-value ratio (PBR)2

(Times)

3.0 2.6 5.9

6th 7th 8th (2006/3) (2005/3) (2004/3) (2006/3) (2005/3) (2004/3) Base price: Last price on 2006/4/26

PER: 11.4 times

Base price: Last price on 2006/4/26

PBR: 2.5 times

Note 1: PER (6th, 7th, and 8th periods) = Final stock price on TSE at the end of each period / Net profit per share in current period. PER (Base price: Last price on 2006.4.26) = Last price on TSE for 2006.4.26 / Net profit per share in 8th period The last stock price at the end of the 8th period is 66,600 yen and the last stock price on 2006.4.26 is 56,900 yen. Note 2: PBR = Last price on TSE at the end of each period / Net assets per share at the end of period PBR (Base price: Last price on 2006.4.26) = Last price on TSE for 2006.4.26 / Net assets per share at the end of 8th period

Currently, PER and PBR are at historically low levels.

Correlation between Mothers Index and Hercules Index

60% 80% 100% 120% 140% 160% 180%

SBI Holdings Mothers index Hercules index

2006/1/17 Livedoor shock

2005/10/25 2006/2 2005/12 2006/1 2006/3 2006/4

From 2005/10/25 to 2006/4/25, correlations with the Mothers index and the Hercules index were 0.88 and 0.90 respectively. After the Livedoor shock, correlations rose to 0.94 and 0.96 respectively.

The base index of 100 is taken as the stock price on 2005/10/25.

84,000 yen: Highest price from the beginning of the year

Correlation with Softbank Stock Price

80% 100% 120% 140% 160% 180% 200% 220% 240%

SBI Holding Softbank Nikkei 225

Note: Figures for Softbank take the stock split into account.

2006/1/17 Livedoor shock 2006/3/17 Vodafone buyout announcement

2005/10/25 2006/2 2005/12 2006/1 2006/3 2006/4

From 2005/10/25 to 2006/4/25, the correlation with Softbank stock price was 0.75. After the Vodafone buyout announcement, the correlation with Softbank stock price rose to 0.84.

84,000 yen: Highest price from the beginning of the year

The base index of 100 is taken as the stock price on 2005/10/25.

12,112 132,698 97,181 60,080 50,000 100,000 150,000 0% 20% 40% 60% 80% 100%

Institutional investor Corporate business Individual Other

25.7%

Shareholder structure

Shareholder Structure

Over the past year, the rate of share ownership by institutional investors rose from 25.7% to 39.6%. Of the institutional investors, the rate of overseas investors rose from 9.86% to 19.46%.

6.7%

Shareholders

End of 2003/3 End of 2004/3 End of 2005/3 End of 2003/3 End of 2004/3 End of 2005/3

(Unit: Shareholder)

End of 2006/3

39.6%

End of 2006/3

17.5% Softbank AM voting rights ratio (end of 2006/3): 26.6%

• 2. Outlook of Main Businesses

(1) Outlook By Segment

243 454

119

378 802

192

300 600 900 1,200 1,500

Asset management Brokerage & investment banking Financial services

Sales Comparison by Segment

(Unit: 100 million yen) (Unit: 100 million yen)

FY 2004 Sales FY 2005 Sales 1,372 815

(29.8%) (55.7%) (14.5%) (14.0%) (27.6%) (58.4%) Note 2: Figures for SBI Partners from 2005/9 to 2006/2 (before merger) were added to the consolidated performance results. Note 1: Due to a change in accounting indication division in FY 2005, 3.2 billion yen was subtracted from sales in the asset management segment.

106 148 104 385

23

50 100 150 200 250 300 350 400 450 500 550

Asset management Brokerage & investment banking Financial services

Operating Profit Comparison by Segment

(Unit: 100 million yen) (Unit: 100 million yen)

(3.9%)

513 265

FY 2004 Operating profit FY 2005 Operating profit

(75.22) (4.5%) (20.3%) (40.1%) (56.0%)

10

Note 1: Due to a change in accounting indication division in FY 2005, 2.8 billion yen was subtracted from operating profit in the asset management segment. Note 2: Figures for SBI Partners from 2005/9 to 2006/2 (before merger) were added to the consolidated performance results. Note 3: The operating profit here shows a figure before consolidated elimination and before expense deductions for the whole company. So the total does not correspond to the operating profit for consolidated financial performance.

(2) Asset Management

Asset Management Highlights

① Continuously expanding the scale of asset management SBI actively established new funds related to IT and bio-technology, enterprise revitalization, and the new core segment of real estate. In addition to investment trust and related consulting businesses, the Group as a whole saw the scale of asset management expand to 560 billion yen by the end of the current term. ② Excellent management performance As previously established funds enter their period of redemption, dividends are accumulating smoothly. For funds under management at the end of the current term, total dividends are 81.8 billion yen. During the next year, SBI plans to distribute an additional 200 billion yen in profits.

The current value of net assets of the IT Fund at the end of March 2006 is 277.5 billion yen,

which is 1.8 times greater than the initial investment. From 2004/1 to 2006/3, the investment amount of 22 companies that went public from the IT Fund increased by 6.2 times.

The current value of net assets of the SBI/LBO Fund #1 at the end of March 2006 is 9.5 billion

yen, which is 1.9 times greater than the initial investment. For the same term, the Enterprise Revitalization Fund #1 is worth 15.4 billion yen, which is 1.5 times greater than the initial

• investment. As the Mezzanine Fund gained name recognition, loan proposals increased in the

fourth quarter by 66% compared to the same period in the previous year.

Unlisted Stock Funds I and II were redeemed at two times their initial base price. Unlisted Stock

Fund I was awarded top honors by the Lipper Fund Awards Japan 2006.

Real Estate Fund Real Estate Fund Total: 35.1 billion yen Total: 35.1 billion yen

Investment trust, investment consulting Investment trust, investment consulting Total: 123 billion yen Total: 123 billion yen

Buyout Mezzanine Fund Buyout Mezzanine Fund Total: 27.5 billion yen Total: 27.5 billion yen IT Bio Fund IT Bio Fund Total: 373.4 billion yen Total: 373.4 billion yen

Current Fund Management Scale for SBI Group

(Current from end of 2006/3)

IT Fund: 245.9 billion yen IT Fund: 245.9 billion yen BB Fund: 51.3 billion yen BB Fund: 51.3 billion yen Bio Fund: 9.9 billion yen Bio Fund: 9.9 billion yen Others: 66.3 billion yen Others: 66.3 billion yen LBO Fund: 6.1 billion yen LBO Fund: 6.1 billion yen Enterprise Revitalization Fund: 9.6 billion yen Enterprise Revitalization Fund: 9.6 billion yen Mezzanine Fund: 11 billion yen Mezzanine Fund: 11 billion yen Others: 800 million yen Others: 800 million yen Investment trust: 96.6 billion yen Investment trust: 96.6 billion yen Investment consulting: 22.2 billion yen Investment consulting: 22.2 billion yen Investment corporation: 4.2 billion yen Investment corporation: 4.2 billion yen Real estate: 26 billion yen Real estate: 26 billion yen Development proposals: 9.1 billion yen Development proposals: 9.1 billion yen

Total amount: 559 billion yen Total amount: 559 billion yen

Note: Figures for the Real Estate Fund represent the amount of investment. Figures for investment trust and investment consulting represent the current value of net assets at the end of December 2005. Figures for other funds represent the current value of net assets based on the account settlement closest to December 2005 for each fund.

By the end of March 2006, SBI distributed a total of 81.8 billion yen in profits from six funds.

(Unit: 100 million yen)

Management Funds and Distribution Performance

Fund total Total distribution SBIH receipts

IT Fund 1,505 575 (196) Contents Fund 94 94 (50) SBI/LBO Fund #1 50 47 (21) Enterprise Revitalization Fund #1 104 91 (54) VR Enterprise Revitalization Fund 10 9 (-) SBI Mezzanine Fund #2 83 2 (1) Total 1,846 818 (322)

(Unit: 100 million yen, %)

Performance Estimates of Main Funds

Note: The net internal rate of return (IRR) indicates a figure after deducting for management and contingency fees.

Fund total Total distribution (Including estimate) Net IRR

IT Fund 1,505 2,508 8.3 SBI/LBO Fund #1 50 108 18.1 Enterprise Revitalization Fund #1 104 197 25.4 VR Enterprise Revitalization Fund 10 19 27.4 Total 1,669 2,832

i) Softbank Investment Corporation

IT Fund Conditions

By the end of March 2006, the current value of net assets had risen smoothly to 277.5 billion yen.

370

1,505 794 1,611 500 1,000 1,500 2,000 2,500

2000 End of 2006/3

Unrealized profits Cash (Including total distribution) Investment balance

2,775

(Unit: 100 million yen)

6 years 1.8 times

55 129 462 17 186 186

250 500

(Unit: 100 million yen)

Performance of Planned IPOs (IT Fund)

2006/3 end Investment balance

SBI anticipates further gains in unrealized profit and actual profit.

Investment book value of 21 planned IPOs Estimated profit: 333

SBI estimated amount

370

Balance of unsold amount from 9 completed IPOs 70 other companies

665

129 X 3.6 times (Investment book value: 5.5 billion yen X 0.3)

359 415 186 1,611

500 1,000 1,500 2,000

(Unit: 100 million yen)

Performance of IPO Investment Targets (IT Fund)

Actual sales amount

Investment amount in 22 companies 2006/3 end

2,212 From 2004/1 to 2006/3, the investment amount of 22 companies that went public from the IT Fund increased by 6.2 times.

Unsold principal of stock that has gone public Unrealized profit

6.2 times 6.2 times

Content Fund Which Has Already Redeemed Its Principal

As the Contents Fund enters its harvest period, 1) it will have a cash distribution of 9.4 billion yen, which is equivalent to the principal, and 2) it will have a contingency fee of 700 million yen.

30 94 94

50 100

1997/7 2006/2 end Redemption time

Total distribution Current value of net assets

124

(Unit: 100 million yen)

8.5 years

Management fees: 3.4 billion yen after deductions

(Including contingency fee of 700 million yen) 11 37

Planned IPO issue Prospective sales

• n planned IPO issue

11 X 3.4 times

(Applying the most recent trading price) Companies expected to have an IPO

• Alibaba.com Corporation
• TeraRecon, Inc.

Note: Companies expecting an IPO undergo a five-stage investment evaluation based on examination meetings held weekly. The top prospects are included here, but Softbank does not guarantee a prospective IPO company will go public.

• The number of IPOs and M&As represent the ones that have already been transacted.

IPOs and M&As (Total for Direct Investments and All Managed Funds)

As of 2006/3/31 Already public and planning to go public Already public 12 companies (1 M&A) 77 companies (38 foreign) To 2004/12 ※ 2005/1 to 2005/12 Planning to go public 2006/1 to 2006/12 20 companies

Note

Company name

IPO period Public offering price (A) First price (B) Increase rate (%) (B/A) 06/4/18 Final price (C) Increase rate (%) (C/A) Public offering price / Book value (Times) First price / Book value (Times)

Gold Do Co., Ltd

Apr

170,000 407,000 239.4 351,000 206.5 0.5 1.1 On 2006/4/6, Golf Do Co., Ltd. went public on the Centrex Market of the Nagoya Stock Exchange. Two other companies have filed applications to go public. On May 31, SBI Futures plans to go public on the Osaka Hercules Stock Exchange.

ii) SBI Capital Co., Ltd.

17 10 30 34 10 47 40 4

50 100

Unrealized profit Total distribution Cash Investment balanace

30 23 67 40 91 50

50 100 150 200

Unrealized profit Total distribution Cash Investment balance

LBO Fund and Enterprise Revitalization Fund

2005/4 Fund settlement time

(Unit: 100 million yen)

2001/5 Establishment 2006/3 Current 2005/5 Fund settlement time 2002/2 Establishment 2006/3 Current

SBI/LBO Fund #1 Enterprise Revitalization Fund #1 Limited Liability Investment Partnership

(Unit: 100 million yen)

Current 9.5 billion yen

Current 15.4 billion yen Initial 5 billion yen Initial 10.4 billion yen

Principal redemption is nearly complete.

SBI Mezzanine Fund

At the end of March, the Mezzanine Fund had an investment balance of 5.8 billion yen. As the Fund gained name recognition in the fourth quarter of FY 2005, investment proposals increased by 66% compared to the same period in the previous year. With the formation of Shinginko Tokyo and the Metropolitan Enterprise Revitalization Fund (#3 Fund), full-scale management operations will begin from June. Total fund management in the mezzanine segment is 11 billion yen, which is well above our target of 10 billion yen.

SBI Mezzanine Fund Investment Balance

iii) SBI Asset Management Co., Ltd.

Accumulating Management Assets at SBI Asset Management

48 44 42 234 473 966 40 210 222

500 1,000

2005/3 end 2005/9 end 2006/3 end

Investment consulting Investment trust Investment corporation

322 726 1,230

Established 2005/2 Established 2005/7 Established 2005/10 Established 2005/12 (Unit: 100 million yen)

Management assets are expanding as more and more new products are being offered.

69.5% Up 125.4% Up

Unlisted Stock Fund II (Redeemed) Unlisted Stock Fund II (Redeemed)

Management start Management start

2001/6 2001/6

Redemption date Redemption date

12/10/12 12/10/12

Final redemption price Final redemption price

19,660 yen 19,660 yen

Redemption on the Outstanding Performance of Unlisted Stock Funds I and II

Management start Management start

2000/7 2000/7

Redemption date Redemption date

2006/3/3 2006/3/3

As of 2006/3/2 As of 2006/3/2 Base price Base price

21,208 yen 21,208 yen

Unlisted Stock Fund I (Redeemed) Unlisted Stock Fund I (Redeemed)

Lipper Fund Awards Japan 2006 Lipper Fund Awards Japan 2006 Most Excellent Fund Award Most Excellent Fund Award

(The final redemption price will be decided in May.)

(3) Securities Business

Securities Highlights

I. E*TRADE Securities recorded the highest ever consolidated operating profit (60.2 billion yen, up 122% from the same period in previous term) and consolidated ordinary profit (30 billion yen, up 165% from the same period in the previous term). The rate of consolidated ordinary profit in the fourth quarter was 53.7% (56% non-consolidated). ① In FY 2005, the number of new accounts was 575,035. By the end of March total accounts topped 1.16 million. Client assets at the end of March were 95.8% higher than the same period in the previous term at 4.58 trillion yen. ② With a rock-solid firm customer base, individual brokerage turnover share for the FY 2005 full term climbed to 23.1%. For the fourth quarter, it was 24.9%. Total brokerage turnover share, which includes institutional investors, surpassed 10% for the first time in the fourth quarter. ③ There were 94 IPO underwritings, which is the most ever in a term. ④ For this period, we are planning a per-share dividend of 4,800 yen (before taking account of a stock split), which is over two times the 2,300 yen dividend (including commemorative dividend) of the previous period. (1,600 yen after taking account of a stock

split on 2006/1/2)

II. Revenues and profits of SBI Securities increased sharply with operating revenue of 16 billion yen (up 50% from the same period in the previous term) and ordinary profit of 8.1 billion yen (up 181% from the same period in the previous term). III. On April 21, SBI Futures was approved for listing on the Osaka Hercules Stock Exchange. Listing is planned for May 31.

(Unit: Million yen, %)

Operating revenue Operating profit Ordinary profit Current net profit Net operating revenue 27,174 11,112 11,343 6,178

FY 2004 (2004/4 to 2005/3)

25,180 +121.6 +170.1 +165.2 +174.7

Compared to same period in previous year

+123.7 60,213 30,011 30,077 16,970

FY 2005 (2005/4 to 2006/3)

56,317

E*TRADE Securities: FY 2005 Consolidated Performance

Business Model of Increasing Returns and Ordinary Profit Rate by Quarter

22.7 30.5 33.7 38.7 38.3 38.3 40.6 46.1 52.1 42.7 47.4 0.0 10.0 20.0 30.0 40.0 50.0 60.0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 2003 FY 2004 FY 2005

E*TRADE ordinary profit rate

Note: Calculated using ordinary profit divided by operating revenue.

(Figures are consolidated from the first quarter of FY 2005 and on.)

53.7％

（%）

(Non-consolidated: 56%)

475,425 517,521 552,816 631,548 1,167,778

200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1,100,000 1,200,000

E*TRADE Monex Rakuten Matsui Kabu.com

100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 650,000 700,000 750,000 800,000 850,000 900,000 950,000 1,000,000 1,050,000 1,100,000 1,150,000 1,200,000

Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar

Accounts of five main online securities companies Account trend of five main online securities companies

(Accounts) (Accounts) (Current from end of 2006/3) (2004/3 to 2006/3) Source: Public documents from each company's website. Note: Monex Securities and Nikko Beans are totaled as Monex. On January 1, 2006, Kabu.com Securities merged with MeNet Securities.

Account Comparison for Main Online Securities Companies

2004

Accounts increased by 2 times for the 12 months from 2005/4 to 2006/3. The account gap with #2 Monex Securities expanded by 1.8 times over one year. Beginning from October, E*TRADE acquired a record number of new accounts for five consecutive months. From October, E*TRADE acquired an average of 65,053 new accounts per month, which is two times the monthly average from April to September.

E*TRADE 1,167,778

Monex 631,548 Matsui 517,521 Rakuten 552,816 Kabu.com 475,425 2006 2005 By this month, accounts are expected to exceed 1.2 million.

5,000 10,000 15,000 20,000 25,000 30,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

(1 billion yen)

4Q FY 2005 Turnover E*TRADE: 27,809

Brokerage turnover for 5 main online securities companies

Brokerage Turnover for Main Online Securities Companies

(1Q FY 2005 to 4Q FY 2005) FY 2004 FY 2005

Source: Public documents from each company's website. Note: Monex Securities and Nikko Beans are totaled as Monex. Kabu.com Securities merged with MeNet Securities in January 2006.

FY 2003 Matsui: 10,752 Rakuten: 13,373 Kabu.com: 6,340 Monex: 8,154

Individual Brokerage Turnover Share for Main Online Securities Companies

Same period comparison over last 3 years (Term: 2005/ to 2006/3)

Source: Tokyo Stock Exchange statistical data, JASDAQ statistical data, and public documents from each company’s website. Others 50.9％ Five main

• nline

securities companies 49.1 ％

FY 2005 (2005/4 to 2006/3)

Five main

• nline

Securities companies 57.4％ Five main

• nline

Securities companies 59.6 ％ Others 42.6％ Others 40.4％ E*TRADE 15.2％ Matsui Securities 12.2 DLJ (Rakuten Securities) 9.5 Monex 7.5 Kabu.com 4.6 E*TRADE 21.1％ Matsui Securities 13.1 Rakuten Securities 11.3 Monex 8.7 Kabu.com 5.4 E*TRADE 23.1％ Rakuten Securities 11.1 Matsui Securities 10.0 Monex 8.0 Kabu.com 5.2

FY 2004 (2004/4 to 2005/3) FY 2003 (2003/4 to 2004/3)

Note: Individual brokerage turnover is totaled from three exchanges (sections one and two) and JASDAQ. Monex Securities and Nikko Beans are totaled as Monex. Kabu.com Securities merged with MeNet Securities in January 2006.

4Q 24.9%

Brokerage Turnover Comparison for Big Three Securities Companies

5,000 10,000 15,000 20,000 25,000 30,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

(Billion yen)

(Unit: 1 billion yen. Figures in parentheses indicate each brokerage turnover share as a percentage of total turnover in the three markets. Source: Figures are based on public documents from each securities company and the Tokyo Stock Exchange. (Figures for E*TRADE include orders from overseas investors.)

FY 2001 FY 2002 FY 2003 FY 2004

Brokerage turnover for each company

Share of commissions for the 4Q FY 2005

(3Q FY 2005 for companies other than E*TRADE, Matsui, Daiwa SMBC, and Daiwa)

Nikko City: 7,509 (2.83%) Daiwa: 6.184 (2.33%) Matsui: 10,752 (4.05%) Nomura: 19,279 (7.26%) Daiwa SMBC: 9,440 (3.55%) 28,371 (10.68%) Nikko Cordial 2,623 (0.99%)

FY 2005

Overtake Nomura in 4Q FY 2004.

Total share in 4th Quarter tops 10%!

4.8 5.5 11.7 9.9 9.1

2 4 6 8 10 12 14

E*TRADE Kabu.com MBH Matsui Rakuten

Basis comparison

Basis Comparison for Main Online Securities Companies

for five main online securities companies

(FY ended March 31, 2006) (Basis)

Source: Prepared by SBI using settlement of account documents from each company. Note: For Matsui and Rakuten, the fiscal year ends December 31, 2005.

(Brokerage commission / Brokerage turnover)

Note Note Note Note

Reference

Client Asset Trend

(100 million yen)

Compared to previous year +95.8% Compared to previous year +90.1% Compared to previous year +49.4% Compared to previous year +65.9% Compared to previous year +114.5% Source: Public documents from each company's website. Note: Monex Securities and Nikko Beans are totaled as Monex. Kabu.com Securities merged with MeNet Securities in January 2006. Figures for Matsui Securities are for the end of February in the FY ended March 31, 2006 (the end of March in the FY ended March 31, 2005).

25,000 35,000 45,000 55,000 65,000 75,000 85,000 95,000 105,000 115,000

M a r M a y J u l S e p N

• v

J a n M a r M a y J u l S e p N

• v

J a n M a r

41,700 115,611 71,154 54,250 42,554

20,000 40,000 60,000 80,000 100,000 120,000

E*TRADE Matsui Rakuten Kabu.com Monex

(Margin accounts)

Margin account comparison with Matsui Securities Margin trading accounts of five main

• nline securities companies

2004

Margin Trading Account Comparison for Main Online Securities Companies

E*TRADE has 9.9% of total accounts as of the end of March (Matsui: 13.7%). In the future, after gaining some experience, we expect more and more novice investors to establish margin accounts and to begin trading.

(2004/3 to 2006/3) (Current from end of 2006/3) (Margin accounts) Source: Public documents from each company's website. Note: Monex Securities and Nikko Beans Securities are added together as Monex. Kabu.com Securities merged with MeNet Securities in January 2006. Note *: Brokerage turnover in individual margin trading is totaled from three exchanges (sections one and two) and JASDAQ.

E*TRADE: 115,611 Matsui: 71,154

2005 2006

Brokerage turnover share in individual margin trading* (FY 2005) E*TRADE: 27.5% Matsui: 14.4%

3,809 9,334 13,230 5,803

5,000 10,000 15,000

Financial revenue Financial balance (Revenue - Expenses)

(Million yen)

Financial Revenue Expansion

Financial revenue 128% increase

FY 2004 (2004/4 to 2005/3) FY 2005 (2005/4 to 2006/3)

Financial balance 145% increase

8 38 38 23 42 87 94

10 20 30 40 50 60 70 80 90 100

FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005

E*TRADE Securities

IPO Underwriting Performance

Note: Figures do not include agency transactions and real estate investment trust.

IPO stock underwriting performance

162 202 257 330

50 100 150 200 250 300 350

E*TRADE Monex Matsui Rakuten

Source: Public documents at each company. The data is from the first day of online trading for each company to March 31, 2006 (Listing date base).

(Underwritings)

Underwriting Comparison (Listing date base)

(Underwritings)

#1 Online Securities Company

(FY 2005)

Reinforce Online Securities Trading System

In December 2005, capacity was enhanced three times greater than the original system infrastructure introduced in July 2003.

As trading volume expands sharply, strengthen the system even further.

452,493 592,743 777,455 1,167,778

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 9月 3月 9月 3月 6月 9月

2004/12 1-million account capacity 2005/12 1.5-million account capacity

2004 2005

Total securities accounts and system capacity

(Accounts)

By July 2006, capacity will be further enhanced to handle two million accounts (four

times greater than the original system). There is already ample leeway to enable a stress-free

trading environment.

2006/7 2-million account capacity Note: The account growth arrow is a forecast. 2006/5 1.75-million account capacity

2006

E*TRADE Korea Outlook

FY 2005 performance outlook

(Current from end of 2006/3)

Stock capitalization: 56 billion Korean won Employees: 101 Investment ratio: 87%

Operating revenue Operating profit Ordinary profit Profit of current term

5,202 1,182 1,189 922

(Million yen)

Accounts: 96,711

• The lowest online commission rate in Korea (Stock: 0.024%)
• Online investment consulting (video, audio, chat)

In FY 2005, E*TRADE Korea wiped away its accumulated losses and made preparations for listing on the KOSDAQ market.

(Unit: Million yen)

Operating Operating revenue revenue Operating Operating profit profit Ordinary Ordinary profit profit Current net Current net profit profit

Compared to Compared to same period in same period in previous year (%) previous year (%)

+ +５０．５ ５０．５ １０，６７１ １０，６７１ ２，７０１ ２，７０１ ２，９０６ ２，９０６ ３，７７７ ３，７７７

(2005/4 to 2006/3) (2005/4 to 2006/3) FY 2005 FY 2005 Full term Full term

１６，０６２ １６，０６２ ８，０４６ ８，０４６ ８，１７９ ８，１７９ ６，４８２ ６，４８２

(2004/4 to 2005/3) (2004/4 to 2005/3) FY 2004 FY 2004 Full term Full term

+ +１９７．８ １９７．８ + +１８１．４ １８１．４ + +７１．６ ７１．６

SBI Securities: Full Term Non-consolidated Performance (12 Months)

(Unit: Million yen)

Operating Operating revenue revenue Operating Operating profit profit Ordinary Ordinary profit profit Current net Current net profit profit

Compared to Compared to same period in same period in previous year (%) previous year (%)

+ +７７．８ ７７．８ ２，４４９ ２，４４９ ５１６ ５１６ ５３５ ５３５ １，１３４ １，１３４

(2006/1 to 2006/3) (2006/1 to 2006/3) FY 2005 FY 2005 4th quarter non 4th quarter non-

• consolidated

consolidated

４，３５６ ４，３５６ ２，３４５ ２，３４５ ２，３５６ ２，３５６ １，５０３ １，５０３

(2005/1 to 2005/3) (2005/1 to 2005/3) FY 2004 FY 2004 4th quarter non 4th quarter non-

• consolidated

consolidated

+ +３５４．４ ３５４．４ + +３３９．７ ３３９．７ + +３２．６ ３２．６

SBI Securities Fourth Quarter Non-consolidated Performance (3 Months)

100 200 300 400 500 600 700 800 900

Feb- 05 Mar- 05 Apr- 05 May- 05 Jun- 05 Jul- 05 Aug- 05 Sep- 05 Oct- 05 Nov- 05 Dec- 05 Jan- 06 Feb- 06 Mar- 06

J next J cool

Total Net Assets of Main Investment Trusts (Jnext and Jcool)

Investment consulting company: Hirotaka Usabi of Angel Japan Asset Management Co., Ltd. provides consultation services. Trust management company: SBI Asset Management

Net Assets Net increase Tops 80 billion yen

(14-month performance)

Jnext: Newly established Jcool: Newly established (100 million yen) Total net assets at the end

• f each month from 2005/2

to 2006/3

Launch Agency Sales System through Merger of Underwriting Business with E*TRADE Securities

Issuer Customer Customer

(1) Sales (1) Sales (2) Underwriting (2) Underwriting (3) Sales (3) Sales

Issuer Customer Customer

(1) Sales (2) Underwriting

(3) Agency sales

(4) Sales (4) Sales

Change When E*TRADE obtains underwriting order, as a managing underwriter, it will commission SBI Securities to sell a fixed ratio of those issues. E*TRADE and SBI Securities work independently on underwriting sales to increase their own share.

After reorganization After reorganization

Change

After reorganization After reorganization (from 2006/2) Move to the new system from February 2006. Already from February to March, the new agency sales system has handled 15 accounts.

SBI Futures IPO

Schedule

Approval date: 2006/4/21 Tentatively set price range: 2006/5/10 Demand forecast period: 2006/5/12 to 2006/5/18 Set IPO price: 2006/5/19 IPO date: 2006/5/31 Establishment date: 2000/10/13 Business content: Commodity transaction outsourcing through the Internet and call centers. Business type, code: Securities and commodities futures transactions, 8735 On April 21, 2006, SBI Futures was approved for listing

• n the Osaka Hercules Stock Exchange.

(4) Financial Services

Financial Services Highlights

I Centered around E-Loan and InsWeb, the market place business had 62.5% more estimate inquiries compared to the previous term. From the end of last term, 10 new websites opened and page-view growth reached 150 million views per year. II At SBI Mortgage, the Flat 35 Loan (a securitized loan from the Government Housing Loan Corporation) business grew rapidly. The execution balance at the end of March topped 200 billion yen. III At Morningstar from January to March 2006, ordinary profit expanded by 3.1 times compared to the same period in the previous term. (1) The rising price of media services helped Internet advertising sales to expand by 4.8 times compared to the same period in the previous term. (2) At Gomez Consulting, sales related to website design consultations grew by 60% compared to the same period in the previous term. IV At SBI VeriTrans, transactions increased by 47% compared to the previous

• term. Sales and ordinary profit recorded the highest levels ever.

V At SBI Equal Credit, the loan balance reached 9 billion yen 16 months after the start of business.

625,256 436,748 321,570 54,393 173,250

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

2003/4-2004/3 2004/4-2005/3 2005/4-2006/3

(Unit: Page view)

Growing Marketplace Business

Non-financial sector

The count for transactions and users indicates the number of unique visitors to the website to

• btain a total estimate, a document request, or a provisional application.

173,250 625,256

Annual page views Financial sector 150 million page views

Transactions and users

62.5% increase

compared to previous term

The number of transactions and users are expanding smoothly. The number of companies participating has increased to 1,300. Both financial and non Both financial and non-

• financial sectors are healthy.

financial sectors are healthy.

Note: Page views include views at six financial and 11 non-financial websites. Figures here do not include page views for the E-golf service website (14 million page views per month).

158 million page views 70 million page views 34 million page views

487,603 351,929 277,342

100,000 200,000 300,000 400,000 500,000

2003/4-2004/3 2004/4-2005/3 2005/4-2006/3

The Largest Financial Comparison Website in Japan

80,553 106,697 44,228

20,000 40,000 60,000 80,000 100,000 120,000

2003/4-2004/4 2004/4-2005/3 2005/4-2006/3

The mobile finance business and the number of transactions and users are expanding smoothly.

(Unit: Application) InsWeb Insurance Portal Participants: 20 nonlife insurance companies and 13 life insurance companies E-Loan Participants: 70 financial institutions with 560 types of loan products Compared to same period in previous year 38.5% increase Compared to same period in previous year 32.4% increase (Unit: Estimate)

Completed automobile insurance estimates Provisional loan applications

500 1,000 1,500 2,000

9月 12月 3月 6月 9月 12月 3月 6月 9月 12月 3月 6月 9月 12月 3月 6月 ９月 12月 3月

(100 million yen)

2004 2004 2003 2003 2005 2005 2002 2002 2001 2001

Home Loan execution balance

Fast Growth for SBI Mortgage's Home Loan Business

2004/12: Start handling Super Flat 35 (Government Housing Loan Corporation)

2006/3 end 2006/3 end Execution balance Execution balance 206.2 billion yen 206.2 billion yen

2006 2006

2005/12 2005/12 Tops 150 billion yen Tops 150 billion yen 2006/3 2006/3 Tops 200 billion yen Tops 200 billion yen 2005/8 2005/8 Tops 100 billion yen Tops 100 billion yen 2006/4 Tops 210 billion yen

Super Flat 35 is a securitized long-term loan with a fixed rate of interest. Based on low-cost operations and a customer-centric philosophy, SBI can offer the lowest interest rate in the industry for this type of loan.

Source: Compiled by SBI from information available on the Government Housing Loan Corporation website. 3.100 3.000 2.900 2.800 2.700

Super Flat 35 Interest Rate Comparison

Interest rate for 2006/4

Each financial institution has its own commission

• rates. When borrowing from SBI Mortgage, the

handling commission is 2.1% against the loan

• amount. From 2006/4/1 to 2006/4/30, for a 35-

year loan of 30 million yen with repayment of interest and principal in equal installments and without advance repayment, the effective annual interest rate was 2.845%.

SBI Mortgage SBI Mortgage

Average rate: 3.048%

Interest (%)

2.701% 2.701%

2.950%: Mizuho Bank 2.980%: Mitsui Sumitomo Bank 3.050%: Mitsubishi Tokyo UFJ Bank

Morningstar Consolidated Performance (3 Months)

(Unit: Million yen) (2005/1 to 2005/3) (2005/1 to 2005/3)

Sales Sales ４３８ ４３８

FY ended 2005/12/31 FY ended 2005/12/31 1st Quarter 1st Quarter

+49.4 +49.4 ２９３ ２９３

(2006/1 to 2006/3) (2006/1 to 2006/3) FY ended 2006/12/31 FY ended 2006/12/31 1st Quarter 1st Quarter

Operating Operating profit profit Ordinary Ordinary profit profit Current net Current net profit profit １８９ １８９ １５８ １５８ +112.3 +112.3 +209.8 +209.8 +337.7 +337.7 ６１ ６１ ６０ ６０ ３６ ３６ １２８ １２８

Compared to same Compared to same period in previous period in previous year (%) year (%)

1Q FY 2006 (2006/1 to 2006/3)

Investment education, consulting 53.5% Custom data 8.9% Individual stock, fund report 16.3% Internet advertising 21.3%

Consolidated Sales Comparison by Product

1Q FY 2005 (2005/1 to 2005/3)

Investment education, consulting 61.0% Custom data 10.4% Individual stock, fund report 21.9% Internet advertising 6.7%

Internet advertising, which has a high profit rate, expanded by 4.8 times compared to the same period in the previous year. Morningstar

Offer Asset Management Bulletin at Japan Post

• The content is easy for investment novices to read and understand.
• Product explanations use investment data and graphics.
• Offer a free magazine in cooperation with sponsors from investment trust

management companies.

• Distribute 50,000 copies to 575 post offices that sell investment trusts.

March 2006 Morningstar

• Japan Post aims for a balance of 4.9 trillion yen (3 times greater than at the

start) in investment trust sales by the end of FY 2009.

• 2007/10 Privatization: Increase the number of post offices that handle

investment trust sales to 1,550 (3 times greater than now).

90,726 127,578

20,000 40,000 60,000 80,000 100,000 120,000 140,000

2005_1Q 2006_1Q

Sales Ordinary profit

Compared to previous year 40.6% increase (1000 yen)

49,429 32,608

10,000 20,000 30,000 40,000 50,000 60,000

2005_1Q 2006_1Q

(1000 yen) Compared to previous year 51.6% increase

Gomez Consulting Non-consolidated Performance

Morningstar

IPO preparation

2005/3 end: 46 categories (Research target sites: 696)

275 351 476 603 696 100 200 300 400 500 600 700 800

2001/3 2003/3 2004/3 2005/3 2006/3

Trend in research target websites

Items marked with “New!” entered the ranking in the period from 2006/1 to 2006/3.

696 sites

Sharp Increase in Research Target Websites

Morningstar

E-commerce ranking Mobile site ranking Online banking Mobile online banking Online bank and branch Mobile online securities Online securities New! Mobile credit card Online general securities New! Mobile part-time work information Credit card Mobile used car info Commodity futures Mobile concert tickets Overseas tours Domestic tours Overseas air tickets Domestic air tickets Domestic lodging reservations IR site ranking New real estate info New! General IR website New! Pre-owned real estate info New! Bank IR Rental real estate info New! Securities IR Real estate subdivision Telecommunications IR Career change info Wholesaler IR Personnel placement Utilities IR Part-time work info Retailer IR Automobile insurance Insurance IR Medical insurance Land transportation IR Online shopping Airline IR Online auction IR site ranking Concert tickets Online bookstore FTTH providers Used car info websites Automobile manufacturers Department stores Online cosmetics manufacturers New! Cosmetics manufacturers

(Unit: Million yen)

Operating Operating revenue revenue Operating Operating profit profit Ordinary Ordinary profit profit Current net Current net profit profit

Compared to Compared to same period in same period in previous year previous year (%) (%)

+103.0 +103.0 944 944 221 221 225 225 183 183Note

Note

(2005/4 to 2006/3) (2005/4 to 2006/3) FY 2005 FY 2005 Full term Full term (2004/4 to 2005/3) (2004/4 to 2005/3) FY 2004 FY 2004 Full term Full term

+81.0 +81.0 +75.6 +75.6 +38.3 +38.3 1,916 1,916 400 400 395 395 253 253

Full Term Performance of SBI VeriTrans

SBI VeriTrans records the highest ever sales and profits.

Note: Net profit for the current term for the third quarter of F Note: Net profit for the current term for the third quarter of FY 2005 included 11 million yen in deferred tax assets as part of Y 2005 included 11 million yen in deferred tax assets as part of a loss a loss brought forward from the last financial year became collectible. brought forward from the last financial year became collectible.

Shop Trend

(Number of shops)

300 600 900 1200 1500 1700

The number of shops increased by 86.2% to 1,881 compared to the previous year.

SBI VeriTrans

FY ended 2003/3/31 FY ended 2004/3/31 FY ended 2005/3/31 FY ended 2006/3/31 ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q

Transaction Trend

(Unit: 1000 transactions)

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

The number of transactions increased by 46.8% compared to the previous year.

SBI VeriTrans

FY ended 2003/3/31 FY ended 2004/3/31 FY ended 2005/3/31 FY ended 2006/3/31 ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q

SBI EQual Credit Loan Performance

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000

Loan balance Loan accounts

The loan balance topped 9 billion yen 16 months after starting business.

(Unit: Million yen) (Accounts) 2005

Note: Operations launched on 2004/11/17.

Current as of end of March Loan balance: 8.965 billion yen Loan accounts: 22,313 Annual amortization rate: 3.23%

2006

• Operations are expected to be profitable on a monthly basis beginning this summer.
• Operations are expected to be profitable for the full term ending March 31, 2007.

• 3. Further Develop SBI Group Ecosystem

(1) Expand the enterprise ecosystem to support the SBI financial business, which aims to become the largest distributor of financial products in Japan. (2) Form an enterprise ecosystem where the great number of potential synergies with the home real estate business may flourish. (3) Form a system management ecosystem within the Group that can contribute greatly to maintenance and construction.

New Development Stage Based on Mutual Synergies in the Enterprise Ecosystem

Home real estate ecosystem System management ecosystem

Financial Synergies

Synergy

Synergy Synergy Synergy

Card Processing (SBI real estate on the web)

(1) Expand the enterprise ecosystem to support the SBI financial business, which aims to become the largest distributor of financial products in Japan.

① Collaborate with Sumitomo Trust Bank and establish an Internet bank. ② Jointly establish a nonlife insurance company with Aioi Insurance Co., Ltd. ③ Establish SBI Guarantee Co., Ltd. ④ SBI Card: Obtain a tentative license for MasterCard.

Develop Business through Multi-Faceted Collaboration with Sumitomo Trust Bank

(2005/1/17 Announcement)

１ ． Harmonize Internet and real assets

E*TRADE Securities becomes a trust agreement agent and a business operations

agent for Sumitomo Trust Bank. As soon as the Banking Law is revised, it will become a banking agent of Sumitomo Trust.

E*TRADE Securities provides securities brokerage and business promotion

business services on behalf of Sumitomo Trust.

Become mutual distributors of home loan products (SBI Mortgage).

２ ． Merge securities and banking (private) businesses

From Sumitomo Trust, the SBI Group receives products and services related to

customer deposits, loans, trusts, and real estate. Sumitomo Trust also provides asset management and inheritance consulting.

From SBI Securities, Sumitomo Trust receives products related to helping

customers incorporate unlisted stocks into their portfolios. ３ ． Jointly develop and sell products

Offer the investment trust services that both companies establish and manage

(SBI Asset Management).

Jointly establish new investment trusts (Morningstar). Offer real estate brokerage services to SBI Group customers (SBI Holdings).

Establish Joint Company with Sumitomo Trust Bank

(2005/4/3 Agreement)

Conduct research and gather information about the market and marketing methods related to the new Internet bank.

Business content: Outsourcer for research and information related to Internet banking Representatives Chief Executive Officer: Kaichi Tanaka (currently manager of head office at Sumitomo Trust Bank) Executive Vice-President：: Katsuya Kawashima (currently director at E*TRADE Securities) Head office location: 1-6-1 Roppongi, Minato-ku, Tokyo (currently SBI Holdings head office) Stock capitalization: 4 billion yen Shareholders: SBI Holdings 50%, Sumitomo Trust Bank 50% Start-up preparation company for SBI Sumitomo Trust Internet Bank

Multi-faceted collaboration

Establish Joint Nonlife Insurance Company with Aioi Insurance

• Nonlife insurance

management

• Product development

Total accounts 1.16 million Annual execution loans 6,000 Annual transactions/users 800,000 people

New Internet nonlife New Internet nonlife insurance company insurance company Customer base of SBI Group

Registered members 380,000 affluent customers

• Office operations
• Call center
• Damage claim service

Investment targets 255 companies

Extensive expertise in Internet business Marketing channels Cooperation Cooperation Establish joint venture

Support Support

Management infrastructure Experience, expertise Largest website in Japan for insurance comparisons and estimates

Establish SBI Guarantee Co., Ltd.

New company overview

The SBI Group aims to expand its business horizons and to develop financial services for affluent customers. To meet increasing demand for different types of transaction services in e-commerce, SBI Guarantee will engage in a wide variety of related services such as surety for settlement of accounts, home rent, and works of art.

SBI Guarantee is a 100%-owned subsidiary engaged in guarantee and related services. Trade name

SBI Guarantee Co., Ltd.

Location Izumi Garden Tower, 1-6-1, Roppongi, Minato-ku Establishment date February 2, 2006 Paid-in capital 150 million yen, capital reserve of 150 million yen Shareholder structure SBI Holdings Inc. 100% Executives Yoshitaka Kitao, Representative Director & CEO Hidehiko Kobayashi, Representative Director & COO Hiroyoshi Kido, Director

Obtain MasterCard tentative license 2006/3 Issue preparation, ICA No. (International bank number) 2006/7 Official approval (Planned) From 2006/9 Start issuing cards (Planned)

SBI Card: Obtain a Tentative License for MasterCard

Use Silverlake solutions to issue sophisticated, value-added cards. Schedule

Principle member Principle member license license MasterCard International Inc.

Card processing service Card Processing

Establish joint venture System

• utsourcing

Issue credit card

Silverlake Group Card company, bank System

• utsourcing

Sub-license Joint cooperative sub-license Issue SBI Group Card

New Internet Bank Users of comparison website

(Formal license planned for 2006/7)

Examine New Loan Products Based on Cooperation between SBI Card and SBI Mortgage

• Issue, process cards
• Monthly collection
• Card system management
• Establish, execute, and manage

a home equity framework

• Raise funds
• Collect late payments

Collateral assessment amount Fixed rate (%) for collateral assessment amount

Home equity framework

Card is compatible with free loans.

(The equity limit is the balance after subtracting the loan execution amount from the fixed rate of the collateral value.)

Home loan balance Home loan balance

• Flat 35
• Conversion ("Good Loan")

Balance Period

Through new products such as home equity loans, make it possible to use the card for loan execution and repayment.

(2) Form an enterprise ecosystem where the great number of potential synergies with the home real estate business may flourish.

Build a Strong Enterprise Ecosystem for Home Real Estate Business

Home Real Estate Ecosystem

(SBI real estate network)

Zephyr SBI Planners SF Reality

(Under construction)

ZECS

Real estate brokerage

Tozai Asset Management

SBI Holdings real estate business

Construction Real estate securitization Mansion subdivision Real estate consulting

2005/8: SBI Partners becomes a subsidiary. 2005/9: Zephyr becomes an affiliate company accounted for by the equity method. 2006/3: Tozai Asset Management becomes affiliate company accounted for by the equity method. 2006/3: Merger with SBI Partners.

Real Estate Business Head Office Lifestyle Network Business Head Office SBI Real Estate on the Web

Buy Sell Build Loan Borrow Assess value Repair

Auction Buying/selling Order home Home builder comparison Home rent search Sale value assessment Home renovator comparison Estimates Information, blog, community Advertising, affiliates Additional services: Home loan, nonlife insurance, moving, home rent guarantee

Members Real estate office network

Real estate agency comparison

Lifestyle guide Brokerage, media, other services

Materials bank SBI Planners Developed property

SBI Real Estate on the Web

SBI Guarantee

Home rent guarantee Eco-materials Construction Asset value assessment

Strong Performance of Zephyr Affiliate

Current term estimate

(2006/4/18 announcement)

Change over previous year (%) Previous term performance

(Full-term, FY ended 2005/3/31)

Sales 95,200 + 41.6 67,209 Ordinary profit 8,100 +60.0 5,062 Current net profit 4,300 + 58.9 2,706

(Unit: Million yen)

The real estate subdivision business is operating smoothly. Performance estimates are being revised upward.

Performance estimate for FY 2005 full term (2005/4/1 to 2006/3/31)

The sale of large- scale properties was strong.

Joint Investment with ZECS in Tozai Asset Management

President: Hiroyuki Hirayama Since establishment, the company has been developing its real estate home business and facility management business for senior housing. Representative Director & CEO: Yoshitaka Kitao Toward an integrated financial group, this investment expresses SBI's clear objective of making home real estate a core business. President: Takuichiro Shiro The company concentrates on real estate finance for unlisted

• companies. Business activities include real estate securitization,

asset management, and property management.

25％ equity investment Affiliate accounted for by equity method

SBI and ZECS are making a joint investment in Tozai Asset Management, who are strong in real estate finance. This investment will help develop mutual real estate solution expertise. For the future, SBI and ZECS are also studying ways to cooperate by taking advantage

• f each company's strengths.

Affiliate accounted for by equity method Financial expertise Real estate solution expertise

(3) Form a systems management ecosystem within the Group that can contribute greatly to maintenance and construction.

Build a System Management Ecosystem

System Management Ecosystem

Traders Financial systems SOLXYZ C4 Technology SBI Technology SBI VeriTrans

E-commerce settlements Software development Financial IT solutions Financial IT solutions Card processing service Information security

Card Processing SBI Card Processing

Silverlake Group

Strengthen Capital Tie-up with Traders Securities Group

Merge solutions of two companies

Consolidated subsidiary Consolidated subsidiary Capital collaboration Traders Securities Traders Securities

TDS

Traders Financial Systems Traders Financial Systems

TFS

2005/9 Hold 5% of TFS

Account aggregation service (Integrated processing of financial accounts)

Money Look HTS

Home trading system Foreign exchange transaction system Nikkei 225 transaction system

2005/9 Hold 5% of SBIT Collaboration

• n strategic
• perations

Financial IT solutions Financial IT solutions

Financial institutions Multiple securities companies

• High value-added services
• Product differentiation
• Improved competitiveness

TFS becomes an affiliate company accounted for by the equity method.

• SBIT: 5% holder

Total: 25%

2005/9: 5% holder 2006/3: Add 15%

• SBIH: 20% holder

By making use of C4 Technology's information security expertise, SBI can implement C4's security consulting among the 30 main Group companies. With C4 expertise, SBI can build a highly secure information infrastructure, which will help the Group differentiate itself from the competition and raise the level of trust among customers.

Operations and Capital Collaboration with C4 Technology

Individual privacy protection Anti-phishing Server security

・・・・・

Stock share: 14% (Potential stock base at end of 2006/3)

Information security technology, expertise

(When separately using new stock option rights)

Operations and Capital Collaboration with Software Development Company SOLXYZ

Capital collaboration Operations collaboration

Work as a core partner to develop systems for each SBI Group company. Cooperate on an SOLXYZ M&A strategy.

SBI Holdings has acquired 21.4% of SOLXYZ's stock, which makes SOLXYZ an affiliate company accounted for by the equity method. SBI Holdings and SOLXYZ have agreed to implement an operations tie-up (2006/4). Using SOLXYZ's agile system development power, SBI will be able to speedily develop systems for each Group company.

Acquire 21.4% of SOLXYZ, which becomes an affiliate company accounted for by the equity method.

• Concentrate on outsource system

develop for financial institutions.

• Work as an independent system

integrator.

• A wealth of financial technology

and network expertise

• Financial resources

Establish Joint Corporation with Silverlake Group

Establish a joint company as a new entrant in the card processing service business. SBI Holdings and the Silverlake Group have also agreed on joint business management in Japan.

Last year: Launched business. This summer: Plan to acquire international brand license. Prepare for full-scale business development.

SBI Group (SBI Card) Silverlake Group

Offer excellent solutions in the same business sectors. Have one company listed in Malaysia and one in Singapore. Both companies are now applying for public listing.

Promote global SBI Group expansion.

Establish SBI Card Processing Co., Ltd.

Build a firm business base through a brand and as a system management outsourcer in card settlements for credit card companies and banks.

(4) Build an Enterprise Ecosystem to Increase Unrealized Assets in Stocks.

Market Capitalization and Unrealized Profit of Listed SBI Subsidiaries and Affiliate Companies

SBI stock share (%) SBI investment amount

51.2 122 70 4 153

SOLXYZ2

21.4 11 12 1

Sumitomo Trust Bank

0.5 100 117 17

C4 Technology3

（14.1） 20 27 7 480 50.0 40.6

Zephyr

21.4 206 53

Market capitalization of SBI's share Unrealized profit

E*TRADE Securities1

4,358 4,236

Morningstar

152 82

SBI VeriTrans

99 95

Total

4,971 4,491

(Current as of 2006/3/31)

Maintain the market capitalization and unrealized profit related to SBI Group companies and affiliates.

Note 3: These figures are calculated on the assumption that only SBI Holdings exercises its rights on convertible bonds that it holds. Note 1: On 2006/4/3, the share increased to 53.2% through additional acquisition. Note 2: Figures are calculated using the final price on the acquisition date (2006/4/19).

(100 million yen)

• 4. Asset Management Expansion

in Current Term

(1) Collection period starts for IT Fund and Enterprise Revitalization Fund. (2) Establish new funds. (3) Strengthen collaboration with overseas financial institutions. (4) Support venture business between industry and academia.

(1) Collection period starts for IT Fund and Enterprise Revitalization Fund.

2005/8 2006/8 end (Planned)

Cash distribution per 100 million yen investment (Planned)

IT Fund #1 30 million yen 100 million yen 90 million yen 130 million yen IT Fund #2 33 million yen 123 million yen

Cash Distribution Schedule for IT Funds #1 and #2

Near the end of August 2006, SBI plans to implement a cash distribution to fund investors.

Cash distribution for IT Funds #1 and #2

SBI total receipts (Planned) 52.7 billion yen

2005/8 41.1 billion yen 2006/8 end (Planned) 124.8 billion yen Total (Planned) 165.9 billion yen

370 794 2,262 1,611 210

500 1,000 1,500 2,000 2,500 3,000

• 1. Sales: 13 billion yen

Contingency fee: 13 billion

• 2. Operating profit: 13 billion yen
• 3. Extraordinary gain: 46.8 billion yen

(Unit: 100 million yen)

Investment balance Cash (Including accumulated dividend) Unrealized profit

2006/3 end 162

SBI equity as of 3/31 42.4％ (639 units / 1,505 units) 2,635

2006/4/3 estimate

Below is the estimated impact on consolidated performance in FY ended 2007/3/31 related to the sale of E*TRADE stock.

The impact on profits before taxes for FY ended 2007/3/31 is estimated at 59.8 billion yen.

Note: The above estimate may change at a future date.

2,775

Effect on Consolidated Performance related to Selling Stock of E*TRADE Securities (Who Hold IT Funds)

Breakdown on E*TRADE Stock Buyers based on IT Funds Breakdown on E*TRADE Stock Buyers based on IT Funds

• The fund has been sold to over 150 institutional investors through

securities companies.

• SBI also made additional purchases and raised its equity ratio.

Europe 38% 24％ 18% 21% U.S. Japan Asia Institutional investors Institutional investors by country by country

After change Before change

(2006/4/3)

Shareholder ratio Shareholder ratio

SBI Holdings 51.2% 53.2% Softbank Internet Technology Fund #2 14.4% 0.0% Softbank Internet Technology Fund #1 3.6% 0.0% Softbank Internet Technology Fund #3 1.0% 0.0% Softbank Internet Fund 0.4% 0.0% Others 29.5% 46.8%

Transfer of Shinwa Scaffolding Company Stock based on SBI Capital Management Fund

Overview of target company

Trade name: Shinwa Co., Ltd. Representative: Hiroshi Yamada, President Location: 30-7 Bushi-gawa, Hirata-cho, Kaizu-shi, Gifu-ken Business content: Manufacture and sale of temporary construction materials Employees: 92 (As of 2006/3 end) Sales: 10.058 billion yen (2006/3/31 estimate) Operating profit: 1.527 billion yen (2006/3/31 estimate)

Stock transferred to Cosmetics Global Holdings Japan Co., Ltd. Below is the estimated effect on consolidated performance for SBI Holdings for FY ending March 31, 2007. Consolidated sales: 8.1 billion yen Consolidated ordinary profit: 6.8 billion yen

2003/12 Acquire 100% of stock through management fund. FY 2005 SBI estimates that Shinwa will achieve its highest ever sales and profits.

• Arrange the internal management system.
• Draw up a management strategy

together with company executives.

Stock transfer proposal: 87% IRRNote

Note: This figure is before deducting for management and contingency fees.

(2) Establish new funds.

Invest in companies related to Invest in companies related to domestic Internet services. domestic Internet services.

Market scale of Internet industry

Time Time SBI Group SBI Group investment investment phase phase

Invest in companies related to Invest in companies related to mobile communications. mobile communications.

Mobile Fund Mobile Fund

Invest in companies related to Invest in companies related to broadband communications. broadband communications.

Softben #2 Softben #2 Softbank Ventures Softbank Ventures Softbank Internet Softbank Internet Technology Fund Technology Fund SBI BB Media Fund SBI BB Media Fund SBI Broadband Fund SBI Broadband Fund Ubiquitous Ubiquitous

Establish Establish fund for US fund for US industries industries

Internet Internet Internet Internet

Internet Internet Broadband Broadband Mobile and wireless Mobile and wireless

’ ’95 to 95 to ’ ’96 96 Growth period for Growth period for US Internet industry US Internet industry ’ ’99 to 99 to ’ ’00 00 Growth period for Growth period for Japan's Internet industry Japan's Internet industry ’ ’04 to 04 to ’ ’05 05 Growth period for Growth period for broadband industry broadband industry ‘ ‘06 to 06 to Growth period for Growth period for mobile and wireless industries mobile and wireless industries

Media Media

Toward Establishing a New Mobile Fund

In the future, the SBI Group wants to become active in pension i In the future, the SBI Group wants to become active in pension investments. nvestments. Aim for a total of Aim for a total of

42 billion yen 42 billion yen.

.

Invest in companies related to Invest in companies related to US Internet services. US Internet services.

Unlisted Stock Real Estate Fund

Investor (Partner) Investor (Partner)

Contract

Partner Outsourcer (SBI Holdings, Inc) Outsourcer (SBI Holdings, Inc)

Outsourcing contract

Manager A (SBIP Hybrid LLC) Manager A (SBIP Hybrid LLC) Asset manager (SBI Holdings, Inc) Asset manager (SBI Holdings, Inc)

Asset management contract

Beneficial interest trust

Investment

Manager B (Undecided) Manager B (Undecided) J-REIT, other unlisted stock

Investment

Trust bank Trust bank Property manager Property manager

Property management contract Property management

Investment consultant (Selected as needed) Investment consultant (Selected as needed)

Investment consulting contract Anonymous partnership contract

Issuer SBI Real Estate Management LLC Issuer SBI Real Estate Management LLC Trust real estate

Scheme

Subscription dealers

Name: SBI Unlisted Stock Real Estate Fund Anonymous Partnership #1 (Quarterly dividend)

Overview First stage

Informal name: Four-Leaf Clover Amount: 15 billion yen upper limit Investment target: Over 80%

• f

the anonymous partnership investment money will be indirectly invested in beneficial interest

• REITs. The other 20% will be indirectly

invested in unlisted stocks. Distribution policy: In principle, there will be a dividend each quarter.

: 15-billion-yen upper limit (Now taking subscriptions) Second stage: 10 billion yen (Planned)

Metropolitan Revitalization Fund (Limited Liability Investment Partnership) 2.5 billion yen (250 accounts) 200 million yen (20 accounts) Total: 2.7 billion yen

• DIP finance for enterprises going through

civil rehabilitation procedures

• Funds to enterprises at risk of going bankrupt.
• Debt factoring
• Buyout
• Enterprise revitalization

finance

• Lawyer
• Consultant
• Bank

Introduce proposal

Investment target

(small- and medium-sized companies) Enterprises with offices in Metropolitan Tokyo This fund will support the revitalization of enterprises who are overburdened with debt that has led to voluntary liquidation, specific arbitration, corporate split-up, civil rehabilitation,

• r bankruptcy.

Contribute to the resolution of bad debt in regional institutions and the revitalization of metropolitan enterprises.

GP (Management company)

New Bank Tokyo

LP (Investor)

Audit corporation Audit

(1) SBI Capital is establishing a Metropolitan Enterprise Revitalization Fund with ShinGinko Tokyo as the principle investor.

• Mezzanine investment

(2) The fund will be used for value-up investment, targeting small and medium listed stocks in Japan.

SBI Capital Establishes New Fund

• Take charge of debt

settlements

• Introduce accountants
• Handle loans

(3) Strengthen collaboration with

• verseas financial institutions.

Establish Capital Ties with Overseas Financial Institutions and Strengthen Cooperation in Financial and Investment Sectors

China India Korea

• Invest in funds managed by the Tata

Group.

• Examine how to establish venture capital

business with Indian financial institutions.

• Sale Indian stock funds in Japan (Under

examination).

• Establish a joint investment fund with

Tamasek of Singapore.

• Establish an office in Beijing with resident

employees.

• Invest in funds managed by Legend Capital of

the Lenovo Group. Establish capital ties with influential business partners (Under examination).

(4) Support venture business between industry and academia.

Support Venture Business between Industry and Academia

Yokohama City University

Fuji Bio

New company B.B.I.

Provide hospital facilities (Return profits to investors if the venture business becomes profitable). Make effective use of university employees (intellectual assets (network of professors and expertise). Provide office space, university facilities, and expenses such as lighting.

Purchase expensive equipment (Lease to new company). Effectively use CRO. Offer expertise in drawing up protocols and contracts.

SBI

Offer management expertise in analysis equipment.

High Energy Accelerator Research Organization

Offer management expertise. Establish new business.

Advantage for university

Improve the quality of research through introducing the latest equipment. Motivate staff and students through the creation of venture business that originates from the university. Improve university name recognition and become more attractive to students and joint research enterprises.

Offer donations and courses to university (CEO).

Investment

Investment (from people involved)

Investment 12.5％ equity investment

Jointly establish a new company that will greatly reduce the cost and time of new drug development.

(2006/4/3)

Potential Collaboration with Tsinghua University in China

Establish a joint industry-academia fund.

IT industry Environment, energy Life science High technology 1995 to 2004 Tsinghua Industry revenue trend

• 5. Each SBI Group Company Actively

Returns Profits to Shareholders

On 2006/2/22, SBI adjusted the dividend estimate upwards (merger commemorative dividend).

FY 2005 Profit Distribution Proposal for SBI Holdings

(Per share)

Term end Year Merger commemorative dividend Ordinary dividend (Per share) 2006/2/22 Upward adjustment FY 2004 performance

－

100 yen 500 yen 600 yen

－

－ 350 yen 350 yen

Interim

The 250-yen increase in dividend is a sharp increase (71%) over the previous term.

SBI Holdings Acquires Treasury Stock

• 1. Purchase period: 2006/2/17 to 2/24
• 2. Number of stocks purchased: 50,000
• 3. Total purchase amount: 2,901,493,700 yen
• 4. Purchase method: Market purchase on TSE

To offset the effect of a steep drop in the stock market, SBI has purchased its own stock. Average purchase price per share: 58,030 yen Treasury stock conditions after purchase (2006/2/24) Total number of issued stocks (excluding treasury stock): 9,602,600.09 Number of treasury stocks: 61,141.41

E*TRADE Securities Dividend Proposal this Term

FY 2005 (Current term) FY 2004 (Previous term)

Per share (After taking account of split) (Before taking account of split) (Per share)

Ordinary dividend

1,600 yen 4,800 yen 1,500 yen

IPO commemorative dividend

－ － 4,800 yen 800 yen

Total

1,600 yen 2,300 yen

E*TRADE plans to have a dividend of 1,600 yen per common stock. (After taking account

• f a three-for-one stock split that takes effect on February 1, 2006) Before taking account
• f the split, the dividend is 4,800 yen, which is over two times the previous dividend of

2,300 yen (including commemorative dividend) for a 2,500 yen increase. The increase is

• ver three times larger than the ordinary dividend of the previous period.

Note: On February 1, 2006, E*TRADE executed a three-for-one common stock split

X３ X３

Morningstar plans a sharp increase in dividends, up 78% compared to the previous term.

Morningstar Dividend Proposal this Term

FY ended 2005/12/31

(Current term)

FY ended 2004/12/31

(Previous term)

Term-end dividend

400 yen 450 yen

(After taking account of split: 225 yen) (Per share) Announced on 2006/1/19

Implement SBI VeriTrans stock split. Announced on 2006/1/23 A 3-for-1 stock split is announced. Base date: 2006/3/31 Effectuation date: 2006/4/1

• 6. Other Business Activities

(2) Promote SBI Group CSR (1) Recruit New Graduates and Establish SBI University

(1) Recruit New Graduates and Establish SBI University

This is SBI's first recruitment of new graduates. This is SBI's first recruitment of new graduates.

Manpower development (1) Manpower development (1)

New graduate recruitment objectives

Accept 43 freshmen recruits this spring. Plan to accept double this number next spring.

• SBI is recruiting new graduates to ensure it has a pool of talented

individuals to groom as future candidates for positions of responsibility within the Group.

• SBI will educate new recruits in Group corporate culture and groom

manpower resources to succeed as next-generation executives.

Establish SBI University.

The open university will use the Internet and accept talented individuals from other companies. It will be a place where ambitious individuals can train their intellect.

Manpower development (2) Manpower development (2)

Business Business A Administration dministration Human Human S Studies tudies SBI SBI UNIVERSITY UNIVERSITY Internationalism Internationalism

Cooperate with universities and business schools in the USA, China, and India.

• Yoshitaka Kitao
• Hiroshi Tasaka
• Jian Kong
• Steve Chang (Trend

Micro founder)

• Joe Mansueto

(Morningstar Inc. founder and CEO)

• Venture capital

managers

• Finance
• Accounting
• Strategy
• Marketing

Accomplished lecturers

Global access

(2) SBI Group CSR

SBI Group Corporate Social Responsibility (CSR)

SBI has three original points in pursuit of corporate social responsibility.

信 信 義 義 仁 仁

“Shin”: Trust & reliability

Strengthen internal audit system. Strengthen corporate communication. Protect private information. Promote open employment opportunity and fair treatment. Promote businesses that will benefit society. Offer innovative financial services. Create and foster new industries. Pursue a total customer-centric business model.

“Gi”: Create and implement honorable businesses Support research in the field of medicine. Improve child welfare through foundation activities. “Jin”: Contribute directly to society

These three Chinese characters (Shin, Gi, and Jin) symbolize the SBI outlook on corporate social responsibility.

SBI Group Corporate Social Responsibility (CSR)

Trust Trust

SBI maintains its own credit and strives to SBI maintains its own credit and strives to become a highly reliable and trusted become a highly reliable and trusted financial group. financial group.

Fairness Fairness The SBI Group pursues business activities

based on a sense of social fairness.

Charity Charity The SBI Group considers deeply what it can

do for society.

Number of donations (Facilities) Amount (Million yen)

173 167 155 105

FY 2004 (SBI Group activities) FY 2005 (Foundation activities)

SBI Group Activities for Direct Contributions to Society SBI Group Activities for Direct Contributions to Society

Increase the activities of the SBI Children's Hope Foundation. Foundation Activities in FY 2005

Donation budget 200 million yen

Self-reliance support Make additional donations to facilities that treat abused children. Increased cooperation with local governments Coordinate activities with 42 prefectures (three more than the previous year) and nine special government ordinance cities (one more than the previous year). Donations based on actual conditions Actively interview and visit donation targets. Base target donations on actual needs and conditions.

More Direct Support

The SBI Group is planning to build a facility in Saitama Prefecture for short-term treatment of children who have been abused.

• Decide on the budget in Saitama.
• Preparations are now underway to cooperate

with the public treasury.

Source: Saitama Newspaper (Morning edition), 2006/2/16. (News article)

Facility name Children's Heart Care House (Tentative) Location Hikigunranzan-machi, Saitama-ken Management corporation Jitokuin (Tentative name for social welfare corporation) Director Yoshitaka Kitao Opening date Autumn 2007 (Planned)

Visitors can access the SBI Group website to download broadcasts about business strategy. SBI also has additional special broadcasts on topics related to ever-changing market conditions.

2/9 Broadcast E*TRADE President Taro Izuchi 1/30 Broadcast SBI Management Starting Point 3/9 Broadcast Launching the New SBI Group 1/6 Broadcast Challenges For The New Year 1/20 Broadcast Special The LiveDoor Shock 2/17 Broadcast Former Finance All COO Masahito Ito SBI Mortgage COO Noriaki Maruyama 2/24 Broadcast Special The Stock Market Inside SBI from the Top 3/30 Broadcast New Nonlife Insurance Company and Internet Bank Vision 3/20 Broadcast SBI VeriTrans COO Takashi Okita SBI EQual Credit COO Kazukimi Ishii

http://www.sbigroup.co.jp