TEXT-S&P summary: Sumitomo Mitsui Trust Bank Ltd.

(The following statement was released by the rating agency)

Oct 09 - =============================================================================== Summary analysis -- Sumitomo Mitsui Trust Bank Ltd. --------------- 09-Oct-2012 =============================================================================== CREDIT RATING: A+/Negative/A-1 Country: Japan Primary SIC: Commercial banks, nec Mult. CUSIP6: 865625 =============================================================================== Credit Rating History: Local currency Foreign currency 18-Jun-2007 A+/A-1 A+/A-1 08-Jun-2005 A/A-1 A/A-1 =============================================================================== Major Rating Factors Strengths: -- Strong domestic market position as the largest trust banking group in Japan -- Stable fee income from businesses such as asset management and custody

-- Strong risk position that reflects its focus on asset management and traditional commercial banking

Weaknesses:

-- Moderate capitalization, with the risk-adjusted capital ratio expected to remain lower than 7%, and relatively weak capital quality

-- Key risks in exposures to stock price and interest rate movements through its securities portfolio, like other Japanese banks

-- Moderate profitability characterized by low net interest and fee margins due to competition

Outlook

The negative outlook reflects Standard & Poor's Ratings Services' view that the ratings on Sumitomo Mitsui Trust Bank Ltd. (SMTB), which incorporate one notch of government support, are likely to be lowered should the sovereign rating on Japan (AA-/Negative/A-1+) be lowered. The outlook on the sovereign rating on Japan is negative.

The ratings on SMTB could also come under pressure if the bank's stand-alone credit profile (SACP) weakens due to substantial deterioration in its asset quality or if its capitalization weakens significantly. In our view, the latter is a less likely scenario in the medium term because it has a diversified revenue base and its pensions-related business is stable. We expect Sumitomo Mitsui Trust Holdings Inc.'s (SMTH; not rated) consolidated base risk-adjusted capital (RAC) ratio to remain around 5%-6% and its profitability, in terms of return on assets, to remain rather stable at a modest level of approximately 0.3%-0.4%. At the same time, we expect SMTB's credit risk profile to remain close to the current level with gross nonperforming loans (NPL) at approximately 1%-2% and credit loss provisions for loans at 0.2%-0.3%.

Conversely, we could raise the ratings on SMTB if the bank's capitalization and earnings improve substantially, although we view this as an unlikely scenario in the near term, given that it faces pressure from its equity holdings.

Related Criteria And Research -- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov.9, 2011 -- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011 ((Bangalore Ratings Team, Hotline: [phone], [e-mail], Group id: [e-mail], Reuters Messaging: [e-mail]))