ANNUAL REPORT
2010
YEAR ENDED MARCH 31, 2010
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
0
Aiming to become a globally competitive financial
services group with the highest trust
We are a group of highly qualified professionals
that can provide truly valuable financial services to our customers.
Each of us thinks and acts with pride as experts in each business area
in order to LEAD the competition in creating and delivering
customer VALUE in a continually changing business environment.
This material contains certain forward-looking statements. Such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and actual results may
materially differ from those contained in the forward-looking statements as a result of various
factors. Important factors that might cause such a material difference include, but are not limited
to, those economic conditions referred to in this material as assumptions.
In addition, the following items are among the factors that could cause actual results to differ
materially from the forward-looking statements in this material: business conditions in the banking
industry, the regulatory environment, new legislation, competition with other financial services
companies, changing technology and evolving banking industry standards and similar matters.
CONTENTS
(cid:129)Message from the Management .............................. 2
(cid:129)Business Overview .................................................. 10
Consumer Banking ................................................................. 10
Corporate Banking.................................................................. 12
Services for High Networth Individuals,
Business Owners and Employees ....................................... 14
Investment Banking ................................................................ 15
International Banking .............................................................. 16
Treasury Markets .................................................................... 17
and Quality ........................................................... 51
(cid:129)Group Companies ................................................... 18
(cid:129)Financial Highlights ................................................. 21
(cid:129)Financial Review ...................................................... 25
(cid:129)Risk Management .................................................... 34
(cid:129)Corporate Social Responsibility (CSR) .................... 50
(cid:129)Initiatives for Enhancing Customer Satisfaction (CS)
(cid:129)Corporate Governance ............................................ 52
(cid:129)Internal Audit System .............................................. 53
(cid:129)Compliance ............................................................. 54
(cid:129)Environmental Preservation Initiatives ..................... 56
(cid:129)Social Contribution Activities ................................... 60
(cid:129)Human Resources ................................................... 64
(cid:129)Financial Section and Corporate Data .................... 69
Financial Section..................................................................... 69
Corporate Data ....................................................................... 205
Sumitomo Mitsui Financial Group, Inc.
Public Relations Department
September 2010
1-2, Yurakucho 1-chome, Chiyoda-ku,
Tokyo 100-0006, Japan
TEL: +81-3-5512-3411
Sumitomo Mitsui Banking Corporation
Public Relations Department
1-2, Yurakucho 1-chome, Chiyoda-ku,
Tokyo 100-0006, Japan
TEL: +81-3-3501-1111
Notice of Address Change
The head offices of Sumitomo Mitsui Financial Group, Inc.
and Sumitomo Mitsui Banking Corporation will move to the
following addresses on October 18, 2010.
Sumitomo Mitsui Financial Group, Inc.
Public Relations Department
1-2, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100-0005, Japan
TEL: +81-3-3282-8111
Sumitomo Mitsui Banking Corporation
Public Relations Department
1-2, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100-0005, Japan
TEL: +81-3-3282-1111
SMFG 2010 1
These activities are supported by our three core strengths:
Spirit of Innovation
We LEAD the market by
providing innovative,
globally competitive services
that meet customer needs.
Solution &
Execution
We LEAD the business by using all
the knowledge and experiences of
our group to solve the issues of our
customers, whether individuals
or corporates, identified through a
deep understanding of their needs
and financial situations.
Speed
We LEAD the pace by
providing our customers
with desirable services in a
timely manner with speed
and determination.
We create new VALUE by forming teams of
specialists in various fields and providing optimal services to
our customers through two-way communication.
As a result, we will be selected as a truly trusted partner.
Message from the Management
We would like to thank you for your continued support and patronage. In this annual report, we review the
initiatives implemented in fiscal 2009, ended March 31, 2010, and explain our management policies for fiscal
2010.
Principal Initiatives in Fiscal 2009
policy of increasing dividends stably and continuously through
sustainable growth in enterprise value and achieving a dividend
Having designated fiscal 2009 as the year for “establishing the
payout ratio of over 20% on a consolidated net income basis. As
next foundation for future growth, while continuing to strengthen
SMFG recorded consolidated net income in fiscal 2009 versus
business consistent with our philosophy of ‘Follow the Basics,’”
consolidated net loss of the previous fiscal year and the amount
we have been implementing initiatives to control expenses, credit
was higher than the forecast announced in November 2009, we
costs and risk-adjusted assets in the core operation of our group
have decided to increase the annual dividend for common shares
companies. Additionally, to achieve growth over the medium and
by ¥10 to ¥100 per share.
long term, we continued to focus on two strategic initiatives: “real-
Regarding our medium-term management plan, or “LEAD
izing a solid financial base as a global player” and “strengthening
THE VALUE” plan that ended in March 2010, the macroeco-
targeted growth business areas.”
nomic reality has diverged substantially from the plan’s original
Specifically, at SMBC we reinforced our efforts to reduce
assumptions, particularly since fiscal 2008, amid increasingly
expenses during fiscal 2009, and kept the overhead ratio to
uncertain business environment in domestic and overseas mar-
below 50%. We also took measures to reduce credit costs mainly
kets. Accordingly, we were unable to attain the originally targeted
through measures tailored to the business circumstances of our
level of earnings for fiscal 2009. We, however, have been making
corporate borrowers. SMFG took steps to strengthen its capital
steady progress in realizing the strategic initiatives – strengthen-
base during fiscal 2009, principally through a common equity
ing targeted growth business areas, and fortifying platforms to
offering totaling ¥861.0 billion completed in July 2009, followed
support sustainable growth.
by another offering totaling ¥973.0 billion completed in February
2010. Consequently, our consolidated Tier I ratio at the end of
March 2010 was 11.15%, an increase of 2.93% compared with
the end of March 2009. In addition, in October 2009 we laid the
foundation for the next stage of strong growth by consolidating
Nikko Cordial Securities into the Group as a wholly-owned subsid-
iary of SMBC.
As a result of these initiatives, consolidated ordinary profit
for fiscal 2009 was ¥558.7 billion, a year-on-year increase of
¥513.4 billion, while consolidated net income also increased, by
¥645.0 billion year on year, to ¥271.5 billion. In view of the public
nature of our business, while enhancing the Group’s capital to
maintain a sound financial position, we have set a fundamental
Teisuke Kitayama
President
Sumitomo Mitsui
Financial Group, Inc.
Management Policies in Fiscal 2010
The business environment surrounding financial institutions is
changing greatly amid the global discussion about financial regu-
latory and supervisory reform to prevent another financial crisis.
Under these circumstances, we have designated our manage-
ment policies for fiscal 2010 as 1) “forward looking” - transforming
our business model to grow steadily under a new regulatory and
competitive environment and 2) emphasizing return on risks and
costs, in order to improve asset quality and thoroughly control
expenses and credit costs, so as to secure a resilient capital
base and reinforce our business portfolio to achieve sustainable
growth.
(1) Securing a resilient capital base
During fiscal 2009 we took steps to establish a resilient capital
base through the issuance of new shares, among other measures.
Moving forward, our focus will shift to steps such as reducing
stock price fluctuation risks associated with our stockholdings,
and building up retained earnings by reinforcing a business port-
folio to achieve sustainable growth. Through these measures, we
aim to maintain over around 10% of consolidated Tier I ratio.
Meanwhile, as a result of the common equity offerings exe-
cuted during fiscal 2009, the number of SMFG’s ordinary shares
issued reached approximately 1.4 billion shares, or more than
90% of the authorized ordinary shares of 1.5 billion stipulated
in SMFG’s Articles of Incorporation. We believe that securing
strategic flexibility, which will enable us to further strengthen
our targeted growth business areas, is essential to enhancing
SMFG’s medium- to long-term enterprise value. For this reason,
2
SMFG 2010
at the ordinary general shareholders meeting held in June 2010,
Overseas operations, centered on Asia
we proposed and received approval to increase the number of
Regarding SMFG’s operations in the Asia-Pacific region, in May
authorized ordinary shares to 3.0 billion.
2010 we established the Financial Products Marketing Dept.,
which has taken charge of certain functions hitherto performed
by the representative offices of individual departments of SMBC’s
Investment Banking Unit. This is part of our efforts to offer fast
and appropriate solutions to customers whose financial needs
are becoming more diversified and sophisticated. Regarding
our operations in China, in April 2009 we established Sumitomo
Mitsui Banking Corporation (China) Limited to facilitate even more
closely tailored individual solutions for customers who operate
globally. With effect from April 2010, the responsibility for planning
and management of business with Japanese corporate custom-
ers was transferred from the Planning Dept., International Banking
Unit, to the Planning Dept., Corporate Banking Unit & Middle
Market Banking Unit. This change allows us to offer seamless
services both inside and outside Japan. In addition, in June 2010,
we received permission to establish a subsidiary in Malaysia, and
preparation is currently underway for its establishment in the first
half of 2011. As well as expanding our network of business base
in this way, we have also formed alliances with leading banks
in Asia to enable us to offer even higher value-added services.
These banks include Kookmin Bank in Korea, First Commercial
Bank in Taiwan, Eximbank in Vietnam, The Bank of East Asia in
Hong Kong, Bank Central Asia in Indonesia, and Kotak Mahindra
Bank in India.
In European and American markets, we will continue to bol-
ster our competitive-edge products, including project finance.
Through a business alliance with a South African subsidiary of the
major British financial institution Barclays PLC, we are strengthen-
ing our ability to provide services to Japanese companies operat-
ing in South Africa.
Masayuki Oku
President
Sumitomo Mitsui
Banking Corporation
(2) Reinforcing our business portfolio to
achieve sustainable growth
We will focus on targeted growth business areas to pursue profit-
ability, as well as review current businesses to fortify the bottom-
line profit. At the same time, we will further enhance customer
responsiveness by leveraging advisory functions and increase
productivity by improving business processes.
● Fortify bottom-line profit by reviewing current
businesses
Facilitating financing to customers in an appropriate and proac-
tive manner is one of our management priorities.
SMBC has always worked hard on delivering optimal products
and services to customers based on a thorough understanding of
their needs and issues. Further, pursuant to the “Act concerning
Temporary Measures to Facilitate Financing for SMEs, etc.,” which
took effect in December 2009, we are enhancing our capability to
meet their needs, including establishing consulting desks for
SMEs and retail customers to address their financing concerns.
In addition to meeting customers’ financing needs, we will
continue to control and reduce credit costs and expenses and
rebalance our asset portfolio for more growth and profitability
in order to improve the risk-return profile and fortify bottom-line
profit.
The economic situation in Europe remains uncertain, but our
credit exposure in Portugal, Italy, Ireland, Greece, and Spain as
of March 31, 2010 totaled approximately ¥300 billion and was
mainly to large corporations and project-finance related. In the
case of Greece, where the economic situation is a particularly
serious cause for concern, the amount of exposure is not so large
and is mostly secured by collateral. We therefore believe that the
associated risks from this source are limited.
● Pursue profitability by focusing on targeted
growth business areas
Nikko Cordial Securities
Nikko Cordial Securities in March 2010 drew up a three-year
medium-term management plan, up to the end of fiscal 2012,
with a prospect of “becoming a No. 1 general securities company
in Japan, which is excellent both in quality and in quantity and
globally competitive.” Maintaining a low-cost operation using
IT, Nikko Cordial Securities aims for sustainable expansion of
its businesses centered on the retail business, and creation of
new businesses centered on the wholesale business. It has
also adopted an active stance on employment of personnel and
enhancement of personnel development programs, while increas-
ing system investment and improving the organizational structure
of the head office in response to the full-line business operation.
SMFG 2010 3
We also take into account the discussions being held on the
to further raise our profile in Japan’s evolving consumer finance
introduction of liquidity standards, and are taking steps to ensure
more stable funding and investment in foreign currencies.
Payment & settlement services, and Consumer finance
In the credit card business, we have established a two-company
system within the Group, centered on Sumitomo Mitsui Card and
Cedyna. Our aim is to become “the number one credit card busi-
ness entity in Japan,” and we will continue to pursue economies
of scale while leveraging the strengths of each company to maxi-
mize top-line synergy.
Cedyna is now implementing initiatives for investment in
new businesses and system development to increase enterprise
value and speed up cost restructuring. To accelerate such initia-
tives, and to further clarify the positioning of Cedyna as one of
the Group’s core business entities in the credit card business
and enhance Cedyna’s capital base, the intermediate holding
company SMFG Card & Credit acquired new shares issued by
Cedyna through a third-party allotment in May 2010.
In the consumer finance business, our goal is to create an
even better foundation for meeting the sound financing needs of
individual consumers, capitalizing on strategic alliances of Group
companies to capture market share and thereby become more
efficient. As part of this strategy, ORIX Credit Corporation became
a consolidated subsidiary of SMBC in July 2009. In March 2010
market and target an even broader array of customer needs.
● Further enhance customer responsiveness by
leveraging advisory functions
Solution providing for corporations, investment banking and
trust businesses
We remain strongly committed to delivering to our corporate
clients high-quality solutions that precisely target a broad range
of management issues. Specifically, SMBC has three special-
ized departments, Corporate Advisory Division, Private Advisory
Department and Global Advisory Department, that operate cross-
sectionally across business segments — consumer, corporate
and overseas. This structure facilitates the pooling among these
departments of “V-KIP” — value, knowledge, information and
profits. As a result, we can deliver more tailored support to corpo-
rate clients and upgrade our ability to provide solutions. Sumitomo
Mitsui Finance and Leasing is engaged in aircraft operating lease
business, one of the strategic joint businesses in leasing with
Sumitomo Corporation, as well as a variety of other leasing ser-
vices that offer financial and sales solutions for both users and
suppliers. In addition, Japan Research Institute offers a lineup of
high value-added services by continuously strengthening services
that range from consulting for managerial innovation and IT utiliza-
tion to the planning and creation of strategic IT systems.
we reviewed the consumer finance business model, which we
Financial consulting for individuals
call “cascade strategy,” jointly operated by SMBC, Promise and
Our aim is to harness the total capabilities of the Group to estab-
At-Loan, and the three companies reached a basic agreement on
lish SMBC as the leading bank in the field of full-line personal
the absorption-type merger between Promise and At-Loan with
financial services for individuals. To this end, we are working to
Promise as the surviving company. Through these moves, we aim
realize even higher levels of customer convenience, principally
Management policy under the new financial regime
New financial regime
Our strategy
Benchmark targets
Basel Committee
“Consultative proposal
to strengthen the resilience
of the banking sector”
Reorganization in
global financial
industry /
Rebuilding
business model
Securing a
resilient capital base
Reinforcing business
portfolio to achieve
sustainable growth
Maintain over
around 10% of
consolidated
Tier I ratio
Target around
10% of
consolidated
ROE in the
medium term
4
SMFG 2010
by reinforcing our online financial services. We also continue to
Concerning SMFG’s listing on the New York Stock Exchange,
strive to realize “total consulting services” which offers customers
we aim to build a framework that will greatly accelerate our drive
a wide range of one-stop financial services to meet diversifying
to develop our business as a global player. Expanding and diver-
financial needs of individual customers. For example, in August
sifying our investor base by securing access to the world’s largest
2009, all branches of SMBC started selling level-premium insur-
securities market is a key piece of the framework and, to this
ances, and after making Nikko Cordial Securities SMBC’s wholly-
end, we are pursuing further financial transparency and greater
owned subsidiary in October 2009, through cooperation with
convenience for investors. We are currently making final-stage
Nikko Cordial Securities, we have commenced a range of new
preparations for listing on the NYSE within fiscal 2010.
services including the sale of jointly developed investment trusts,
joint seminars and financial instruments intermediary service for
individuals. In May 2010 we also began handling single-premium
type variable permanent life insurances jointly developed with
Nikko Cordial Securities.
Fiscal 2010 Outlook and Policies
Going Forward
In June 2010 SMBC, Nikko Cordial Securities, and Barclays
Outlook for fiscal 2010
PLC reached an agreement to commence joint operation in
private banking in Japan. Individual customers of SMBC will
be introduced to “SMBC Barclays Wealth Division,” which has
been set up within Nikko Cordial Securities. The Division will offer
investment solutions making use of unique strengths and the
know-how of Barclays Wealth, which is a leading global wealth
manager and a division of Barclays.
We are pursuing still closer collaboration between SMFG’s
banking and securities businesses in the field of financial services
for individuals, in order to offer a wider lineup of products and
services. For this purpose, in addition to the start of the finan-
cial instruments intermediary service for individuals by SMBC
and Nikko Cordial Securities, by the end of January 2011 Nikko
Cordial Securities will take over the services for individuals cur-
rently being offered by SMBC Friend Securities in collaboration
with SMBC. Meanwhile, with the goal of increasing the number
of customers using the services of SMBC Friend Securities, we
are expanding the company’s product lineup and diversifying
its information dissemination channels by holding investment
seminars, among other measures.
● Further increase productivity by improving
business processes
We aim to maintain SMBC’s non-consolidated overhead ratio at
below 50%. We will do this by prioritizing expenses based on
size, timing, and effectiveness and adopt a stronger focus on our
targeted growth business areas in the allocation of the expenses
budget, while taking measures to raise operational efficiency.
These measures will be implemented in tandem with our
constant efforts to thoroughly comply with laws and regulations
both within and outside Japan and create a strong compliance
system. Specifically, SMBC aims to ensure consumer protection
by enhancing its framework for explaining financial products and
services to its customers. SMBC is also taking measures to miti-
gate potential conflicts of interest and avoid all transactions with
anti-social forces, and is pressing forward with the reinforcement
of its system for the prevention of money laundering.
With regard to customer satisfaction and the enhancement of
service quality, we intend to create a stronger system for ensur-
ing that customers’ requests are reflected in our management
decisions.
We expect consolidated ordinary profit of ¥690 billion, a year-
on-year increase of ¥131.3 billion and consolidated net income
of ¥340 billion, a ¥68.5 billion increase from the previous fiscal
year. This is based mainly on an increase in profit at SMBC and a
steady recovery in earnings of certain subsidiaries and affiliates.
We are planning an annual dividend of ¥100 per share of common
stock, the same level as the previous fiscal year, and half of the
amount (¥50 per share) will be paid as an interim dividend.
Dedicated to medium- to long-term growth in enterprise value
The business environment of financial institutions is changing
radically as regulators discuss the global reform of financial
regulations in order to prevent another financial crisis, but our
basic policy remains unchanged, namely, to become a “globally
competitive financial services group with the highest trust” by
maximizing our strengths of “Spirit of Innovation,” “Speed” and
“Solution & Execution.” While securing a resilient capital base,
we look forward, anticipate future changes and steadily transform
our business model. Through such means, we aim for sustainable
growth in enterprise value in order to meet the expectations of our
stakeholders. We ask for your support and understanding as we
endeavor to achieve these goals.
September 2010
Teisuke Kitayama
President
Sumitomo Mitsui
Financial Group, Inc.
Masayuki Oku
President
Sumitomo Mitsui
Banking Corporation
SMFG 2010 5
Supplementary Information
Key Achievements in Fiscal 2009
Management policy for fiscal 2009
“Establishing the next foundation for future growth, while continuing to strengthen businesses consistent
with our philosophy of ‘Follow the Basics’”
Managing expenses & credit costs
Realizing a solid capital base as a global player
Overhead ratio
SMBC non-consolidated
Controlled below
50%
YOY change
+1.1%
47.1%
Total credit cost
SMBC non-consolidated
Substantially
reduced
YOY change
+ ¥295.4 billion
¥(254.7) billion
●
●
●
Raised common equity (¥1.8 trillion in total)
Repurchased hybrid securities (¥293 billion in total)
Conversion of preferred shares held by Goldman Sachs into common equity
Tier I ratio
Achieved
targeted level
Compared with
Mar. 09
+2.93%
SMFG consolidated
11.15%
Steady income growth
Initiatives to fortify targeted growth business areas
Net income
Increased
YOY change
+ JPY 645.0 bn
Compared with Nov. 09
forecast + ¥51.6 billion
SMFG consolidated
¥271.6 billion
[Consolidated ROE:7.5%]
Dividend for common share
Increased
YOY change
+ ¥10 / share
¥100 / share
Made Nikko Cordial Securities a wholly-owned
subsidiary and started its business as a new
securities and investment banking company
Made ORIX Credit a consolidated subsidiary
Signed MOU on mutual business cooperation
with Bank Central Asia (Indonesia)
Subscribed new shares of The Bank of East Asia (Hong Kong)
Management Policy in Fiscal 2010
Management policy in fiscal 2010
✔
✔
“Forward looking”
~Transforming our business model to grow steadily under a new regulatory and competitive
environment
Emphasizing return on risks and costs, in order to improve asset quality and thoroughly control
expenses and credit costs
Pursue profitability by focusing on targeted growth business areas
Fortify bottom-line profit by reviewing current business
Further enhance customer responsiveness by leveraging advisory functions
Further increase productivity by improving business processes
[SMFG’s targeted growth business areas]
Overseas business especially in Asia
Solution providing for corporations / Investment banking, trust business
Retail / Wholesale securities business
Financial consulting for individuals
Payment & settlement services, consumer finance
●
●
●
●
Improving risk-return profile by rebalancing our assets while meeting
customers’ financing needs / Controlling credit costs and expenses
Steadily accumulating earnings based on our management plan
Minimizing risks to our capital posed by volatility in our equity holdings
Initiatives toward NYSE listing
Reinforcing business portfolio to achieve sustainable growth
Securing a resilient capital base
Target around 10% of consolidated ROE in the medium term
Maintain over around 10% of consolidated Tier I ratio
6
SMFG 2010
Overseas Business
In the medium to long term, we aim to increase the proportion of Banking profit from International Banking Unit to overall Marketing units, which was 20% in fiscal 2009,
by allocating more capital and resources into overseas business, especially in Asia where high growth is expected.
Trends of Banking profit in International Banking Unit*1
Products with a competitive edge
■ International Banking Unit (Left axis)
■ Proportion to Marketing units (Right axis)
(USD bn)
1.5
1.0
0.5
0.0
7%
Project finance
Global ranking (Year 2009)*2
Loan syndication
Global ranking (Year 2009)*4
5th
6th
Awarded Global
Arranger of the Year*3
Ranked at 1st among foreign
banks in China*5
Cash management providers’ ranking
(in Asia Pacific)*6
CMS*7 as voted by Corporates
JPY CMS*7 as voted by Financial Institutions
Large Corporates
Medium Corporates
Small Corporates
20%
30%
20%
10%
0%
Fiscal
2004
2005
2006
2007
2008
2009
4th
4th
3rd
1st
*1 Sum of SMBC and its overseas subsidiaries (exchanged to USD at respective term-end FX rate). Managerial accounting basis
*2 Source: Project finance mandated arranger (Project Finance International) *3 Source: Infrastructure Journal
*4 Source: Syndicated loan bookrunner ranking (Thomson Reuters) *5 Source: “Basis Point” (Reuter LPC)
*6 Source: “ASIAMONEY”: “The Cash Management Poll 2009” (Aug. 09) *7 “CMS” stands for “Cash Management Service”
(Reference) Business Expansions in Asia
1st among Japanese banks for the four consecutive years
Strategic partners*1
Overseas channel network*2
Channel network
Established after fiscal 2009
China
Korea
Taiwan
Bank of China
Industrial and Commercial Bank of China
Agricultural Bank of China
Kookmin Bank
First Commercial Bank
Hong Kong
Bank of East Asia
Philippines
Metrobank
Vietnam
Vietnam Eximbank
Malaysia
RHB Bank
Indonesia
Bank Central Asia
India
Standard Charterered Bank
Kotak Mahindra Bank
●
●
Established SMBC (China) (April 2009)
Functions such as planning and managing SMBC
(China)’s business development for Japanese companies
were shifted from the Planning Dept., International
Banking Unit to the Planning Dept., Corporate Banking
Unit & Middle Market Banking Unit (April 2010)
●
●
Received approval to establish a
subsidiary bank in Malaysia (June
2010)
Established Financial Products Marketing Dept.
(May 2010)
*1 Bold print indicates the strategic partners in which SMBC has an investment in equity (includes equity investments currently planned)
*2 Network of SMBC and principal overseas subsidiaries
SMFG 2010 7
Strategy for Securities Business (Nikko Cordial Securities)
Nikko Cordial Securities has made a good start in both its retail and wholesale businesses as our securities body. Going forward, we will pursue an
integrated business model spanning banking and securities services businesses by accelerating cooperation between SMBC and Nikko Cordial Securities.
Expansion of customer base
Medium-term management plan
Customer assets
(Unit: ¥ trillion)
40
■ Stock ■ Bonds ■ Investment trusts ■ Other
23.5
25.9
30
20
10
0
After becoming a
wholly-owned subsidiary
28.1
Number of
accounts (1,000)
2008/3
2,461
2009/3
2,481
2010/3
2,511
Number of successful deals in referral service
Aim to become No.1 general securities company in Japan which is
excellent both in quality and in quantity and globally competitive
Net operating revenue
■ After becoming a wholly-owned subsidiary
Wholesale business
[100]
Retail business
[200]
(JPY bn)
300
200
100
Investment banking business
23%
Over 200 deals
Investment management
77%
Investment banking business
17%
Over 400 deals
Investment management
83%
0
Fiscal
3Q, fiscal 2009
4Q, fiscal 2009
2004
2005
2006
2007
2008
2009
2012
Targeted ordinary profit in
fiscal 2012 JPY 100 bn
SMFG’s Group Structure*1
Sumitomo Mitsui Financial Group
Consolidated total assets
¥123 trillion
Consolidated Tier I ratio
11.15%
100%
SUMITOMO MITSUI Banking Corporation
Sumitomo Mitsui Banking Corporation
60%
100%
100%
100%
100%
Total assets
Deposits
Loans
¥104 trillion
¥70 trillion
¥57 trillion
Number of customer deposit accounts
(individual customers)
approx. 26 mn
Number of corporate borrowers
approx. 128,000
66%
*2
69%
22%
51%
Promise *3
ORIX Credit
Sumitomo Mitsui Finance and Leasing
Japan Research Institute
40%
(Leasing)
Sumitomo
Corporation
(System engineering and
management consulting, etc.)
Nikko Cordial Securities
(Securities)
SMBC Friend Securities
SMFG Card & Credit
(Credit card)
34%
Sumitomo Mitsui Card
NTT DOCOMO
Cedyna
(Consumer finance)
100%
SANYO SHINPAN*3
*1 As of Mar. 31, 2010. Stake (%) is as of August 31, 2010. *2 Total voting shares held by SMFG group. *3 Promise and Sanyo Shinpan planned to merge in Oct. 2010.
8
SMFG 2010
Performance in Growth Businesses (SMBC Nonconsolidated)
Customer Assets
(Investment Trusts and Pension-Type Insurance)
Unit: ¥ trillion
Cumulative sales of pension-type insurance
Balance of investment trusts
Housing Loans*
Unit: ¥ trillion
Consumer Finance
Securitized balance
Balance outstanding
Unit: ¥ billion
Unsecured card loans
Of which, portion under tie-up with Promise
1.9
1.6
9.9
10.0
0.8
10.0
2.1
11.0
2.0
10.5
2.2
2.6
2.9
3.0
3.4
2.0
3.3
2.6
6
5
4
3
2
1
0
1.7
2.8
12
9
6
3
0
520
490
310
280
440
390
210
140
330
60
500
400
300
200
100
0
3/06
3/07
3/08
3/09
3/10
3/06
3/07
3/08
3/09
3/10
3/06
3/07
3/08
3/09
3/10
* Owner-occupied homes
Loan Syndications
Amount originated (¥ trillion)
Number of originations
Loans guaranteed by credit guarantee
corporations and Business Select Loans
Global e-Trade Service
(Number of Contracts)
Unit: ¥ billion
Unit: Thousands of contracts
Business Select Loans
Loans guaranteed by credit guarantee corporations
10
1,000
8
6
4
2
0
800
600
400
200
0
Fiscal
8.6
754
780
7.0
702
6.7
9.3
7.6
685
531
3,500
3,000
2,500
2,000
1,500
1,000
500
0
17.1
16.5
15.0
13.7
11.7
20
15
10
5
0
2005
2006 2007
2008
2009
3/06
3/07
3/08
3/09
3/10
3/06
3/07
3/08
3/09
3/10
PC Bank Web21 (Number of Contracts)
SMBC Direct Customer Contracts
Number of Internet Transactions
Unit: Thousands of contract
Unit: Million customers
Unit: Millions
154
149
141
125
105
150
120
90
60
30
0
10.1
9.3
8.4
7.4
6.6
10
8
6
4
2
0
179
166
151
129
108
180
120
60
0
3/06
3/07
3/08
3/09
3/10
3/06
3/07
3/08
3/09
3/10
3/06
3/07
3/08
3/09
3/10
SMFG 2010 9
Business Overview
■ Consumer Banking
The Group companies of SMFG are collaborating to enhance
the financial services they provide to consumers. Some of
the key indicators of SMBC’s performance in fiscal 2009,
reflecting the high esteem customers have for our services,
include an outstanding balance of investment trusts under
management of ¥2,620.7 billion (March 31, 2010); sales of
foreign bonds and yen-denominated bonds of ¥212.7 billion;
pension-type insurance sales of ¥381.8 billion; sales of single
premium full life insurance of ¥60.9 billion; and mortgage
loans outstanding of ¥14,497.5 billion (March 31, 2010).
Financial Consulting Business
In fiscal 2009, SMBC continued to
broaden its product lineup of invest-
ment trusts, annuity insurance for
individuals, life insurance policies
and other financial products.
In investment trusts, SMBC
expanded our lineup of investment
targets to include funds such as
those investing in bonds issued by
emerging countries, while allow-
ing customers to select from a
number of currencies including the
Australian dollar and the Brazilian Real for hedging purposes,
and funds primarily focused on the World Bank Green Bonds.
Since October 2009 we have launched funds with customer
access only via the Internet or mobile phones, and as of July
1, 2010 the number of such funds had reached thirty. In these
ways, we are responding to a wide range of customer needs.
In the field of life insurance policies, in August 2009
we expanded our over-the-counter sales of life insurance
products at all our branches in Japan. By offering 20 dif-
ferent insurance policies (as of March 31, 2010), including
whole-life, term and medical, we can now meet a still broader
range of customer needs. We have also further expanded our
insurance policy lineup, including offering annuity insurance
for individuals in which the annuity amount is set at a higher-
than-normal level for an initial specified period.
In our financial products intermediation business, we
diversified our product lineup by offering yen-denominated
bonds for the first time, as well as subscription of SMBC’s
subordinated bonds (yen-denominated) and sale of foreign
bonds.
It is important to support customers after they have
bought our products. As part of this commitment, we take
many measures to keep customers up-to-date with devel-
opments — for example, holding seminars about fund
performance, issuing monthly and special market reports,
and sending customers statements detailing assets via direct
mailing.
Loan Business
To enable us to respond to the wide-ranging needs of our custom-
ers, we have developed new products, and enhanced services.
In February 2010, following our introduction in December
2008 of an unsecured educational loan, we began offering
loans for car purchases (guaranteed by Promise Co., Ltd.)
and a general-purpose unsecured loan. Customers can
apply for these loans to the Consumer Finance Promotion
Office, every day (except January 1) up to nine in the eve-
ning using the automated loan contract machines installed
within SMBC branches, the Internet, or other channels. In
most cases, applicants receive a response on the same day.
Such advantages mean these new loan products offer much
greater convenience than conventional loans.
As a result of these initiatives, more than 3,000 customers
per year have applied for our unsecured educational loans,
the first of this type of product to be
offered.
The “Act concerning Temporary
Measures to Facilitate Financing
for Small and Medium-Sized
Enterprises, etc.” was enforced on
December 4, 2009, with facilitating
financing to housing loan borrowers
as one of the objectives. In line with
this objective, SMBC has set up the
Consumer Facilitating Financing
Dept. within the Planning Dept. of the Consumer Banking Unit.
We have also appointed specialist staff for providing consult-
ing and other forms of assistance tailored to the individual
circumstances of customers experiencing difficulties repaying
their housing loans, at all bank branches as well as within the
nine special Loan Support Offices located nationwide.
We will continue working to provide closely tailored sup-
port services for such customers, and are working to improve
the speed and precision of these services.
Settlement and Consumer Finance Business
The iD* credit service, which is based on a strategic alliance
between SMFG and NTT DoCoMo, Inc., continues to grow.
As of March 31, 2010, subscribers to this service and the
terminals for accessing the service located on the premises
of affiliated merchants totaled approximately 14.2 million and
440,000, respectively.
*iD is a trademark of NTT DoCoMo, Inc.
The consumer finance business collab-
oratively launched in April 2005 by SMBC,
Promise Co., Ltd. and At-Loan Co., Ltd.,
continues to grow also. There were 716 auto-
mated contract machines and the balance of
loans made by SMBC and At-Loan together
totaled approximately ¥423.5 billion, as of
March 31, 2010.
10
SMFG 2010
Transaction Channels
In fiscal 2009, SMBC opened new branches in 14 locations:
Wakabadai in Tokyo, Hiyoshi and Shonandai in Kanagawa
Prefecture, Chiba New Town in Chiba Prefecture, Tsukuba in
Ibaraki Prefecture, Tenpaku-Ueda, Okazaki, Gokiso, Nonami,
Irinaka, and Kanayama in Aichi Prefecture, and Izumi-Chuo,
Shoji, and Komyoike in Osaka Prefecture.
Also, in the Tokai Region centered on Aichi Prefecture,
in addition to opening conventional staffed offices, we are
installing ATMs at or near stations of the Nagoya municipal
subway system, for increased customer convenience.
We opened a third call center in June 2009, in Fukuoka,
to serve retail customers, along with existing facilities in Tokyo
and Kobe. We also offer telephone-based services for online
users who prefer to discuss important matters with a real per-
son. Operating three centers enhances our capacity to offer
telephone consulting on asset management and loans, as
well as other information services, and tailor financial services
to the lifestyle and needs of each customer.
Wakabadai Branch
Nonami Branch
For the SMBC Direct online banking service, we are con-
stantly adding highly advanced services to meet customer
needs and deliver greater convenience, and reinforcing
security. In October 2009 we began a major expansion of
the scope of our banking services offered via the Internet
and mobile phones. For example, customers with an ATM
card can check the balance in their savings account over the
Internet. This is just one of the steps we have taken to further
enhance the convenience of our online services.
SMBC Direct has come first for seven consecutive years
in the ranking of Internet banking by e-commerce website
rating firm Gomez Consulting Co., Ltd. As of March 31, 2010,
there were approximately 10.12 million registered customers.
Topics
l Businesses Operated Jointly with Nikko Cordial
Securities
Nikko Cordial Securities became a subsidiary of SMBC
on October 1, 2009, in a move that further enhanced the
ability of all Group companies to offer our customers com-
petitive products and services.
A number of joint initiatives have been implemented
since then: three new investment trust products devel-
oped jointly by SMBC and Nikko Cordial Securities were
launched on the market, the two companies held joint sem-
inars, and also proactively introduced customers to each
other when either one was better suited to deal with their
specific requirements. On April 19, 2010, we expanded our
financial instruments intermediary service for individuals to
include Nikko Cordial Securities as an agent to execute the
actual transactions. The same service operated with SMBC
Friend Securities is scheduled to be integrated into Nikko
Cordial Securities by January 31, 2011.
Further joint activities that combine banking and secu-
rities transactions are planned, including Nikko Cordial
Securities conducting banking agency business.
A joint seminar held with Nikko Cordial Securities
SMFG 2010 11
■ Corporate Banking
Improving Products and Services for Midsized
Companies and SMEs
(cid:129)Initiatives to provide easier access to financing
SMBC believes that the smooth and efficient supply of funds
to its clients is its main social responsibility as a financial insti-
tution. With companies facing growing challenges caused by
the global financial crisis, we are making every effort to facili-
tate financing to our corporate clients — midsized companies
and SMEs — proactively and more tailored to their needs. To
this end, in December 2009, SMBC established the Middle
Market Facilitating Financing Department within the Planning
Department of the Corporate Banking Unit.
We will continue to implement initiatives to identify the
ever-changing needs and issues of our corporate clients and
offer more tailored products and services in order to support
their business growth.
(cid:129)Products and services to meet financing needs
Amid the economic uncertainty, a broad range of financing
needs is emerging. In order to meet these needs, we are con-
stantly expanding our lineup of loans for our corporate clients.
In 2008, SMBC introduced the Certified Company Support
Loan for companies who have received SMBC designated
national/local management-related certification or award; the
Web Report Loan for companies using the Japanese national
tax authorities’ e-Tax service; and the Asset Value Truck and
Bus Loan which uses commercial vehicles as collateral (loan
features were upgraded in 2009).
(cid:129)Environmentally responsible products and services
In October 2008, SMBC launched the SMBC Environmental
Assessment Loan/Private Placement Bonds. To be eligible, an
applicant company must undergo an environmental evalua-
tion using Japan Research Institute’s assessment standards.
Loan terms depend on the evaluation results, which are
disclosed to the applicant company to help improve its envi-
ronmental protection measures. As of March 31, 2010, about
30 companies had raised approximately ¥100 billion in loans
and bonds. SMBC announces these transactions to the public
through SMBC press releases, newspaper advertisements
and other forms of mass media, receiving high marks from our
clients. In January 2010, this loan/bond product won the 2009
Nikkei Superior Products and Services Award for Superiority
from Nikkei Inc., indicating the high regard in which it is held
by Japanese society as a whole.
Another initiative was the “Fight Global Warming
Campaign” held from May through July 2009 in connection
with SMBC-ECO Loan for companies with environmental
management certifications. During the campaign period,
SMBC used part of the earnings from the SMBC-ECO Loan to
purchase and write off carbon credits equivalent to five tons
of CO2 emissions per borrower, enabling the borrowers to
play a part in combating global warming.
In April 2010, we added companies reporting their energy
consumption to the Tokyo Metropolitan Government under
its initiatives on reducing global warming to the scope of
companies eligible for the SMBC-ECO Loan. In this way, we
are supporting those midsized companies and SMEs that are
taking a proactive approach to environmental issues.
In addition, SMBC extends loans under two programs
operated by the Ministry of the Environment in which the
government pays the interest. One program is for supporting
initiatives aimed at reaching the goals of the Kyoto Protocol,
in which investments in facilities that reduce greenhouse
gas emissions are partly subsidized. The other program is to
support the acceleration of countermeasures against global
warming. The Japanese government has set a high target of
25% reduction in the emission of greenhouse gases, and we
believe this financing mechanism will provide invaluable sup-
port for the environmental initiatives of Japanese industries.
(cid:129)Information services
SMBC has been strengthening its internal systems for busi-
ness-matching, resulting in a dramatic increase in the number
of business meetings we have arranged between possible
partners. In particular, in our “all-in-one matching” program,
which simultaneously matches a large number of corporate
clients with the purchasing departments of large corporations,
we have enhanced our corporate client information database,
and are able to supply information on the purchasing needs
of major corporations to more corporate clients.
We will continue enhancing our ability to provide a wide
spectrum of information to our clients.
Reinforcing Services for Globalizing
Corporations
An increasing number of our corporate clients are setting
up businesses overseas, and they face a growing need to
address issues such as differences in business practices;
cultures; legal, accounting, and taxation systems, and inter-
pretation of such systems; as well as funding.
At SMBC, the Global Advisory Department was estab-
lished to specifically help devise solutions for cross-border
issues of globally operating clients. The department works
to provide seamless support for the operations of companies
both inside and outside Japan by straddling the three units
of SMBC that do business with corporate clients – the Middle
Market Banking Unit, the Corporate Banking Unit, and the
International Banking Unit. Based in Tokyo, the department
has staff members at SMBC offices overseas, chiefly in Asia.
With about 200 professionals in the fields of foreign trade
and global business operations, the department maximizes
synergies by integrating issue-solving skills with expertise in
collecting and analyzing information, and by making effective
use of relationships with clients and business partners world-
wide. Thanks to this infrastructure, we can devise customized
solutions from a global perspective to serve both companies
in Japan and their overseas subsidiaries.
12
SMFG 2010
We hold overseas business-related seminars with themes
of particular interest to our clients, and distribute the latest
information on overseas markets, enabling companies con-
sidering the launch of an overseas business to gain insight
into local conditions, regulations, industry trends, and other
relevant matters. Our services are also useful for companies
with established overseas operations who can count on us
for valuable assistance in areas such as growth strategy and
reorganization.
Intensifying Initiatives in the Chinese Market
China is a major driver of global economic growth and many
Japanese companies have already set up operations there,
targeting the market that continues to grow. Japanese cor-
porations’ entry into and business development in China is
projected to accelerate in the coming years.
To be able to more effectively meet the needs of such
clients whose business straddles the Japanese and Chinese
markets, at the beginning of fiscal 2010 SMBC appointed a
director to be responsible for overseeing its Chinese subsid-
iary Sumitomo Mitsui Banking Corporation (China) Limited. It
also transferred responsibility for the planning, promotion, and
management of transactions between the SMBC subsidiary
in China and Japanese corporations from the International
Banking Unit to a domestic banking unit. The aim of this move
was to integrate SMBC services for clients’ head offices in
Japan and their local subsidiaries in China, facilitating the
smooth transaction of business and enabling us to deliver
more closely tailored services.
Intensifying Initiatives in the Public and
Financial Sectors
We are working to create solutions for issues of regional
governments, public corporations and financial institutions.
Moreover, to upgrade services for regional clients, we under-
take joint initiatives with regional governments and financial
institutions.
In October 2009 SMBC was selected as the primary
financial institution for the Tokyo Metropolitan Government’s
Eco Finance Project. In partnership with Sumitomo Mitsui
Finance & Leasing and other financial institutions, SMBC
has created a number of financial products and programs,
such as mortgage loans, leasing plans, and so on, that are
designed to help improve the environment. These products
proved popular, and over 300 applications for the mortgage
loan had been received by the end of fiscal 2009.
Tokyo Metropolitan Government Eco Finance Project
Tokyo Metropolitan
Government
Deposits
Primary financial institution: SMBC
(Project management, Overall coordination, Trust accounts)
Profits from fund management
SMBC
The Tokyo
Tomin Bank
Seibu Shinkin
Bank
Sumitomo Mitsui
Finance & Leasing
Marketing of financial products with environmental benefits
Individuals and business owners
In July 2008 SMBC signed a Cooperative Agreement
for the Promotion of Industry with the Miyagi Prefectural
Government and The 77 Bank, Ltd. In the third venture under
this agreement, the three partners initiated a project to help
companies in Miyagi Prefecture become more environmen-
tally responsible as well as cut
costs. Subsidies are provided
by the prefectural government to
help companies purchase equip-
ment that contribute to energy
conservation and cost-cutting.
We are taking a variety of steps to
make this project a success, such
as holding seminars.
We will continue to step up initiatives that contribute to
regional economic growth while delivering high value-added
services to clients throughout Japan.
Seminar on energy conservation
and cost-cutting
Topics
l Business Alliance in the Environment Business
in China
In November 2009, SMBC together with the Japan
Research Institute signed a basic agreement with the
Tianjin Eco-City Administrative Committee on initiatives
to attract Japanese business corporations to the Tianjin
Eco-city project.
The Tianjin Eco-City project is the first large-scale
project in China to build an ecologically friendly city to
have been approved at the national government level.
The new city will feature various measures to harmonize
human activities with the natural environment, measures
for conserving natural resources, and an efficient system
of resource recycling.
The environment business is expected to show signifi-
cant further development in China along with the growth
of the country’s overall market, and SMBC intends to play
an important role in introducing Japanese companies to
projects where they can make a major contribution.
SMBC is strongly committed to delivering enhanced
services for Japanese corporate clients in the process of
setting up businesses in China or planning to do so.
The signing ceremony for the agreement
on the Tianjin Eco-City project.
SMFG 2010 13
Private Banking
Customers can rely on PAD for all-inclusive financial advice
concerning financial assets. We share and understand
customers’ financial goals, including risk profiles, through
a series of discussions with each customer. After agreeing
on the goals, we create proposals for asset allocation and
management.
1. Sharing
Understanding customers’
financial goals, and
analyzing current portfolios
Business
strategy
2. Consulting
Organizational
restructuring
Asset
management
OUR
SOLUTION
M&A/MBO
Capital policy
Tax payment
arrangements
Asset
succession
Stock price
simulations
Succession
plan
4. Review
3. Action
Workplace Banking
The management environment for SMBC’s corporate cus-
tomers is undergoing dramatic changes that are giving rise
to various issues in the field of HR strategy. PAD employs
the wide range of financial products and services offered
by SMBC to prepare solutions to these issues, and supports
corporate customers to create employee financial benefit
programs and defined-contribution pension plans.
Further, employees can obtain SMBC products and
services for achieving financial and other goals in their lives
through their employers in addition to SMBC marketing
channels.
■ Services for High Networth Individuals,
Business Owners and Employees
Private Advisory Department
The Private Advisory Department (PAD) of SMBC specializes
in products and services that meet the diverse requirements
of business owners and high networth individuals. Activities
of this department span three areas. The first is carefully
tailored support services for business and asset succes-
sion. We combine the extensive know-how of our own staff,
accumulated over many years of experience, with the input
of alliance partners such as leading tax accountancy firms.
The second area is private banking services, which include
comprehensive financial services for managing customers’
financial assets. These services, too, are offered in collabora-
tion with alliance partners. The third area is workplace bank-
ing services to support the HR strategies of corporate clients.
This service category includes providing assistance in the
design of employee savings and other employee financial
benefit programs, and defined-contribution pension plans.
By working with other SMBC Group companies and alli-
ance partners, PAD uses its “One Bank” approach to provide
seamlessly a broad range of products and services. This
allows the department to cover many types of needs involving
both individual and corporate clients.
Support for Business and Asset Succession
PAD specialists prepare tailored proposals for customers with
concerns about business and asset succession. We hold a
variety of seminars to supply timely information and advise
business owners on a wide range of matters. Our consulting
services cover issues of all types involving both individuals
and companies.
High networth individuals
Customers
Business owners
Heads of wealthy families
Sumitomo Mitsui Banking Corporation
Corporate Business Office
Branches
Private Advisory Department
Business
growth
needs
Business
succession
needs
Asset
succession
needs
Asset
management
needs
Assistance for
employee benefit
programs
Support from specialized
units of SMBC
SMFG companies
Sumitomo Mitsui Financial Group
Alliance partners (leading tax accountancy firms and other professionals)
14
SMFG 2010
■ Investment Banking
Accomplishments in Fiscal 2009
SMBC was awarded the best arranger of syndicated loans
in the Japanese market by Euroweek Asia magazine. It was
also awarded “Global Arranger of the Year” by Infrastructure
Journal in project finance for infrastructure development for
its seawater desalination project finance deal in the Australian
state of Victoria, and other projects. In addition, in settlement
services, SMBC is steadily increasing its profile, ranking first
for two consecutive years among Japanese banks in the
Asia-Pacific region, in a cash management services survey
conducted by Asiamoney magazine.
Collaboration with Nikko Cordial Securities
Since October 2009, Nikko Cordial Securities, Inc. (NCS) has
been operating as a full-line securities company by adding
wholesale capabilities to its retail securities business. SMBC
has been referring its customers to NCS since the latter
half of fiscal 2009, and as a result, NCS closed more than
100 deals introduced by SMBC in underwriting and M&A.
Benefiting from the collaboration between SMBC and NCS,
in the league tables published by Thomson Reuters, SMFG
was third in the ranking of bookrunners in the “Japanese
Corporate Bonds” category with a market share of 20.0% in
the second half of fiscal 2009, and fourth with a market share
of 8.8% in the “Global Equity & Equity-Related – Underwriting
Value in Japan” category. SMFG will continue to strengthen
further collaboration between SMBC and NCS so as to meet
the diverse needs of our customers, including fund raising
through capital markets, cross-border M&A, and debt securi-
tization, more fully.
Japanese Corporate Bonds*1
Rank
Bookrunner
Oct. 2009 – Mar. 2010
Proceeds
(¥ mil)
Market
share
Number
of deals
1 Mitsubishi UFJ Financial Group
913,567.1 21.4%
2 Mizuho Financial Group
877,981.5 20.5%
3 Sumitomo Mitsui Financial Group
855,233.5 20.0%
4 Nomura Holdings, Inc.
819,153.9 19.1%
5 Daiwa Securities Group Inc.
760,928.5 17.8%
6 Barclays Capital
7 Shinkin Central Bank
8 Citi
9 Goldman Sachs & Co.
14,600.0
0.3%
10,000.0
0.2%
8,750.0
0.2%
6,000.0
0.1%
10 Bank of America Merrill Lynch
5,000.0
0.1%
51
50
29
54
57
2
1
1
1
2
Global Equity & Equity-Related – Underwriting
Value in Japan*1
Rank
Underwriter
Oct. 2009 – Mar. 2010
Proceeds
(US$m)
Market
share
Number
of deals
1 Nomura Holdings, Inc.
19,816.7 34.8%
2 Mitsubishi UFJ Financial Group
5,856.2 10.3%
3 Daiwa Securities Group Inc.
5,375.9
9.4%
4 Sumitomo Mitsui Financial Group
5,004.8
8.8%
5 Mizuho Financial Group
6 Goldman Sachs & Co.
7 Morgan Stanley
8 Citi
9 JP Morgan
4,745.7
8.3%
4,091.0
7.2%
3,465.3
6.1%
2,117.8
3.7%
1,792.0
3.1%
10 Bank of America Merrill Lynch
1,761.6
3.1%
63
53
47
43
58
10
6
4
9
9
*1 Source: Thomson Reuters
Topics
l Reinforcing our operations in Asia
In May 2010 SMBC established the Financial Products
Marketing Department in Singapore, by integrating certain
functions performed by various departments of Investment
Banking Unit at its Singapore branch. This will enable us to
meet the increasingly diversifying and sophisticated needs
of our customers in Asia more flexibly. This department will
provide a diversity of investment banking products such
as debt securitization and derivatives, and will enable us
to offer prompt and appropriate financial solutions to our
customers more swiftly.
lProject Finance
SMBC is highly respected globally for its ability in project
finance. It became the first financial institution from the
Asia-Pacific region to be awarded “Global Arranger of the
Year” for 2009 by Infrastructure Journal. In addition, SMBC
placed among the top five global arrangers in the league
table published by Project Finance International magazine.
Global Initial Mandated Lead Arrangers*2
Jan. – Dec. 2009
Rank
Mandated Arranger
1 State Bank of India
2 Calyon
3 BNP Paribas S.A.
4 Société Générale
5 Sumitomo Mitsui Financial Group, Inc.
*2 Source: Project Finance International
Volume
(US$m)
19,944.9
7,359.6
5,836.1
4,283.7
4,025.1
SMFG 2010 15
■ International Banking
SMFG offers value-added services to clients (corporations,
financial institutions, governmental organizations and public
entities) operating globally by creating tailor-made solu-
tions that meet various local needs, mainly through SMBC’s
International Banking Unit.
SMBC has three regional headquarters — Europe, the
Americas and the Asia-Pacific region — and subsidiaries in
the emerging markets of China, Russia and Brazil. With this
network, we have the speed and flexibility to respond to dif-
fering needs in each region. We endeavor to become a global
commercial bank, capable of delivering our strengths in vari-
ous business opportunities in this vast international market.
Expansion of Overseas Network
We are working to expand our overseas branch network to
enhance services for Japanese companies and increase our
presence in the emerging markets.
Considerable progress is being made in developing the
infrastructure in Africa, and in March 2010 SMBC enhanced
the functions of its Johannesburg Representative Office in
a move to better serve the needs of our customers, mainly
Japanese corporations that are planning to set up businesses
in Africa or expand their existing operations there. In May
2010, SMBC signed an agreement on a business alliance
with Absa Bank Limited, one of the largest private-sector
banks in South Africa and a subsidiary of Barclays PLC of
the United Kingdom. This builds on the capital and business
alliance entered into with Barclays PLC in 2008. We hope
to leverage Absa’s wide marketing base in South Africa to
further enhance our services.
Capital and Business Alliances
with Prominent Asian Financial Institutions
Our alliance strategy in Asia is tailored to the characteristics
of each country and region. We aim to strengthen our solution
providing capability in the region, such as by expanding our
Asian currency denominated services.
In July 2009, SMBC established an alliance with PT Bank
Central Asia Tbk, the largest privately owned commercial
bank in Indonesia. Forming this partnership positions us
to better provide our customers with solutions that include
stable local-currency financing, cash management services,
and other corporate finance activities. In the same month,
SMBC signed a technical service agreement, including risk
management, with its capital and business alliance partner
Vietnam Export Import Commercial Joint Stock Bank. Then,
in December 2009, through private placement, SMBC
acquired shares of The Bank of East Asia, Ltd., a major
private-sector bank in Hong Kong. The bank was already
one of our business partners, and this investment has further
strengthened our collaborative ties.
We will continue to forge ties with leading financial institu-
tions, while organically growing our marketing network in
Asia — a multifaceted approach to expanding our business
operations in Asia.
Core IT System Upgrades
Starting in fiscal 2009, SMBC has been revamping its Asian
accounting systems and customer information and manage-
ment administration systems as part of a worldwide opera-
tions system upgrade to support corporate clients operating
globally.
Strengthening of Risk Management
As part of a broader strategy for reinforcing our credit cost
control framework, SMBC has enhanced its credit monitoring
system, and has set up dedicated credit management units
in Europe and the United States.
SMBC has also reinforced coordination between the
Credit Management Department of the International Banking
Unit, which was established in fiscal 2009, and the credit
portfolio management (CPM) functions of regional head-
quarters to create an even more effective hedging system to
minimize the impact of economic fluctuations.
Strengthening of Compliance System
The global regulatory environment is changing rapidly, and
we are focusing our efforts on creating a compliance system
capable of swiftly responding to BIS guidelines and the regu-
latory authorities of countries across the globe.
SMBC has taken various steps to computerize adminis-
trative processes at its overseas offices and introduce more
advanced management systems in order to create an anti-
money laundering system in line with international standards.
Moving forward, we will continue to tighten controls on the
operational side still further.
Fostering Professionals Needed to Realize
Overseas Business Growth
We are strengthening our training and educational programs
in order to meet seamlessly and accurately customers’
increasingly diverse and advanced needs. We station promis-
ing young employees at our overseas offices or dispatch them
to specialist overseas financial institutions outside the Group.
In this way, we are developing employees with invaluable
expertise in international business. In Asia, where our opera-
tions are growing noticeably, SMBC’s Asia Pacific Training
Department is constantly enhancing seminars and e-learning
programs for our national staff in order to strengthen their abil-
ity to deliver the best solutions to our customers.
16
SMFG 2010
Topics
lEnvironmental Business Opportunities Overseas
We are reinforcing our initiatives in the global environ-
mental business. In Asia, SMBC is one of the advisors in
the Tianjin Eco-City project in northern China. In March
2010, SMBC signed a financing agreement on a renew-
able energy development project and other matters with
the International Finance Corporation and Environmental
Cooperation-Asia (ECO-Asia), a regional program of the
United States Agency for International Development. On
April 20, 2010, SMBC signed a memorandum of under-
standing on the promotion of environmental business in
Malaysia with the Federation of Malaysian Manufacturers
(FMM) and
the NGO Green Purchasing Network
Association Malaysia (GPNM). In the Americas, SMBC
signed a memorandum on a business alliance in emis-
sions trading with the Banco de la Republica Oriental del
Uruguay (a major financial institution administered by the
government of Uruguay). This is the latest move in our
continued expansion of our network of business alliances
in South America, which began with Banco do Brasil, a
leading Brazilian commercial bank, in August 2006.
trends in financial markets.
We are constantly improving the functions of i-Deal, a
system that allows clients to conclude foreign exchange con-
tracts over the Internet. Moving forward, the Treasury Unit will
continue working to fulfill all our customers’ market transaction
needs by offering full support services of the highest quality
in the industry.
ALM and Trading Operations
Through its ALM and trading operations, and while controlling
market and liquidity risks, the Treasury Unit seeks to maximize
earnings by targeting opportunities created by trends in many
financial markets.
We will continue to conduct trading operations that take
advantage of changes in market conditions in order to gener-
ate a consistent stream of earnings.
SMFG President Kitayama with representatives of FMM and GPNM at the
signing ceremony
■ Treasury Markets
SMFG, through the Treasury Unit of SMBC, aims to offer
increasingly higher value-added services to meet the ever
more sophisticated and diverse needs of its customers for
transactions in the money, foreign exchange, bond and
derivatives markets. To maintain and further strengthen profit-
ability, and while managing risk appropriately, the Treasury
Unit focuses on three goals: (a) expanding transaction volume
from its customers; (b) strengthening its asset-liability man-
agement (ALM) system and trading skills; and (c) bringing
sharper focus to portfolio management.
More Solutions and Services for Customers’
Market Transactions
SMBC is dedicated to supplying solutions that precisely
match the market transaction needs of its customers. To this
end, the Treasury Unit works with branches to create hedging
and other proposals for corporate clients that reflect shifting
Topics
l Issuance of A$-denominated bonds for individual
investors
We have been diversifying our longer-term procurement
channels to adapt more effectively to new regulations and
cope with an increasingly competitive market. In March
2010, SMBC issued corporate bonds denominated in
Australian dollars for individual investors.
lSound Market Operations
SMBC executes sound market operations in response to
changes in market conditions based on a conservative risk
management policy. In addition, we are constantly taking
steps to use even more advanced methods for our ALM
activities.
SMFG 2010 17
Group Companies (as of March 31, 2010)
The companies of the Sumitomo Mitsui Financial Group (SMFG) offer
a diverse range of financial services, centered on banking operations,
and including credit card services, leasing, information services, and
securities.
Our Mission
(cid:129) To provide optimum added value to our customers
and together with them achieve growth
(cid:129) To create sustainable shareholder value through
business growth
(cid:129) To provide a challenging and professionally reward-
ing work environment for our dedicated employees
www.smfg.co.jp/english/
Company Name: Sumitomo Mitsui Financial Group, Inc.
Business Description:
Management of banking subsidiaries (under the stipulations of Japan’s Banking
Law) and of non-bank subsidiaries, as well as performance of ancillary functions
Establishment: December 2, 2002
Head Office: 1-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo, Japan
(As of October 18, 2010: 1-2, Marunouchi 1-chome, Chiyodaku,
Tokyo Japan)
Chairman of the Board: Masayuki Oku
(Concurrent President at Sumitomo Mitsui Banking Corporation)
President: Teisuke Kitayama
(Concurrent Chairman of the Board of Directors at Sumitomo Mitsui Banking
Corporation)
Capital: ¥2,337.8 billion (as of March 31, 2010)
Stock Exchange Listings:
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Nagoya Stock Exchange (First Section)
SUMITOMO MITSUI Banking Corporation
SUMITOMO MITSUI Banking Corporation
www.smbc.co.jp/english/
Sumitomo Mitsui Banking Corporation (SMBC)
was established in April 2001 through the
merger of two leading banks: The Sakura Bank,
Limited, and The Sumitomo Bank, Limited.
Sumitomo Mitsui Financial Group, Inc., was
established in December 2002 through a stock
transfer as a bank holding company, and SMBC
became a wholly owned subsidiary of SMFG. In
March 2003, SMBC merged with the Wakashio
Bank, Ltd. SMBC’s competitive advantages
include a strong customer base, the quick
implementation of strategies, and an extensive
lineup of financial products and services that
leverage the expertise of strategic Group com-
panies in specialized areas. SMBC, as a core
member of SMFG, works together with other
members of the Group to offer customers highly
sophisticated, comprehensive financial services.
Company Name: Sumitomo Mitsui Banking Corporation
Business Profile: Banking
Establishment: June 6, 1996
Head Office: 1-2, Yurakucho 1-chome, Chiyoda-ku,
Tokyo, Japan
(As of October 18, 2010: 1-2, Marunouchi
1-chome, Chiyodaku, Tokyo Japan)
President: Masayuki Oku
Number of Employees: 22,460
Number of branches and other business locations:
In Japan:
1,549*
Branches:
494
(Including 38 specialized deposit account branches)
164
Subbranches:
1
Agency:
23
Offices handling non-banking business:
867
Automated service centers:
34
Overseas:
15
Branches:
6
Subbranches:
13
Representative offices:
* The number of domestic branches excludes ATMs located at
the business sites of companies and at retail convenience stores.
Credit Ratings (as of June 30, 2010)
Moody’s
Standard & Poor’s
Fitch Ratings
R&I
JCR
Long-term Short-term
P–1
A–1
F1
a–1
J–1+
Aa2
A+
A
A+
AA–
Financial Information (Consolidated basis, years ended March 31)
2010
Billions of yen
2008
2009
2007
For the Year:
Ordinary income .....
Ordinary profit ........
Net income (loss) ....
At Year-End:
¥6,894.5
Net assets ...............
Total assets ............ 120,041.3
¥2,579.9
557.7
332.4
¥2,989.6
59.2
(317.3)
¥3,411.0
734.9
351.8
¥2,925.6
716.6
401.7
¥4,518.6
115,849.3
¥5,080.7
108,637.7
¥5,412.4
98,570.6
SMFG CARD & CREDIT, INC.
SMFG Card & Credit, Inc. (“FGCC”), was
established in October 2008 as an intermedi-
ate holding company of SMFG to hold shares
of Sumitomo Mitsui Card Co., Ltd., and Cedyna
Financial Corporation. FGCC is the core com-
pany responsible for implementing SMFG’s credit
card strategy and establishing uniform business
policies. FGCC will also create a framework for
promoting a solid partnership between Sumitomo
Mitsui Card and Cedyna Financial Corporation,
seek to realize economies of scale for the Group
as a whole, and maximize top-line synergy by
leveraging each party’s strengths.
* Cedyna Financial Corporation was formed in April 2009
through the merger of three companies: Central Finance Co.,
Ltd., OMC Card, Inc., and QUOQ Inc., and has become one
of the largest consumer finance companies in Japan.
18
SMFG 2010
Company Name: SMFG Card & Credit, Inc.
Business Profile: Management of subsidiaries
and affiliates
Establishment: October 1, 2008
Head Office: 1-2, Yurakucho 1-chome,
Chiyoda-ku, Tokyo, Japan
(As of October 18, 2010: 1-2,
Marunouchi 1-chome,
Chiyodaku, Tokyo
Japan)
President & CEO: Kazuya Jono
Number of Employees: 36
SMFG SUMITOMO MITSUI Financial group
SMFG CARD & CREDIT, INC.
Maximization of
top-line synergies
Pursuit of economies of scale
As the pioneer in the issuance of the VISA
Card in Japan and a leader in the domestic
credit card industry, Sumitomo Mitsui Card
Company, Limited, enjoys the strong support
of its many customers and plays a major role
as one of the strategic businesses of SMFG.
Leveraging its strong brand image and its
excel-lent capabilities across a wide range of
card-related services, the company provides
settlement and financing services focused
around providing credit services that meet
customer needs. Through its credit card busi-
ness operations, the company aims to actively
contribute to the realization of comfortable and
www.smbc-card.com
(Japanese only)
affluent consumer lifestyles and make further
dramatic advances as a leading brand in its
industry sector.
Company Name: Sumitomo Mitsui Card
Credit Ratings (as of June 30, 2010)
Company, Limited
Business Profile: Credit card services
Establishment: December 26, 1967
Head Office:
Tokyo Head Office: 1-2-20, Kaigan,
Minato-ku, Tokyo
Osaka Head Office: 4-5-15, Imab ashi,
Chuo-ku, Osaka
President & CEO: Koichi Tsukihara
Number of Employees: 2,247
JCR
Long-term Short-term
J–1+
A+
Financial Information (Years ended March 31)
2010
Billions of yen
2008
2009
2007
For the Year:
Revenue from credit
card operations ......... ¥6,209.0
183.6
Operating revenue......
Operating profit...........
24.3
At Year-End:
Number of cardholders
(in thousands) ...........
20,504
¥5,858.7
180.2
22.3
¥5,375.2
168.4
16.9
¥4,753.8
157.6
14.1
18,655
16,406
14,951
www.cedyna.co.jp/english/
Cedyna Financial Corporation was formed
in April 2009 through the merger of OMC
Card, Inc., Central Finance Co., Ltd. and
QUOQ Inc., bringing together the customer
bases, marketing capabilities and propri-
etary know-how of these credit card com-
panies. It aims, in alliance with fellow SMFG
Group member Sumitomo Mitsui Card, to
become “the number one credit card busi-
ness entity in Japan.” As one of Japan’s
largest consumer finance companies offer-
ing a fusion of the credit card, consumer
credit and solutions businesses, Cedyna
provides products and services of great
value to its customers.
Company Name: Cedyna Financial Corporation
Business Profile: Credit-card services, consumer
credit
Establishment: September 11, 1950
Head Office:
Head Office: 3-23-20 Marunouchi, Naka-ku,
Nagoya
Tokyo Head Office: 2-16-4 Konan, Minato-ku,
Tokyo
President & CEO: Hajime Yamashita
Number of Employees: 3,223
Credit Ratings (as of June 30, 2010)
Standard & Poor’s
JCR
Long-term Short-term
A–2
J–1
A–
A
Financial Information (Years ended March 31)
2010
Billions of yen
2009
CF*
OMC*
QQ*
For the Year:
Revenue from credit
card operations .........
Operating revenue......
Operating profit...........
At Year-End:
Number of cardholders
(in thousands) ...........
¥223.9
(40.8)
¥137.7
6.9
¥80.6
(1.4)
¥44.8
(5.2)
24,933
* OMC: OMC Card, Inc.
CF: Central Finance Co., Ltd.
QQ: QUOQ Inc.
www.smfl.co.jp/english/
Sumitomo Mitsui Finance and Leasing Co.,
Ltd. (SMFL) was created from the merger
of SMBC Leasing Company, Limited, and
Sumisho Lease Co., Ltd., in October 2007.
SMFL aims to become the top leasing com-
pany in Japan in terms of both quantity and
quality by leveraging (a) the financial solu-
tions offered by other subsidiaries of SMFG,
and (b) business relationships along the
value chains in a wide range of industries
held by the Sumitomo Corporation Group,
one of Japan’s leading trading houses.
SMFL is one of the leading companies in
the leasing industry, known for its capabili-
ties for offering high-value-added products
and services, because of its strong market-
ing position based on its access to chan-
nels to users of leased equipment and to
suppliers of equipment, as well as having
business in the aircraft operating lease
field. SMFL is working to contribute to soci-
ety as a leading leasing company by antici-
pating future needs and offering top quality
leasing services.
Company Name: Sumitomo Mitsui Finance and
Leasing Co., Ltd.
Business Profile: Leasing
Establishment: February 4, 1963
Head Office:
Tokyo Head Office: 3-9-4, Nishi-Shimbashi, Minato-ku, Tokyo
Osaka Head Office: 3-10-19, Minami-Semba, Chuo-ku, Osaka
President & CEO: Koji Ishida
Number of Employees: 1,538
Credit Ratings (as of June 30, 2010)
R&I
JCR
Long-term Short-term
a–1
J–1+
A+
AA–
Financial Information (Years ended March 31)
For the Year:
Revenue from
leasing operations
2010
Billions of yen
2008
2009
¥733.6
¥895.8
¥1,054.1
Operating revenue ....
894.7
947.6
708.4
Operating profit .........
43.9
36.4
36.2
2007*
¥599.4
516.8
630.0
379.9
31.5
24.7
* The upper row of figures for 2007 are for SMBC Leasing and the
lower row of figures are for Sumisho Lease.
SMFG 2010 19
www.jri.co.jp/english/
Financial Information (Years ended March 31)
For the Year:
Operating revenue ....
Operating profit .........
2010
¥81.7
0.9
Billions of yen
2008
2009
¥88.0
1.0
¥88.1
3.8
2007*
¥84.6
3.0
* JSOL (formerly JRI Solutions) was spun off as a separate
company in July 2006.
The Japan Research Institute, Limited (JRI), con-
ducts “knowledge engineering” activities which
effectively combine three functions: information
systems integration, consulting, and think-tank
services. All activities are guided by the funda-
mental philosophy of “creating new value for the
client.” JRI offers unique added value in many
fields by leveraging IT expertise to plan and
assemble strategic data systems and provide out-
sourcing services. Additionally, its activities span
consulting for corporate management strategies
and governmental administrative reform, research
and analysis on both domestic and foreign eco-
nomic issues, and policy recommendation, as
well as formulation of, and support for, start-up
incubation in new markets and industries.
In December 2008, JRI concluded a capital
and business alliance with NTT Data Co., Ltd.
and JRI Solutions, Limited, an SMFG Group
company offering IT solutions to custom-
ers across a wide range of industries. And, in
January 2009, JRI Solutions began operations
anew under the name “JSOL.” Looking ahead,
JRI Group, while maintaining close relation-
ships with other SMFG Group companies, will
draw on the diverse range of resources and
know-how of the NTT Data Group, as well as
the know-how it has accumulated, to further
grow and develop as a total IT service provider.
Company Name: The Japan Research Institute,
Limited
Business Profile: Systems engineering, data
processing, management
consulting, think-tank services
Establishment: November 1, 2002
Head Office:
Tokyo Head Office: 16, Ichibancho,
Chiyoda-ku, Tokyo
Osaka Head Office: 2-2-4, Tosabori,
Nishi-ku, Osaka
President & CEO: Yasuyuki Kimoto
Number of Employees: 2,061
www.smbc-friend.co.jp
(Japanese only)
Providing a full range of securities ser-
vices, focused mainly on retail customers,
SMBC Friend Securities Co., Ltd. has one
of the strongest financial positions among
Japanese securities companies and boasts
highly efficient operations with a nationwide
network. SMBC Friend Securities offers
services closely tailored to the needs of its
customers and the communities it serves. It
became a wholly owned subsidiary of SMFG
through a share transfer in September 2006,
and is developing business operations jointly
with other SMFG Group companies.
SMBC Friend Securities will continue to
move steadily forward toward its goal of
becoming “a leading Japanese securities
company in the retail market,” offering high-
quality products and services matching the
needs of its customers and building strong
bonds of trust with them.
Company Name: SMBC Friend Securities Co., Ltd.
Business Profile: Securities services
Establishment: March 2, 1948
Head Office: 7-12, Kabuto-cho, Nihonbashi,
Chuo-ku, Tokyo
President & CEO: Osamu Endo
Number of Employees: 2,197
Financial Information (Years ended March 31)
For the Year:
Operating revenue ...
Operating profit.......
2010
¥67.4
22.8
Billions of yen
2008
2009
¥43.2
2.3
¥60.5
19.0
2007
¥58.7
21.2
www.nikko.co.jp/SEC/e-home.html
Since its establishment in July 1918, Nikko
Cordial Securities Inc. — then known as
Kawashimaya Shoten — has grown with
its customers for over 90 years. It started
a new chapter in Nikko Cordial’s history
in October 2009 as a member of SMFG
Group. One of the largest full-service secu-
rities and investment banking firms in Japan
and a provider of high-quality products and
services, Nikko Cordial Securities is work-
ing with SMBC to create a new business
model integrating banking and securities
activities. It aims to become the number
one securities company in Japan by deliv-
ering still more value.
Company Name: Nikko Cordial Securities Inc.
Business Profile: Securities services
Establishment: June 15, 2009
Nikko Cordial De-merger Preparatory
Company Ltd. was established to
succeed all of the operations (excluding
selected assets and liabilities) of former
Nikko Cordial Securities Inc. and certain
businesses of former Nikko Citigroup Ltd.
through a corporate spin-off from Nikko
Citi Holdings, Inc. On October 1, 2009, it
started operating under the trade name
“Nikko Cordial Securities Inc.”
Head Office: 3-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
President & CEO: Eiji Watanabe
Number of Employees: 6,533
Credit Ratings (as of June 30, 2010)
Moody’s
Standard & Poor’s
R&I
JCR
Long-term Short-term
P–1
A–1
a–1
Aa2
A
A+
AA–
Financial Information (Years ended March 31)
2010
Nikko Cordial Securities
From June 2009
(started operating under this
trade name in October)
2009
Former
Nikko Cordial
Securities
1H
Former Nikko
Cordial Securities
For the Year:
Operating
revenue .........
Operating
profit .............
¥85.6
20.9
¥104.9
23.5
¥164.1
19.6
* Expenses related to preparatory costs prior to the start
of operations were posted during the period from June
to September.
20
SMFG 2010
Financial Highlights
Sumitomo Mitsui Financial Group
l Consolidated
Year ended March 31
For the Year:
2010
2009
Total income .................................................................
Total expenses .............................................................
Net income (loss) .........................................................
¥ 3,184,688
2,626,590
271,559
At Year-End:
Total net assets ............................................................
Total assets ..................................................................
Risk-monitored loans ...................................................
Reserve for possible loan losses .................................
Net unrealized gains (losses) on other securities ........
Number of employees ..................................................
¥ 7,000,805
123,159,513
1,529,484
1,068,329
586,414
57,888
Selected Ratios:
¥ 3,556,536
3,527,040
(373,456)
¥ 4,611,764
119,637,224
1,586,317
1,077,852
(33,176)
48,079
Capital ratio ..................................................................
Return on Equity ..........................................................
Price Earnings Ratio ....................................................
15.02%
7.63%
12.44x
11.47%
—%
—x
Per Share (Yen):
Millions of yen
2008
¥ 4,739,040
3,810,084
461,536
¥ 5,224,076
111,955,918
1,092,661
894,702
745,420
46,429
10.56%
13.23%
11.06x
2007
2006
¥ 3,947,786
3,140,996
441,351
¥ 5,331,279
100,858,309
1,067,386
889,093
1,825,168
41,428
11.31%
13.07%
18.74x
¥ 3,803,089
2,759,726
686,841
¥ 4,454,399
107,010,575
1,243,160
1,035,468
1,373,337
40,681
12.39%
33.15%
13.72x
Net assets ....................................................................
Net income (loss) .........................................................
Net income — diluted ...................................................
¥3,391.75
248.40
244.18
¥2,790.27
(497.39)
—
¥424,546.01
59,298.24
56,657.41
¥469,228.59
57,085.83
51,494.17
¥400,168.89
94,733.62
75,642.93
Notes: 1. “Net unrealized gains (losses) on other securities” represent the difference between the market prices and acquisition costs (or amortized costs) of
“other securities.” In principle, the values of stocks are calculated using the average market prices during the final month. For details, please refer to
page 26.
2. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members
but excludes contract employees and temporary staff.
3. From the fiscal year ended March 31, 2007, in calculating total net assets and total assets, SMFG has applied “Accounting Standard for Presentation
of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 5) and “Guidance on Accounting Standard for
Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8).
4. The ASBJ has revised “Guidance on Accounting Standard for Earnings per Share” (ASBJ Guidance No. 4). From the fiscal year ended March 31,
2007, SMFG has applied the revised Guidance and calculated net assets per share by including net deferred gains (losses) on hedges.
5. From the fiscal year ended March 31, 2007 (fiscal 2006), the consolidated capital ratio has been calculated according to the formula specified in
the Financial Services Agency (“FSA”) Notification No. 20 issued in fiscal 2006, which is based on Article 52-25 of the Banking Act of Japan. The
consolidated capital ratio of SMFG is calculated under Basel II. Please note that in fiscal 2005, the capital ratio was calculated according to the
formula specified in the Ministry of Finance Notification No. 62 issued in fiscal 1998, which was based on Article 52-25 of the Banking Act of Japan.
6. “Net income — diluted” per share for the fiscal year ended March 31, 2009 is not reported due to a net loss.
7. SMFG implemented a 100-for-1 stock split of common stock on January 4, 2009. If the stock split had been implemented in the prior years, per share
information would be as follows:
Year ended March 31
Net assets .............................................................................................................................
Net income ...........................................................................................................................
Net income — diluted ...........................................................................................................
2008
¥4,245.46
592.98
566.57
Yen
2007
¥4,692.29
570.86
514.94
2006
¥4,001.69
947.34
756.43
SMFG 2010 21
l Nonconsolidated
Year ended March 31
For the Year:
2010
2009
Millions of yen
2008
2007
2006
Operating income .........................................................
Dividends on investments in subsidiaries and affiliates ...
Operating expenses .....................................................
Net income ...................................................................
At Year-End:
Total net assets (A) ......................................................
Total assets (B) ............................................................
Total net assets to total assets (A) / (B) ......................
Capital stock .................................................................
Number of shares issued
¥ 133,379
118,818
16,641
66,176
¥4,805,574
6,152,774
78.10%
2,337,895
¥ 134,772
117,051
8,790
103,468
¥2,977,547
4,057,313
73.39%
1,420,877
Preferred stock ....................................................
70,001
Common stock .................................................... 1,414,055,625
183
Number of employees ..................................................
103,401
789,080,477
167
Selected Ratios:
Return on Equity ..........................................................
Price Earnings Ratio ....................................................
Dividend payout ratio ...................................................
1.59%
57.41x
213.41%
3.52%
28.79x
75.96%
Per Share (Yen):
¥ 111,637
89,693
6,246
82,975
¥2,968,749
4,021,217
73.83%
1,420,877
120,101
7,733,653
136
2.67%
71.82x
131.37%
¥ 376,479
366,680
3,641
363,535
¥2,997,898
3,959,444
75.72%
1,420,877
120,101
7,733,653
131
13.71%
23.10x
15.31%
¥ 55,482
46,432
3,196
73,408
¥3,935,426
4,166,332
94.46%
1,420,877
950,101
7,424,172
124
2.38%
190.16x
46.64%
Net assets ....................................................................
Dividends:
Common stock .........................................................
Preferred stock (Type 1) ..........................................
Preferred stock (Type 2) ..........................................
Preferred stock (Type 3) ..........................................
Preferred stock (1st series Type 4) ..........................
Preferred stock (2nd series Type 4) ........................
Preferred stock (3rd series Type 4) .........................
Preferred stock (4th series Type 4) .........................
Preferred stock (5th series Type 4) .........................
Preferred stock (6th series Type 4) .........................
Preferred stock (7th series Type 4) .........................
Preferred stock (8th series Type 4) .........................
Preferred stock (9th series Type 4) .........................
Preferred stock (10th series Type 4) .......................
Preferred stock (11th series Type 4) .......................
Preferred stock (12th series Type 4) .......................
Preferred stock (1st series Type 6) ..........................
Net income ..................................................................
Net income — diluted ...................................................
¥3,256.32
¥3,389.38
¥339,454.71
¥342,382.75
¥330,206.27
100
/
/
/
67,500
67,500
67,500
67,500
/
/
/
/
67,500
67,500
67,500
67,500
88,500
53.82
—
90
/
/
/
135,000
135,000
135,000
135,000
/
/
/
/
135,000
135,000
135,000
135,000
88,500
118.43
—
12,000
/
/
/
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
88,500
9,134.13
9,133.76
7,000
—
—
—
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
88,500
46,326.41
41,973.46
3,000
10,500
28,500
13,700
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
135,000
88,500
6,836.35
6,737.46
Notes: 1. All SMFG employees are on secondment assignment from SMBC, etc.
2. From the fiscal year ended March 31, 2007, in calculating total net assets and total assets, SMFG has applied “Accounting Standard for Presentation
of Net Assets in the Balance Sheet” (ASBJ Statement No. 5) and “Guidance on Accounting Standard for Presentation of Net Assets in the Balance
Sheet” (ASBJ Guidance No. 8).
3. The ASBJ has revised “Guidance on Accounting Standard for Earnings per Share” (ASBJ Guidance No. 4). From the fiscal year ended March 31,
2007, SMFG has applied the revised Guidance and calculated net assets per share by including net deferred gains (losses) on hedges.
4. SMFG implemented a 100-for-1 stock split of common stock on January 4, 2009. If the stock split had been implemented in the prior years, per share
information would be as follows:
Year ended March 31
Net assets .............................................................................................................................
Dividends:
2008
¥3,394.55
Common stock .................................................................................................................
Net income ...........................................................................................................................
Net income — diluted ...........................................................................................................
120
91.34
91.34
Yen
2007
¥3,423.83
70
463.26
419.73
2006
¥3,302.06
30
68.36
67.37
22
SMFG 2010
Sumitomo Mitsui Banking Corporation
l Consolidated
Year ended March 31
For the Year:
2010
2009
Total income .................................................................
Total expenses .............................................................
Net income (loss) .........................................................
¥ 2,597,675
2,039,296
332,497
At Year-End:
Total net assets ............................................................
Total assets ..................................................................
Risk-monitored loans ...................................................
Reserve for possible loan losses .................................
Net unrealized gains (losses) on other securities ........
Number of employees ..................................................
¥ 6,894,564
120,041,369
1,498,271
1,007,160
523,444
47,837
Selected Ratios:
Capital ratio ..................................................................
Return on Equity ..........................................................
16.68%
8.64%
Per Share (Yen):
Net assets ....................................................................
Net income (loss) .........................................................
Net income — diluted ...................................................
¥49,036.12
4,240.20
4,236.01
¥ 2,991,839
2,941,009
(317,306)
¥ 4,518,647
115,849,385
1,561,824
1,011,845
(59,758)
37,345
13.54%
—%
¥41,492.54
(5,740.34)
—
Millions of yen
2008
¥ 3,417,611
2,691,606
351,820
¥ 5,080,747
108,637,791
1,073,471
848,031
754,456
36,085
12.19%
9.56%
¥60,442.81
6,132.91
6,132.75
2007
2006
¥ 2,971,693
2,220,971
401,795
¥ 5,412,458
98,570,638
1,047,566
860,799
1,852,971
31,718
12.95%
12.95%
¥67,823.69
7,072.09
7,012.46
¥ 2,789,433
1,903,374
563,584
¥ 3,598,294
104,418,597
1,219,383
1,006,223
1,337,192
32,918
10.77%
30.15%
¥41,444.83
9,864.54
9,827.19
Notes: 1. “Net unrealized gains (losses) on other securities” represent the difference between the market prices and acquisition costs (or amortized costs) of
“other securities.” In principle, the values of stocks are calculated using the average market prices during the final month.
2. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members
but excludes contract employees and temporary staff.
3. From the fiscal year ended March 31, 2007, in calculating total net assets and total assets, SMBC has applied “Accounting Standard for Presentation
of Net Assets in the Balance Sheet” (ASBJ Statement No. 5) and “Guidance on Accounting Standard for Presentation of Net Assets in the Balance
Sheet” (ASBJ Guidance No. 8).
4. The ASBJ has revised “Guidance on Accounting Standard for Earnings per Share” (ASBJ Guidance No. 4). From the fiscal year ended March 31,
2007, SMBC has applied the revised Guidance and calculated net assets per share by including net deferred gains (losses) on hedges.
5. From the fiscal year ended March 31, 2007 (fiscal 2006), the consolidated capital ratio has been calculated according to the formula specified in the
FSA Notification No. 19 issued in fiscal 2006, which is based on Article 14-2 of the Banking Act of Japan. The consolidated capital ratio of SMBC is
calculated under Basel II. Please note that in fiscal 2005, the capital ratio was calculated according to the formula specified in the Ministry of Finance
Notification No. 55 issued in fiscal 1993, which was based on Article 14-2 of the Banking Act of Japan.
6. “Net income — diluted” per share for the fiscal year ended March 31, 2009 is not reported due to a net loss.
SMFG 2010 23
l Nonconsolidated
Year ended March 31
For the Year:
Total income .................................................................
Total expenses .............................................................
Net income (loss) .........................................................
(Appendix)
Gross banking profit (A) ...........................................
Banking profit ...........................................................
Banking profit (before provision for general
reserve for possible loan losses) ...........................
Expenses (excluding nonrecurring losses) (B) ........
At Year-End:
Total net assets ............................................................
Total assets ..................................................................
Deposits .......................................................................
Loans and bills discounted ...........................................
Securities .....................................................................
Risk-monitored loans ...................................................
Problem assets based on the
Financial Reconstruction Law ....................................
Reserve for possible loan losses .................................
Net unrealized gains (losses) on other securities ........
Trust assets and liabilities ............................................
Loans and bills discounted ......................................
Securities .................................................................
Capital stock .................................................................
Number of shares issued (in thousands)
Preferred stock ....................................................
Common stock ....................................................
Number of employees ..................................................
Selected Ratios:
Capital ratio ..................................................................
Return on Equity ..........................................................
Dividend payout ratio ...................................................
Overhead ratio (B) / (A) ................................................
Per Share (Yen):
Net assets ....................................................................
Dividends:
Common stock .........................................................
Preferred stock (Type 1) ..........................................
Preferred stock (Type 2) ..........................................
Preferred stock (Type 3) ..........................................
Preferred stock (1st series Type 6) ..........................
Net income (loss) .........................................................
Net income — diluted ...................................................
2010
2009
Millions of yen
2008
2007
2006
¥ 2,087,777
1,633,026
317,995
¥ 2,548,073
2,520,286
(301,116)
¥ 2,944,677
2,437,222
205,742
¥ 2,492,577
1,905,648
315,740
¥ 2,322,699
1,576,026
519,520
1,455,275
778,589
769,522
685,752
¥ 5,397,949
103,536,394
77,630,639
56,619,058
28,536,200
1,068,017
1,100,685
758,178
521,377
1,403,236
221,970
457,585
1,770,996
70
106,248
22,460
18.28%
8.28%
48.06%
47.1%
1,524,856
747,647
823,377
701,479
¥ 2,546,493
107,478,218
76,905,708
60,241,266
28,000,515
1,137,058
1,194,170
791,885
(42,701)
1,262,993
222,030
392,812
664,986
70
56,355
21,816
13.85%
—%
—%
46.0%
1,484,783
819,691
819,691
665,091
¥ 3,493,249
100,033,020
69,382,834
56,957,813
22,758,241
770,587
803,939
620,004
755,749
1,175,711
223,740
273,504
664,986
70
56,355
17,886
12.67%
5.64%
41.99%
44.8%
1,344,490
782,330
740,601
603,888
¥ 3,992,884
91,537,228
68,809,338
53,756,440
20,060,873
721,064
738,667
677,573
1,832,891
1,174,396
5,350
267,110
664,986
70
56,355
16,407
13.45%
10.13%
13.89%
44.9%
1,552,033
810,593
965,573
586,459
¥ 3,634,776
97,443,428
68,222,167
51,857,559
25,202,541
914,173
960,095
816,437
1,316,206
1,305,915
7,870
238,205
664,986
900
55,212
16,050
11.35%
26.57%
63.02%
37.8%
¥48,799.31
¥41,404.62
¥58,204.22
¥67,124.90
¥42,105.57
1,620
/
/
/
88,500
4,051.75
—
1,638
/
/
/
88,500
(5,453.06)
—
1,487
/
/
/
88,500
3,540.84
—
763
/
/
/
88,500
5,533.69
5,487.21
5,714
10,500
28,500
13,700
88,500
9,066.46
9,050.63
Notes: 1. Please refer to page 161 for the definitions of risk-monitored loans and problem assets based on the Financial Reconstruction Law.
2. “Net unrealized gains (losses) on other securities” represent the difference between the market prices and acquisition costs (or amortized costs) of
“other securities.” The values of stocks are calculated using the average market prices during the final month. For details, please refer to page 31.
3. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members
but excludes contract employees, temporary staff, and executive officers who are not also Board members.
4. From the fiscal year ended March 31, 2007, in calculating total net assets and total assets, SMBC has applied “Accounting Standard for Presentation
of Net Assets in the Balance Sheet” (ASBJ Statement No. 5) and “Guidance on Accounting Standard for Presentation of Net Assets in the Balance
Sheet” (ASBJ Guidance No. 8).
5. The ASBJ has revised “Guidance on Accounting Standard for Earnings per Share” (ASBJ Guidance No. 4). From the fiscal year ended March 31,
2007, SMBC has applied the revised Guidance and calculated net assets per share by including net deferred gains (losses) on hedges.
6. From the fiscal year ended March 31, 2007 (fiscal 2006), the nonconsolidated capital ratio has been calculated according to the formula specified
in the FSA Notification No. 19 issued in fiscal 2006, which is based on Article 14-2 of the Banking Act of Japan. The nonconsolidated capital ratio of
SMBC is calculated under Basel II. Please note that in fiscal 2005, the capital ratio was calculated according to the formula specified in the Ministry
of Finance Notification No. 55 issued in fiscal 1993, which was based on Article 14-2 of the Banking Act of Japan.
7. “Net income — diluted” per share for the fiscal years ended March 31, 2008 and after is not reported because no potentially dilutive shares have
been issued.
24
SMFG 2010
Financial Review
Sumitomo Mitsui Financial Group (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
The following is a summary of SMFG’s consolidated financial results for the fiscal year ended March 31, 2010.
1. Operating Results
Operating results for fiscal 2009 include the results of 307
consolidated subsidiaries and 58 subsidiaries and affiliates
accounted for by the equity method.
Gross profit increased ¥70.7 billion year on year, to
¥2,236.6 billion. The principal reasons for this increase were
1) an increase in net interest income in SMBC’s international
operations as a result of a decline in U.S. interest rates and
an improvement in net interest margins, and 2) an increase
in net fees and commissions resulting from the acquisition
of Nikko Cordial Securities. After adjusting for general and
administrative expenses, credit cost, net losses on stocks,
equity in losses of affiliates, and other items, ordinary profit
increased ¥513.4 billion year on year, to ¥558.7 billion. The
main factors were decreases in both credit cost and losses on
devaluation of stocks resulting from the recovery in stock
prices.
Number of Consolidated Subsidiaries, and Subsidiaries and Affiliates Accounted for by the Equity Method
March 31
Consolidated subsidiaries ..............................................................................................
Subsidiaries and affiliates accounted for by the equity method .....................................
2010 (A)
2009 (B)
307
58
288
79
Income Summary
Year ended March 31
Consolidated gross profit ...............................................................................................
Net interest income ....................................................................................................
Trust fees ...................................................................................................................
Net fees and commissions.........................................................................................
Net trading income.....................................................................................................
Net other operating income .......................................................................................
General and administrative expenses ...........................................................................
Credit cost (A) ................................................................................................................
Write-off of loans ........................................................................................................
Provision for specific reserve for possible loan losses ..............................................
Provision for general reserve for possible loan losses ..............................................
Others ........................................................................................................................
Net gains (losses) on stocks ..........................................................................................
Equity in earnings (losses) of affiliates ..........................................................................
Net other income (expenses) ........................................................................................
Ordinary profit ................................................................................................................
Extraordinary gains (losses) ..........................................................................................
Losses on impairment of fixed assets ........................................................................
Gains on recoveries of written-off claims (B) .............................................................
Income before income taxes and minority interests ......................................................
Income taxes:
Current ......................................................................................................................
Deferred .....................................................................................................................
Minority interests in net income ....................................................................................
Net income (loss) ...........................................................................................................
Total credit cost (A) + (B) ...............................................................................................
[Reference]
Consolidated banking profit (Billions of yen) .................................................................
2010 (A)
¥2,236,634
1,380,912
1,778
608,616
194,087
51,238
(1,161,302)
(473,937)
(176,672)
(184,257)
(17,944)
(95,063)
(10,078)
(21,542)
(11,003)
558,769
(671)
(12,856)
968
558,097
(104,110)
(74,759)
(107,668)
¥ 271,559
¥ (472,968)
Millions of yen
2009 (B)
¥2,165,880
1,338,453
2,122
557,178
211,738
56,386
(1,063,419)
(769,484)
(302,353)
(297,400)
(104,145)
(65,585)
(183,677)
(94,876)
(9,111)
45,311
(15,815)
(7,363)
1,708
29,495
(72,238)
(262,405)
(68,308)
¥ (373,456)
¥ (767,775)
Increase (decrease)
(A) – (B)
19
(21)
Increase (decrease)
(A) – (B)
¥ 70,754
42,459
(344)
51,438
(17,651)
(5,148)
(97,883)
295,547
125,681
113,143
86,201
(29,478)
173,599
73,334
(1,892)
513,458
15,144
(5,493)
(740)
528,602
(31,872)
187,646
(39,360)
¥645,015
¥294,807
¥ 832.3
¥ 728.7
¥ 103.6
Notes: 1. Consolidated gross profit = (Interest income – Interest expenses) + Trust fees + (Fees and commissions – Fees and commissions payments)
+ (Trading income – Trading losses) + (Other operating income – Other operating expenses)
2. Consolidated banking profit = SMBC’s nonconsolidated banking profit (before provision for general reserve for possible loan losses)
+ SMFG’s ordinary profit + Other subsidiaries’ ordinary profit (excluding nonrecurring factors) + Equity method affiliates’ ordinary profit
✕ Ownership ratio – Internal transactions (dividends, etc.)
SMFG 2010 25
After adjusting ordinary profit for extraordinary gains
and losses, income taxes, and other items, net income was
¥271.5 billion, a year-on-year increase of ¥645.0 billion
from the previous fiscal year’s net loss.
Deposits (excluding negotiable certificates of deposit) at
the end of the fiscal year under review rose ¥3,079.0 billion
in comparison with March 31, 2009, to ¥78,648.5 billion,
and negotiable certificates of deposit decreased ¥465.6
billion, to ¥6,995.6 billion.
Meanwhile, loans and bills discounted decreased ¥2,434.2
billion year on year, to ¥62,701.0 billion, and the balance of
securities decreased ¥74.1 billion, to ¥28,623.9 billion.
Net assets amounted to ¥7,000.8 billion, and, of this total,
stockholders’ equity was ¥4,644.6 billion, due to issuance of
new shares and an increase in retained earnings from record-
ing of net income.
Assets, Liabilities and Net Assets
March 31
Assets ............................................................................................................................ ¥123,159,513
28,623,968
62,701,033
116,158,708
78,648,595
6,995,619
7,000,805
Securities ...................................................................................................................
Loans and bills discounted ........................................................................................
Liabilities ........................................................................................................................
Deposits .....................................................................................................................
Negotiable certificates of deposit ...............................................................................
Net assets ......................................................................................................................
2010 (A)
Millions of yen
2009 (B)
¥119,637,224
28,698,164
65,135,319
115,025,460
75,569,497
7,461,284
4,611,764
Increase (decrease)
(A) – (B)
¥3,522,289
(74,196)
(2,434,286)
1,133,248
3,079,098
(465,665)
2,389,041
2. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2010
amounted to ¥645.0 billion, an increase of ¥651.7 billion
from the previous fiscal year-end, reflecting an increase in the
value of equities and other factors. Of this total, net
unrealized gains on other securities including “other money
held in trust” — which are directly debited to net assets —
totaled ¥586.4 billion, an increase of ¥619.9 billion from the
losses of the previous term.
Unrealized Gains (Losses) on Securities
2010
Millions of yen
March 31
Held-to-maturity securities ..................
Other securities ..................................
Stocks .............................................
Bonds..............................................
Others .............................................
Other money held in trust ...................
Total ....................................................
Stocks .............................................
Bonds..............................................
Others .............................................
Net unrealized
gains (losses) (A)
¥ 58,610
586,414
410,984
123,658
51,771
62
645,087
410,984
182,369
51,733
(A) – (B)
¥ 31,869
619,590
403,922
126,484
89,183
324
651,784
403,922
157,950
89,913
Unrealized
gains
¥ 59,344
799,355
543,745
131,821
123,788
157
858,858
543,745
191,162
123,950
Unrealized
losses
¥ 734
212,941
132,761
8,163
72,017
95
213,770
132,761
8,793
72,216
Net unrealized
gains (losses) (B)
¥26,741
(33,176)
7,062
(2,826)
(37,412)
(262)
(6,697)
7,062
24,419
(38,180)
2009
Unrealized
gains
¥ 28,155
356,834
287,380
21,534
47,920
—
384,990
287,380
49,690
47,920
Unrealized
losses
¥ 1,414
390,011
280,317
24,360
85,332
262
391,688
280,317
25,270
86,100
Notes: 1. The figures above include unrealized gains (losses) on negotiable certificates of deposit in “Cash and due from banks” and “Deposits with banks”
and beneficiary claims on loan trusts in “Monetary claims bought,” etc.
2. Unrealized gains (losses) on stocks (including foreign stocks) are mainly calculated using the average market price during the final month of the
respective reporting period. The rest of the securities are valuated at the market price as of the balance sheet date.
3. “Other securities” and “Other money held in trust” are valuated and recorded on the consolidated balance sheet at market prices. The figures in the
table above indicate the differences between the acquisition costs (or amortized costs) and the balance sheet amounts.
Among net unrealized gains (losses) on other securities as of March 31, 2010, ¥105 million that is recognized in the fiscal year's earnings by apply-
ing fair value hedge accounting is not included in net assets.
4. Floating-rate Japanese government bonds which SMFG held as “Other securities” are carried on the consolidated balance sheet at their reasonably
estimated amounts in accordance with the “Practical Solution on Measurement of Fair Value for Financial Assets” (ASBJ Practical Issues Task Force
No. 25).
5. “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, partially revised on March 10, 2008) and “Implementation Guidance on
Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued on March 10, 2008) became effective from the fiscal year
ending on and after March 31, 2010. SMFG has applied them from the fiscal year ended March 31, 2010.
As a result of this accounting change, compared with the former accounting method, “Monetary claims bought” increased by ¥8,710 million,
“Securities” increased by ¥41,914 million, “Net unrealized gains (losses) on other securities” increased by ¥39,315 million, “Deferred tax assets”
related to net unrealized gains (losses) on other securities decreased by ¥27,056 million, and “Reserve for possible loan losses” decreased by
¥34,999 million.
26
SMFG 2010
3. Consolidated Capital Ratio
SMFG’s consolidated capital ratio as of March 31, 2010 was
15.02%, 3.55 percentage points higher than at March 31,
2009.
Total capital, which is the numerator in the capital ratio
calculation equation, rose ¥2,080.4 billion year on year, to
¥8,128.2 billion. This was due mainly to increases in
capital stock and capital surplus resulting from the issu-
ance of new shares. Risk-adjusted assets, the denominator
in the equation, increased ¥1,357.9 billion year on year, to
¥54,084.4 billion due mainly to the acquisition of Nikko
Cordial Securities.
Consolidated Capital Ratio
March 31
Tier I capital ...................................................................................................................
Tier II capital included as qualifying capital ...................................................................
Deductions .....................................................................................................................
Total capital ....................................................................................................................
Risk-adjusted assets .....................................................................................................
Consolidated capital ratio ..............................................................................................
Tier I capital ratio ...........................................................................................................
2010 (A)
¥ 6,032,280
2,563,853
(467,906)
8,128,228
54,084,471
Millions of yen
2009 (B)
¥ 4,335,085
2,420,968
(708,241)
6,047,812
52,726,507
Increase (decrease)
(A) – (B)
¥1,697,195
142,885
240,335
2,080,416
1,357,964
15.02%
11.15%
11.47%
8.22%
3.55%
2.93%
4. Dividend Policy
In view of the public nature of its business, SMFG has set a
fundamental policy of increasing dividends stably and contin-
uously through sustainable growth in enterprise value, while
enhancing the Group’s capital to maintain a sound financial
position. SMFG aims for a dividend payout ratio of over
20% on a consolidated net income basis, and its fundamen-
tal policy is to distribute dividends from retained earnings
twice a year in the form of an interim dividend and a yearend
dividend. An interim dividend can be declared by the Board
of Directors, with September 30 of each year as the recorded
date, but the approval of shareholders at the annual general
meeting is required to pay a yearend dividend.
After taking into account the fiscal 2009 business perfor-
mance, SMFG has decided to pay a term-end dividend of
¥100 per share of common stock for the fiscal year, a year-on
year increase of ¥10, and the predetermined amounts for each
category of preferred stock.
SMFG will employ its retained earnings to increase its
enterprise value by investing mainly in growth business areas
in order to build a business portfolio for achieving sustainable
growth.
5. Deferred Tax Assets
Net deferred tax assets decreased ¥128.3 billion from the
end of the previous fiscal year to ¥702.0 billion. This was
mainly attributable to the posting of income before income
taxes and an increase in deferred tax liabilities resulting from
an improvement in unrealized gains on other securities due
to higher stock prices.
SMFG takes a conservative approach to recognizing
deferred tax assets in order to secure a sound financial
position.
Deferred Tax Assets
March 31
Net deferred tax assets .................................................................................................
Net deferred tax assets / Tier I capital × 100 .................................................................
Millions of yen
2010 (A)
¥702,065
2009 (B)
¥830,370
Increase (decrease)
(A) – (B)
¥(128,305)
11.6%
19.2%
(7.6)%
SMFG 2010 27
Sumitomo Mitsui Banking Corporation (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
The following is a summary of SMBC’s nonconsolidated financial results for the fiscal year ended March 31, 2010.
1. Operating Results
Gross banking profit in fiscal 2009 decreased ¥69.5 bil-
lion from the previous fiscal year, to ¥1,455.2 billion, and
expenses (excluding nonrecurring losses) declined ¥15.7
billion, to ¥685.7 billion. As a result, banking profit
(before provision for general reserve for possible loan losses)
decreased ¥53.8 billion, to ¥769.5 billion.
Ordinary profit — banking profit (before provision for
general reserve for possible loan losses) adjusted for non-
recurring items such as total credit cost and net gains on
stocks — increased ¥426.6 billion, to ¥462.7 billion.
After adjustment of ordinary profit for extraordinary losses
and income taxes, SMBC posted net income of ¥317.9 bil-
lion, a year-on-year increase of ¥619.1 billion.
2. Income Analysis
Gross Banking Profit
Gross banking profit decreased ¥69.5 billion year on year,
to ¥1,455.2 billion. This was due mainly to a decrease in
foreign exchange-related gains resulting from the economic
slowdown. This factor more than offset the higher net trad-
ing income.
Expenses
Expenses (excluding nonrecurring losses) decreased ¥15.7 bil-
lion to ¥685.7 billion, due mainly to more restrained opera-
tions in light of the severe overall business environment.
Banking Profit
Banking profit (before provision for general reserve for pos-
sible loan losses) decreased ¥53.8 billion from the previous
fiscal year, to ¥769.5 billion.
Banking Profit
Year ended March 31
Gross banking profit ......................................................................................................
[Gross domestic banking profit] .................................................................................
[Gross international banking profit] ............................................................................
Net interest income ....................................................................................................
Trust fees ...................................................................................................................
Net fees and commissions.........................................................................................
Net trading income.....................................................................................................
Net other operating income .......................................................................................
[Gross banking profit (excluding gains (losses) on bonds)] .......................................
Expenses (excluding nonrecurring losses) ....................................................................
Personnel expenses ..................................................................................................
Nonpersonnel expenses ............................................................................................
Taxes .........................................................................................................................
Banking profit (before provision for general reserve for possible loan losses) ...
[Banking profit (before provision for general reserve for
possible loan losses and gains (losses) on bonds)] ................................................
Provision for general reserve for possible loan losses ..................................................
Banking profit .................................................................................................................
2010 (A)
¥1,455,275
[1,117,224]
[338,050]
1,046,382
1,736
286,714
115,356
5,085
[1,418,005]
(685,752)
(245,728)
(403,265)
(36,759)
769,522
[732,252]
9,067
778,589
Banking Profit by Business Unit
Millions of yen
2009 (B)
¥1,524,856
[1,147,202]
[377,654]
1,018,389
2,074
293,824
175,038
35,530
[1,498,728]
(701,479)
(236,966)
(426,231)
(38,282)
823,377
[797,248]
(75,730)
747,647
Increase (decrease)
(A) – (B)
¥(69,581)
[(29,978)]
[(39,604)]
27,993
(338)
(7,110)
(59,682)
(30,445)
[(80,723)]
15,727
(8,762)
22,966
1,523
(53,855)
[(64,996)]
84,797
30,942
Year ended March 31, 2010
Banking profit (before provision for
general reserve for possible loan losses) .................
Year-on-year increase (decrease) ..............................
Consumer
Banking Unit
Middle Market
Banking Unit
Corporate
Banking Unit
Billions of yen
International
Banking Unit
Treasury
Unit
Others
Total
¥103.0
(4.6)
¥254.2
(39.7)
¥164.0
19.5
¥114.6
30.6
¥256.5
29.9
¥(122.8)
(89.6)
¥769.5
(53.9)
Notes: 1. Year-on-year comparisons are those used for internal reporting and exclude changes due to interest rate and foreign exchange rate fluctuations.
2. “Others” consist of (1) financing costs on preferred securities and subordinated debt, (2) profit earned on investing the Bank’s own capital, and
(3) adjustment of inter-unit transactions, etc.
28
SMFG 2010
Ordinary Profit
As a result of the foregoing, ordinary profit totaled ¥462.7 bil-
lion, ¥426.6 billion higher than in the previous fiscal year.
Extraordinary Gains (Losses)
Extraordinary losses amounted to ¥7.9 billion, a decrease of
¥0.2 billion from the previous year.
Net Income
Current income taxes amounted to ¥44.9 billion, and deferred
income taxes were ¥91.7 billion. As a result, net income
increased ¥619.1 billion to ¥317.9 billion year on year.
Nonrecurring Losses (Credit Cost, etc.)
Nonrecurring losses amounted to ¥315.8 billion, an improve-
ment of ¥395.7 billion from the previous fiscal year. The main
factor was a decrease of ¥210.5 billion in credit cost, to ¥263.8
billion, due to the effects of the government’s economic stimu-
lus package and SMBC’s business improvement and other
measures tailored to each customer’s individual circumstances.
In addition, SMBC recorded net gain on stocks of ¥3.8 billion
versus net losses on stocks of ¥220.4 billion in the previous fis-
cal year, an improvement of ¥224.2 billion, owing to gains on
sale of stocks and a decrease in losses on devaluation of stocks
due to the market’s recovery.
Total credit cost — the sum of credit cost recorded under
“Nonrecurring losses,” provision for general reserve for possible
loan losses, and gains on recoveries of written-off claims —
amounted to ¥254.6 billion, a year-on-year decrease of ¥295.4
billion.
Ordinary Profit and Net Income (Loss)
Year ended March 31
Banking profit (before provision for general reserve for possible loan losses) ..............
Provision for general reserve for possible loan losses (A) ............................................
Banking profit .................................................................................................................
Nonrecurring gains (losses) ...........................................................................................
Credit cost (B) ............................................................................................................
Net gains (losses) on stocks ......................................................................................
Gains on sale of stocks ..........................................................................................
Losses on sale of stocks ........................................................................................
Losses on devaluation of stocks ............................................................................
Others ........................................................................................................................
Ordinary profit ................................................................................................................
Extraordinary gains (losses) ..........................................................................................
Gains (losses) on disposal of fixed assets .................................................................
Losses on impairment of fixed assets ........................................................................
Gains on recoveries of written-off claims (C) .............................................................
2010 (A)
¥ 769,522
9,067
778,589
(315,839)
(263,805)
3,857
56,719
(886)
(51,975)
(55,892)
462,749
(7,999)
2,448
(10,525)
77
Income taxes:
Current .......................................................................................................................
Deferred .....................................................................................................................
Net income (loss) ...........................................................................................................
(44,997)
(91,757)
¥ 317,995
Total credit cost (A) + (B) + (C) ......................................................................................
Provision for general reserve for possible loan losses ..............................................
Write-off of loans ........................................................................................................
Provision for specific reserve for possible loan losses ..............................................
Losses on sales of delinquent loans ..........................................................................
Provision for loan loss reserve for specific overseas countries .................................
Gains on recoveries of written-off claims ...................................................................
¥(254,660)
9,067
(102,663)
(92,114)
(69,259)
232
77
Millions of yen
2009 (B)
¥ 823,377
(75,730)
747,647
(711,591)
(474,358)
(220,429)
7,066
(4,348)
(223,147)
(16,803)
36,055
(8,269)
(2,139)
(6,138)
8
(23,748)
(305,154)
¥(301,116)
¥(550,079)
(75,730)
(231,412)
(182,346)
(60,182)
(417)
8
Increase (decrease)
(A) – (B)
¥ (53,855)
84,797
30,942
395,752
210,553
224,286
49,653
3,462
171,172
(39,089)
426,694
270
4,587
(4,387)
69
(21,249)
213,397
¥619,111
¥295,419
84,797
128,749
90,232
(9,077)
649
69
SMFG 2010 29
Net Assets
Net assets at fiscal year-end amounted to ¥5,397.9 billion. Of
this total, stockholders’ equity amounted to ¥4,949.0 billion,
consisting of ¥1,770.9 billion in capital stock, ¥2,473.5 bil-
lion in capital surplus (including ¥702.5 billion in other capi-
tal surplus), and ¥704.4 billion in retained earnings.
Valuation and translation adjustments were ¥448.9 billion,
comprising ¥379.3 billion in net unrealized gains on other
securities, ¥48.0 billion in net deferred gains on hedges, and
¥21.5 billion in land revaluation excess.
3. Assets, Liabilities and Net Assets
Assets
In spite of efforts to ensure a smooth supply of funds to our
customers, SMBC’s assets as of March 31, 2010 decreased
¥3,941.8 billion from the previous fiscal year-end, to a total
of ¥103,536.3 billion. This was due mainly to a ¥3,622.2
billion year on year decrease in loans and bills discounted,
due to the weak borrowing demand in Japan and SMBC’s
conservative stance on asset operations overseas.
Liabilities
Liabilities as of March 31, 2010 amounted to ¥98,138.4
billion, a decrease of ¥6,793.2 billion from the previous fis-
cal year-end. This is mainly due to a decrease of ¥4,153.7
billion in payables under securities lending transactions con-
ducted as part of overall funding activities, and the amount
declined in line with the decrease in assets.
Assets, Liabilities and Net Assets
March 31
Assets ............................................................................................................................ ¥103,536,394
28,536,200
56,619,058
98,138,445
70,457,266
7,173,373
5,397,949
Securities ...................................................................................................................
Loans and bills discounted ........................................................................................
Liabilities ........................................................................................................................
Deposits .....................................................................................................................
Negotiable certificates of deposit ...............................................................................
Net assets ......................................................................................................................
2010 (A)
Millions of yen
2009 (B)
¥107,478,218
28,000,515
60,241,266
104,931,725
69,499,997
7,405,710
2,546,493
Increase (decrease)
(A) – (B)
¥(3,941,824)
535,685
(3,622,208)
(6,793,280)
957,269
(232,337)
2,851,456
30
SMFG 2010
4. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2010
amounted to ¥565.8 billion versus net unrealized losses of
¥18.6 billion in the previous fiscal year-end, an increase of
¥584.5 billion, due mainly to improvements in stocks and
bonds. Net unrealized gains on other securities, including
“other money held in trust,” which is directly debited to net
assets, increased by ¥564.4 billion from the previous year’s
losses, to ¥521.4 billion.
Unrealized Gains (Losses) on Securities
2010
Millions of yen
March 31
Held-to-maturity securities ..................
Stocks of subsidiaries and affiliates ....
Other securities ..................................
Stocks .............................................
Bonds..............................................
Others .............................................
Other money held in trust ...................
Total ....................................................
Stocks .............................................
Bonds..............................................
Others .............................................
Net unrealized
gains (losses) (A)
¥ 57,903
(13,471)
521,377
371,459
116,145
33,772
62
565,872
365,979
174,049
25,843
(A) – (B)
¥ 30,052
(9,935)
564,078
388,004
117,386
58,686
324
584,521
386,061
147,440
51,019
Unrealized
gains
¥ 58,530
—
738,870
518,132
123,064
97,674
157
797,558
518,132
181,594
97,831
Unrealized
losses
¥ 626
13,471
217,493
146,672
6,918
63,901
95
231,686
152,153
7,545
71,987
Net unrealized
gains (losses) (B)
¥27,851
(3,536)
(42,701)
(16,545)
(1,241)
(24,914)
(262)
(18,649)
(20,082)
26,609
(25,176)
2009
Unrealized
gains
¥ 28,155
—
337,535
273,058
16,910
47,566
—
365,691
273,058
45,066
47,566
Unrealized
losses
¥ 304
3,536
380,237
289,604
18,152
72,480
262
384,341
293,140
18,456
72,743
Notes: 1. The figures above include unrealized gains (losses) on negotiable certificates of deposit in “Cash and due from banks” and “Deposits with banks”
and beneficiary claims on loan trusts in “Monetary claims bought,” etc.
2. Unrealized gains (losses) on stocks (excluding stocks of subsidiaries and affiliates) (including foreign stocks) are calculated using the average
market price during the final month of the respective reporting period. The rest of the securities are valuated at the market price as of the balance
sheet date.
3. “Other securities” and “Other money held in trust” are valuated and recorded on the balance sheet at market prices. The figures in the table above
indicate the differences between the acquisition costs (or amortized costs) and the balance sheet amounts.
Among net unrealized gains (losses) on other securities as of March 31, 2010, ¥105 million that is recognized in the fiscal year's earnings by apply-
ing fair value hedge accounting is not included in net assets.
4. Floating-rate Japanese government bonds which SMBC held as “Other securities” are carried on the balance sheet at their reasonably estimated
amounts in accordance with the “Practical Solution on Measurement of Fair Value of Financial Assets” (ASBJ Practical Issues Task Force No. 25).
5. “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, partially revised on March 10, 2008) became effective from the fiscal year
ending on and after March 31, 2010. SMBC has applied them from the fiscal year ended March 31, 2010.
As a result of this accounting change, compared with the former accounting method, “Monetary claims bought” increased by ¥8,710 million, Bonds
in “Securities” increased by ¥46,708 million, Stocks in “Securities” increased by ¥1,217 million, “Net unrealized gains (losses) on other securities”
increased by ¥39,714 million, Other securities in “Securities” decreased by ¥604 million, “Deferred tax assets” related to Net unrealized gains
(losses) on other securities decreased by ¥27,178 million, and “Reserve for possible loan losses” decreased by ¥29,909 million.
SMFG 2010 31
Exposure of Securitized Products (Sumitomo Mitsui Financial Group (Consolidated))
The figures contained in this section have been compiled on a managerial accounting basis.
1. Securitized Products
As of March 31, 2010, the Group held ¥0.1 billion in
sub-prime related securitized products and ¥16.5 billion
other than sub-prime related products after write-offs and
provisions. Those figures exclude Government Sponsored
Sub-prime Related Products
Enterprises (“GSE”) etc. The amount of loss on securitized
products for the fiscal year ended March 31, 2010 was ¥0.2
billion for sub-prime related products and no amount of loss
for other than sub-prime related products.
(Billions of yen)
March 31, 2010
March 31, 2009
Investments to securitized products
Total
Balances
(after provisions
and write-offs)
¥0.1
¥0.1
Change from
Mar. 31, 2009
¥(0.2)
¥(0.2)
Overseas
¥0.1
¥0.1
Change from
Mar. 31, 2009
¥(0.2)
¥(0.2)
Net unrealized
gains/losses
(after write-offs)
¥0.0
¥0.0
Change from
Mar. 31, 2009
¥0.0
¥0.0
Balances
(after provisions
and write-offs)
¥0.3
¥0.3
Products Other Than Sub-prime Related (Excludes GSE etc.)
Overseas
Net unrealized
gains/losses
(after write-offs)
Ratings of
underlying
assets, etc.
¥0.3
¥0.3
¥ — Speculative
¥ —
ratings
(Billions of yen)
March 31, 2010
March 31, 2009
Cards
CLO
Senior
Equity
CMBS
Investments to securitized products
Warehousing Loans, etc.
Total
Balances
(after provisions
and write-offs)
Change from
Mar. 31, 2009
¥ — ¥ (4.1)
(2.2)
(2.2)
(0.0)
(7.2)
(13.5)
(6.6)
¥(20.1)
2.9
2.8
0.1
13.6
16.5
—
¥16.5
Overseas
Change from
Mar. 31, 2009
¥ — ¥ (4.1)
(2.2)
2.9
(2.2)
2.8
(0.0)
0.1
—
—
(6.3)
2.9
(6.6)
—
¥(12.9)
¥2.9
Net unrealized
gains/losses
(after write-offs)
¥ —
0.5
(0.2)
0.7
0.0
0.5
—
¥0.5
Change from
Mar. 31, 2009
¥0.4
1.6
0.9
0.7
0.2
2.2
—
¥2.2
Balances
(after provisions
and write-offs)
¥ 4.1
5.1
5.0
0.1
20.8
30.0
6.6
¥36.6
Overseas
¥ 4.1
5.1
5.0
0.1
—
9.2
6.6
¥15.8
Ratings of
underlying
assets, etc.
Net unrealized
gains/losses
(after write-offs)
¥(0.4)
(1.1)
(1.1) AAA~AA
— No ratings
(0.2) AAA~BBB
(1.7)
—
¥(1.7)
Notes: 1. “Senior” means the upper tranche under senior-subordinate structure.
2. Warehousing loans are loans made based on collateral consisting of securitized investment products held by a special-purpose company estab-
lished for the purpose of securitization.
3. Credit ratings are in principle indicated by the lower of Standard & Poor’s (“S&P”) ratings and Moody’s Investors Service (“Moody’s”) ratings. Notation
of credit ratings follows the notation system of S&P.
4. There is no amount of RMBS (excludes GSE etc.) and ABCP.
5. Excludes GSE and SMBC’s exposure to subordinated beneficiaries owned through the securitization of SMBC’s loan receivables (see below).
Government Sponsored Enterprises etc.
GSE etc.
March 31, 2010
March 31, 2009
Balances
Change from
Mar. 31, 2009
¥35.9 ¥(239.3)
Overseas
Change from
Mar. 31, 2009
¥35.9 ¥(239.3)
Net unrealized
gains/losses
Change from
Mar. 31, 2009
Balances
Overseas
Net unrealized
gains/losses
Ratings, etc.
¥0.2
¥(2.9) ¥275.2
¥275.2
¥3.1
AAA
(Billions of yen)
Notes: 1. GSE etc. includes GNMA, FNMA and FHLMC. Besides RMBS, SMFG held bonds issued by GSEs (FNMA, FHLMC and Federal Home Loan Banks) of
¥142.1 billion.
2. Credit ratings are in principle indicated by the lower of S&P ratings and Moody’s ratings. Notation of credit ratings follows the notation system of S&P.
3. The amount of gains on sales related to GSE etc. in the fiscal year ended March 31, 2010 was ¥3.1 billion.
Subordinated Beneficiaries in Securitization of SMBC’s Loans
Receivables of residential mortgage loans
Receivables of loans to corporations
Total
March 31, 2010
March 31, 2009
Balances
¥248.8
7.8
¥256.6
Change from
Mar. 31, 2009
¥(2.0)
0.7
¥(1.3)
Overseas
¥ —
—
¥ —
Sub-prime
related
¥ —
—
¥ —
Reserve for
possible loan
losses
Balances
Overseas
¥ — ¥250.8
7.1
¥257.9
3.0
¥3.0
¥ —
—
¥ —
Sub-prime
related
¥ —
—
¥ —
Reserve for
possible loan
losses
¥ —
1.5
¥1.5
(Billions of yen)
Notes: 1. No subsidiary other than SMBC has those subordinated beneficiaries mentioned above.
2. Reserves do not include general reserve for possible loan losses for normal borrowers.
32
SMFG 2010
2. Transactions with Monoline Insurance Companies
Credit Derivatives (Credit Default Swap [“CDS”]) Transactions with Monoline Insurance Companies
Exposure to CDS transactions with
monoline insurance companies
March 31, 2010
March 31, 2009
March 31, 2010
Net
exposure
Change from
Mar. 31, 2009
Reserve for
possible loan
losses
Net
exposure
Reserve for
possible loan
losses
Amount of
reference
assets
Change from
Mar. 31, 2009
March 31, 2009
Amount of
reference
assets
¥48.5
¥(83.5)
¥13.6
¥132.0
¥5.0
¥503.1
¥(33.6)
¥536.7
(Billions of yen)
Loans and Investments Guaranteed by Monoline Insurance Companies, etc.
Loans and investments guaranteed or
insured by monoline insurance companies
(Billions of yen)
March 31, 2010
March 31, 2009
Exposure
Change from
Mar. 31, 2009
Reserve for
possible loan
losses
Exposure
Reserve for
possible loan
losses
¥9.5
¥(2.8)
¥0.0
¥12.3
¥0.0
Reference: In addition, we had ¥0.7 billion in commitment contracts (fully-drawn) to insurance companies with monoline
insurance as group members.
3. Leveraged Loans
Europe
Japan
United States
Asia (excluding Japan)
Total
(Billions of yen)
March 31, 2010
March 31, 2009
Loans
¥261.1
176.2
113.2
59.6
¥610.1
Change from
Mar. 31, 2009
Undrawn
commitments
Change from
Mar. 31, 2009
¥ (44.9)
(3.7)
(65.8)
(19.2)
¥(133.6)
¥ 28.8
11.8
73.5
9.4
¥123.5
¥ (5.4)
(17.4)
3.5
5.5
¥(13.8)
Reserve for
possible loan
losses
¥ 6.2
12.7
12.2
2.3
¥33.4
Loans
Undrawn
commitments
¥306.0
179.9
179.0
78.8
¥743.7
¥ 34.2
29.2
70.0
3.9
¥137.3
Reserve for
possible loan
losses
¥ 2.8
13.4
4.1
2.3
¥22.6
Notes: 1. Above figures include the amount to be sold of approximately ¥10 billion.
In the fiscal year ended March 31, 2010, we sold leveraged loans of approximately ¥51 billion, and loss on the sale amounted to approximately ¥12
billion.
2. Above figures do not include leveraged loans which are included in underlying assets of “1. Securitized Products.”
3. Reserves do not include general reserve for possible loan losses for normal borrowers.
4. Asset Backed Commercial Paper (ABCP) Programs as Sponsor
March 31, 2010
March 31, 2009
Support for programs
(Billions of yen)
Types of reference assets
Claims on corporations
Claims on financial institutions
Retail loan claims
Other claims
Total
Overseas
Change from
Mar. 31, 2009
Change from
Mar. 31, 2009
Notional
amount of
reference
assets
¥467.8 ¥(192.1) ¥105.1 ¥(107.2)
(2.0)
(12.6)
(0.6)
¥501.3 ¥(207.3) ¥138.6 ¥(122.4)
(2.0)
(12.6)
(0.6)
17.7
15.8
—
17.7
15.8
—
Reserve for
possible
loan losses
Notional
amount of
reference
assets
¥ — ¥659.9
19.7
28.4
0.6
¥ — ¥708.6
—
—
—
Overseas
Reserve for
possible
loan losses
Liquidity
support
Credit
support
¥212.3
19.7
28.4
0.6
¥261.0
¥ — Yes
— Yes
— Yes
— Yes
¥ —
Yes
Yes
Yes
Yes
Note: Reserves do not include general reserve for possible loan losses for normal borrowers.
Reference: In addition, we provide liquidity and credit supports for ABCP programs which are sponsored by other banks.
Total notional amount of reference assets of such programs is approximately ¥52 billion.
5. Others
We have no securities issued by structured investment vehicles.
SMFG 2010 33
Risk Management
Basic Approach
As risks in the financial services increase in diversity and com-
(2) Fundamental Principles and Basic Policies for Risk
Management
plexity, risk management—identifying, measuring, and controlling
SMFG’s Groupwide basic policies for risk management stipulate
risk—has never been more important in the management of a
the fundamental principles for risk management that must be
financial holding company.
followed, and spell out risk management procedures from various
SMFG has encapsulated the basic principles to be employed
perspectives. These include managing risk on a consolidated
in risk management in the manual entitled Regulations on Risk
accounting basis, managing risk using quantification methods,
Management. In the manual, we have specified the basic poli-
ensuring consistency with business strategies, setting up a sys-
cies for risk management: 1) Set forth SMFG’s Groupwide basic
tem of checks and balances, contingency planning for emergen-
policies for risk management after specifying the categories of
cies and serious situations, and verifying preparedness to handle
risk to which these policies apply; 2) Provide all necessary guid-
all conceivable risk situations. In addition, there are specific
ance to Group companies to enable them to follow the basic
operational policies for implementing appropriate management
risk management policies set forth by SMFG and set up their
of risk by all Group companies.
own appropriate risk management systems; and 3) Monitor the
Under SMFG’s Groupwide basic policies for risk manage-
implementation of risk management by all Group companies to
ment, all Group companies periodically carry out reviews of the
ensure that their practices meet the relevant standards.
(1) Types of Risk to Be Managed
At SMFG, we classify risk into the following categories:
(1) credit risk, (2) market risk, (3) liquidity risk and (4) operational
risk (including processing risk and system risk). In addition, we
provide individually tailored guidance to help Group companies
identify categories of risk that need to be addressed. Risk cat-
egories are constantly reviewed, and new categories may be
added in response to changes in the operating environment.
The Corporate Risk Management Department works with the
Corporate Planning Department to comprehensively and sys-
tematically manage all these categories of risk across the entire
Group.
basic management policies for each risk category, or whenever
deemed necessary, thus ensuring that the policies followed at
any time are the most appropriate. The management of SMFG
constantly monitors the conduct of risk management at Group
companies, providing guidance when necessary.
Risk Management System
Top management plays an active role in determining SMFG’s
Groupwide basic policies for risk management. The system
works as follows: The basic policies for risk management are
determined by the Management Committee before being autho-
rized by the Board. The Management Committee, the designated
board members, and the relevant risk management departments
perform risk management according to the basic policies.
■SMFG’s Risk Management System
SMFG
Board of Directors
Corporate Auditors
Management Committee
External Audit
Designated Board Members
Audit Dept.
Corporate Risk
Management
Dept.
Credit Risk
Market Risk
Liquidity Risk
Operational Risk
Corporate-wide
Risk Management
Corporate Planning Dept./
Corporate Risk
Management Dept.
General Affairs Dept.
Processing Risk
IT Planning Dept.
System Risk
34
SMFG 2010
Guidance for
drafting of basic
policies
Monitoring
Report
SMBC
SMFG
Card & Credit
Sumitomo
Mitsui Card
Cedyna
Financial
Sumitomo Mitsui
Finance & Leasing
Japan
Research
Institute
SMBC
Friend
Securities
Board of Directors
Management
Committee
Credit Risk
Management Committee
Market Risk
Management Committee
Corporate Auditors
External Audit
Designated
Board Members
Board Member in Charge of Risk Management Unit
Internal Audit Unit
Credit & Investment
Planning Dept.
Credit Risk
Risk
Manage-
ment Unit
Corporate Risk
Management
Dept.
Market Risk
Liquidity Risk
Settle-
ment
Risk
Operational Risk
Bank-wide
Risk Management
Corporate Planning
Dept./Corporate Risk
Management Dept.
Operations Planning Dept.
Processing Risk
IT Planning Dept.
System Risk
Other Departments
Other Risks
Risk management systems are in place at the individual
Risk Capital-Based Management
Group companies in accordance with SMFG’s Groupwide basic
policies for risk management. For example, at SMBC, specific
departments have been appointed to oversee the handling of
the four risk categories listed above, in addition to risks asso-
ciated with settlement. Each risk category is managed taking
into account the particular characteristics of that category. In
addition, the Risk Management Unit has been established—
independent of the business units—and the risk management
framework has been strengthened by consolidating the functions
for managing major risks—credit, market, liquidity and opera-
tional—into the Risk Management Unit and enhancing our across-
the-board risk monitoring ability. A board member is assigned to
oversee the Risk Management Unit comprising the Corporate
Risk Management Department and Credit & Investment Planning
Department. The Corporate Risk Management Department—the
unit’s planning department—comprehensively and systematically
manages all categories of risk in cooperation with the Corporate
Planning Department. Moreover, the Internal Audit Unit—
independent of all business units—conducts periodic audits to
ensure that the management system is functioning properly.
Furthermore, under our system top management plays an
active role in the approval of basic policies for risk management.
The decision-making process for addressing credit, market, and
liquidity risk at the operating level is strengthened by the Credit
Risk Management Committee and the Market Risk Management
Committee, which are subcommittees of the Management
Committee. The Management Committee is also attended by the
relevant department heads.
■ Risk Management Framework
(1) Framework
In order to maintain a balance between risk and return as well
as ensure the soundness of the Group from an overall perspec-
tive, we employ the risk capital-based management method.
We measure “risk capital” based on value at risk (VaR), etc.
as a uniform basic measure of credit, market, and operational
risk, taking account of the special characteristics of each type
of risk and the business activities of each Group company. We
then allocate capital appropriately and effectively to each unit
to keep total exposure to various risks within the scope of our
resources, i.e., capital. In this framework, risk capital includes
credit concentration risk and interest rate risk in the banking book
which are taken into account under the Second Pillar of Basel II.
In addition, we conduct risk capital-based management activities
on a consolidated basis, including each Group company.
Liquidity risk is managed within the context of cash-flow
plans and funding gap. Other risk categories are managed with
procedures closely attuned to the nature of the risk, as described
in the following paragraphs.
(2) Risk Capital Limit
In the case of credit and market risk, we set maximum risk capital
limits, which indicate the maximum risk that may be taken during
the period, taking account the level of stress stipulated in busi-
ness plans. In addition, for operational risk, we also allocate risk
capital, and, for the Group as a whole, we set total risk capital
allocations within SMFG’s capital. In the case of credit and market
Framework
Risk Category
Credit Risk
Credit risk is the possibility of a loss arising from a credit event, such as deterioration in the financial condition of
a borrower, that causes an asset (including off-balance sheet transactions) to lose value or become worthless.
Market
Risk
Risk
Capital-Based
Management
Banking Risk/Trading Risk
Strategic Equity Investment Risk
Market risk is the possibility that fluctuations in interest rates, foreign exchange rates, stock prices,
or other market prices will change the market value of financial products, leading to a loss.
Other Market-Related Risks
Operational Risk
Processing Risk
System Risk
Operational risk is the possibility of losses arising from inadequate or failed internal
processes, people, and systems or from external events.
Processing risk is the possibility of losses arising from negligent processing by
employees, accidents, or unauthorized activities.
System risk is the possibility of a loss arising from the failure, malfunction, or
unauthorized use of computer systems.
ALM/
Funding Gap
Liquidity Risk
Liquidity risk is the risk that there may be difficulties in raising funds needed for settlements,
as a result of the mismatching of uses of funds and sources of funds or unexpected outflows
of funds, which may make it necessary to raise funds at higher rates than normal levels.
Management
by Risk Type
Other Risks
(Settlement Risk and Others)
—
SMFG 2010 35
risk, risk capital limits are sub-divided into guidelines or ceil-
the corresponding losses on operations can be overwhelming.
ings for each business including VaR and loss limits. Therefore,
The purpose of credit risk management is to keep credit risk
by strictly observing the VaR and loss limits, and other factors,
exposure to a permissible level relative to capital, to maintain
SMFG maintains the soundness of the Group as a whole.
the soundness of Groupwide assets, and to ensure returns com-
Implementation of Basel II
The Basel Capital Accord, an international agreement for ensur-
ing the soundness of banks through adherence to BIS capital
adequacy regulations, was revised in response to the diversifica-
tion of the banking business and the increasing sophistication of
risk management technology. The revised BIS regulations, known
as Basel II, became effective from March 31, 2007 in Japan.
Basel II requires banks to implement internal controls to serve
as the basis for capital calculation, and to strengthen their risk
management framework. It also requires disclosure of information
to encourage market discipline in risk management.
We have been implementing initiatives to strengthen our risk
management framework, taking into account Basel II and other
considerations. We introduced the advanced internal ratings-
based (IRB) approach for credit risk on March 31, 2009, and the
Advanced Measurement Approach (AMA) for operational risk on
March 31, 2008.
Details of the initiatives are provided below, and detailed
information on the capital ratio is provided in the discussion on
Capital Ratio Information appearing in the Financial Section and
Corporate Data.
Credit Risk
1. Basic Approach to Credit Risk Management
(1) Definition of Credit Risk
Credit risk is the possibility of a loss arising from a credit event,
such as deterioration in the financial condition of a borrower, that
causes an asset (including off-balance sheet transactions) to
lose value or become worthless.
Overseas credits also include an element of country risk,
which is closely related to credit risk. This is the risk of loss
caused by changes in foreign exchange, or political or economic
situations.
(2) Fundamental Principles for Credit Risk Management
All Group companies follow the fundamental principles
established by SMFG to assess and manage credit risk on a
Groupwide basis and further raise the level of accuracy and
comprehensiveness of Groupwide credit risk management.
Each Group company must comprehensively manage credit risk
according to the nature of its business, and assess and manage
credit risk of individual loans and credit portfolios quantitatively
and using consistent standards.
Credit risk is the most significant risk to which SMFG is
exposed. Without effective credit risk management, the impact of
36
SMFG 2010
mensurate with risk. This leads to a loan portfolio that achieves
high returns on capital and assets.
(3) Credit Policy
SMBC’s credit policy comprises clearly stated universal and
basic operating concepts, policies, and standards for credit
operations, in accordance with the business mission and rules
of conduct.
SMBC is promoting the understanding of and strict adher-
ence to its credit policy among all its managers and employees.
By conducting risk-sensitive credit management, SMBC aims
to enhance shareholder value and play a key part in society by
providing high-value-added financial services.
2. Credit Risk Management System
At SMBC, the Credit & Investment Planning Department within
the Risk Management Unit is responsible for the comprehensive
management of credit risk. This department drafts and admin-
isters credit policies, the internal rating system, credit authority
guidelines, and credit application guidelines, and manages non-
performing loans (NPLs) and other aspects of credit portfolio
management. The department also cooperates with the
Corporate Risk Management Department in quantifying credit
risk (risk capital and risk-weighted assets) and controls the
bank’s entire credit risk. Further, the Credit Portfolio Management
Department within the Credit & Investment Planning Department
has been strengthening its active portfolio management function
whereby loan securitization and other market transactions are
used to stabilize the portfolio’s credit risk for a more sophisticated
portfolio.
The Corporate Research Department within the Corporate
Services Unit performs research on industries as well as
investigates the business situations of borrower enterprises to
detect early signs of problems or growth potential. The Credit
Administration Department is responsible for handling NPLs of
borrowers classified as potentially bankrupt or lower, and draws
up plans for their workouts, including write-offs, and corporate
rehabilitation. The department closely liaises with the Group
company SMBC Servicer Co., Ltd., which engages in related
services, and works to efficiently reduce the amount of NPLs by
such means as the sell-off of claims.
The credit departments within each business unit conduct
credit risk management along with branches, for loans handled
by their units and manage their units’ portfolios. The credit limits
they use are based on the baseline amounts established for each
grading category, with particular attention paid to evaluating and
managing customers or loans perceived to have particularly high
credit risk.
The Internal Audit Unit, operating independently of the busi-
SMBC has established the Credit Risk Committee, as a con-
ness units, audits asset quality, accuracy of gradings and self-
sultative body, to round out its oversight system for undertaking
assessment, and state of credit risk management, and reports
flexible and efficient control of credit risk, and ensuring the overall
the results directly to the Board of Directors and the Management
soundness of the bank’s loan operations.
Committee.
■ SMBC’s Credit Risk Management System
Board of Directors
Corporate Auditors
Management Committee
External Audit (Auditing Firm)
Risk Management Unit
Corporate Risk Management Dept.
(cid:129)Aggregates risk for comprehensive management
(cid:129)Plans and proposes risk quantification methods
Credit & Investment Planning Dept.
(cid:129)Aggregates credit risk for unified management
(cid:129)Plans and proposes basic credit policies
(cid:129)Drafts, administers, and examines internal rating system
Credit Portfolio Management Dept.
(cid:129)Undertakes active portfolio management
Internal Audit Unit
Internal Audit Dept.
(cid:129)Audits credit risk management
Credit Review Dept.
(cid:129)Audits self-assessments, grading (obligors and facilities), and
effectiveness of write-offs and reserves
Corporate Services Unit
Corporate Research Dept.
(cid:129)Industry trend research
(cid:129)Credit assessment of major industry players
Credit Administration Dept.
(cid:129)Manages problem assets (plans, implements corporate rehabilitation
program, sells off the revitalized company)
Business Units
Consumer Banking Unit
Middle Market Banking Unit
Corporate Banking Unit
International Banking Unit
Investment Banking Unit
Credit
Dept.
Credit Dept.
Credit Dept.
I & II
Credit Dept.
Credit for Individuals
Small and Medium-Sized Enterprises
Large Domestic Corporations
Credit Dept., Americas Div.
Credit Dept., Europe Div.
Asia Credit Dept.
Credit Management Dept.
Overseas Corporations
Structured Finance
Structured Finance Credit Dept.
Domestic Structured Finance
3. Credit Risk Management Methods
(1) Credit Risk Assessment and Quantification
At SMBC, to effectively manage the risk involved in individual
loans as well as the credit portfolio as a whole, we first acknowl-
edge that every loan entails credit risks, assess the credit risk
posed by each borrower and loan using an internal rating system,
and quantify that risk for control purposes.
(a) Internal Rating System
There is an internal rating system for each asset control category
set according to portfolio characteristics. For example, credits
to commercial and industrial (C&I) companies, individuals for
business purposes (domestic only), sovereigns, public-sector
entities, and financial institutions are assigned an “obligor grade,”
which indicates the borrower’s creditworthiness, and/or “facility
grade,” which indicates the collectibility of assets taking into
account transaction conditions such as guarantee/collateral,
and tenor. An obligor grade is determined by first assigning a
financial grade using a financial strength grading model and data
obtained from the obligor’s financial statements. The financial
grade is then adjusted taking into account the actual state of the
obligor’s balance sheet and qualitative factors to derive the obli-
gor grade. In the event that the borrower is domiciled overseas,
internal ratings for credit are made after taking into consideration
country rank, which represents an assessment of the credit qual-
ity of each country, based on its political and economic situation,
as well as its current account balance and external debt. Self-
assessment is the obligor grading process for assigning lower
grades, and the borrower categories used in self-assessment are
consistent with the obligor grade categories.
Obligor grades and facility grades are reviewed once a year,
and, whenever necessary, such as when there are changes in the
credit situation.
There are also grading systems for small and medium-sized
enterprises (SME) loans, loans to individuals, and project finance
and other structured finance tailored according to the risk
SMFG 2010 37
characteristics of these types of assets.
Risk quantification is also executed for purposes such as
The Credit & Investment Planning Department centrally man-
to determine the portfolio’s risk concentration, or to simulate
ages the internal rating systems, and properly designs, operates,
economic movements (stress tests), and the results are used for
supervises, and validates the grading models. It validates the
making optimal decisions across the whole range of business
grading models (including statistical validation) of main assets
operations, including formulating business plans and provid-
following the procedures manual once a year, to ensure their
ing a standard against which individual credit applications are
effectiveness and suitability.
assessed.
(b) Quantification of Credit Risk
Credit risk quantification refers to the process of estimating the
degree of credit risk of a portfolio or individual loan taking into
account not just the obligor’s probability of default (PD), but also
the concentration of risk in a specific customer or industry and
the loss impact of fluctuations in the value of collateral, such as
real estate and securities.
Specifically, first, the PD by grade, loss given default (LGD),
credit quality correlation among obligors, and other parameter
values are estimated using historical data of obligors and facili-
ties stored in a database to calculate the credit risk. Then, based
on these parameters, we run a simulation of simultaneous default
using the Monte Carlo method to calculate our maximum loss
exposure to the estimated amount of the maximum losses that
may be incurred. Based on these quantitative results, we allocate
risk capital.
■SMBC’s Obligor Grading System
Obligor Grade
Domestic
(C&I), etc.
Overseas
(C&I), etc.
Definition
J1
G1
Very high certainty of debt repayment
J2
G2
High certainty of debt repayment
J3
G3
Satisfactory certainty of debt repayment
J4
G4
Debt repayment is likely but this could change in cases of
significant changes in economic trends or business
environment
J5
G5
No problem with debt repayment over the short term, but not
satisfactory over the mid to long term and the situation could
change in cases of significant changes in economic trends or
business environment
J6
G6
Currently no problem with debt repayment, but there are
unstable business and financial factors that could lead to debt
repayment problems
Borrower
Category
Financial Reconstruction
Law Based Disclosure
Category
(Domestic)
Normal
Borrowers
Normal Assets
(2) Framework for Managing Individual Loans
(a) Credit Assessment
At SMBC, credit assessment of corporate loans involves a variety
of financial analyses, including cash flow, to predict an enter-
prise’s capability of loan repayment and its growth prospects.
These quantitative measures, when combined with qualitative
analyses of industrial trends, the enterprise’s R&D capabilities,
the competitiveness of its products or services, and its manage-
ment caliber, result in a comprehensive credit assessment. The
loan application is analyzed in terms of the intended utilization
of the funds and the repayment schedule. Thus, SMBC is able to
arrive at an accurate and fair credit decision based on an objec-
tive examination of all relevant factors.
Increasing the understandability to customers of loan condi-
tions and approval standards for specific borrowing purposes
and loan categories is a part of SMBC’s ongoing review of lend-
ing practices, which includes the revision of loan contract forms
with the chief aim of clarifying lending conditions utilizing financial
covenants.
SMBC is also making steady progress in rationalizing its
credit assessment process. To respond pro-
actively and promptly to customers’ funding
needs—particularly those of SMEs—we employ
a standardized credit risk assessment process
for SMEs that uses a credit-scoring model.
With this process, we are building a regime for
efficiently marketing our Business Select Loan
and other SME loans.
In the field of housing loans for individuals,
we employ a credit assessment model based
on credit data amassed and analyzed by SMBC
over many years. This model enables our loan
officers to efficiently make rational decisions on
housing loan applications, and to reply to the
customers without delay. It also facilitates the
effective management of credit risk, as well as
the flexible setting of interest rates.
J7
G7
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrowers
Requiring Caution
J7R
G7R
(Of which Substandard Borrowers)
Substandard Borrowers
Substandard Loans
We also provide loans to individuals who
J8
G8
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly
likely to go bankrupt
J9
G9
Though not yet legally or formally bankrupt, has serious
business difficulties and rehabilitation is unlikely; thus,
effectively bankrupt
J10
G10
Legally or formally bankrupt
Potentially
Bankrupt
Borrowers
Effectively
Bankrupt
Borrowers
Bankrupt
Borrowers
Doubtful Assets
rent out properties such as apartments. The
Bankrupt and
Quasi-Bankrupt
Assets
loan applications are subjected to a precise
credit risk assessment process utilizing a risk
assessment model that factors in the projected
revenue from the rental business. The process
38
SMFG 2010
is also used to provide advice to such customers on how to
revise their business plans.
(b) Controlling Concentration Risk
Because the concentration of credit risk in an industry or corpo-
rate group has the potential to substantially impair capital, SMBC
(b) Credit Monitoring System
At SMBC, in addition to analyzing loans at the application stage,
implements measures to prevent the excessive concentration of
loans in an industry and to control large exposure to individual
the Credit Monitoring System is utilized to reassess obligor
companies or corporate groups by setting guidelines for maxi-
grades and review self-assessment and credit policies so that
mum loan amounts.
problems can be detected at an early stage, and quick and
To manage country risk, SMBC also has credit limit guidelines
effective action can be taken. The system includes periodic
based on each country’s creditworthiness.
monitoring carried out each time an obligor enterprise discloses
financial results, as well as continuous monitoring performed
(c) Researching Borrowers More Rigorously and Balancing Risk
each time credit conditions change, as indicated in the diagram
and Returns
below.
(3) Framework for Credit Portfolio Management
In addition to managing individual loans, SMBC applies the
following basic policies to the management of the entire credit
portfolio to maintain and improve its soundness and profitability
over the mid to long term.
(a) Risk-Taking within the Scope of Capital
To keep credit risk exposure to a permissible level relative to
capital, SMBC sets credit risk capital limits for internal control
purposes. Under these limits, separate guidelines are issued for
each business unit and marketing unit, such as for real estate
finance, fund investment, and investment in securitization prod-
ucts. Regular monitoring is conducted to make sure that these
guidelines are being followed, thus ensuring appropriate overall
management of credit risk.
Against a backdrop of drastic change in the business environ-
ment, SMBC rigorously researches borrower companies’ actual
conditions. It runs credit operations on the basic principle
of earning returns that are commensurate with the credit risk
involved, and makes every effort to reduce credit and capital
costs as well as general and administrative expenses.
(d) Prevention and Reduction of Non-Performing Loans
On NPLs and potential NPLs, SMBC carries out regular loan
reviews to clarify handling policies and action plans, enabling it
to swiftly implement measures to prevent deterioration of borrow-
ers’ business situations, support business recoveries, collect on
loans, and enhance loan security.
(e) Toward Active Portfolio Management
SMBC makes active use of credit derivatives, loan asset sales,
and other instruments to proactively and flexibly manage its port-
folio to stabilize credit risk.
■SMBC’s Credit Monitoring System
Obligor Information
Processing
Flow of Obligor Grading/Grading Outlook/Credit Policies/Action Plans/Facility Grading Assignment
Registration
of Financial
Statements/
Creation and
Revision of
Corporate
Card
Nonconsoli-
dated
Financial
Grade
Consolidated
Financial
Grade
Effective
Financial
Grade
Flagging
According to
Self-
Assessment
Criteria
Not Flagged
Self-Assessment
Logic
Quantitative
Assessment
Financial
Assessment
Credit Status
Qualitative
Assessment
Flagged
Normal
Borrowers
Borrowers
Requiring
Caution
Potentially
Bankrupt
Borrowers
Effectively
Bankrupt
Borrowers
Bankrupt
Borrowers
Grading Outlook Assessment
Performance
Trends
+
Qualitative
Risk
Factors
Final
Obligor
Grade
(cid:129)Positive
(cid:129)Flat
(cid:129)Negative
Determination of
Credit Policies
Credit Policy Segment
Policy for Handling
Each Individual
Company
Action Plan Formulation
Restructuring
Feasibility
Basic
Approach
Specific
Action Plan
Facility Grading Assignment
SMFG 2010 39
(4) Self-Assessment, Asset Write-Offs and Provisions,
amount deemed uncollectible, referred to as an indirect write-off.
and Disclosure of Problem Assets
Recognition of indirect write-offs is generally known as provision
(a) Self-Assessment
SMBC conducts rigorous self-assessment of asset quality
for the reserve for possible loan losses.
SMBC’s write-off and provision criteria for each self-
using criteria based on the Financial Inspection Manual of the
assessment borrower category are shown in the table below.
Financial Services Agency and the Practical Guideline published
As part of our overall measures to strengthen risk management
by the Japanese Institute of Certified Public Accountants. Self-
throughout the Group, all consolidated subsidiaries use substan-
assessment is the latter stage of the obligor grading process for
tially the same standards as SMBC for write-offs and provisions.
determining the borrower’s ability to fulfill debt obligations, and
the obligor grade criteria are consistent with the categories used
in self-assessment.
At the same time, self-assessment is a preparatory task for
ensuring SMBC’s asset quality and calculating the appropri-
ate level of write-offs and provisions. Each asset is assessed
individually for its security and collectibility. Depending on the
borrower’s current situation, the borrower is assigned to one of
five categories: Normal Borrowers, Borrowers Requiring Caution,
Potentially Bankrupt Borrowers, Effectively Bankrupt Borrowers,
and Bankrupt Borrowers. Based on the borrower’s category,
claims on the borrower are classified into Classification I, II, III,
and IV assets according to their default and impairment risk lev-
els, taking into account such factors as collateral and guarantees.
Self-Assessment
Borrower Categories
Normal Borrowers
Borrowers Requiring Caution
As part of our efforts to bolster risk management throughout the
Potentially Bankrupt Borrowers
Group, our consolidated subsidiaries carry out self-assessment
in substantially the same manner.
Borrower Categories, Defined
Effectively Bankrupt/ Bankrupt
Borrowers
Normal Borrowers
Borrowers with good earnings performances and no significant
financial problems
Borrowers Requiring Caution
Borrowers identified for close monitoring
Potentially Bankrupt Borrowers
Borrowers perceived to have a high risk of falling into
bankruptcy
Effectively Bankrupt Borrowers
Borrowers that may not have legally or formally declared
bankruptcy but are essentially bankrupt
Bankrupt Borrowers
Borrowers that have been legally or formally declared bankrupt
General reserve
Notes
Specific reserve
Standards for Write-Offs and Provisions
The expected loss amount for the next 12 months is calculated
for each grade based on the grade’s historical bankruptcy rate,
and the total amount is recorded as “provision for the general
reserve for possible loan losses.”
These assets are divided into groups according to the level
of default risk. Amounts are recorded as provisions for the
general reserve in proportion to the expected losses based
on the historical bankruptcy rate of each group. The groups
are “claims on Substandard Borrowers” and “claims on other
Borrowers Requiring Caution.” The latter group is further
subdivided according to the borrower’s financial position,
credit situation, and other factors. Further, when cash flows
can be estimated reasonably accurately, the discounted cash
flow (DCF) method is applied mainly to large claims for
calculating the provision amount.
A provision for the specific reserve for possible loan losses is
made for the portion of Classification III assets (calculated for
each borrower) not secured by collateral, guarantee, or other
means. Further, when cash flows can be estimated reasonably
accurately, the DCF method is applied mainly to large claims
for calculating the provision amount.
Classification III asset and Classification IV asset amounts
for each borrower are calculated, and the full amount of
Classification IV assets (deemed to be uncollectible or of no
value) is written off in principle and provision for the specific
reserve is made for the full amount of Classification III assets.
Provisions made in accordance with general inherent default
risk of loans, unrelated to specific individual loans or other
claims
Provisions made for claims that have been found uncollectible
in part or in total (individually evaluated claims)
Asset Classifications, Defined
Classification I
Classification II
Classification III
Assets not classified under Classifications II, III, or IV
Assets perceived to have an above-average risk of
uncollectibility
Assets for which final collection or asset value is very doubtful
and which pose a high risk of incurring a loss
Classification IV
Assets assessed as uncollectible or worthless
(b) Asset Write-Offs and Provisions
In cases where claims have been determined to be uncollectible,
or deemed to be uncollectible, write-offs signify the recognition
of losses on the account books with respect to such claims.
Write-offs can be made either in the form of loss recognition by
offsetting uncollectible amounts against corresponding balance
sheet items, referred to as a direct write-off, or else by recog-
nition of a loan loss provision on a contra-asset account in the
40
SMFG 2010
Discounted Cash Flow Method
SMBC uses the discounted cash flow (DCF) method to cal-
culate the provision amounts for large claims on Substandard
Borrowers and Potentially Bankrupt Borrowers when the cash
flow from repayment of principal and interest received can be
estimated reasonably accurately. SMBC then makes provisions
equivalent to the excess of the book value of the claims over
the said cash inflow discounted by the initial contractual interest
rate or the effective interest rate at the time of origination. One
of the major advantages of the DCF method over conventional
methods of calculating the provision amount is that it enables
effective evaluation of each individual borrower. However, as the
provision amount depends on the future cash flow estimated on
the basis of the borrower’s business reconstruction plan and
the DCF formula input values, such as the discount rate and the
probability of the borrower going into bankruptcy, SMBC makes
every effort to utilize up-to-date and correct data to realize the
most accurate estimates possible.
(c) Disclosure of Problem Assets
Problem assets are loans and other claims of which recovery of
either principal or interest appears doubtful, and are disclosed
in accordance with the Banking Law (in which they are referred
to as “risk-monitored loans”) and the Financial Reconstruction
Law (where they are referred to as “problem assets”). Problem
assets are classified based on the borrower categories assigned
during self-assessment. For detailed information on results of
self-assessments, asset write-offs and provisions, and disclosure
of problem assets at March 31, 2010, please refer to page 162.
4. Market Credit Risk Management
Financial products, such as investments in funds, securitized
products, and credit derivatives, that bear indirect risk arising
from underlying assets such as bonds and loan obligations, are
considered to be exposed to both credit risk from the underlying
assets as well as “market risk” and “liquidity risk” that arise from
their trading as financial products. This is referred to as market
credit risk.
For these types of products, we manage credit risk using the
methods of analysis and assessment in detail of characteristics
of underlying assets, but, for the sake of complete risk manage-
ment, we also apply the methods for management of market and
liquidity risks.
In addition, we have established guidelines based on the
characteristics of these types of risk and appropriately manage
the risk of losses.
Market and Liquidity Risks
1. Basic Approach to Market and Liquidity Risk
Management
(1) Definitions of Market and Liquidity Risks
Market risk is the possibility that fluctuations in interest rates,
foreign exchange rates, stock prices, or other market prices will
change the market value of financial products, leading to a loss.
Liquidity risk is the risk that there may be difficulties in raising
funds needed for settlements, as a result of the mismatching
of uses of funds and sources of funds or unexpected outflows
of funds, which may make it necessary to raise funds at higher
rates than normal levels.
(2) Fundamental Principles for Market and Liquidity
Risk Management
SMFG is working to further enhance the effectiveness of its quan-
titative management of market and liquidity risks across the entire
Group by setting allowable risk limits; ensuring the transparency
of the risk management process; clearly separating front-office,
middle-office and back-office operations; and establishing a
control system of mutual checks and balances.
2. Market and Liquidity Risk Management System
On the basis of SMFG’s Groupwide basic policies for risk
management, SMBC’s Board of Directors authorizes important
matters relating to the management of market and liquidity risks,
such as basic policies and risk limits, which are decided by the
Management Committee. Additionally, at SMBC, the Corporate
Risk Management Department, which is the planning department
of the Risk Management Unit, an independent of the business
units that directly handle market transactions, manages mar-
ket and liquidity risks in an integrated manner. The Corporate
Risk Management Department not only monitors the current
risk situations, but also reports regularly to the Management
Committee and the Board of Directors. Furthermore, SMBC’s
ALM Committee meets on a monthly basis to examine reports on
the state of observance of SMBC’s limits on market and liquidity
risks, and to review and discuss the SMBC’s ALM operation.
To prevent unforeseen processing errors as well as fraudulent
transactions, it is important to establish a system of checks on
the business units (front office). At SMBC, both the processing
■ SMBC’s Market Risk and Liquidity Risk Management
System
Board of Directors
Market
Risk
Manage-
ment
Management Committee
Market Risk Management Committee
ALM Committee
Board Member in Charge of
Risk Management Unit
Policy
Reporting
Liquidity
Risk
Manage-
ment
Corporate
Auditors
External
Audit
(auditing firm)
Internal
Audit Dept.
Back Office
(Back offices of Japan
and overseas branches)
Middle Office
(Corporate Risk Management Dept.)
Inspection and verification
of transactions
Final approval and Management of Model,
new products and risk limits
Managing Depts.
Other market-
related
operations
Market
operations
(Treasury Unit)
Market
operations
(International
Banking Unit)
Market
operations
(Group companies)
Front Office
Front/Middle/Back Offices
SMFG 2010 41
departments (back office) and the administrative departments
the maximum losses that may occur (this is known as the his-
(middle office) conduct the checks. In addition, the Internal Audit
torical simulation method). This internal SMBC model is evaluated
Unit of SMBC periodically performs comprehensive internal
periodically by an independent auditing firm to assess its
audits to verify that the risk management framework is functioning
appropriateness and accuracy.
properly.
3. Market and Liquidity Risk Management Methods
(1) Market Risk Management
SMBC manages market risk by setting maximum limits for VaR
and maximum loss. These limits are set within the “market risk
capital limit” which is determined taking into account the bank’s
shareholders’ equity and other principal indicators of the bank’s
financial position and management resources.
Market risk can be divided into various factors: foreign
exchange rates, interest rates, equity prices and option risks.
SMBC manages each of these risk categories by employing the
VaR method as well as supplemental indicators suitable for man-
aging the risk of each risk factor, such as the BPV.
Please note that, in the case of interest rate fluctuation risk,
the methods for recognizing the dates for maturity of demand
deposits (current accounts and ordinary deposit accounts that
can be withdrawn at any time) and the method for estimating
the time of cancellation prior to maturity of time deposits and
consumer loans differ substantially. At SMBC, the maturity of
demand deposits that are expected to be left with the bank for
a prolonged period is regarded to be five years (2.5 years on
average). The cancellation prior to maturity of time deposits and
consumer loans is estimated based on historical data.
(a) VaR Results
The results of VaR calculations for fiscal 2009 are shown in the
table below. SMBC’s internal VaR model makes use of historical
data to prepare scenarios for market fluctuations and, by con-
ducting simulations of gains and losses, the model estimates
(b) Back-Testing Results
The relationship between the VaR calculated with the model and
the actual profit and loss data is back-tested daily. The back-
testing results for SMBC’s trading accounts for fiscal 2009
are shown at the top of the next page. A data point below the
diagonal line indicates a loss in excess of the predicted VaR for
that day; however, as in fiscal 2008, there were no such excess
losses during fiscal 2009. This demonstrates that the SMBC VaR
model, with a one-sided confidence interval of 99.0%, is suf-
ficiently reliable.
Glossary
1. VaR (Value at risk)
The largest predicted loss that is possible given a fixed
confidence interval. For example, VaR indicates, for a hold-
ing period of one day and a confidence interval of 99.0%,
the maximum loss that may occur as a result of market fluc-
tuations in one day with a probability of 1%.
2. BPV (Basis point value)
The amount of change in assessed value as a result of a
one basis point (0.01%) movement in interest rates.
3. Trading
A market operation for generating profit by taking advan-
tage of short-term fluctuations in market values and differ-
ences in value among markets.
4. Banking
A market operation for generating profit through manage-
ment of interest rates, terms, and other aspects of assets
(loans, bonds, etc.) and liabilities (deposits, etc.).
■VaR Results
June 2009
Sept. 2009
Dec. 2009
Mar. 2010
Maximum
Minimum
Average
SMFG (consolidated)
SMBC (consolidated)
SMBC (nonconsolidated)
Trading Book
Banking Book
Trading Book
Banking Book
Trading Book
Banking Book
(Billions of yen)
2.7
2.0
1.7
1.5
2.8
1.2
1.6
42.2
43.7
33.3
33.8
44.0
31.8
37.7
2.7
2.0
1.7
1.5
2.8
1.2
1.6
40.3
42.1
32.0
32.8
42.4
30.9
36.2
2.3
1.6
1.4
1.2
2.5
0.8
1.3
36.7
38.6
28.4
28.9
39.0
27.1
32.5
Note: VaR for a one-day holding period with a one-sided confidence interval of 99.0% [computed daily using the historical simulation
method (based on four years of historical observations)]. Principal consolidated subsidiaries are included and specific risks for
the trading book are excluded.
42
SMFG 2010
■Back-Testing Results (Trading Book)
SMFG (consolidated)
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
Actual Profit or Loss (¥ billion)
0
0.5
1.0
1.5
2.0
2.5
3.0
VaR (¥ billion)
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
SMBC (consolidated)
Actual Profit or Loss (¥ billion)
0
0.5
1.0
1.5
2.0
2.5
3.0
VaR (¥ billion)
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
SMBC (nonconsolidated)
Actual Profit or Loss (¥ billion)
0
0.5
1.0
1.5
2.0
2.5
3.0
VaR (¥ billion)
(c) Stress Testing
The market occasionally undergoes extreme fluctuations that
exceed projections. To manage market risk, therefore, it is impor-
To minimize the impact of crises on the SMBC’s funding,
SMBC manages highly liquid supplementary funding sources,
whereby SMBC maintains high quality liquid assets, such as
tant to run simulations of unforeseen situations that may occur in
government bonds and has emergency borrowing facilities.
financial markets (stress testing). To prepare for unforeseeable
In addition, for emergency situations, there are contingency
market swings, SMBC performs stress testing on a monthly
plans in place for addressing funding liquidity risk that include
basis based on various scenarios including historical simulations
an action plan with measures for reducing funding gap limits and
which reflect past market fluctuations.
guidelines.
(d) Outlier Framework
In the event the economic value of a bank declines by more than
20% of the sum of Tier I and Tier II capital (“outlier ratio”) as a
result of interest rate shocks, the bank falls into the category of
“outlier bank,” as stipulated under the Second Pillar of Basel II.
As of March 31, 2010, the outlier ratio was around 6%, sub-
stantially below the 20% criterion.
(e) Managing Risk of Stocks Held for Strategic Purposes
The Corporate Risk Management Department establishes limits
on allowable risk for strategic equity investments, and monitors
the observance of those limits in order to control stock price
fluctuation risk.
SMBC has been reducing its strategic equity investments and
the outstanding amount is now significantly below the amount
of Tier I capital, the maximum level permitted under the Act on
Financial Institutions (,etc.)’, Limits for Share, etc. Holdings.
(2) Liquidity Risk Management
At SMBC, liquidity risk is regarded as one of the major risks.
SMBC’s liquidity risk management is based on a framework con-
sisting of setting funding gap limits and guidelines, maintaining
highly liquid supplementary funding sources, and establishing
contingency plans.
So as not to be overly dependent on short-term market-based
funding to cover cash outflows, SMBC sets funding gap limits and
guidelines. The funding gap limits and guidelines are set Bank-
wide and for each region, taking into account cash management
plans, external environment, funding status, characteristics of
local currency and other factors. Additionally, a risk limit is set by
currency as needed to achieve more rigorous management.
■ Decline in Economic Value Based on Outlier Framework
SMBC (consolidated)
SMBC (nonconsolidated)
March 31, 2009 March 31, 2010 March 31, 2009 March 31, 2010
(Billions of yen)
Total
Impact of yen
interest rates
Impact of U.S. dollar
interest rates
Impact of Euro
interest rates
588.4
272.4
202.4
60.4
532.7
396.7
90.3
33.2
561.7
249.3
200.0
60.1
490.8
357.9
88.6
32.8
Percentage of Tier I + Tier II
8.6%
6.1%
8.9%
5.8%
Note: “Decline in economic value” is the decline of present value after interest rate
shocks (1st and 99th percentile of observed interest rate changes using a
1-year holding period and 5 years of observations).
■ Composition, by Industry, of Listed Equity Portfolio
(%)
25
20
15
10
5
0
(March 31, 2010)
SMBC Portfolio
TOPIX
Nikkei Average
T
e
x
t
i
l
e
s
l
P
u
p
/
P
a
p
e
r
C
h
e
m
i
c
a
l
s
M
n
i
i
n
g
C
o
n
s
t
r
u
c
t
i
o
n
F
o
o
d
P
r
o
d
u
c
t
s
S
t
e
e
l
P
h
a
r
m
a
c
e
u
t
i
c
a
l
s
P
e
t
r
o
l
e
u
m
/
C
o
a
l
R
u
b
b
e
r
P
r
o
d
u
c
t
s
G
l
a
s
s
/
M
n
e
r
a
l
s
i
R
e
t
a
i
l
B
a
n
k
i
n
g
W
h
o
l
e
s
a
l
e
M
a
c
h
n
e
r
y
i
M
e
t
a
l
P
r
o
d
u
c
t
s
N
o
n
f
e
r
r
o
u
s
M
e
t
a
l
s
t
O
h
e
r
P
r
o
d
u
c
t
s
E
l
e
c
t
r
i
c
M
a
c
h
i
n
e
r
y
T
r
a
n
s
p
o
r
t
M
a
c
h
i
n
e
r
y
P
r
e
c
i
s
i
o
n
M
a
c
h
i
n
e
r
y
A
i
r
T
r
a
n
s
p
o
r
t
M
a
r
i
n
e
T
r
a
n
s
p
o
r
t
O
v
e
r
l
a
n
d
T
r
a
n
s
p
o
r
t
E
l
e
c
t
r
i
c
i
t
y
/
G
a
s
U
t
i
l
i
t
i
e
s
T
e
l
e
c
o
m
m
u
n
i
c
a
t
i
o
n
s
W
a
r
e
h
o
u
s
i
n
g
/
D
i
s
t
r
i
b
u
t
i
o
n
F
i
s
h
e
r
i
e
s
/
F
a
r
m
n
g
/
F
o
r
e
s
t
r
y
i
S
e
r
v
i
c
e
s
R
e
a
l
E
s
t
a
t
e
I
n
s
u
r
a
n
c
e
t
O
h
e
r
F
i
n
a
n
c
i
a
l
S
e
c
u
r
i
t
i
e
s
/
C
o
m
m
o
d
i
t
y
F
u
t
u
r
e
s
T
r
a
d
i
n
g
SMFG 2010 43
Operational Risk
1. Basic Approach to Operational Risk Management
(1) Definition of Operational Risk
Operational risk is the risk of loss resulting from inadequate or
failed internal processes, people and systems or from external
events. Specifically, Basel II—which, in addition to processing
risk and system risk, also covers legal risk, personnel risk, and
physical asset risk—defines the following seven types of events
that may lead to the risk of loss: (1) internal fraud, (2) external
fraud, (3) employment practices and workplace safety, (4) clients,
products and business practices, (5) damage to physical assets,
(6) business disruption and system failures, and (7) execution,
delivery, and process management.
(2) Fundamental Principles for Operational Risk Management
SMFG and SMBC have drawn up the Regulations on Operational
Risk Management to define the basic rules to be observed in
the conduct of operational risk management across the entire
Group. Under these regulations, SMFG and SMBC have been
working to enhance the operational risk management framework
across the whole Group by establishing an effective system for
identification, assessment, controlling, and monitoring of material
operational risk and a system for executing contingency and
business continuity plans. In view of the inclusion of operational
risk in the framework of the capital adequacy requirements of
Basel II, SMFG has been working on a continuing basis to cre-
ate a more sophisticated quantification model and to enhance
operational risk management throughout the Group.
2. Operational Risk Management System
SMFG has designed and implemented an operational risk
management framework for Groupwide basic policies for risk
management.
At SMBC, the Management Committee makes decisions
on important matters such as basic policies for operational
risk management, and these decisions are authorized by the
SMBC Board of Directors. In addition, SMBC has established its
Operational Risk Management Department, within the Corporate
Risk Management Department as an integrated operational risk
management department. This department works together with
other departments responsible for controlling processing risk and
system risk.
The operational risk management framework is described in
more detail in the later part of this section, but it can be outlined
as follows: operational risk is managed by (1) collecting and
analyzing internal loss data, and (2) comprehensively identifying
risk scenarios in each business process through a regular risk
control assessment to estimate the loss severity and frequency.
Operational risk impact is assessed for each risk scenario. When
high-severity scenarios are identified, each branch/department
establishes a risk mitigation plan and the Operational Risk
Management Department monitors the progress. Furthermore,
operational risk is quantified using the internal loss data and
scenarios, and the results of quantification are used to manage
and reduce operational risk.
The generation of internal loss data, scenarios identified
through risk control assessments, and status of risk mitigation
activities are regularly reported to the director in charge of the
■SMBC’s Operational Risk Management System
Corporate Auditors
External Audit
(Auditing Firm)
Internal Audit Dept.
Auditing of management
and measurement system
Board of Directors
Management Committee
Decision and authorization of important matters related
to operational risk management
Direction
Reporting
Operational Risk Committee
Audit
Board Member in Charge of Risk Management Unit
Direction
Reporting
Corporate Risk Management Dept.
Measurement of
operational risk
Operational Risk Management Dept.
Integrated Operational Risk
Supervisory Dept.
Reporting
Reporting
Internal loss data
Head Office departments
Reporting on operational
risk information,
discussion on measures
for risk mitigation
Feedback of
measurement
results related to
operational risk
and direction for
risk mitigation
Generation of scenarios and development of risk
mitigation actions through risk control assessments
Reflection of internal loss data,
external loss data and BEICFs in scenarios
Consumer
Banking
Middle Market
Banking
Corporate
Banking
Treasury
Investment
Banking
International
Banking
44
SMFG 2010
Operational Risk Management Department. In addition, there
The basic framework of the AMA quantification model of
is the Operational Risk Committee, comprising all relevant units
SMFG and SMBC is outlined in the diagram below. Among the
of the bank, where operational risk information is reported and
four elements, collected internal loss data and the results of
risk mitigation plans are discussed. In this way, we realize a
scenarios analysis through risk control assessment are input
highly effective operational risk management framework. The
directly into the quantification model described later in this
operational risk situation is also reported to the Management
section to calculate required capital and risk-weighted assets
Committee and the Board of Directors on a regular basis, for
(= required capital divided by 8%). In addition, external loss data
review of the basic policies on operational risk management.
and BEICFs are used in verifying the assessment of scenarios,
Moreover, the bank’s independent Internal Audit Department
along with internal loss data, to increase objectivity, accuracy,
conducts periodic audits to ensure that the operational risk man-
and completeness.
agement system is functioning properly.
3. Operational Risk Management Methodology
As previously defined, operational risk covers a wide range of
events, including the risk of losses due to errors in operation,
system failures, and natural disasters. Also, operational risk
events can occur virtually anywhere and everywhere. Thus, it is
essential to check whether material operational risks have been
overlooked, monitor the overall status of risks, and manage/
control them. To this end, it is necessary to be able to quantify
risks using a measurement methodology that can be applied
to all types of operational risk, and to comprehensively and
comparatively capture the status of and changes in potential
operational risks of business processes. Also, from the viewpoint
The specific content and method of collection and use of the
four elements are described below. At present, 21 Group compa-
nies have adopted the AMA, including SMFG and SMBC, and all
Group companies collect and make use of the four elements.
■ Basic Framework of Operational Risk Measurement
of SMFG and SMBC
(1) Internal Loss Data
(2) External Loss Data
Verifi-
cation
of internal control, the measurement methodology used to create
(3) BEICFs
a risk mitigation plan must be such that the implementation of the
plan quantitatively reduces operational risk.
SMFG and SMBC have received an approval from Japan’s
Financial Services Agency for the application of the Advanced
Measurement Approach (AMA), which is the most sophisticated
measurement method out of the three cited methods under Basel
II for measurement of operational risk. SMFG and SMBC have
adopted the AMA for operational risk management and for cal-
culating operational risk-weighted assets. It has been used for
calculating the capital adequacy ratio since March 31, 2008.
When using the AMA, regulations require that the internal
measurement system (hereinafter, the “quantification model”)
must use four data elements (hereinafter, the “four elements”):
namely, internal loss data, external loss data, Business
Environment and Internal Control Factors (BEICFs), and sce-
narios analysis through risk control assessments. In addition,
the operational risk equivalent amount (hereinafter, “required
capital”) calculated under the AMA must cover the maximum loss
comparable to a one-year holding period and a 99.9 percentile
confidence interval.
(4)
Scenario
Analysis through
Risk Control
Assessments
Data
input
(5)
Measurement
Using the
Quantification
Model
(6) Risk Mitigation Initiatives
SMFG 2010 45
(1) Internal Loss Data
Internal loss data are defined as “the information on events in
(4) Scenario Analysis through Risk Control Assessments
Risk control assessment is defined as “risk management method-
which SMFG and SMBC incur losses resulting from the realization
ology to (a) identify material operational risks, and describe them
of operational risk.” At SMFG and SMBC, internal loss data are
in terms of risk scenarios, (b) assess the risks and the effective-
collected for all cases where the gross loss amount is at least
ness of controls, and (c) estimate the frequency and severity of
one yen (the threshold amount), and seven years of internal loss
risk scenarios.” SMFG and SMBC apply this methodology to their
data are directly used in the quantification of required capital for
principal business activities.
operational risk.
(2) External Loss Data
External loss data are defined as “the information on events in
which other banks, etc., incur losses resulting from the realization
of operational risk.” SMFG and other Group companies collect
external loss data where such losses may occur within the Group.
Please note that SMFG and SMBC have compiled external loss
data for more than 7,000 cases over the past nine years, which
are indirectly used in quantifying required capital for operational
risk.
(3) Business Environment and Internal Control Factors
(BEICFs)
BEICFs are defined as “indicators of operational risk profiles of
SMFG and SMBC that reflect underlying business risk factors and
an assessment of the effectiveness of the internal control factors.”
The Group periodically collects data relating to changes in laws
and regulations, changes in internal rules and processes, and
launch of new business and products pertinent to the Group’s
business operations.
■Flowchart for Risk Control Assessment (Example)
The purpose of risk control assessment is to identify material
and potential operational risks pertinent to business processes,
to measure them, and to develop and carry out a risk mitiga-
tion plan to manage the risks. Another purpose of risk control
assessment is to estimate the frequency of low-frequency and
high-severity events for each scenario (which may be difficult to
estimate using internal loss data alone).
During the process of periodic risk control assessment,
operational risks inherent in various business processes are
recognized as “scenarios.” The risk and control conditions
for each scenario are assessed, and the frequency of occur-
rence and amount of losses are estimated based on them. The
assessment process comprises three steps: (i) initial assess-
ment, (ii) Operational Risk Management Department review, and
(iii) final assessment. Through the process, the frequency of
“low-frequency and high-severity” events for each scenario are
estimated in terms of four loss amounts (¥100 million, ¥1 billion,
¥5 billion, and ¥10 billion). Please note that SMFG and SMBC
have identified more than 10,000 risk scenarios for the Group on
a consolidated basis.
As an effective mechanism for mitigating operational risks,
the maximum loss occurring once in 100 years (hereinafter,
(i) Initial Assessment
(ii) Operational Risk Management Department Review
(iii) Final Assessment
Deriving
scenarios
Identify risk patterns
inherent in business
processes and
develop a
comprehensive set of
scenarios
Assessment of
scenarios
Conduct assessment
of risks and controls
by scenario
Estimate the
frequency of losses
for scenarios
Estimate the
frequency of losses
by scenario, taking
account of past
internal loss data
Estimate the severity
of losses
for scenarios
Estimate the severity
of losses by scenario,
taking account of the
amount of
transactions used in
various operations
Assess the magnitude
of scenarios
Verification of
magnitude rating
Calculation
of required
capital
Calculate the
maximum loss once
in 100 years and
assess the magnitude
and classify into five
categories
Estimate the frequency
of the “low-frequency and
high-severity” loss cases
Estimate the frequency
of the “low-frequency
and high-severity”
loss cases that are
difficult to estimate
using internal loss
data alone
Check magnitude
rating empirically
against each risk
scenario
Develop risk
mitigation plans
Develop risk
mitigation plans by
scenario, focusing on
those with higher
magnitude rating
Review
of scenario
assessment
Implementation
of risk mitigation
measures
46
SMFG 2010
“scenario exposure”) is calculated for each scenario derived
Group companies other than those applying the AMA. Then, the
through the risk control assessment, and then a magnitude rating
required capital and risk-weighted assets for SMFG and SMBC
is provided by classifying them into five categories according to
Group are measured by aggregating these figures.
the severity of loss. Risk mitigation plans are developed by the
The outline of the quantification model for SMBC is as follows.
relevant business units for those scenarios with high-severity risk
First, we generate a loss frequency distribution (number of loss
identified through magnitude rating.
incidents over a one-year period) based on the number of histori-
The principal features of this risk control assessment method
cal internal losses. Then, we generate a loss severity distribution
are (1) “objectivity,” which is realized by estimating the frequency
(amount of loss per loss incident) based on internal losses and
of losses based on historical internal loss experience and by esti-
frequency of “low-frequency and high-severity” events obtained
mating the severity of losses based on the transaction amounts
through the risk control assessment.
pertinent to the scenarios, and (2) an appropriate level of “sen-
By using the loss frequency and loss severity distribu-
sitivity,” because changes in the business environment and the
tions, the aggregated loss severity distribution is generated by
implementation of risk mitigation measures can be reflected in
conducting Monte Carlo simulations and by generating various
the frequency and severity of losses by changing the assessment
combinations of loss occurrence and loss amount which are
of risk and control as well as transactions amounts.
simulated by changing these two factors. 99.0% VaR is calcu-
(5) Measurement Using the Quantification Model
SMFG, SMBC, and other Group companies using the AMA
measure the maximum operational loss with a 99.9 percentile
confidence interval and a holding period of one year (hereinafter
referred to as 99.9% VaR) by using the four elements. In addition,
99.9% VaR is measured on an SMFG consolidated basis, SMBC
consolidated basis, and SMBC nonconsolidated basis. The
operational risk is measured for each of seven event types
defined under Basel II, and then, by calculating the simple sum
for all event types, 99.9% VaR is measured for each company
applying the AMA. Meanwhile, the Basic Indicator Approach
(BIA) is applied to estimate maximum operational risk losses for
■Measurement Using the Quantification Model
Distribution of Loss Frequency
lated from the resulting aggregated loss severity distribution.
Finally, we multiply 99.0% VaR by a conversion factor
mentioned later in the section of “Capital Ratio Information” to
compute 99.9% VaR.
This quantification model takes into account not only empiri-
cal internal loss data but also potential risk (scenarios) identified
in the risk control assessment. An important feature of this model
is that it enables us to measure and reflect the “low-frequency
and high severity” events of operational risk. Moreover, by intro-
ducing a conversion factor, it is unnecessary to directly estimate
99.9% VaR, which tends to have a lower accuracy, and stable
estimation results can be obtained by estimating 99.0% VaR
which can be estimated with higher accuracy.
Repeat (e.g., 1 million times)
(
f
r
e
q
u
e
n
c
y
)
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.20
0.15
0.10
0.05
0
0
5
10
15
Number of incidents/year
20
Sampling of the
number of losses
from the distribution
(e.g., 5 incidents)
25
30
0.30
0.25
0.20
0.15
0.10
0.05
0
0
Distribution of Loss Severity
2
4
6
8
10
Loss per incident
Sampling of the amounts
of losses corresponding
to the above number of
losses from the distribution
of losses (e.g., 50, 100, 80,
150, 70)
Calculate aggregated
annual loss amount
(e.g., 450)
Total
Aggregated Loss Distribution
Frequency x Severity
x conversion factor
99.0% 99.9%
Aggregated annual loss amount
(
f
r
e
q
u
e
n
c
y
)
0.4
0.3
0.2
0.1
0
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
SMFG 2010 47
Please note that the accuracy of quantification model outputs
described above is secured through the regular ex ante and ex
post facto verification processes.
(6) Risk Mitigation Initiatives
To mitigate risk using the quantitative results of the AMA, SMFG
and SMBC implement risk mitigation measures to high-severity risk
The breakdown of risk-weighted assets by event type for the
scenarios identified in the previously mentioned magnitude rating.
Group on a consolidated basis, computed with the previously
In addition to the above, the operational risk-weighted assets
described quantification method, is as follows.
■ Breakdown of Consolidated Risk-Weighted Assets
by Event Type
Event Type
(1) Internal fraud
(2) External fraud
(3) Employment practices and workplace safety
(4) Clients, products, and business practices
(5) Damage to physical assets
(6) Business disruption and system failures
(7) Execution, delivery, and process management
Note: Only risk-weighted assets calculated under the AMA.
(March 31, 2010)
Percentage
10%
7%
1%
20%
16%
4%
42%
calculated using the quantification methods are allocated to the
business units of SMBC and other Group companies, as part of
initiatives to mitigate risk for the Group as a whole.
Specifically, (1) at the beginning of each fiscal year, the
operational risk-weighted assets calculated using the internal
loss data and the scenario exposure determined from the risk
control assessment are allocated to each business unit and
Group company, (2) during the fiscal year, each business unit
and Group company work to prevent the realization of opera-
tional risk and improve scenario control by implementing risk
mitigation measures, (3) during the first and second halves of the
fiscal year, the measurements of risk-weighted assets of each
business unit and Group company and an analysis of factors
causing the change from the previous half-year period (including
the frequency and severity of scenario) are fed back to the busi-
ness units and Group companies for revising their plans, and,
(4) finally, at the end of the fiscal year, by comparing the planned
versus actual results, we endeavor to enhance the awareness
of operational risk, improve the effectiveness of operational risk
management, and mitigate operational risk within the Group as a
whole.
■SMFG’s Operational Risk Mitigation Activities on a Semi-Annual Basis
Objectives
Management Process/Roles of Organizational Units
Planning
Implementation
Assessment and Review
Magnitude rating
assignment of risk
scenarios
Mitigation of
high-impact
operational risk
within the Group as
a whole
Preparation of plans for risk
mitigation for high-impact risk
scenarios based on risk control
assessments
Implementation of risk mitigation
measures
Decision to implement plans made by
the Operational Risk Committee
Implementation by the department
responsible for the risk scenario
Plans for operational
risk assets
Autonomous risk
management by
business units
and Group
companies as a
whole
Calculation of planned targets of
each business unit and Group
company under the AMA
Prevention of internal loss occurrence,
and improvements in risk and control
of risk scenarios
Decision to implement related
operating plans of each department
and Group company made by the
Management Committee and other
decision-making and related bodies
Implementation by the responsible
department within each business unit
and Group company
Reassessment of scenarios by taking
account of the implementation of risk
mitigation measures. Review of
scenarios targeted for risk mitigation,
followed by the further development
and implementation of risk mitigation
activities
Decision to implement plans, etc.,
made by the Operational Risk
Committee
Results of measurements and
analysis of changes from the previous
half-year period (including the
frequency and severity of scenario)
are fed back to each business unit
and Group company
Feedback of results from the unit in
overall charge of operational risk,
plus an assessment by the
Management Committee and others
of planned versus actual results at the
end of the period
48
SMFG 2010
4. Processing Risk
Processing risk is the possibility of losses arising from negligent
processing by employees, accidents, or unauthorized activities.
SMFG recognizes that all operations entail processing risk.
We are, therefore, working to raise the level of sophistication of
our management of processing risk across the whole Group by
ensuring that each branch conducts its own regular investiga-
tions of processing risk; minimizing losses in the event of pro-
cessing errors or negligence by drafting exhaustive contingency
plans; and carrying out thorough quantification of the risk under
management.
In the administrative regulations of SMBC, in line with SMFG’s
Groupwide basic policies for risk management, the basic
administrative regulations are defined as “comprehending the
risks and costs of administration and transaction processing, and
managing them accordingly,” and “seeking to raise the quality
of administration to deliver high-quality service to customers.”
Adding new policies or making major revisions to existing ones
for processing risk management requires the approval of both
the Management Committee and the Board of Directors.
Computer-related trouble at financial institutions now has
greater potential to impact society, with system risk diversifying
owing to the IT revolution, the resulting expansion of networks
and the rise in the number of personal computer users. To pre-
vent any computer system breakdowns, we have taken numer-
ous measures, including constant maintenance of our computer
system to ensure steady and uninterrupted operation, duplication
of various systems and infrastructures, and the establishment of
a disaster-prevention system consisting of computer centers in
eastern and western Japan. And to maintain the confidentiality
of customer information and prevent information leaks, sensi-
tive information is encrypted, unauthorized external access is
blocked, and all known countermeasures to secure data are
implemented. There are also contingency plans and training
sessions held as necessary to ensure full preparedness in the
event of an emergency. To maintain security, countermeasures
are revised as new technologies and usage patterns emerge.
Settlement Risk
In the administrative regulations, SMBC has also defined
Settlement risk is the possibility of a loss arising from a trans-
specific rules for processing risk management. The rules
action that cannot be settled as planned. Because this risk
allocate processing risk management tasks among six types
comprises elements of several types of risk, including credit,
of departments: operations planning departments, compliance
liquidity, processing, and system risk, it requires interdisciplinary
departments, operations departments, transaction execution
management.
departments (primarily front-office departments, branches, and
At SMBC, the Operations Planning Department is respon-
branch service offices), internal audit departments, and the cus-
sible for coordinating the management of settlement risk with the
tomer support departments. In addition, there is a specialized
Credit & Investment Planning Department, which oversees credit
group within the Operations Planning Department to strengthen
risk, and the Corporate Risk Management Department, which
administrative procedures throughout the Group.
oversees liquidity risk.
5. System Risk
System risk is the possibility of a loss arising from the failure,
malfunction, or unauthorized use of computer systems.
SMFG recognizes that reliable computer systems are essen-
tial for the effective implementation of management strategy
in view of the IT revolution. We strive to minimize system risk
by drafting regulations and specific management standards,
including a security policy. We also have contingency plans with
the goal of minimizing losses in the event of a system failure.
The development of such a system risk management system
ensures that the Group as a whole is undertaking adequate risk
management.
At SMBC, safety measures are strengthened according to risk
assessment based on the Financial Services Agency’s Financial
Inspection Manual, and the Security Guidelines published by the
Center for Financial Industry Information Systems (FISC).
SMFG 2010 49
Corporate Social Responsibility (CSR)
Key Points of CSR Activities
The key points of our CSR activities are as follows. First of all,
we have created a solid management framework, including
corporate governance, internal auditing, compliance, and risk
management systems. Second, we offer higher added value to
our four major stakeholder groups in the following ways.
(cid:129) We endeavor to develop and prosper with our customers
by offering top-quality, high-value-added products and
services.
(cid:129) We maintain sound management through disclosing appro-
priate information, designing and operating robust internal
control systems, and managing to increase shareholder
value.
(cid:129) We implement initiatives on a continuing and active basis to
contribute to society and preserve the natural environment.
(cid:129) We work to foster a free and active business environment
that emphasizes respect for individuals and allows employ-
ees to realize their full potential.
Finally, we ultimately contribute to the sustainable develop-
ment of society through all these activities.
■ The SMFG CSR Concept
Contributing to the Sustainable Development of Society
Customers
Shareholders
and the Market
The Environment
and Society
Employees
Group CSR Initiatives
High value-added
products and
services
Sound
Management
Social and
community
activities and
environmental
activities
Corporate
culture that respects
the individual
Solid management structure
(corporate governance, internal controls, compliance, risk
management, information disclosure, etc.)
Implementing CSR Activities and
Business Growth Strategies in Tandem
SMFG and the Group companies position CSR activities as the
basis for the effective implementation of business growth strate-
gies and conduct these activities in tandem with their strategies
to attain management objectives.
The proper conduct of CSR activities is clearly an integral
part of “management itself,” and commitment to serious
implementation of CSR initiatives is the shortest path to reaching
management objectives.
Contributing to
the Sustainable Development of Society
SMFG’s goal is to earn the highest trust of society by meeting
the public’s expectations and fulfilling its social responsibilities.
Earning the highest level of trust requires the balanced provision
of value to our four constituencies: customers, shareholders
and the market, the environment and society, and employees.
Through this process, we aim to contribute to the sustainable
development of society as a whole, and to fulfill our corporate
social responsibility.
Basic CSR Policies
As a basis for implementing its CSR activities, SMFG has
formulated a definition of CSR and a set of business ethics that
articulate its basic principles for the Group.
SMFG’s Definition of CSR
In the conduct of its business activities, SMFG fulfills its social responsibilities
by contributing to the sustainable development of society as a whole through
offering higher added value to (i) customers, (ii) shareholders and the market,
(iii) the environment and society, and (iv) employees.
Common SMFG CSR Philosophy: Business Ethics
I. Satisfactory Customer Services
We intend to be a financial services group that has the complete trust and
support of our customers. For this purpose, we will always provide services
that meet the true needs of our customers to assure their satisfaction and
earn confidence in the Group.
II. Sound Management
We intend to be a financial services group that maintains fair, transparent,
and sound management based on the principle of self-responsibility. For
this purpose, along with earning the firm confidence of our shareholders,
our customers, and the general public, we take a long-term view of our
business and operate it efficiently, and actively disclose accurate business
information about the Group. Through these activities, we work to maintain
continued growth based on a sound financial position.
III. Contributing to Social Development
We intend to be a financial services group that contributes to the healthy
development of society. For this purpose, we recognize the importance of
our mission to serve as a crucial part of the public infrastructure and also
our social responsibilities. With such recognition, we undertake business
operations that contribute to the steady development of Japan and the rest
of the world, and endeavor, as a good corporate citizen, to make a positive
contribution to society.
IV. Free and Active Business Environment
We intend to be a financial services group for which all officers and
employees work with pride and commitment. For this purpose, we respect
people and develop employees with extensive professional knowledge and
capabilities, thereby creating a free and active business environment.
V. Compliance
We intend to be a financial services group that always keeps in mind the
importance of compliance. For this purpose, we reflect our awareness
of Business Ethics in our business activities at all times. In addition, we
respond promptly to directives from auditors and inspectors. Through
these actions, we observe all laws and regulations, and uphold moral
standards in our business practices.
50
SMFG 2010
Initiatives for Enhancing Customer Satisfaction (CS) and Quality
Working closely with Group companies, SMFG is taking initiatives to enhance customer satisfaction and the quality of Group services and
products. SMFG calls meetings of its Group Customer Satisfaction Committee periodically to review reports based on analyses of the
Voice of the Customers (VOC) and discuss measures to increase customer satisfaction.
At SMBC, we created the Quality Management Department
in April 2006, with the aim of drawing fully on VOC to make
improvements in the bank’s business and management. The
Quality Management Department is primarily responsible for
analyzing the VOC data. Reports of this department are then dis-
cussed by the CS and Quality Improvement Committee, whose
members include the chairman and directors who are members
of the bank’s Management Committee, and these reports are
used proactively to enhance the satisfaction of our customers
and the quality of our services.
In parallel with these activities, we are undertaking a wide
range of initiatives for improving customer satisfaction and
quality. These include conducting questionnaire surveys to obtain
the opinions of a broader range of customers by interviewing
them at our branches and offices and via mail. Also, to provide
services that will meet with greater customer satisfaction, we are
conducting related training and educational programs.
VOC Database
We have also created a VOC database, a record of the opinions
that our customers have expressed, principally at our branches,
and are working to make this database widely available within the
bank. In addition, the data is analyzed and used by the Quality
Management Department to provide guidance to our branches
and to make improvement proposals to the Head Office
departments so they can establish bankwide CS enhancement
measures.
The Head Office departments also analyze the VOC data
themselves and employ the results to make improvements in
products and services.
CS and Quality Improvement Committee
CS and Quality Improvement Committee, which is chaired by
the president of SMBC, meets periodically to hear reports on the
specific opinions that customers have expressed and to review
the fluctuations in the number of opinions expressed from month
to month. The committee also receives reports on the results of
analyses of VOC and proposals for improvements, and members
of management represented on the committee listen to these
reports and consider appropriate courses of action.
In addition, to instill the awareness of making our activities
more customer centric, we prepare documents containing points
based on specific examples and distribute these throughout
the bank. We also arrange for study meetings and implement
other measures, and the content of these activities is reported to
members of management for their consideration.
Moreover, to enhance customer satisfaction and the quality of
our products and services from a broader point of view, we invite
specialists familiar with these and related areas to provide their
advice.
■ Activities to Obtain and Act on Voice of the Customers
Guidance and measures
Directives
Related
departments
Opinions
Analysis
Reports
Customers
Branches
and
other offices
Inputs
VOC Database
Suggestions
for improvement
Response
Analysis/
management
Guidance and measures
Quality
Management
Dept.
Directives
Reports
Management
Committee
CS and
Quality
Improvement
Committee,
etc.
SMFG 2010 51
Corporate Governance
Our Stance on Corporate Governance
SMFG and its Group companies follow the SMFG management
philosophy as a universal guide for Group management and
position this philosophy as the anchor for corporate action. To
three major Group companies, namely, SMFG Card & Credit,
Inc., Sumitomo Mitsui Finance and Leasing Co., Ltd., and The
Japan Research Institute, Limited, the SMFG director in charge
of each of these subsidiaries serves as a director (and can be an
implement the ideas contained in our Group philosophy, we
outside director) of these companies.
believe one of the issues with highest priority is strengthening
and improving our corporate governance system.
The SMFG Corporate Governance System
SMFG employs the “corporate auditor” governance model in
which statutory auditors oversee the execution of business by
Furthermore, to maintain the soundness of management,
SMFG has established internal control systems to ensure the
proper conduct of company operations following the Japanese
Company Law. Designing and implementing an internal control
system, to strengthen management systems, is regarded as a
major issue, and initiatives are under way to enhance such inter-
the directors. At SMFG, we have six corporate auditors, three of
nal control systems.
whom are outside auditors. The auditors monitor the execution of
business operations of SMFG and its subsidiaries by attending
meetings of the Board of Directors and listen to reports on opera-
tions from the directors and others. They also examine docu-
ments relating to important decisions and receive reports from
the internal audit departments, representatives of subsidiaries of
SMFG, and the CPAs.
The chairman of SMFG serves as the chairman of the Board
of Directors of SMFG. This separates the role of the president,
whose responsibility is the overall supervision of business
The SMBC Corporate Governance System
SMBC employs the corporate auditor governance model. Of the
six statutory auditors appointed, three are from outside the bank.
To ensure sound and transparent management, SMBC separates
the two functions of management decision-making at the opera-
tional level and the overall supervision of the conduct of duties by
the management of the bank. For this purpose, the bank employs
a system under which executive officers are responsible for
operational duties, while the supervisory functions are performed
activities of SMFG and other Group companies, from the role of
principally by the Board.
supervising management. To enhance the effectiveness of the
Board, we have appointed outside directors and formed four
governance committees: namely, the Auditing Committee, the
Risk Management Committee, the Compensation Committee,
and the Nominating Committee. Outside directors have been
appointed to all four of these committees to provide for corpo-
rate governance from an objective perspective. As the need
for objectivity is particularly acute in the case of the Auditing
Committee and the Compensation Committee, outside directors
The chairman of the bank serves as the chairman of the
Board of Directors, and, to clearly separate his functions from
those of the president of the bank, who is responsible for the
overall supervision of the bank’s activities, the chairman does
not simultaneously serve as an executive officer and is primar-
ily responsible for supervising management’s execution of their
duties. As at SMFG and to ensure a robust supervisory func-
tion, outside directors are appointed to the Board of Directors.
At SMBC, three outside directors currently serve on the Board,
serve as the chairmen of these committees. To ensure that the
which has a total membership of sixteen.
execution of the Group’s business operations is in conformity
both with legal regulations and generally accepted practices, the
outside directors have been selected from among the ranks of
specialists (including CPAs, lawyers, and consultants).
SMFG has created the Management Committee to serve as
the top decision-making body, and it is under the direct super-
vision of the Board of Directors and chaired by the president
of SMFG. This committee is composed of directors chosen by
the president. Its role is to consider important matters related to
the execution of business and to make decisions for or against
the execution of matters in accord with the basic policies of the
Board of Directors. SMFG also has a Group Strategy Committee
that serves as a forum for the top managers of SMFG and all
other Group companies to exchange opinions and information
on their respective business plans. To enable SMFG to monitor
the execution of day-to-day business operations at SMBC, 10
Executive officers are appointed by the Board to manage
the operation of SMBC’s businesses. As of June 30, 2010, SMBC
has 72 executive officers, including the president, and 12 serve
concurrently as directors. The Management Committee of SMBC
is the highest decision-making body at the operational level and
is under the direct supervision of the Board of Directors. The
president chairs this committee and selects its members from
the executive officers. The committee members consider impor-
tant management issues based on policies set by the Board of
Directors, and the president has the authority to make the final
decision after considering the committee’s recommendations.
The president designates certain members of
the
Management Committee to be Authorized Management
Committee members in charge of particular Head Office depart-
ments or units. All of these designated individuals are in charge
of implementing the directives of the Management Committee
SMFG directors (including three outside directors) of the total of
within the businesses they oversee.
11 SMFG directors (including three outside directors) also serve
as directors of SMBC. To monitor the conduct of operations at
52
SMFG 2010
Internal Audit System
An Outline of the Group’s Internal Audit System
In addition to the SMFG Auditing Committee, which functions
as a governance committee reporting to the Board of Directors,
we have established the Internal Auditing Committee, which is a
part of the Management Committee, to give a higher profile to the
internal auditing functions and facilitate effective conduct of inter-
nal audits. The Internal Auditing Committee meets every quarter,
domestic and overseas branches - and SMBC group companies.
Auditing of operations of head office departments is conducted
by assessing the appropriateness of all internal control systems
of each department. In addition, audits of head office depart-
ments focus on material issues that arise in the management of
specific operations and categories of risk. These auditing activi-
ties emphasize the verification of “Targeted Audit Items” across
and its members discuss important matters related to internal
the whole of the bank’s organization.
auditing based on reports prepared by the departments respon-
sible for internal audits. There is also the Audit Department, which
is an internal auditing unit that is independent of the operational
departments of the Group.
The Audit Department conducts internal audits of the opera-
tions of all the Group’s units and departments to contribute to
optimal management and ensure the proper conduct of the
Group’s operations and the soundness of its assets. These audits
also have the function of verifying that the Group’s internal control
systems, including compliance and risk management, are oper-
ating appropriately and effectively. The Audit Department is also
responsible for the overall supervision of the internal audit sys-
tems of Group companies. It monitors the appropriateness and
effectiveness of the internal audit systems at Group companies
by verifying past data related to internal auditing and monitoring
activities, which include inspections and other activities based on
actual samples, and, when deemed necessary, by conducting
audits. Based on these activities, the Audit Department provides
recommendations and guidance to the business units and
departments as well as Group companies.
At SMBC, we have formed auditing departments that are
independent of bank units involved in marketing and other busi-
ness activities. Within the Internal Audit Unit of SMBC, we have
formed two departments: the Internal Audit Department and the
Credit Review Department. As at SMFG, SMBC has an Internal
Auditing Committee which is a part of its Management Committee
and responsible for examining and conducting deliberations on
reports on important matters submitted by the Internal Audit Unit.
The Internal Audit Unit is responsible for auditing compliance
and risk management at SMBC - its head office departments,
Moreover, audits of branches and offices are not limited just
to checking for control and other deficiencies but also include
pointing out compliance and risk management problems and
making recommendations for corrective action. In other Group
companies, internal audit departments have been formed suited
to the respective nature of each company’s lines of business.
Initiatives to Enhance the Sophistication and
Efficiency of Internal Auditing
The Audit Department has adopted methods following the stan-
dards of the Institute of Internal Auditors (IIA)*, an international
organization. The Audit Department conducts risk-based audits
and works to apply best practices to Group companies.
To fulfill effectively its role as the department in overall charge
of internal auditing, the Audit Department is constantly endeavor-
ing to advance the professional skills of personnel engaged in
internal auditing. Activities include collecting the latest informa-
tion on internal auditing from inside and outside Japan and dis-
seminating it to all Group companies. Also, the Audit Department
organizes training courses, led by outside experts, for the staff of
Group companies and encourages them to obtain international
qualifications to enhance their professional knowledge and skills in
internal auditing. To improve further the effectiveness of auditing,
we also take active measures on a Groupwide basis to assess the
quality of our internal auditing in the light of IIA standards.
* The Institute of Internal Auditors (IIA) was founded in 1941 in the United States as an
organization dedicated to helping raise the level of specialization and professionalism
of internal auditing staff. In addition to conducting theoretical and practical research on
internal auditing, the IIA administers examinations for Certified Internal Auditor (CIA),
which is the internationally recognized qualification in this field.
SMFG
Shareholders’ Meeting
Nominating
Committee
Board of Directors
Risk Management
Compensation
Committee
Committee
Auditing
Committee
Corporate Auditors/
Board of Corporate Auditors
Office of Corporate Auditors
SMBC
Shareholders’ Meeting
Board of Directors
Management Committee
Internal Auditing Committee
Corporate Auditors/
Board of Corporate Auditors
Office of Corporate Auditors
Group Strategy
Committee
Management Committee
Internal Auditing Committee
Business units subject
to auditing
Business units subject to auditing
All Departments
Internal
Audits
Audit
Department
Head Office/Business Units
Internal
Audits
Internal Audit Unit
Internal Audit Department
Credit Review Department
M
o
n
i
t
o
r
i
n
g
Auditing
SMFG 2010 53
Compliance
Compliance Systems at SMFG
Basic Compliance Policies
As a financial services group offering a multiplicity of products
and services, SMFG is intensifying its efforts to maintain high
Hotline for Reporting Improper Accounting and
Auditing Activities
SMFG has established the SMFG Accounting and Auditing
standards of compliance to carry out its mission as an impor-
Hotline to provide a channel for individuals within and outside
tant part of the nation’s public infrastructure and fulfill its social
the Group to report improper activities. This hotline enables
responsibilities. Through these efforts, SMFG is becoming a truly
us to quickly identify and take action against fraud and other
outstanding global corporate group.
misconduct involving accounting and auditing at SMFG and its
At SMFG, we have positioned compliance as one of the
consolidated subsidiaries.
principal supports of our Business Ethics (please refer to page
50), which serve as the basic principles for fulfilling our corporate
social responsibility (CSR). Accordingly, we regard strengthening
our compliance systems as one of our top management priorities.
Group Management from a Compliance
Perspective
As a financial holding company, SMFG seeks to maintain and
enhance systems for providing appropriate direction, guidance,
and monitoring for the compliance and related systems of Group
companies to ensure the sound and proper conduct of business
activities throughout the entire Group.
Specific activities include holding regular meetings that
are attended by representatives of Group companies, as well
as meetings with individual companies, with the objective of
overseeing the state of autonomously implemented compliance
functions at those companies. The priority areas for strengthen-
ing oversight in fiscal 2010 include (a) guidance and oversight
of Group companies to deal with a changing regulatory envi-
ronment, and (b) creation of an internal management structure
appropriate for a comprehensive financial services group. These
measures will enable us to strengthen compliance management
at the individual Group company level.
Reports can be submitted by post or e-mail as follows.
Post
SMFG Accounting and Auditing Hotline
Iwata Godo Attorneys and Counsellors at Law
10th floor, Marunouchi Building
2-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-6310
e-mail
smfghotline@iwatagodo.com
* The hotline accepts alerts of improper activities concerning account-
ing and auditing at SMFG and its consolidated subsidiaries.
* Anonymous reports are accepted, but, if possible, please provide
personal information such as your name and contact number.
* Please provide as much detail as you can regarding the activities.
An investigation may not be possible if the description is too vague.
* Personal information will not be disclosed to a third party without
your consent, or unless required by law.
Sumitomo Mitsui Financial Group, Inc.
Audit
Report
Corporate Auditors
Audit Dept.
Group Business
Management
Dept.
Board of Directors
Management Committee
Directions
Report
General Affairs Dept.
Audit/Monitoring
Group Company
Audit/Monitoring
Group Company
Compliance System
Oversight and
Guidelines
Report
Departments and Offices
General Manager responsible for compliance
Compliance Officers to assist General Managers
Management Report
Compliance Committee
Group Companies
SMBC, SMFG Card & Credit*, Sumitomo Mitsui Finance and Leasing, JRI, and SMBC Friend Securities
* SMFG Card & Credit, Inc. is an intermediary holding company for Sumitomo Mitsui Card and Cedyna.
54
SMFG 2010
Compliance at SMBC
Strengthening Compliance Systems
Compliance with laws, regulations, and other social standards
Issuance of a Compliance Manual
To assist management and staff in choosing proper courses of
is a basic requirement for corporations in general. Especially for
action, SMBC has prepared its Compliance Manual containing 60
banks, compliance is a particularly important issue because of
principles for action that provide objectives and guidance. This
their public mission and social responsibilities as key players in
manual has been approved by the Board of Directors, and all
the financial system and socioeconomic infrastructure.
SMBC, in line with the basic policy of SMFG, requires all its
management and staff to assign the highest value to maintaining
management and staff have been fully apprised of its contents.
Preparation of Compliance Programs
With the objectives of ensuring that compliance systems function
people’s trust, abiding by relevant laws and regulations, uphold-
effectively and making necessary improvements in compliance
ing high ethical standards, and acting fairly and sincerely. SMBC,
systems within SMBC and its consolidated subsidiaries, the
therefore, positions maintenance of high standards of compli-
Board of Directors prepares a specific plan for compliance-
ance as one of its most important management priorities, and
related activities each fiscal year, including review of and
is committed to always abiding by the Banking Law, Financial
necessary revisions to regulations and training. In fiscal 2010,
Instruments and Exchange Act and other legislation and taking
measures focusing on better adapting our compliance posture
preventive measures against financial activities of anti-social
to social change are being implemented, including a review of
forces.
our marketing practices for derivative and other products which
entail risk, creating more effective mechanisms for resolving
Management of the Compliance System
SMBC adopts a basic, two-tiered structure to ensure compliance.
complaints and conflict in anticipation of establishment of a new
Japanese financial-sector ADR (Alternative Dispute Resolution)
First, each department and office is held individually responsible
mechanism, further measures to facilitate financing to SMEs and
for making before the fact decisions that ensure its conduct com-
mortgage borrowers, and taking further preventive measures
plies with laws and regulations. Second, an independent, Internal
Audit Unit conducts rigorous audits of department and branch
compliance.
against financial activities of anti-social forces.
Appointment of Compliance Officers
In addition to the compliance officers appointed within the bank’s
To maintain this two-tiered structure and ensure it is operat-
departments and branches, we have appointed Area Compliance
ing effectively, the Compliance Unit, which includes the General
Officers, who are independent from frontline departments,
Affairs Department and the Legal Department, plans and imple-
within certain of our business units including the Middle Market
ments systems and system improvements to secure compliance,
Banking Unit and the Consumer Banking Unit. These officers are
acting under directions from management. The Compliance
responsible for directing and overseeing compliance regarding
Unit also provides guidance and conducts monitoring activities
transactions carried out by the staff of our branches and other
regarding the activities of all departments and branches, and
assists departments and branches make compliance decisions.
The framework of SMBC’s compliance system is shown in
frontline offices.
Formation of the Compliance Committee
To ensure that compliance issues related to various operations
the diagram at the bottom of this page. To ensure that this frame-
within the bank are reviewed and discussed comprehensively,
work functions effectively, SMBC also engages in the activities
we have formed the Compliance Committee, which has members
described in the following paragraphs.
■Compliance System Overview
Board of Directors, Management Committee
Directions
Report
Compliance Unit
General Affairs Dept.
(overall control), Legal Dept.
Directions,
Monitoring and
Legal Support
Discuss
Compliance
Committee
Report
and
Discuss
drawn from across the organization. This committee is chaired
by the director responsible for compliance issues and includes
the heads of relevant departments. To enhance the fairness and
objectivity of the committee’s deliberations, outside members
also participate in the Compliance Committee meetings.
Audit
Corporate
Auditors
Head Office Departments
Directions
General
Managers
Area Compliance Officers
Front-Line Offices
(Corporate Business Offices, Branches)
General Managers
Compliance Officers
Compliance Officers
Report
Audit
Internal
Audit
Dept.
SMFG 2010 55
Environmental Preservation Initiatives
The Group recognizes environmental preservation to be one of its most important management issues. Based
on our Group Environmental Policy, we are implementing initiatives to preserve and achieve harmony with the
natural environment in our corporate activities. SMFG is a signatory to the “Statement by Financial Institutions on
the Environment and Sustainable Development” of the United Nations Environment Programme (UNEP).
The Group Environmental Policy
Basic Concepts
Recognizing the importance of realizing a sustainable society, SMFG is making continuous efforts to harmonize environmental preserva-
tion and corporate activities, in order to support the economy and contribute to the general well-being of society as a whole.
Specific Environmental Policies
(cid:129) We provide environment-friendly financial products, information, and solutions that help our customers in their efforts to preserve the
eco-system.
(cid:129) We devise ways to reduce levels of environmental risk posed by our own activities and those of society at large.
(cid:129) We are determined to fulfill our social responsibilities through the conservation of resources, energy saving, and the reduction of
waste.
(cid:129) We enforce a policy of strict adherence to environment-related laws and regulations.
(cid:129) We practice a high level of disclosure of information relating to the Group’s environmental activities, and make ceaseless efforts to
improve our contribution to environmental preservation, incorporating the views of our staff and concerned persons from outside the
Group.
(cid:129) We place a high priority on thoroughly educating our staff in our environmental principles, and in ensuring that they conform to these
principles in the performance of their work.
(cid:129) We actively and effectively conduct environmentally aware management, and make continuous efforts to improve our system for tack-
ling environmental issues, including by setting targets for each business term and reviewing them when deemed advisable.
(cid:129) These policies are published on the Group’s website, and are also available in printed form upon request.
Three Pillars of Group’s Activities
The three pillars of our environmental action plan are to
“reduce environmental impact,” “manage environmental
risk,” and “promote environmental businesses.” We set
environmental objectives for various activities and follow
the PDCA (plan, do, check, and act) cycle in these envi-
ronmental activities. SMFG and principal Group companies
have obtained ISO 14001 certification, the international
standard for environmental management systems (EMS).
EMS Enhancement System
Environmental Action Plan and the PDCA Cycle
The Group Environmental
Policy
Implementation of
environmental initiatives
Reduce environmental
impact
Manage environmental risk
Promote environmental
businesses
PLAN
DO
CHECK
ACT
SMFG
Officer in charge of environment:
Officer responsible for environment management: GM of Group CSR Dept., Corporate Planning Dept.
ISO 14001 Secretariat:
Officer in charge of Corporate Planning Dept.
Group CSR Dept., Corporate Planning Dept.
SMFG Card & Credit
SMBC
Nikko Cordial Securities
Sumitomo Mitsui Card
Sumitomo Mitsui
Finance and Leasing
SMBC Friend Securities
Japan Research Institute
Corporate Planning Dept.
Communications Dept.
Corporate Planning Dept.
Corporate Planning Dept.
General Affairs Dept.
Operational Section
56
SMFG 2010
Reducing Environmental Impact
(cid:129) Realizing Carbon Neutrality
SMFG sets objectives each year for reduction in its use of electric
determining, assessing and managing social and environmental
risk in project financing. Its Environment Analysis Department
assesses the social and environmental risk of large-scale projects
power and other sources of energy and is actively engaged in
in accordance with the Equator Principles.
reaching these energy conservation goals.
SMBC has made its Head Office “carbon neutral” through
the procurement of “green” sources of energy and purchases of
carbon credits.* Sumitomo Mitsui Finance and Leasing’s Tokyo
Head Office is also carbon neutral.
■ Flow Chart of SMBC’s Social and Environmental
Risk Assessment
Project Information
Screening
t
n
e
m
* Carbon credits are also referred to as “Kyoto credits,” “emission allow-
ances,” and “Certified Emission Reductions (CER).” In this annual report,
we use “carbon credits” to refer to these and the other concepts recog-
nized under the Kyoto Protocol.
(cid:129) Response to Amended Act on the Rational Use of Energy
In April 2010, the amendments to the Act on the Rational Use
of Energy came into effect, and as a result, the standard unit
for evaluation of energy management was changed from the
individual factory or office building to the entire company.
Companies using 1,500kl or more of energy (crude oil equivalent)
per annum are now required to establish an energy consumption
s
r
e
m
o
t
s
u
C
Covenants Compliance
Environmental Monitoring
s
e
h
c
n
a
r
B
g
n
d
n
e
L
i
Environmental Review
Environmental Monitoring
Social and Environmental
Risk Assessment
Credit Departments
t
r
a
p
e
D
s
s
y
a
n
A
l
i
t
n
e
m
n
o
r
i
v
n
E
management system and draw up medium- to long-term plans for
improving energy efficiency, with the aim of reducing the volume
Promoting Environmental Businesses
The Group pursues environmental business as an effective way
of energy consumed by at least 1% per year. In response, the
of contributing to society and the international community.
Group is taking measures to reduce energy consumption at all
SMBC, in particular, formed the cross-organizational Eco-
workplaces, and is also developing a consultancy business to
Biz Promotion Council in fiscal 2005 to discuss periodically the
meet the needs of customers attempting to conserve energy and
reduce CO2 emissions.
development of sophisticated and efficient products and services
that contribute to environmental maintenance and improvement.
(cid:129) Greening Bank Operations
SMBC has been steadily applying green IT to its branch terminals
and ATMs. The new CUTE terminal for handling over-the-counter
transactions, which was jointly developed with NEC Corporation
Topics
and Oki Electric Industry Co., Ltd., uses highly functional image
processing to electronically store documents, mainly copies of
driver’s license and other forms of IDs, for a reduction in paper
usage of 3 million A4 sheets per year. SMBC donated part of the
cost savings resulting from the introduction of this system to the
Tokyo Metropolitan Government’s Green Tokyo Fund, specifically
for the “Creating Umi-no-Mori (Sea Forest)” project, one of the
fund’s four greening projects.
In April 2010, SMBC began storing ATM transaction data,
which had hitherto been printed out on paper (the “ATM Journal”),
in the CUTE operations processing server. This is expected to
save 28 million A4 sheets annually.
Managing Environmental Risk
(cid:129) Dealing with Soil Contamination and Asbestos Risk
To deal with the risk that land pledged as collateral by borrowers
may be contaminated, SMBC requires contamination risk assess-
ment for land meeting certain criteria. When the risk is judged to
be high, the assessed value of the potential risk is deducted from
the value of the collateral.
In addition, similar measures are taken regarding asbestos
risk — risk assessments are conducted for asset collateral meet-
ing certain criteria, and the assessed value of the potential risk is
deducted from the value of the collateral. SMBC also encourages
its customers to have structures surveyed more comprehensively
for asbestos pollution. Regarding its own premises, SMBC sur-
veys and properly removes asbestos from structures.
(cid:129) Adoption of the “Equator Principles”
SMBC has adopted the Equator Principles, a set of principles for
l SMBC Environmental Assessment Loan/Private
Placement Bond
SMBC wins 2009 Nikkei Veritas Superiority Award
SMBC received the Nikkei Veritas Award for Superiority at
the 2009 Nikkei Superior Products and Services Awards for
its SMBC Environmental Assessment Loan/Private Placement
Bond, a financial product developed in collaboration with the
Japan Research Institute. In this product, the environmental
friendliness of the business operations of a corporate customer
seeking to raise funds is assessed using JRI’s own assess-
ment standards. The terms and conditions of the loan or bond
are then set in accordance with the results of the assessment.
SMBC has received high praise for
this product, which aims to support
companies that are helping to pre-
serve the global environment.
l New Bank Branch Terminal
— CUTE
Receives Special Award in Green IT AWARD 2009
The new CUTE terminal used in our branches, jointly devel-
oped by SMBC with NEC Corporation and Oki Electric Industry
Co., Ltd., received a special award at the Green IT AWARD
2009, held by the Green IT Promotion Council. The award was
given for CUTE’s significant contribution to reducing the envi-
ronmental impact of bank operations by realizing paperless
processing using IT, as well as for being a good example of
how companies in different industries can collaborate to help
preserve the environment. This is the first time the award has
been received by a bank.
SMFG 2010 57
Environmental Initiatives by Group Companies
Company Customers
SMFG
Corporate
Program/Product
SAFE environmental magazine
SMFG Environmental Business Forum
SMBC*1
SMBC-ECO Loan
SMBC
JRI*2
SMBC Environmental Assessment Loan/
Private Placement Bond
Eco-Products International Fair
Ministry of Environment’s interest-free
financing program
Global ECOBIZ Assist
Assistance in using the domestic
carbon credit system
Carbon-credit related business
activities (matching, advisory, trust and
consulting activities)
Carbon credit trading
Matching Business
Strengthening alliances with
international and financial institutions
“Climate & Children Supporters”
Individuals
SMBC Nikko World Bank Green Fund
DWS New Resource Technology Fund
Environmental campaign using JGBs
for individuals
SMBC
SMFL*3
Individuals
Corporate
Leading the Tokyo Metropolitan
Government’s Eco-Finance Project
Corporate
eco japan cup
SMFL
Carbon-neutral leases
Consulting business related to amended
Act on the Rational Use of Energy
Environmental advisory business
Consulting for construction of Tianjin
Eco-City, and attracting Japanese
companies
JRI
JRI
SMBC
SMBCCN*4
JRIS*5
SMCC*6
Description
Started in 1996, this bimonthly magazine contains interviews with top management of companies, analyses of business trends
and other useful information for corporate environmental activities.
SMBC and SMBC Consulting Co., Ltd. jointly hold multifunctional events at Eco-Products, one of Japan’s largest environmental
exhibitions. This forum combines many types of events such as environmental seminar, business matching, etc.
This loan offers reductions on loan interest rates of up to 0.25% for SMEs with environmental management systems certified by
any of more than 20 companies and organizations, including local governments.
Terms and conditions of this loan/bond depend on the results of an assessment of a company’s environmental friendliness using
standards established by the JRI. Customers can choose the fund procurement method — loans or private placement bonds.
Loans extended: ¥100 billion to 30 companies (as of March 31, 2010)
At the fifth (March 2009) and sixth (March 2010) fair, SMFG president Teisuke Kitayama chaired the planning committees and
oversaw the booths, international conferences and other activities.
The Ministry of the Environment operates a special interest-free financing program to support the attainment of the objectives
under the Kyoto Protocol. Companies receive loans from financial institutions with interest subsidized by the government to
finance capital investment, on condition that they set CO2 emission reduction targets and achieve them within a specified period.
As one of the financial institutions authorized to make loans under this program, SMBC provides support for companies tackling
environmental issues.
This program supports the globalization of Japanese companies with environmental technologies by offering preferential fees
and interest rates on loans for international trade. It offers these to midsize and SME companies that develop and manufacture
equipment related to water, waste materials, new energy, the atmosphere, energy conservation and other areas (soil pollution
remediation, greening, recovery of natural areas, etc.).
SMBC and Group companies are working on a program for assisting CO2 emission reduction activities by using the domestic
carbon credit system that began in October 2008.
SMBC serves customers with needs involving carbon credits by using overseas offices, trust functions and other resources to
offer products and services such as introduction of sellers in developing countries, advisory service to support transactions,
trust products, and financing. SMBC established a consulting company in Brazil to assist in development of Clean Development
Mechanism (CDM) projects.
In June 2009, SMBC became a carbon credit dealer, the first Japanese bank to purchase and sell carbon credits directly with
customers.
SMBC utilizes its network of overseas offices to introduce valuable partners in developing countries for corporate customers
planning to set up or expand business operations overseas.
In March 2010, with the aim of providing financing for renewable energy projects and developing its carbon credits trading and
other businesses, SMBC signed a memorandum of understanding with International Finance Corporation (IFC) and Environmental
Cooperation-Asia (ECO-Asia), a regional program of the United States Agency for International Development (USAID). SMBC has
been forging business alliances with local financial institutions and economic organizations in Malaysia, the Philippines, Brazil and
other countries as part of an effort to build a stronger global network.
SMBC and UNICEF started this program to target both the causes and results of climate change. When participating companies
buy carbon credits to fight global warming, monetary contributions to the program are also made to aid a developing country
(Mozambique) that is suffering from the effects of global warming.
SMBC and Nikko Cordial Securities started marketing “SMBC Nikko World Bank Green Fund,” launched by Nikko Asset Management
Co., Ltd. in collaboration with the World Bank. The fund is the world’s first fund that invests in World Bank green bonds.
To adapt to global shifts and growth in demand patterns, this fund invests mainly in stocks of companies worldwide with excellent
growth prospects involving businesses associated with three themes of infrastructure, food and clean energy.
SMBC has been conducting an environmental campaign for each issue of Japanese government bonds (JGBs) since June 2008.
Since June 2010, when SMBC began handling a new series of three-year JGBs for individuals, SMBC has used part of its earnings
from the sale of these bonds to purchase a 100kg carbon credit per customer, and transfers the credits gratis to the Japanese
government, thereby helping to reduce Japan’s volume of greenhouse gas emissions.
SMBC has been selected as a core financial institution in the Eco-Finance Project being implemented by the Tokyo Metropolitan
Government over a 5-year period starting in fiscal 2009. In this project, the fund deposited by the Tokyo Metropolitan Government
with SMBC is used to meet a wide range of needs, conditioned on satisfying certain environmental standards, from financing and
leasing for corporate clients to mortgage loans, automobile loans, and fixed-term deposits for individuals.
This is a contest for selecting companies that have practical environmental technologies and ideas. SMBC gives assistance to
those venture companies jointly with Japanese universities and thereby provides support for their R&D activities.
Started in August 2007, this is a new service that renders the greenhouse gases released by leased assets neutral through
the allocation of carbon credits to these assets. The goal is to provide more support to companies that protect the environment
through their own activities.
SMFL is enhancing environmental advisory services for companies in response to the amended Act on the Rational Use of Energy.
This includes comprehensive energy conservation proposals that utilize leases.
This business is involved in many projects centered on waste treatment and energy. The objective is to combat global warming
and support the growth of environmental companies by creating new businesses.
Leveraging its environmental business expertise, JRI is creating a plan for the use of renewable energy at the Tianjin Eco-City,
China’s first national project for an environmentally sustainable city. SMBC, SMBCCN and JRIS have signed a basic agreement
with the Tianjin Eco-City Administrative Committee on initiatives to attract Japanese companies to the Tianjin Eco-City project.
Individuals Web Registration Campaign
SMCC is vigorously promoting the use of online account statements (the total bill amount is e-mailed and the details are posted on
its website) as a means of conserving paper and helping cut CO2 emissions.
*1 Sumitomo Mitsui Banking Corporation *2 The Japan Research Institute Limited *3 Sumitomo Mitsui Finance and Leasing Co., Ltd. *4 Sumitomo Mitsui Banking Corporation (China) Limited
*5 The Japan Research Institute (Shanghai) Consulting Co., Ltd. *6 Sumitomo Mitsui Card Company, Limited
58
SMFG 2010
SMFG Environmental Business Forum at
Eco-Products 2009
Advisory services for the Tianjin Eco-City
Project
The Eco-Products exhibition, held each December, is one of Japan’s largest environ-
mental exhibitions. Following on from last year’s event, SMFG once again held the
SMFG Environmental Business Forum, comprising different types of environmental
business events.
Targeting many different types of stakeholder, such as those seeking to newly
enter the environmental business field, those looking to expand their marketing
channels, and those examining their options regarding information gathering, SMFG
conducted business matching, set up booths with catalogs, and held lectures, semi-
nars, and other programs. By these means, SMFG provided forums for representatives
of companies in the environmental field to meet and exchange information, thereby
giving rise to new business opportunities.
Over the three-day duration of the exhibition, we held 17 seminars on various
topics, as well as panel discussions. About 500 cases of business matching were
arranged, and 41 companies had booths showcasing their products and services.
In all, the SMFG Environmental Business Forum hosted a large number of business
negotiations on new environmental technologies,
products, and services.
The Tianjin Eco-City project is a large-scale eco-friendly urban development project
being undertaken in China at the national government level, in line with the country’s
policy on the environment and energy. The development of the Eco-City is guided by
22 quantitative key performance indicators which are set at high levels, such as a
renewable energy utilization rate of 20% or higher and a green building* rate of 100%,
in order to harmonize human activities with the natural environment, conserve natural
resources, and efficiently recycle resources.
The Japan Research Institute (JRI) has drawn up the plan for achieving the
renewable energy utilization rate of 20% or higher, including the technologies and
their implementation methodology. SMBC, meanwhile, has signed a business alliance
agreement with Tianjin Eco-City Administrative Committee, together with Sumitomo
Mitsui Banking Corporation (China) Limited, JRI, and the Japan Research Institute
(Shanghai) Consulting Co., Ltd., to attract Japanese companies to the Tianjin Eco-City
project.
Moving forward, SMBC will further reinforce the services to Japanese companies
setting up operations in the area by enhancing the collaboration with both Tianjin
City and the Tianjin Eco-City project. JRI will actively promote initiatives for launching
environment-/energy-related projects not only in the Tianjin Eco-City, but in many other
parts of China, too.
Hundreds of companies found prospec-
tive business partners at the matching
booth.
SMFG Booth
Artist’s rendition of Tianjin Eco-City when
completed
* “Green building” here refers to minimizing the building’s impact on the environment, and
to use “people-friendly” methods of construction and urban planning.
SMBC Begins Handling World Bank Green Fund
Eco-Products International Fair 2010
On February 1, 2010, SMBC and Nikko Cordial Securities commenced handling of the
SMBC Nikko World Bank Green Fund, an investment trust launched by Nikko Asset
Management Co., Ltd.
This fund is the world’s first fund
developed in cooperation with the World
Bank that invests in World Bank green
bonds. The World Bank green bonds
support World Bank-funded projects in
developing countries to mitigate global
warming. A portion of the profits from this
green fund will be donated to UNICEF and
the Japanese Red Cross.
This international fair is held every year to promote the growth of environmental
businesses in the Asia-Pacific region and increase their global competitiveness by
making their supply chains more eco-friendly. SMBC was a member of the Preparatory
Committee in 2009 and 2010. The sixth Eco-Products International Fair, held in March
2010 in Jakarta, Indonesia, was the largest ever with 164 Asian companies and
organizations participating, and more than 90,000 visitors during the 4-day event.
At the international conference held parallel to the fair, lectures were given and
panel discussions by world leaders and specialists on environmental issues from many
countries were held. SMBC and JRI participated in a session on “Eco Business and
Climate Change,” and representatives of the two companies made presentations on
the outlook for and initiatives on carbon credits business in Asia.
Total asset value: ¥16,784 million (as
of May 31, 2010)
Panel discussion at the international
conference
President Teisuke Kitayama of SMFG
explains the carbon credits business
to Muhaimin Iskandar, Minister of
Manpower and Transmigration of
Indonesia.
SMFG 2010 59
Social Contribution Activities
Fundamental approach to social contribution activities
SMFG and its Group companies, in consideration of the public service nature of the financial services industry, recognize the
importance of using business operations to contribute to the development of society. In addition to this contribution to society
through day-to-day business operations, we must also act as a responsible corporate citizen by engaging in activities that help lay
the foundations for a better society in the future. In the spirit of corporate citizenship, SMFG and its Group companies will fulfill their
social obligations through a broad range of activities.
Policy on social contribution activities
SMFG and its Group companies understand their role as responsible corporate citizens, and undertake activities that contribute
to the realization of a prosperous and sustainable society. We maintain an extensive social contribution program by planning and
executing social contribution activities at the corporate level, as well as encouraging employees to volunteer for worthwhile activities.
The central elements of our social contribution activities
SMFG and its Group companies position the following four sectors as the core fields for social contributions: 1) social welfare;
2) local and international communities; 3) the environment; and 4) culture, the arts and education.
Activities Contributing to Social Welfare
(cid:129) Sign-Language Courses
To enhance the ability of our employees to communicate with
and offer high-level services to hearing-impaired customers,
SMBC holds sign-language courses and seminars for inter-
ested employees. In fiscal 2009, we held one-day introductory
stamps to volunteer organizations to help them cover their post-
age costs. In addition, SMBC collects unused prepaid telephone
cards, Sumitomo Mitsui Finance and Leasing collects PET bottle
caps, SMBC Friend Securities collects PET bottle caps and used
postage stamps, and Sumitomo Mitsui Card collects used post-
age stamps and used prepaid cards from employees, donating
courses that were also attended by employees of Sumitomo
them to volunteer organizations.
Mitsui Card, the Japan Research Institute, and SMBC Friend
Securities. Also in fiscal 2009, SMBC held training sessions for
employees to improve their communication skills, which included
using basic sign language, and learn about consideration for
the needs of both hearing-impaired customers and others.
These courses were
also attended by
employees of other
Group companies
and the Nikko Cordial
Securities Group.
(cid:129) Volunteer Activities, and Blood Donation Drives
In fiscal 2009, SMBC held courses on the environment, focus-
ing on the issue of biodiversity, which were attended by SMBC
employees and family members. SMBC also provided employees
with information on various volunteer activities and encouraged
them to participate. Blood donation drives were also held at
SMBC and Sumitomo Mitsui Card.
(cid:129) Collection and Donation of Voided Postcards, Unused
Prepaid Telephone Cards, and Used Postage Stamps
SMFG collects voided postcards from Group employees,
exchanges them for new postage stamps, and donates the
60
SMFG 2010
(cid:129) Installation of Charity Vending Machines; Sale of
Products Made by Social Welfare Organizations
SMBC has installed vending machines at its head office under a
program in which contributions are made to welfare organizations
with every purchase of a soft drink from these machines. SMBC
also holds regular events where employees can buy products
made by NPOs employing persons with disabilities and NPOs
engaged in international cooperation initiatives.
(cid:129) Donations to Organizations Assisting Senior Citizens
SMBC Friend Securities has been donating part of the income
from a fund that invests in companies contributing to the bet-
terment of the aging population to organizations that assist and
provide nursing care for the elderly.
Topics
l SMBC Receives Commendation from Tokyo Metropolitan
Governor for Contributions to Metropolitan Social
Welfare Initiative
In January 2010 SMBC received a commendation from the
Governor of Tokyo for contributions to an initiative to make Tokyo
into a city with a high level of social welfare services. This was in
recognition of SMBC’s various measures to promote the use of
universal design and provide universal service throughout Japan.
Contribution Activities for Local and Overseas
Communities
(cid:129)Volunteer Fund
SMBC has a system in which employees who volunteer have
¥100 deducted from their salaries each month to fund donations
to organizations that perform volunteer work. As of July 2010,
more than 12,000 employees were participating in this program.
The following are some of the 27 activities funded by the
SMBC Volunteer Fund in fiscal 2009.
Overseas
(cid:129) Funding construction of an orphanage in Cambodia
(cid:129) School library opened in Laos
(cid:129) Operation of a clinic for refugees repatriated to Pakistan
(cid:129) Support for regional activities in Nepal to enable children to
attend school
(cid:129) Livelihood support for the most disadvantaged section of the
population in Myanmar, including the elderly and persons
2009, and have contributed to reforestation projects in Hyogo
Prefecture, educational activities for the prevention of cancer,
and projects to help children in developing countries.
(cid:129)Opening of Accounts for Donations to Disaster Victims
When major natural disasters occur, SMBC opens special
accounts to collect donations for relief efforts without the usual
fund transfer charges. SMBC also solicits donations for such
causes from its own employees and those of other Group
companies including Nikko Cordial Securities. In fiscal 2009,
accounts were established for relief efforts for the victims of the
July torrential rains in the Chugoku and Northern Kyushu regions
and Typhoon No. 9 in August, both in Japan, as well as Typhoon
Ketsana in the Philippines, the 2009 Samoa earthquake, the
2009 Sumatra earthquake, the 2010 Chile earthquake, and the
2010 Haiti earthquake. Following the Haiti earthquake in January,
Sumitomo Mitsui Card collected donations made by customers
with disabilities
using its credit cards.
(cid:129) Clean water project for schools in Southern Sudan
(cid:129) Measures to raise income levels in Bangladesh, including
microfinancing initiatives, and other support efforts
(cid:129) School meals program for elementary schools in Burkina
Faso
(cid:129) In Indonesia, scholarships for middle school and high school
students, a health program targeting infants, and others
Japan
(cid:129) For terminally ill young children, SMBC funds trips for them
and their families, to make their wish come true.
(cid:129) Offering opportunities for school students with hearing impair-
ments to meet and interact with members of a drama troupe
(cid:129) Funding for raising and training puppies to become assis-
tance dogs, including feeding, veterinary medical care and
obedience classes
In addition to the above, the SMBC Volunteer Fund also
donated money to help the victims of such overseas natural
disasters as the September 2009 Sumatra earthquake, the
Philippine Typhoon Ketsana, the 2009 Samoa earthquake,
and the 2010 Haiti earthquake, as well as natural disasters in
Japan including the catastrophic heavy rains in the Chugoku
and Northern Kyushu regions in July 2009, and Typhoon No. 9 in
August.
At Group member SAKURA KCS Corp., as of June 2010,
(cid:129)Activities of YUI, SMBC’s Volunteer Organization
SMBC also provides active support for YUI, an in-house volunteer
organization that provides opportunities for SMBC employees to
plan and carry out volunteer activities. YUI activities conducted
on a regular basis include social events at schools for the
hearing-impaired, holding charity bazaars for items collected
from employees, and visits to facilities for the elderly. In addition
to the continued activities mentioned above, volunteers in Tokyo
and Osaka conducted
tree-planting activities
on the slopes of Mount
Fuji to mark the 10th
anniversary of
the
establishment of YUI.
(cid:129) Contributing to
Local Communities
SMBC has been promoting and carrying out activities planned
by its branches and other offices in Japan to contribute to local
communities, including branch tours, cleaning up the local envi-
ronment, such as parks and other areas in the vicinity of SMBC
branches, participation in local festivals and events, exhibitions
of children’s art from around the world and concerts in the lob-
approximately 900 employees (around 80% of the company’s
bies of SMBC branches.
total staff) have enrolled in their volunteer fund since fiscal
Nikko Cordial Securities also takes part in these activities at
all its branches nationwide. The company has organized tours
of its branches, including hands-on work experience, as well as
local cleanup activities.
Nikko Cordial Securities employees clean up a
sidewalk near a branch.
SMFG 2010 61
(cid:129) Local Community Contribution by Overseas Offices
SMBC overseas offices conducted the following activities in fiscal
(cid:129) Participation in “TABLE FOR TWO”
At SMBC’s head office, we operate a system through the non-
2009.
profit organization TABLE FOR TWO International of providing
(cid:129) Sumitomo Mitsui Banking Corporation (China) Limited
donations to fund school meals in developing countries. The
established a scholarship program for students of Suzhou
price of a nutritiously balanced, low-calorie lunch plate offered
University, Shanghai International Studies University, and
at the head-office employee cafeteria includes a ¥20 donation,
other universities.
the price of one school meal. Vending machines have also been
(cid:129) SMBC’s Hong Kong Branch gave donations in support of an
installed selling health drinks whose price includes a donation to
orchestra composed of young Asian musicians.
TABLE FOR TWO International.
(cid:129) SMBC’s Seoul Branch gave donations in support of a
Japanese-language drama festival aimed at promoting
understanding of Japanese culture.
(cid:129) Social Contribution Activities of In-House Foundations
Based in the United States,
(cid:129) SMBC’s Bangkok Branch arranged lectures at a business
SMBC Global Foundation
school by an SMBC senior economist, and gave donations to
has distributed scholarships
support facilities assisting children suffering from poverty in
to more than 5,000 university
outlying districts of Bangkok.
students in Asian countries
(cid:129) SMBC’s Hanoi Branch gave donations to a Japanese ophthal-
since its establishment in
mologist who provides free treatment.
1994.
(cid:129) Employees of Sumitomo Mitsui Banking Corporation Europe
In the United States, it
conducted volunteer activities in their time off. Also, the
supports study trips to Japan
money saved from switching to e-cards from traditional greet-
organized by a high school in the Harlem area New York City.
ing cards was donated to charity organizations.
Established in 1990, the SMBC Foundation for International
(cid:129) The European office of the Japan Research Institute made a
Cooperation aims to assist in developing the human resources
donation in support of a Japanese-language speech contest.
necessary to achieve sustainable growth in developing econo-
(cid:129) Volunteer employees of SMBC and the Japan Research
mies as well as promote international exchange activities. Since
Institute based in the
United States partici-
pate in school beauti-
fication programs. The
employees also give
donations, which are
matched by SMBC
Global Foundation.
(cid:129)Support for UNICEF
SMBC is a member corporation of the steering committee of
its inception, the foundation has provided financial support for
7-8 students from Asian countries each year, to enable them to
attend universities in Japan. The foundation also offers subsi-
dies to research institutes and researchers undertaking projects
related to developing countries.
Environmental Activities
(cid:129) Participation in Environmental Preservation Initiatives
SMFG holds an “SMFG Clean-up Day” in which Group employ-
ees volunteer to pick up litter on beaches. In 2009, some 130
UNICEF Coin Aid and cooperates in the organization’s fund-
employees participated in this activity at two sites in Kanagawa
raising activities. To this end, SMBC places coin collection boxes
and Hyogo prefectures.
in its branches and offices in Japan and calls for donations from
SMBC Friend Securities held its own beach cleanup events
the general public. The coins collected are sorted by currency
in Chiba and Hyogo prefectures. About 130 employees took part.
before being delivered to UNICEF.
In addition, employees of Sumitomo Mitsui Finance and Leasing
SMBC also cooperates with UNICEF by implementing the
and Japan Research Institute regularly participate in cleanup
UNICEF Donation Account program. This program enables cus-
activities near their offices.
tomers to donate their interest earnings after tax to UNICEF and
SMBC employees volunteered in the Sea Forest (tree-
SMBC provides a matching donation.
planting) project organized by
the Tokyo Metropolitan
Sumitomo Mitsui Card and VJA group companies collect
Government, and also made donations to the project.
donations to UNICEF, UNESCO, the World Wide Fund for Nature
Japan, and the World Food Program from holders of their cards
through the World Present point service. Sumitomo Mitsui Card
also makes its own donations to UNICEF, matching those of the
cardholders.
In addition, Sumitomo Mitsui Card also issues cards that
automatically make donations to specific charities, such as the
UNICEF VISA Card and the Red Feather VISA Card (offered in
cooperation with the Central Community Chest of Japan), and
also makes its own donations to the working funds of all these
organizations from its card business revenues.
62
SMFG 2010
(cid:129) SMBC Environmental Program NPO C.C.C Furano
Field
SMBC also provides support
to an environmental project
implemented by screenwriter
Soh Kuramoto in Furano,
Hokkaido. SMBC is providing
support for reafforestation of
a golf course belonging to a
country club that was shut
down in Furano. C.C.C Furano Field holds educational courses
on environment, in particular exploring nature fully using the five
a charity bazaar is held featuring items for sale that have been
handcrafted by SMBC employees.
(cid:129)Children’s Illustration Contest
SMBC held its first illustration contest for elementary school
children in Japan in fiscal 2007. In fiscal 2009, the contest saw
a large number of entries from children featuring unique ideas on
the theme of “Our Greener Future.” Winners were presented with
original bank passbooks featuring
their own entries. In addition, the
winning works were displayed
at SMBC branches throughout
Japan for the enjoyment of our
senses. Employees and their families are invited to tour the proj-
customers.
ect site to learn about and experience nature at first hand.
(cid:129) Biodiversity Courses Held
In fiscal 2009, SMBC held courses in Tokyo, Osaka and Nagoya
that enabled employees and family members to learn about bio-
diversity and become more closely involved in the tree-planting
(cid:129)Support for Cultural and Artistic Ventures
In support of the classical performing arts of Japan, Sumitomo
Mitsui Card donated a drop curtain to the National Theatre for the
National Engei Hall. The company also helps foster the next gen-
eration of Kabuki artists through sponsorship of performances by
movement by personally making “acorn cubes” (cubes of
children.
SMBC Friend Securities provides support for cultural and
artistic activities through sponsorship of art exhibitions such as
the works of Gyoshu Hayami (a painter of the traditional Nihonga
style) at the Yamatane Museum of Art.
(cid:129)Financial and Economic Education
SMBC welcomes school field trips to bank branches and other
locations. Other financial and economic education activities
include a publication called What Does Bank Do?, a financial
education game on the SMBC website, support for Kidzania (job-
experience theme park for children), internship programs, and
many other programs. Sumitomo Mitsui Card, Japan Research
Institute and Nikko Cordial Securities also provide instructors for
classes at universities. Nikko Cordial Securities also organizes
tours and classes for students and members of the general
public to foster a deeper understanding of the work of securities
companies and the securities investment business.
(cid:129)Student Internship Program
The Japan Research Institute welcomes student interns every
year to learn about career opportunities. The interns deepen
their understanding of the work performed by JRI by studying
at offices where next-generation business ventures are being
created in the fields of the environment and energy. SMBC Friend
Securities also offers internships every year. In fiscal 2009, 22
interns studied financial products and the securities business.
earth and compost planted with an oak seedling). To teach the
courses, staff were invited from the Gobaimidori division of Annex
Co., Ltd., which was the recipi-
ent of the SMBC Prize in the
ecological contest eco japan
cup 2007 (an open competition
for environmental business
ventures), of which SMBC was
one of the sponsors.
(cid:129) Support for EARTH PHOTO CONTEST
Sumitomo Mitsui Finance and Leasing supports a photography
contest aimed at communicating the importance of solving envi-
ronmental problems and spurring people to action. The company
presents the Sumitomo Mitsui Finance and Leasing Prize for
outstanding photographic entries.
Contributing to Cultural, Artistic, and Education
Activities
(cid:129)Charity Concert Held
SMBC has been arranging a charity concert, “A Toy Box of
Favorite Works,” every year since fiscal 2006, to support children
worldwide who have suffered from wars and natural disasters.
SMBC’s employee music societies, choir, chamber ensemble
and wind ensemble, perform a range of pieces from classical
favorites to Japanese songs, including anime songs, that appeal
to everyone from children to adults. Donations are collected from
the audience at the concert, and artwork submitted by children
around the world is displayed in the concert hall lobby. In addition,
SMFG 2010 63
Human Resources
SMFG and the Group companies strive to create a workplace
(management-track) staff up to their fifth year in the company.
for their human resources where each and every employee can
SMFL has created “Young Employees’ Growth Plan & Guide,”
take pride in and be highly motivated about his or her work. In
based on the SMFL Standards and has also opened an in-house
the following pages, we would like to introduce some of initiatives
business school that will be used to supplement on-the-job train-
in the human resources area taken by SMBC, as well as by other
ing from the current fiscal year onward.
Group companies including Sumitomo Mitsui Card, Sumitomo
The credo of Japan Research Institute (JRI) on human
Mitsui Finance and Leasing, the Japan Research Institute, SMBC
resources is that its staff is the source of added value in its
Friend Securities, and Nikko Cordial Securities.
solutions and proposals. In line with this, JRI has set up the
Five Goals of SMBC’s Human Resource
Management
Staff Development Department within the Computer System
Division, and the Human Resources Incubation Center within the
Comprehensive Research Division for well-planned development
1. Maintain and strengthen sound business management to
of human resources.
enable SMBC to compete in global markets
To improve young employees’ knowledge and raise their
2. Develop staff with specialized professional skills who can
skills so as to enable the company to cope effectively with the
provide customers with higher-value-added products and
diversification and increasing sophistication of the securities busi-
services
ness, SMBC Friend Securities has started a course of classes for
3. Motivate employees even more strongly by respecting
acquisition of in-house skill accreditation. It has also introduced
their individuality based on understanding of the inherent
a tutor system to raise the effectiveness of on-the-job training for
value of diversity and encouraging them to seek personal
new employees.
fulfillment
As a full-line securities company which needs to nurture a
4. Foster a corporate culture that encourages a forward-
wide variety of financial professionals, Nikko Cordial Securities
looking and creative attitude and places value on mutual
is working to provide enhanced training to impart the necessary
collaboration
knowledge and skills in each specialist area. It has designated
5. Be mindful of the social responsibilities of the Group,
the first three years after entering the company as the crucial
and nurture a corporate culture that will contribute to the
training period for young staff members, and is putting its full
healthy development of society
Training Staff with Specialized Professional
Skills
To provide a higher level of motivation for growth and develop-
corporate resources into cre-
ating an effective employee
development program.
In these ways, all Group
companies are taking mea-
ment among younger personnel, SMBC provides basic practical
sures to reinforce their human
training programs in consumer banking, corporate banking, and
resources development systems.
operations under separate programs known as the Retail Banking
College, Corporate Banking College, and Banking Operations
College. Employees acquire the necessary business knowledge
and skills through a combina-
tion of on-the-job training and
classroom courses. SMBC
is currently reinforcing its
training system by assigning
mentors to new recruits at
the workplace and placing
regional and head-office men-
tors at the Training Institute.
Corporate Banking College
Following the amendment of the Money Lending Business
Law, Sumitomo Mitsui Card has been putting increased effort into
the development of staff with professional expertise in the credit
Staff training at Nikko Cordial Securities
Creating a Corporate Culture that Derives
Strength from Diversity
(cid:129)Human Resources Diversity
The Group is implementing initiatives to create diversity (e.g.
gender, nationality) in the workplace. At SMBC, 40% of the new
university graduates hired for fiscal 2010 for sogoshoku and con-
sumer services positions were women, and the number of women
holding managerial positions has been increasing. In fiscal 2008,
the Diversity and Inclusion Department was established within
the Human Resources Department and other initiatives were
launched for creating a corporate culture that derives strength
from diversity.
(cid:129)Revision of Personnel System
To enable motivated employees to take on the challenge of
business. Measures taken include active support for employees
performing more difficult work in a higher-level post, SMBC has
to become registered money lending officers, and regularly hold-
introduced a new workplace hierarchy system in which job rank-
ing in-house workshops on products and other topics.
ings are more finely subdivided. This should make it easier for
Sumitomo Mitsui Finance and Leasing (SMFL) has estab-
talented individuals to be quickly promoted to mid-management
lished “SMFL Standards,” which sets forth a human resources
levels. We are also aiming to create a more seamless organiza-
development plan and methods for realizing its human resources
tional system in which an employee’s performance is evaluated
goal for each year. This is targeted principally at sogoshoku
not simply in terms of a single year’s achievements on the job,
64
SMFG 2010
but also from the perspective of contribution to the company as
There are also annual Children’s Visitation Day and Family
a whole.
(cid:129)Creation of New Job Titles
SMBC has launched a new title, “Senior,” for ippanshoku (general
Visitation Day to give employees’ family members a better under-
standing of employees’ work at SMBC, Sumitomo Mitsui Card,
SMFL, JRI, and SMBC Friend Securities. JRI also holds “Mama &
work) employees on the Business Career Path working in front-
Papa Lunches” as forums for information exchange between
office positions at the Middle Market Banking Unit. Sumitomo
employees who are raising children while working. SMBC has
Mitsui Card has likewise instituted a new ippanshoku employee
instituted a “Go Home Early to the Family Day,” while SMFL is
position using the term “Leader.” In this way, we are expanding
pursuing a campaign to encourage employees to reduce the
the playing field for ippanshoku staff so that they can be pro-
amount of overtime work. Nikko Cordial Securities has introduced
moted to managerial positions.
(cid:129)Developing Staff Needed for Global Operations
As a result of the growth of SMBC’s operations on the global
an online support system for employees returning to work after
parental leave. SMBC, Sumitomo Mitsui Card, and JRI have all
received the Kurumin certification from the Japanese Ministry
stage, proficiency in foreign languages is becoming increasingly
of Health, Labour and Welfare in recognition of their activities in
vital. To answer this need, SMBC is expanding its programs for
support of child rearing.
employees to study at language schools, and is assigning more
All Group companies are
young employees to overseas offices.
doing their utmost to create
SMBC is strongly committed to training national staff at its
systems that ensure a good
overseas operations. The training facility established in Singapore
work-life balance, as well as
by the Asia Pacific Training Department covers a broad range
workplaces where employees
of subjects for employees in this region. Sessions are focused
can fully demonstrate their
primarily on business training and the development of capabilities
abilities. We plan to pursue
and skills. Furthermore, SMBC is taking steps to develop human
such measures still further in
Children’s Visitation Program
resources on a global scale by providing education in the his-
the future.
tory of the bank and its management philosophy to newly-hired
national staff during their training courses.
(cid:129)Employing Persons with Disabilities
SMBC has established a special company called SMBC Green
Heightening Awareness of Individual Rights
At SMBC, we have included in our principles of action the con-
cepts that “we will respect the individual human dignity of our
Service Co., Ltd. that provides employment opportunities for
customers and employees” and “we will not permit discrimina-
people with physical disabilities. In December 2008, the company
tion of any kind.” We are implementing the following initiatives
opened the Kobe Branch, and in February 2009 the Unagidani
to heighten the awareness of all employees regarding individual
Office in Osaka for the purpose of creating jobs not only for
rights.
physically but also for mentally impaired persons. In addition, to
(cid:129) Conducting training meetings for manager-level staff (once a
upgrade their skills, SMBC encourages its employees to partici-
year), and personnel newly appointed to management positions
pate actively in skill competitions for the disabled. Over the years,
and staff who have recently joined the bank
a number of its employees have participated in the National Skill
(cid:129) Holding study meetings to discuss individual rights issues, with
Competition for the Disabled (known as the “Abilympics”), three
manager-level personnel leading these sessions (twice a year)
of whom were winners in the fiscal 2008 and 2009 competition.
(cid:129) Soliciting slogans promoting individual rights from management
As of March 2010, disabled people accounted for 1.90% of our
and staff (once a year)
employees, above the legally mandatory level of 1.8%.
(cid:129)Providing Support for a Good Work-Life Balance
The Group has an employee support program that provides a
range of assistance for achieving a proper balance between work
and home. In fiscal 2008, Sumitomo Mitsui Card, SMFL, SMBC
Friend Securities, and JRI all drew up their own Work-Life Balance
Guidebook, based on actual experiences at SMBC. All Group
companies, including Nikko Cordial Securities, already operate
systems for parental leave, leave for taking care of sick children,
shorter working hours, restricted overtime work, and exemption
from late-night work. All these systems provide employee benefits
exceeding those mandated by law. In addition, SMBC, Sumitomo
Mitsui Card, and JRI provide child-care subsidies, while SMBC,
Sumitomo Mitsui Card, and SMFL operate a system for the rehir-
ing of former employees. These systems all help realize a good
work-life balance for the Group’s employees.
l SMBC Named as One of the Best 25 Companies in Japan in
the “Great Place to Work” Rankings
In March 2010, SMBC was selected for the third year running
as one of the best companies in Japan as a place to work in
the survey conducted by Great Place to Work® Institute Japan.
* Great Place to Work® Institute, Inc., a U.S. company, is a
survey organization that supplies data for the annual list of the
“100 Best Places to Work” published by Fortune magazine.
The survey has two major components: a survey of the internal
systems and corporate culture of respondent companies, and a
questionnaire survey of the employ-
ees of these companies. The survey
of employees receives a weighting
of two-thirds in determining the final
results.
SMFG 2010 65
Staff Profile
(cid:2)
SMBC
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2008
2009
2010
20,273
13,457
66.38%
6,816
33.62%
23,543
13,669
58.06%
9,874
41.94%
25,122
13,793
54.90%
11,329
45.10%
38 yrs 7 mths
36 yrs 9 mths
36 yrs 2 mths
40 yrs 10 mths
40 yrs 5 mths
40 yrs 2 mths
34 yrs 2 mths
31 yrs 8 mths
31 yrs 3 mths
Average years of service
15 yrs 11 mths
13 yrs 10 mths
13 yrs 3 mths
Male
Female
Ratio of employees with
disabilities (% of total)**
17 yrs 5 mths
16 yrs 11 mths
16 yrs 8 mths
12 yrs 11 mths
9 yrs 6 mths
9 yrs 0 mths
2.05%
1.95%
1.90%
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: executive officers, employees on short-term contracts, part-time employ-
ees, employees of temporary employment agencies, and national staff at over-
seas branches.
** As of March 1 of the respective years
April 1
Number of new hires
Number of newly employed female
graduates***
Ratio of newly employed females to
total new employees
2008
1,254
518
2009
2010
962
388
569
204
41.3%
40.3%
35.9%
*** Includes sogoshoku staff and consumer service staff. Business Career Path
employees are excluded.
Fiscal
2007
2008
2009
Number of women in managerial
positions****
Number of employees taking leave
for child-rearing
Men taking such leave
Number of career hires
**** As of the end of the fiscal year
(cid:2)
Sumitomo Mitsui Card
354
163
22
500
456
222
27
136
584
331
29
11
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2008
2009
2010
1,989
1,075
54.05%
914
45.95%
2,156
1,112
51.58%
1,044
48.42%
2,247
1,133
50.42%
1,114
49.58%
36 yrs 4 mths
36 yrs 2 mths
36 yrs 4 mths
39 yrs 8 mths
39 yrs 8 mths
39 yrs 10 mths
32 yrs 2 mths
32 yrs 6 mths
32 yrs 10 mths
Average years of service
10 yrs 3 mths
10 yrs 3 mths
10 yrs 7 mths
Male
Female
10 yrs 9 mths
11 yrs 2 mths
11 yrs 6 mths
9 yrs 6 mths
9 yrs 4 mths
9 yrs 7 mths
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: executive officers, employees on short-term contracts, part-time employ-
ees, employees of temporary employment agencies, and national staff at over-
seas branches.
66
SMFG 2010
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
** Includes contract employees
2008
2009
2010
114
79
98
66
84
46
69.3%
67.3%
54.8%
(cid:2)
Sumitomo Mitsui Finance and Leasing
2009
2008
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
1,575
1,022
64.89%
553
35.11%
1,640
1,023
62.38%
617
37.62%
2010
1,666
1,035
62.12%
631
37.88%
37 yrs 2 mths
37 yrs 1 mths
37 yrs 3 mths
40 yrs 2 mths
40 yrs 2 mths
40 yrs 3 mths
31 yrs 9 mths
32 yrs 0 mths
32 yrs 4 mths
Average years of service
12 yrs 1 mths
12 yrs 1 mths
12 yrs 5 mths
Male
Female
14 yrs 6 mths
14 yrs 10 mths
15 yrs 2 mths
7 yrs 8 mths
7 yrs 6 mths
8 yrs 0 mths
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: employees seconded from other companies and organizations, executive
officers, employees on short-term contracts, part-time employees, employees
of temporary employment agencies, and full-time employees of affiliates
(including overseas subsidiaries).
April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
2008
2009
2010
48
5
40
2
28
1
10.4%
5.0%
3.6%
(cid:2)
Japan Research Institute
2008
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2,060
1,618
78.54%
442
21.46%
2,215
1,732
78.19%
483
21.81%
2,322
1,792
77.17%
530
22.83%
39 yrs 1 mths
38 yrs 11 mths
39 yrs 0 mths
40 yrs 0 mths
39 yrs 8 mths
39 yrs 11 mths
36 yrs 0 mths
35 yrs 11 mths
35 yrs 9 mths
Average years of service
9 yrs 8 mths
9 yrs 7 mths
9 yrs 11 mths
Male
Female
10 yrs 0 mths
9 yrs 11 mths
10 yrs 3 mths
8 yrs 8 mths
8 yrs 7 mths
8 yrs 8 mths
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: executive officers, employees on short-term contracts, part-time employ-
ees, employees of temporary employment agencies, and national staff at over-
seas branches.
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
2008
2009
2010
139
39
147
46
50
14
28.1%
31.3%
28.0%
** Includes only sogoshoku staff. Ippanshoku staff are excluded.
(cid:2)
SMBC Friend Securities
(cid:2)
Nikko Cordial Securities
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2008
2009
2010
1,911
1,354
70.85%
557
29.15%
2,011
1,434
71.31%
577
28.69%
2,072
1,462
70.56%
610
29.44%
36 yrs 9 mths
36 yrs 9 mths
36 yrs 11 mths
39 yrs 3 mths
39 yrs 1 mths
39 yrs 4 mths
30 yrs 9 mths
31 yrs 1 mths
31 yrs 4 mths
March*
Number of employees**
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2008
2009
2010
7,137
4,184
58.62%
2,953
41.38%
6,004
3,578
59.59%
2,426
40.41%
6,584
4,057
61.62%
2,527
38.38%
37 yrs 8 mths
37 yrs 2 mths
38 yrs 1 mths
38 yrs 11 mths
38 yrs 11 mths
39 yrs 6 mths
36 yrs 0 mths
34 yrs 7 mths
35 yrs 9 mths
Average years of service
13 yrs 3 mths
13 yrs 2 mths
13 yrs 3 mths
Average years of service
11 yrs 7 mths
12 yrs 0 mths
12 yrs 1 mths
Male
Female
15 yrs 4 mths
15 yrs 1 mths
15 yrs 4 mths
8 yrs 1 mths
8 yrs 3 mths
8 yrs 5 mths
Male
Female
12 yrs 6 mths
13 yrs 0 mths
12 yrs 9 mths
10 yrs 4 mths
10 yrs 7 mths
11 yrs 1 mths
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: employees on short-term contracts, part-time employees, employees of
temporary employment agencies, and national staff at overseas branches.
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
2008
2009
2010
280
132
232
117
148
68
47.1%
50.4%
45.9%
** Both non-area specified and area specified staff
As of March 1 of the respective years
*
** The number of full-time employees, including employees seconded to other
companies and organizations. The following have all been excluded from this
total: executive officers, employees on short-term contracts, part-time employ-
ees, employees of temporary employment agencies, and national staff at over-
seas branches.
April 1
Number of new hires***
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
*** Professional staff (Classes I-II) and FA
2008
2009
2010
408
136
182
53
159
54
33.3%
29.1%
34.0%
(cid:129) The combined employment ratio for persons with disabilities for the above six companies was 1.88% as of March 2010.
Principal Work-Life Balance Systems (Employee Support Programs)
SMBC
Sumitomo Mitsui Card
Sumitomo Mitsui Finance
and Leasing
SMBC Friend Securities
Japan Research Institute
Nikko Cordial Securities
Parental leave
18 months or maximum of
2 years in case of inability to
place in daycare center
18 months or maximum of
2 years in case of inability to
place in daycare center
1 year or maximum of 18
months in case of inability to
place in daycare center
18 months or maximum of
2 years in case of inability to
place in daycare center
18 months or maximum of
2 years in case of inability to
place in daycare center
Up to 3 years old
Leave for taking
care of sick
children
Shorter working
hours
Restrictions on
overtime
Exemption from
late-night work
Other principal
systems
Up to March 31 in the 6th
grade of elementary school
(10 days per annum for one
child; 20 days for two or more
children)
Up to March 31 in the 6th
grade of elementary school
(5 days per annum for one
child; 10 days for two or more
children)
Employees can choose shorter
working hours for each day or
fewer days worked per week,
both applicable up to March
31 in the 6th grade of child’s
elementary school.
Employees can choose shorter
working hours for each day or
fewer days worked per week,
both applicable up to March 31
in the 3rd grade of the child’s
elementary school.
No restrictions on children’s
age or number of days leave
Up to March 31 in the 3rd
grade of elementary school
(5 days per annum for one
child; 10 days for two or more
children)
Up to March 31 in the 6th
grade of elementary school
(5 days per annum for one
child; 10 days for two or more
children)
Up to entry into elementary
school
Employees can reduce daily
working hours to a minimum
of 5 hours 30 minutes up to
March 31 in the 6th grade of
the child’s elementary school.
Employees can reduce daily
working hours to between 6
hours and 6 hours 50 minutes
up to March 31 in the 3rd
grade of the child’s elementary
school.
Employees can choose to work
6 hours per day (9:30 to 16:30)
up to March 31 in the 3rd
grade of the child’s elemen-
tary school (this system can be
combined with flextime).
Up to child’s entry into junior
high school, employees can
reduce working hours in incre-
ments of 30 minutes for a
maximum reduction of 2 hours
30 minutes per day.
Up to March 31 in the 6th
grade of elementary school
Up to March 31 in the 3rd
grade of elementary school
Up to entry into elementary
school
Up to March 31 in the 3rd
grade of elementary school
Up to entry into elementary
school
Up to entry into junior high
school
Up to March 31 in the 6th
grade of elementary school
Up to March 31 in the 3rd
grade of elementary school
Up to entry into elementary
school
Up to March 31 in the 3rd
grade of elementary school
(cid:129) Work relocations
(cid:129) System for rehiring former
(cid:129) Leave to care for sick family
members
employees
(cid:129) Shorter working hours to care
members
For employees who are preg-
nant or have given birth within
1 year
(cid:129) Child-care subsidies
(cid:129) Leave to care for sick family
Up to entry into junior high
school
(cid:129) Use of designated day-care
center at discounted rates
(cid:129) Leave to care for sick family
(cid:129) Work relocations
(cid:129) Child-care subsidies
(cid:129) Leave to care for sick family
(cid:129) Work relocations
(cid:129) Child-care subsidies
(cid:129) Leave to care for sick family
members
members
(cid:129) Shorter working hours to care
(cid:129) System for rehiring former
for sick family members
employees
(cid:129) System for rehiring former
employees
for sick family members
(cid:129) Shorter working hours to care
members
for sick family members
(cid:129) Special days off to care for
sick family members
(cid:129) Staggered working hours
(shift system)
SMFG 2010 67
68
SMFG 2010
Financial Section and Corporate Data
Financial Data
SMFG
Consolidated Balance Sheets ..................................... 70
Consolidated Statements of Operations ...................... 72
Consolidated Statements of
Changes in Net Assets ............................................... 73
Corporate Data
Sumitomo Mitsui Financial Group, Inc.
Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 205
SMFG Organization ................................................ 205
Consolidated Statements of Cash Flows ..................... 75
Sumitomo Mitsui Banking Corporation
Notes to Consolidated Financial Statements ............... 77
Independent Auditors’ Report ...................................... 132
Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 206
SMBC Organization ................................................ 208
Principal Subsidiaries and Affiliates
Principal Domestic Subsidiaries .............................. 210
Principal Overseas Subsidiaries ............................. 211
Principal Affiliates .................................................... 212
International Directory ................................................. 213
SMBC
Supplemental Information ............................................ 133
SMFG
Income Analysis (Consolidated) .................................. 138
Assets and Liabilities (Consolidated) ........................... 141
Capital (Nonconsolidated) ........................................... 144
SMBC
Income Analysis (Consolidated) .................................. 147
Assets and Liabilities (Consolidated) ........................... 150
Income Analysis (Nonconsolidated) ............................ 152
Deposits (Nonconsolidated) ........................................ 156
Loans (Nonconsolidated) ............................................. 158
Securities (Nonconsolidated) ....................................... 163
Ratios (Nonconsolidated) ............................................ 165
Capital (Nonconsolidated) ........................................... 167
Others (Nonconsolidated) ............................................ 168
Trust Assets and Liabilities (Nonconsolidated) ............ 170
Capital Ratio Information
SMFG
Capital Ratio Information (Consolidated) ..................... 171
SMBC
Capital Ratio Information ............................................. 203
SMFG 2010 69
SMFG
Consolidated Balance Sheets
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
March 31
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
Assets
Cash and due from banks (Notes 9 and 28) .........................................................
Deposits with banks (Notes 9 and 28)..................................................................
Call loans and bills bought (Notes 9 and 28) ........................................................
Receivables under resale agreements (Note 28) ..................................................
Receivables under securities borrowing transactions (Note 28) ..........................
Monetary claims bought (Notes 9 and 28) ...........................................................
Trading assets (Notes 3, 9 and 28) .......................................................................
Money held in trust (Note 28) ...............................................................................
Securities (Notes 4, 9 and 28) ..............................................................................
Loans and bills discounted (Notes 5, 9 and 28) ...................................................
Foreign exchanges (Note 28) ...............................................................................
Lease receivables and investment assets (Notes 9, 27 and 28) ..........................
Other assets (Notes 6, 9 and 28) ..........................................................................
Tangible fixed assets (Notes 7, 9 and 15) .............................................................
Intangible fixed assets (Note 8) ............................................................................
Deferred tax assets (Note 23) ...............................................................................
Customers’ liabilities for acceptances and guarantees .......................................
Reserve for possible loan losses (Note 28) ..........................................................
Total assets ..........................................................................................................
¥ 3,371,193
2,468,478
1,121,145
25,226
5,440,622
1,006,738
6,708,688
18,734
28,623,968
62,701,033
1,107,289
1,839,662
3,610,046
1,081,125
626,248
728,586
3,749,056
(1,068,329)
¥123,159,513
¥ 3,800,890
1,440,804
633,655
10,487
1,820,228
1,024,050
4,924,961
8,985
28,698,164
65,135,319
885,082
1,968,347
4,257,251
1,008,801
361,884
857,658
3,878,504
(1,077,852)
¥119,637,224
$ 36,230
26,528
12,049
271
58,470
10,819
72,098
201
307,619
673,842
11,900
19,771
38,797
11,619
6,730
7,830
40,291
(11,481)
$1,323,584
70
SMFG 2010
(Continued)
March 31
Consolidated Balance Sheets
SMFG
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
Liabilities and net assets
Liabilities
Deposits (Notes 9, 10 and 28) ..............................................................................
Call money and bills sold (Notes 9 and 28) ..........................................................
Payables under repurchase agreements (Notes 9 and 28) ..................................
Payables under securities lending transactions (Notes 9 and 28) .......................
Commercial paper (Note 28) ................................................................................
Trading liabilities (Notes 9, 11 and 28)..................................................................
Borrowed money (Notes 9, 12 and 28).................................................................
Foreign exchanges (Note 28) ...............................................................................
Short-term bonds (Notes 13 and 28)....................................................................
Bonds (Notes 13 and 28) ......................................................................................
Due to trust account (Note 28) .............................................................................
Other liabilities (Notes 9, 14, 27 and 28) ..............................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for employee retirement benefits (Note 26) ............................................
Reserve for executive retirement benefits ............................................................
Reserve for reimbursement of deposits ...............................................................
Reserve under the special laws ...........................................................................
Deferred tax liabilities (Note 23) ...........................................................................
Deferred tax liabilities for land revaluation (Note 15) ............................................
Acceptances and guarantees (Note 9) .................................................................
Total liabilities ......................................................................................................
Net assets (Note 24)
Capital stock (Note 16) ........................................................................................
Capital surplus .....................................................................................................
Retained earnings ................................................................................................
Treasury stock .....................................................................................................
Total stockholders’ equity ...................................................................................
Net unrealized gains (losses) on other securities (Notes 23 and 28) ....................
Net deferred losses on hedges (Notes 23 and 30) ...............................................
Land revaluation excess (Note 15) .......................................................................
Foreign currency translation adjustments ............................................................
Total valuation and translation adjustments ......................................................
Stock acquisition rights (Note 31) ........................................................................
Minority interests .................................................................................................
Total net assets ....................................................................................................
Total liabilities and net assets .............................................................................
See accompanying notes to consolidated financial statements.
¥ 85,644,215
2,119,557
1,120,860
4,315,774
310,787
5,066,727
5,470,578
192,299
1,212,178
3,422,672
159,554
3,193,146
43,443
2,333
41,691
8,216
11,734
393
26,520
46,966
3,749,056
116,158,708
2,337,895
978,897
1,451,945
(124,061)
4,644,677
412,708
(39,367)
34,955
(101,650)
306,646
81
2,049,400
7,000,805
¥123,159,513
¥ 83,030,782
2,499,113
778,993
7,589,283
—
3,597,658
4,644,699
281,145
1,019,342
3,683,483
60,918
3,803,046
27,659
513
35,643
7,965
11,767
432
27,287
47,217
3,878,504
115,025,460
1,420,877
57,245
1,245,085
(124,024)
2,599,183
(14,649)
(20,835)
35,159
(129,068)
(129,394)
66
2,141,908
4,611,764
¥119,637,224
$ 920,411
22,779
12,046
46,381
3,340
54,452
58,792
2,066
13,027
36,783
1,715
34,316
467
25
448
88
126
4
285
505
40,291
1,248,347
25,125
10,520
15,604
(1,333)
49,916
4,435
(423)
375
(1,092)
3,295
1
22,025
75,237
$1,323,584
SMFG 2010 71
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
$18,225
13,842
2,592
10
58
159
801
763
19
7,838
2,086
4,869
1,189
34,226
3,384
1,935
475
15
66
791
102
1,298
4,318
12,480
2,167
4,581
28,228
5,998
1,119
804
1,157
$ 2,918
SMFG
Consolidated Statements of Operations
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Year ended March 31
Income
Interest income .....................................................................................................
Interest on loans and discounts .......................................................................
Interest and dividends on securities .................................................................
Interest on receivables under resale agreements .............................................
Interest on receivables under securities borrowing transactions .....................
Interest on deposits with banks .......................................................................
Interest on lease transactions ...........................................................................
Other interest income .......................................................................................
Trust fees ..............................................................................................................
Fees and commissions (Note 17) .........................................................................
Trading income (Note 18) .....................................................................................
Other operating income (Note 19) ........................................................................
Other income (Note 21) ........................................................................................
Total income ........................................................................................................
Expenses
Interest expenses .................................................................................................
Interest on deposits ..........................................................................................
Interest on borrowings and rediscounts ...........................................................
Interest on payables under repurchase agreements ........................................
Interest on payables under securities lending transactions .............................
Interest on bonds and short-term bonds .........................................................
Other interest expenses ...................................................................................
Fees and commissions payments (Note 17) ........................................................
Other operating expenses (Note 20) ....................................................................
General and administrative expenses ..................................................................
Provision for reserve for possible loan losses ......................................................
Other expenses (Note 22) .....................................................................................
Total expenses .....................................................................................................
Income before income taxes and minority interests .........................................
Income taxes (Note 23):
¥1,695,805
1,287,955
241,216
902
5,413
14,757
74,542
71,018
1,778
729,364
194,087
453,012
110,638
3,184,688
314,893
180,021
44,174
1,390
6,165
73,652
9,489
120,748
401,773
1,161,302
201,620
426,252
2,626,590
558,097
¥2,087,348
1,564,768
299,616
1,750
4,506
42,738
77,772
96,195
2,122
672,752
211,738
529,599
52,973
3,556,536
748,894
374,359
85,274
7,298
59,962
89,256
132,743
115,574
473,212
1,063,419
402,807
723,131
3,527,040
29,495
Current ..............................................................................................................
Deferred ............................................................................................................
Minority interests in net income ...........................................................................
Net income (loss) .................................................................................................
104,110
74,759
107,668
¥ 271,559
72,238
262,405
68,308
¥ (373,456)
See accompanying notes to consolidated financial statements.
72
SMFG 2010
Consolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
SMFG
Year ended March 31
Stockholders’ equity
Capital stock
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
¥1,420,877
¥1,420,877
$15,270
Issuance of new shares ................................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
917,018
917,018
¥2,337,895
—
—
¥1,420,877
9,855
9,855
$25,125
Capital surplus
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
57,245
57,826
615
Issuance of new shares ................................................................................
Disposal of treasury stock ............................................................................
Decrease due to decrease in affiliates ..........................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
928,094
(108)
(6,333)
921,652
¥ 978,897
—
(580)
—
(580)
¥ 57,245
Retained earnings
Balance at the end of the previous fiscal year..................................................
Decrease in retained earnings at the beginning of the fiscal year due to
accounting change of overseas subsidiaries .................................................
Changes in the fiscal year:
Cash dividends ............................................................................................
Net income (loss) ..........................................................................................
Increase due to increase in subsidiaries .......................................................
Increase due to decrease in subsidiaries .....................................................
Decrease due to increase in subsidiaries .....................................................
Decrease due to decrease in subsidiaries ....................................................
Increase due to decrease in affiliates ...........................................................
Reversal of land revaluation excess .............................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
1,245,085
1,740,610
—
(3,132)
(71,174)
271,559
8
3
(11)
(1)
6,333
141
206,859
¥1,451,945
(118,833)
(373,456)
19
8
(14)
(1)
—
(114)
(492,392)
¥1,245,085
Treasury stock
9,974
(1)
(68)
9,905
$10,520
13,381
—
(765)
2,918
0
0
(0)
(0)
68
2
2,223
$15,604
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(124,024)
(123,989)
(1,333)
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
(189)
152
(36)
¥ (124,061)
(943)
907
(35)
¥ (124,024)
Total stockholders’ equity
Balance at the end of the previous fiscal year..................................................
Decrease in retained earnings at the beginning of the fiscal year due to
accounting change of overseas subsidiaries .................................................
Changes in the fiscal year:
Issuance of new shares ................................................................................
Cash dividends .............................................................................................
Net income (loss) ..........................................................................................
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Increase due to increase in subsidiaries .......................................................
Increase due to decrease in subsidiaries .....................................................
Decrease due to increase in subsidiaries .....................................................
Decrease due to decrease in subsidiaries ....................................................
Increase due to decrease in affiliates ...........................................................
Decrease due to decrease in affiliates ..........................................................
Reversal of land revaluation excess .............................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
2,599,183
3,095,324
—
(3,132)
1,845,113
(71,174)
271,559
(189)
43
8
3
(11)
(1)
6,333
(6,333)
141
2,045,493
¥4,644,677
—
(118,833)
(373,456)
(943)
326
19
8
(14)
(1)
—
—
(114)
(493,008)
¥2,599,183
(2)
2
(0)
$ (1,333)
27,933
—
19,829
(765)
2,918
(2)
1
0
0
(0)
(0)
68
(68)
2
21,983
$49,916
SMFG 2010 73
SMFG
Consolidated Statements of Changes in Net Assets
(Continued)
Year ended March 31
Valuation and translation adjustments
Net unrealized gains (losses) on other securities
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
¥ (14,649)
¥ 550,648
$ (157)
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
427,358
427,358
¥ 412,708
(565,298)
(565,298)
¥ (14,649)
Net deferred losses on hedges
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(20,835)
(75,233)
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
(18,531)
(18,531)
¥ (39,367)
54,397
54,397
¥ (20,835)
Land revaluation excess
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
35,159
34,910
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
(204)
(204)
¥ 34,955
248
248
¥ 35,159
Foreign currency translation adjustments
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(129,068)
(27,323)
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
27,418
27,418
¥ (101,650)
(101,744)
(101,744)
¥ (129,068)
Total valuation and translation adjustments
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(129,394)
483,002
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
436,040
436,040
¥ 306,646
(612,396)
(612,396)
¥ (129,394)
Stock acquisition rights
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
66
43
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
15
15
¥ 81
22
22
¥ 66
Minority interests
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
2,141,908
1,645,705
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
(92,508)
(92,508)
¥2,049,400
496,202
496,202
¥2,141,908
Total net assets
Balance at the end of the previous fiscal year..................................................
Decrease in retained earnings at the beginning of the fiscal year due to
accounting change of overseas subsidiaries .................................................
Changes in the fiscal year:
Issuance of new shares ................................................................................
Cash dividends .............................................................................................
Net income (loss) ..........................................................................................
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Increase due to increase in subsidiaries .......................................................
Increase due to decrease in subsidiaries .....................................................
Decrease due to increase in subsidiaries .....................................................
Decrease due to decrease in subsidiaries ....................................................
Increase due to decrease in affiliates ...........................................................
Decrease due to decrease in affiliates ..........................................................
Reversal of land revaluation excess .............................................................
Net changes in items other than stockholders’ equity in the fiscal year ......
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
4,611,764
5,224,076
—
(3,132)
1,845,113
(71,174)
271,559
(189)
43
8
3
(11)
(1)
6,333
(6,333)
141
343,547
2,389,041
¥7,000,805
—
(118,833)
(373,456)
(943)
326
19
8
(14)
(1)
—
—
(114)
(116,171)
(609,180)
¥4,611,764
See accompanying notes to consolidated financial statements.
74
SMFG 2010
4,592
4,592
$ 4,435
(224)
(199)
(199)
$ (423)
377
(2)
(2)
$ 375
(1,387)
295
295
$ (1,092)
(1,391)
4,686
4,686
$ 3,295
1
0
0
$ 1
23,019
(994)
(994)
$22,025
49,562
—
19,829
(765)
2,918
(2)
1
0
0
(0)
(0)
68
(68)
2
3,692
25,675
$75,237
Consolidated Statements of Cash Flows
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Year ended March 31
Cash flows from operating activities:
Income before income taxes and minority interests ........................................
Depreciation .....................................................................................................
Losses on impairment of fixed assets ..............................................................
Amortization of goodwill ...................................................................................
Equity in losses of affiliates ..............................................................................
Net change in reserve for possible loan losses ................................................
Net change in reserve for employee bonuses ..................................................
Net change in reserve for executive bonuses ..................................................
Net change in reserve for employee retirement benefits ..................................
Net change in reserve for executive retirement benefits ..................................
Net change in reserve for reimbursement of deposits .....................................
Interest income .................................................................................................
Interest expenses .............................................................................................
Net (gains) losses on securities ........................................................................
Net losses from money held in trust .................................................................
Net exchange losses ........................................................................................
Net (gains) losses from disposal of fixed assets ..............................................
Net change in trading assets ............................................................................
Net change in trading liabilities ........................................................................
Net change in loans and bills discounted ........................................................
Net change in deposits .....................................................................................
Net change in negotiable certificates of deposit ..............................................
Net change in borrowed money (excluding subordinated borrowings) ............
Net change in deposits with banks ..................................................................
Net change in call loans and bills bought and others ......................................
Net change in receivables under securities borrowing transactions ................
Net change in call money and bills sold and others .........................................
Net change in commercial paper .....................................................................
Net change in payables under securities lending transactions ........................
Net change in foreign exchanges (assets) ........................................................
Net change in foreign exchanges (liabilities) ....................................................
Net change in lease receivables and investment assets ..................................
Net change in short-term bonds (liabilities) ......................................................
Issuance and redemption of bonds (excluding subordinated bonds) ..............
Net change in due to trust account ..................................................................
Interest received ...............................................................................................
Interest paid ......................................................................................................
Other, net ..........................................................................................................
Subtotal ............................................................................................................
Income taxes paid ............................................................................................
Net cash provided by (used in) operating activities ..........................................
SMFG
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
¥ 558,097
136,860
12,856
18,634
21,542
(1,419)
7,543
813
903
204
(43)
(1,695,805)
314,893
(19,837)
245
83,038
(11,176)
(983,770)
1,195,098
3,591,071
1,918,359
(462,243)
541,021
(770,291)
(474,477)
(3,226,847)
(473,642)
310,787
(3,409,463)
(220,622)
(89,277)
202,531
168,836
(211,844)
98,635
1,760,370
(341,821)
(321,815)
(1,772,056)
(108,864)
(1,880,921)
¥ 29,495
123,025
7,363
8,388
94,876
191,190
102
(630)
2,273
58
1,350
(2,087,348)
748,894
155,831
134
184,195
10,847
(912,601)
1,028,101
(3,439,852)
3,031,427
4,384,033
475,829
764,080
409,341
119,941
(1,186,720)
—
1,857,241
2,261
(19,280)
46,904
244,242
(283,810)
(19,878)
2,132,561
(765,686)
137,137
7,475,320
(107,266)
7,368,053
$ 5,998
1,471
138
200
231
(15)
81
9
10
2
(0)
(18,225)
3,384
(213)
3
892
(120)
(10,572)
12,844
38,593
20,616
(4,968)
5,814
(8,278)
(5,099)
(34,679)
(5,090)
3,340
(36,641)
(2,371)
(959)
2,177
1,814
(2,277)
1,060
18,919
(3,674)
(3,459)
(19,044)
(1,170)
(20,214)
SMFG 2010 75
SMFG
Consolidated Statements of Cash Flows
(Continued)
Year ended March 31
Cash flows from investing activities:
Purchases of securities ....................................................................................
Proceeds from sale of securities ......................................................................
Proceeds from maturity of securities ................................................................
Purchases of money held in trust .....................................................................
Proceeds from sale of money held in trust .......................................................
Purchases of tangible fixed assets ...................................................................
Proceeds from sale of tangible fixed assets .....................................................
Purchases of intangible fixed assets ................................................................
Proceeds from sale of intangible fixed assets ..................................................
Purchases of stocks of subsidiaries .................................................................
Proceeds from sale of stocks of subsidiaries ...................................................
Purchases of treasury stocks of subsidiaries ...................................................
Proceeds from purchase of stocks of subsidiaries resulting in change in
scope of consolidation ...................................................................................
Purchases of stocks of subsidiaries resulting in change in scope of
consolidation ..................................................................................................
Proceeds from sale of stocks of subsidiaries resulting in change in
scope of consolidation ...................................................................................
Net cash used in investing activities ..................................................................
Cash flows from financing activities:
Proceeds from issuance of subordinated borrowings ......................................
Repayment of subordinated borrowings ..........................................................
Proceeds from issuance of subordinated bonds and bonds with
stock acquisition rights ....................................................................................
Repayment of subordinated bonds and bonds with stock
acquisition rights .............................................................................................
Proceeds from issuance of stocks ...................................................................
Dividends paid ..................................................................................................
Proceeds from contributions paid by minority stockholders ............................
Repayment to minority stockholders ................................................................
Dividends paid to minority stockholders ..........................................................
Purchases of treasury stock .............................................................................
Proceeds from disposal of treasury stock ........................................................
Net cash provided by financing activities ..........................................................
Effect of exchange rate changes on cash and due from banks........................
Net change in cash and due from banks ...........................................................
Cash and due from banks at the beginning of the year ....................................
Change in cash and due from banks due to
merger of consolidated subsidiary ...................................................................
Change in cash and due from banks due to
newly consolidated subsidiaries ......................................................................
Cash and due from banks at the end of the year ..............................................
See accompanying notes to consolidated financial statements.
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
¥(46,300,009)
32,626,376
14,263,916
(9,748)
27
(156,154)
37,114
(82,287)
111
—
—
—
¥(53,213,459)
34,674,690
12,176,246
(2,135)
0
(175,632)
12,081
(74,489)
58
(21,925)
363
(20,000)
—
355
(537,007)
(8,675)
—
(157,661)
13,264
(6,639,254)
8,000
(78,000)
5,000
(92,500)
611,172
380,600
(639,981)
1,824,896
(71,063)
388,000
(492,987)
(98,791)
(189)
43
1,451,099
(302)
(587,786)
3,800,890
(316,874)
—
(118,758)
1,046,529
(460,564)
(90,162)
(943)
326
352,652
(17,315)
1,064,136
2,736,752
158,089
—
$(497,582)
350,633
153,293
(105)
0
(1,678)
399
(884)
1
—
—
—
—
(5,771)
—
(1,694)
86
(838)
6,568
(6,878)
19,612
(764)
4,170
(5,298)
(1,062)
(2)
1
15,595
(3)
(6,316)
40,847
1,699
—
¥ 3,371,193
0
¥ 3,800,890
—
$ 36,230
76
SMFG 2010
Notes to Consolidated Financial Statements
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Years ended March 31, 2010 and 2009
SMFG
1. Basis of Presentation
Sumitomo Mitsui Financial Group, Inc. (“SMFG”) was established
on December 2, 2002 as a holding company for the SMFG group
through a statutory share transfer (kabushiki iten) of all of the out-
standing equity securities of Sumitomo Mitsui Banking Corporation
(“SMBC”) in exchange for SMFG’s newly issued securities. SMFG
is a joint stock corporation with limited liability (Kabushiki Kaisha)
incorporated under the Company Act of Japan. Upon formation of
SMFG and completion of the statutory share transfer, SMBC became
a direct wholly owned subsidiary of SMFG.
SMFG has prepared the accompanying consolidated financial
statements in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Act and its related accounting
regulations, and in conformity with accounting principles gener-
ally accepted in Japan (“Japanese GAAP”), which are different in
certain respects as to application and disclosure requirements from
International Financial Reporting Standards.
The accounts of overseas subsidiaries and affiliated companies
were based on accounting records maintained in conformity with
generally accepted accounting principles (“GAAP”) prevailing in the
respective countries of their domicile. Effective as from the fiscal year
starting April 1, 2008, their accounting principles are in principle
integrated with those of SMFG’s accounting policies for purposes of
consolidation unless they apply different accounting principles and
standards as required under U.S. GAAP or International Financial
Reporting Standards in which case a certain limited number of items
are adjusted based on their materiality. This change did not result in
significant differences or impact on the consolidated financial state-
ments of SMFG.
The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated
financial statements of SMFG prepared in accordance with Japanese
GAAP.
Some supplementary information included in the statutory
Japanese language consolidated financial statements, but not
necessarily required for fair presentation, is not presented in the
accompanying consolidated financial statements.
Amounts less than 1 million yen have been omitted. As a result,
the totals in Japanese yen shown in the financial statements do
not necessarily agree with the sum of the individual amounts. The
translation of the Japanese yen amounts into U.S. dollars is included
solely for the convenience of readers outside Japan, using the prevail-
ing exchange rate at March 31, 2010, which was ¥93.05 to US$1.
These translations should not be construed as representations that
the Japanese yen amounts have been, could have been, or could in the
future be, converted into U.S. dollars at that rate.
2. Significant Accounting Policies
(1) Consolidation and equity method
(a) Scope of consolidation
Japanese accounting standards on consolidated financial
statements require a company to consolidate any subsidiary
when the company substantially controls the operations of
the enterprise, even if it is not a majority owned subsidiary.
Control is defined as the power to govern the decision-
making body of an enterprise.
(i) Consolidated subsidiaries
The number of consolidated subsidiaries is as follows:
March 31
Consolidated subsidiaries ..............
2010
307
2009
288
Principal companies:
Sumitomo Mitsui Banking Corporation
THE MINATO BANK, LTD.
Kansai Urban Banking Corporation
Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Banking Corporation (China) Limited
Manufacturers Bank
Sumitomo Mitsui Finance and Leasing Company, Limited
Sumitomo Mitsui Card Company, Limited
SMBC Finance Service Co., Ltd.
SMBC Friend Securities Co., Ltd.
Nikko Cordial Securities Inc.
The Japan Research Institute, Limited
SMBC Capital Markets, Inc.
Changes in the consolidated subsidiaries in the fiscal
year ended March 31, 2010 are as follows:
62 companies including Nikko Cordial Securities Inc.
were newly consolidated due mainly to acquisition of
shares.
35 companies including QUOQ Inc. were excluded from
the scope of consolidation because they were no longer
subsidiaries due to merger and other reasons.
Furthermore, 8 companies including Apricot Navigation
Co., Ltd. were excluded from the scope of consolidation
and became unconsolidated subsidiaries that are not
accounted for by the equity method because they became
operators of silent partnerships for lease transactions.
(ii) Unconsolidated subsidiaries
Principal company:
SBCS Co., Ltd.
214 subsidiaries including SMLC MAHOGANY CO.,
LTD. are operators of silent partnerships for lease transac-
tions and their assets and profits/losses do not belong to
them substantially. Therefore, they have been excluded
from the scope of consolidation pursuant to Article 5,
Paragraph 1, Item 2 of the Consolidated Financial
Statements Regulations.
Other unconsolidated subsidiaries are also excluded from
the scope of consolidation because their total amounts in
terms of total assets, ordinary income, net income and
retained earnings are immaterial, and as such, they do not
hinder a rational judgment of SMFG’s financial position
and results of operations when excluded from the scope of
consolidation.
(b) Application of the equity method
Japanese accounting standards also require that any
unconsolidated subsidiaries and affiliates which SMFG is
able to exercise material influence over their financial and
operating policies be accounted for by the equity method.
(i) Unconsolidated subsidiaries accounted for by the equity
method
The number of unconsolidated subsidiaries accounted for
by the equity method is as follows:
March 31
Unconsolidated subsidiaries ..........
2009
4
2010
4
Principal company:
SBCS Co., Ltd.
SMFG 2010 77
SMFG
Notes to Consolidated Financial Statements
(ii) Affiliates accounted for by the equity method
The number of affiliates accounted for by the equity
method is as follows:
March 31
Affiliates.......................................
2010
54
2009
75
Principal companies:
Sumitomo Mitsui Auto Service Company, Limited
Promise Co., Ltd.
Cedyna Financial Corporation
Daiwa SMBC Capital Co., Ltd.
Daiwa SB Investments Ltd.
Sumitomo Mitsui Asset Management Company, Limited
Changes in the affiliates accounted for by the equity method
in the fiscal year ended March 31, 2010 are as follows:
16 companies including P.T. Nikko Securities Indonesia
newly became affiliated companies accounted for by the
equity method due mainly to acquisition of shares.
2 companies including AJCC CORPORATION were
excluded from the scope of affiliated companies accounted
for by the equity method because they became consolidated
subsidiaries due to an increase in shareholding ratio.
35 companies including Daiwa Securities SMBC Co. Ltd.
were also excluded due to a sale of stocks and other reasons.
(iii) Unconsolidated subsidiaries that are not accounted for
by the equity method
214 subsidiaries including SMLC MAHOGANY CO.,
LTD. are operators of silent partnerships for lease transac-
tions and their assets and profits/losses do not belong
to them substantially. Therefore, they have not been
accounted for by the equity method pursuant to Article
10, Paragraph 1, Item 2 of the Consolidated Financial
Statements Regulations.
(iv) Affiliates that are not accounted for by the equity
method
Principal company:
Daiwa SB Investments (USA) Ltd.
Affiliates that are not accounted for by the equity
method are excluded from the scope of equity method
because the attributable portions to SMFG from their total
amounts in terms of net income and retained earnings
are immaterial, and as such, they do not hinder a rational
judgment of SMFG’s financial position and results of
operations when excluded from the scope of equity method.
(c) The balance sheet dates of consolidated subsidiaries
(i) The balance sheet dates of the consolidated subsidiaries
are as follows:
March 31
May 31 .........................................
June 30 ........................................
July 31 .........................................
September 30 ...............................
October 31 ...................................
November 30 ...............................
December 31 ................................
January 31 ....................................
February 28 ..................................
March 31 ......................................
2010
—
4
2
5
2
5
120
18
8
143
2009
1
6
2
5
2
4
125
15
7
121
78
SMFG 2010
(ii) The financial statements of subsidiaries with balance
sheets dated May 31, June 30, July 31, September 30,
November 30 and January 31 are consolidated after
the accounts are provisionally closed as of March 31
for the purpose of consolidation. For subsidiaries with
balance sheets dated October 31, financial statements are
consolidated based on the provisional financial statements
closed as of January 31 or March 31. Other subsidiaries are
consolidated on the basis of their respective balance sheet
dates.
Overseas consolidated subsidiaries with balance sheets
dated December 31 were established in March 2010. Their
financial statements are consolidated after the accounts are
provisionally closed as of March 31.
Appropriate adjustments are made for material transac-
tions during the periods between their respective balance
sheet dates and consolidated balance sheet dates.
(d) Special purpose entities
(i) Outline of special purpose entities and transactions
SMBC provides loans, credit lines and liquidity lines to 12
special purpose entities (“SPEs”) for their funding needs
and issuing of commercial paper. The SPEs are engaged
in purchases of monetary claims such as receivables from
SMBC customers and incorporated under the laws of the
Cayman Islands or as intermediate corporations with
limited liabilities. SMBC has no voting rights in the SPEs
and sends no directors or employees. Accordingly, SMFG
does not consolidate these SPEs.
The combined assets and liabilities of the 12 SPEs as of
their most recent closing dates of 2010 were ¥2,261,647
million ($24,306 million) and ¥2,261,476 million
($24,304 million), respectively. The respective amounts of
2009 were ¥3,140,527 million and ¥3,140,894 million.
(ii) The amount of principal transactions with the SPEs as
of and for the fiscal years ended March 31, 2010 and 2009
were as follows:
Millions of yen
2010
March 31
Loans and bills
discounted .................. ¥1,630,152 ¥1,851,401
824,149
Credit lines ...................
394,533
Liquidity lines ..............
670,385
279,947
2009
Year ended March 31
Interest on loans and
discounts ....................
Fees and commissions ...
Millions of yen
2010
2009
¥17,520
2,288
¥26,092
2,133
Millions of
U.S. dollars
2010
$17,519
7,205
3,009
Millions of
U.S. dollars
2010
$188
25
(2) Trading assets/liabilities and trading income/losses
Transactions for trading purposes (seeking gains arising from
short-term changes in interest rates, currency exchange rates,
or market prices of securities and other market related indices
or from variation among markets) are included in “Trading
assets” or “Trading liabilities” on the consolidated balance
sheet on a trade date basis. Income and losses on trading-
purpose transactions are recognized on a trade date basis and
recorded as “Trading income” and “Trading losses.”
Securities and monetary claims purchased for trading
purposes are stated at the fiscal year-end fair value, and
financial derivatives such as swaps, futures and options are
stated at amounts that would be settled if the transactions
were terminated on the consolidated balance sheet date.
“Trading income” and “Trading losses” include interest
received or paid during the fiscal year. The year-on-year
valuation differences of securities and monetary claims are
also recorded in the above-mentioned accounts. As for the
derivatives, assuming that the settlement will be made in
cash, the year-on-year valuation differences are also recorded in
the above-mentioned accounts.
(3) Securities
(a) Other than securities classified for trading purposes, debt
securities that consolidated subsidiaries have the positive
intent and ability to hold to maturity are classified as held-
to-maturity securities and are carried at amortized cost
(straight-line method) using the moving-average method.
Investments in unconsolidated subsidiaries and affiliates
that are not accounted for by the equity method are carried
at cost using the moving-average method.
Securities other than trading purpose securities, held-
to-maturity securities and investments in unconsolidated
subsidiaries and affiliates are classified as “other securities”
(available-for-sale securities). Stocks (including foreign
stocks) in other securities that have market prices are car-
ried at their average market prices during the final month
of the fiscal year, and bonds and others that have market
prices are carried at their fiscal year-end market prices (cost
of securities sold is calculated using primarily the moving-
average method). Other securities, for which it is extremely
difficult to determine fair value, are carried at cost using
the moving-average method. Net unrealized gains (losses)
on other securities, net of income taxes, are included in
“Net assets,” after deducting the amount that is reflected
in the fiscal year’s earnings by applying fair value hedge
accounting.
(b) Securities included in money held in trust are carried using
the same method used for securities mentioned above.
(4) Derivative transactions
Derivative transactions, other than those classified as trading
derivatives, are carried at fair value, with revaluation gain or
loss included in the income or loss, unless they are designated
as effective hedging instruments.
(5) Depreciation
(a) Tangible fixed assets
Buildings owned by SMFG and SMBC are depreciated
using the straight-line method over the estimated useful
lives of the respective assets. Assets other than buildings
are depreciated using the declining-balance method. The
estimated useful lives of major items are as follows:
Buildings: 7 to 50 years
Others: 2 to 20 years
Other consolidated subsidiaries depreciate their tangible
fixed assets primarily using the straight-line method over
the estimated useful lives of the respective assets.
(b) Intangible fixed assets
Intangible fixed assets are depreciated using the straight-
line method. Capitalized software for internal use owned
Notes to Consolidated Financial Statements
SMFG
by SMFG and its consolidated domestic subsidiaries is
depreciated over its estimated useful life (basically 5 years).
(c) Lease assets
Lease assets with respect to non-transfer ownership finance
leases, which are recorded in “Tangible fixed assets,” are
depreciated using the straight-line method, assuming that
lease term is its expected lifetime and salvage value is 0.
(6) Reserve for possible loan losses
The reserve for possible loan losses of major consolidated
subsidiaries is provided for as described below in accordance
with the internal standards for write-offs and provisions.
For claims on borrowers that have entered into bankruptcy,
special liquidation proceedings or similar legal proceedings
(“bankrupt borrowers”) or borrowers that are not legally or
formally insolvent but are regarded as substantially in the
same situation (“effectively bankrupt borrowers”), a reserve is
provided for based on the amount of claims, after the write-off
stated below, net of the expected amount of recoveries from
collateral and guarantees.
For claims on borrowers that are not currently bankrupt but
are perceived to have a high risk of falling into bankruptcy
(“potentially bankrupt borrowers”), a reserve is provided for
in the amount deemed necessary based on an overall solvency
assessment of the claims, net of the expected amount of
recoveries from collateral and guarantees.
The discounted cash flows (“DCF”) method is used for
claims on borrowers whose cash flows from collection of
principal and interest can be rationally estimated, and SMBC
applies it to claims on large potentially bankrupt borrowers
and claims on large borrowers requiring close monitoring that
have been classified as “Past due loans (3 months or more)” or
“Restructured loans,” whose total loans from SMBC exceed
a certain amount. SMBC establishes a reserve for possible
loan losses using the DCF method for such claims in the
amount of the difference between the present value of the
future collection from principal and interest (calculated using
the rationally estimated cash flows discounted at the initial
contractual interest rate) and the book value.
For other claims, a reserve is provided for based on the
historical loan-loss ratio.
For claims originated in specific overseas countries, an addi-
tional reserve is provided for in the amount deemed necessary
based on the assessment of political and economic conditions.
Branches and credit supervision departments assess all
claims in accordance with the internal rules for self-assessment
of assets, and the Credit Review Department, independent
from these operating sections, reviews their assessment. The
reserves are provided for based on the results of these
assessments.
The reserve for possible loan losses of other consolidated
subsidiaries for general claims is provided for in the amount
deemed necessary based on the historical loan-loss ratios, and
for doubtful claims in the amount deemed uncollectible based
on assessment of each claim.
For collateralized or guaranteed claims on bankrupt borrow-
ers and effectively bankrupt borrowers, the amount exceeding
the estimated value of collateral and guarantees is deemed to
be uncollectible and written off against the total outstanding
SMFG 2010 79
SMFG
Notes to Consolidated Financial Statements
amount of the claims. The amount of write-off was ¥843,781
million ($9,068 million) and ¥717,010 million at March 31,
2010 and 2009, respectively.
(7) Reserve for employee bonuses
The reserve for employee bonuses is provided for payment of
bonuses to employees, in the amount of estimated bonuses,
which are attributable to the respective fiscal year.
(8) Reserve for executive bonuses
The reserve for executive bonuses is provided for payment of
bonuses to executives, in the amount of estimated bonuses,
which are attributable to the respective fiscal year.
(14) Lease transactions
(a) Recognition of income on finance leases
Interest income is allocated to each period.
(b) Recognition of income on operating leases
Primarily, lease-related income is recognized on a
straight-line basis over the term of the lease, based on the
contractual amount of lease fees per month.
(c) Recognition of income and expenses on installment sales
Primarily, installment-sales-related income and installment-
sales-related expenses are recognized on a due-date accrual
basis over the period of the installment sales.
(9) Reserve for employee retirement benefits
(15) Hedge accounting
The reserve for employee retirement benefits is provided for
payment of retirement benefits to employees, in the amount
deemed accrued at the fiscal year-end, based on the projected
retirement benefit obligation and the fair value of plan assets
at the fiscal year-end.
Unrecognized prior service cost is amortized using the
straight-line method, primarily over 9 years, over the employ-
ees’ estimated average remaining service period from the fiscal
year of its incurrence.
Unrecognized net actuarial gain or loss is amortized using
the straight-line method, primarily over 9 years, over the
employees’ average remaining service period, commencing
from the next fiscal year of incurrence.
“Partial Amendments to Accounting Standard for
Retirement Benefits (Part3)” (Accounting Standard Board of
Japan (“ASBJ”) Statement No. 19, issued on July 31, 2008)
became effective from the fiscal year beginning on and after
April 1, 2009. Accordingly, SMFG has applied them from the
fiscal year ended March 31, 2010. This accounting method
has no impact on the consolidated financial statements for the
fiscal year ended March 31, 2010.
(10) Reserve for executive retirement benefits
The reserve for executive retirement benefits is provided for
payment of retirement benefits to directors, corporate auditors
and other executive officers, in the amount deemed accrued at
the fiscal year-end based on the internal regulations.
(11) Reserve for reimbursement of deposits
The reserve for reimbursement of deposits which were
derecognized as liabilities under certain conditions is provided
for the possible losses on the future claims of withdrawal based
on the historical reimbursements.
(12) Reserve under the special laws
The reserve under the special laws is a reserve for eventual
future operating losses from financial instruments transactions
pursuant to Article 46-5 of the Financial Instruments and
Exchange Act.
(13) Translation of foreign currency assets and liabilities
Assets and liabilities of SMFG and SMBC denominated in
foreign currencies and accounts of SMBC overseas branches are
translated into Japanese yen mainly at the exchange rates
prevailing at the consolidated balance sheet date, with the
exception of stocks of subsidiaries and affiliates translated at
rates prevailing at the time of acquisition.
Other consolidated subsidiaries’ assets and liabilities
denominated in foreign currencies are translated into Japanese
yen at the exchange rates prevailing at their respective balance
sheet dates.
80
SMFG 2010
(a) Hedging against interest rate changes
As for the hedge accounting method applied to hedging
transactions for interest rate risk arising from financial
assets and liabilities, SMBC applies deferred hedge
accounting.
SMBC applies deferred hedge accounting stipulated in
“Treatment for Accounting and Auditing of Application
of Accounting Standard for Financial Instruments in
Banking Industry” (Japanese Institute of Certified Public
Accountants (“JICPA”) Industry Audit Committee Report
No. 24) to portfolio hedges on groups of large-volume,
small-value monetary claims and debts.
As for the portfolio hedges to offset market fluctuation,
SMBC assesses the effectiveness of such hedges by clas-
sifying the hedged items (such as deposits and loans) and
the hedging instruments (such as interest rate swaps) by
their maturity. As for the portfolio hedges to fix cash flows,
SMBC assesses the effectiveness of such hedges by verifying
the correlation between the hedged items and the hedging
instruments.
As for the individual hedges, SMBC assesses the
effectiveness of such individual hedges.
As a result of the application of JICPA Industry Audit
Committee Report No. 24, SMBC discontinued the
application of hedge accounting or applied fair value hedge
accounting to a portion of the hedging instruments using
“macro hedge,” which had been applied in order to manage
interest rate risk arising from large-volume transactions
in loans, deposits and other interest-earning assets and
interest-bearing liabilities as a whole using derivatives
pursuant to “Temporary Treatment for Accounting and
Auditing of Application of Accounting Standard for
Financial Instruments in Banking Industry” (JICPA
Industry Audit Committee Report No. 15). The deferred
hedge losses and gains related to such a portion of hedging
instruments are charged to “Interest income” or “Interest
expenses” over a 12-year period (maximum) according to
their maturity from the fiscal year ended March 31, 2004.
Gross amounts of deferred hedge losses on “macro hedge”
(before deducting tax effect) at March 31, 2010 and 2009
were ¥2,470 million ($27 million) and ¥6,921 million,
respectively. Gross amounts of deferred hedge gains on
“macro hedge” (before deducting tax effect) at March 31,
2010 and 2009 were ¥2,416 million ($26 million) and
¥5,688 million, respectively.
Notes to Consolidated Financial Statements
SMFG
(b) Hedging against currency fluctuations
(18) Amortization of goodwill
SMBC applies deferred hedge accounting stipulated in
“Treatment of Accounting and Auditing Concerning
Accounting for Foreign Currency Transactions in Banking
Industry” (JICPA Industry Audit Committee Report
No. 25) to currency swap and foreign exchange swap trans-
actions executed for the purpose of lending or borrowing
funds in different currencies.
Pursuant to JICPA Industry Audit Committee Report
No. 25, SMBC assesses the effectiveness of currency swap
and foreign exchange swap transactions executed for
the purpose of offsetting the risk of changes in currency
exchange rates by verifying that there are foreign-currency
monetary claims and debts corresponding to the foreign-
currency positions.
In order to hedge risk arising from volatility of exchange
rates for stocks of subsidiaries and affiliates and other
securities (excluding bonds) denominated in foreign
currencies, SMBC applies deferred hedge accounting or
fair value hedge accounting, on the conditions that the
hedged securities are designated in advance and that suf-
ficient on-balance (actual) or off-balance (forward) liability
exposure exists to cover the cost of the hedged securities
denominated in the same foreign currencies.
(c) Hedging against share price fluctuations
SMBC applies fair value hedge accounting to individual
hedges offsetting the price fluctuation of the shares that are
classified under other securities, and that are held for the
purpose of strategic investment, and accordingly evaluates
the effectiveness of such individual hedges.
(d) Transactions between consolidated subsidiaries
As for derivative transactions between consolidated sub-
sidiaries or internal transactions between trading accounts
and other accounts (or among internal sections), SMBC
manages the interest rate swaps and currency swaps that
are designated as hedging instruments in accordance with
the non-arbitrary and strict criteria for external transac-
tions stipulated in JICPA Industry Audit Committee
Report No. 24 and No. 25. Therefore, SMBC accounts for
the gains or losses that arise from interest rate swaps and
currency swaps in its earnings or defers them, rather than
eliminating them.
Certain other consolidated subsidiaries apply the
deferred hedge accounting or fair value hedge account-
ing or the special treatment for interest rate swaps. A
consolidated domestic subsidiary (a leasing company)
partly applies the accounting method that is permitted
by “Temporary Treatment for Accounting and Auditing
of Application of Accounting Standard for Financial
Instruments in Leasing Industry” (JICPA Industry Audit
Committee Report No. 19).
(16) Consumption taxes
National and local consumption taxes of SMFG and its
consolidated domestic subsidiaries are accounted for using the
tax-excluded method.
(17) Valuation of consolidated subsidiaries’ assets and liabilities
Assets and liabilities of consolidated subsidiaries including the
portion attributable to the minority stockholders are valued
for consolidation at fair value when SMFG acquires control.
Goodwill on SMBC Friend Securities Co., Ltd., Sumitomo
Mitsui Finance and Leasing Company, Limited, Nikko Cordial
Securities Inc. and Kansai Urban Banking Corporation is
amortized using the straight-line method over 20 years.
Goodwill on other companies was charged or credited to
income directly when incurred or benefited.
(19) Statements of cash flows
For the purposes of presenting the consolidated statements of
cash flows, cash and cash equivalents represent cash and due
from banks.
(20) Application of new accounting standards
(a) Accounting standard for financial instruments
“Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10, partially revised on March 10, 2008)
and “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19,
issued on March 10, 2008) became effective from the
fiscal year ending on and after March 31, 2010. SMFG
has applied them from the fiscal year ended March 31,
2010. Accordingly, this accounting change has the fol-
lowing impact on the consolidated financial statements as
compared with the previous accounting method:
Monetary claims bought .............
Securities ....................................
Net unrealized gains (losses)
on other securities .....................
Deferred tax assets ......................
Reserve for possible loan losses ...
Millions
of yen
¥ 8,710
41,914
39,315
(27,056)
(34,999)
Millions of
U.S. dollars
$ 94
450
423
(291)
(376)
As a result, income before income taxes and minority
interests increased by ¥19,251 million ($207 million) as
compared with the former method.
(b) Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial
Statements
“Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (ASBJ Practical Issues Task Force No. 18,
issued on May 17, 2006) became effective from the fiscal
year beginning on and after April 1, 2008. Accordingly,
SMFG has applied it from the fiscal year ended March
31, 2009. This accounting method has decreased retained
earnings at April 1, 2008 by ¥3,132 million, but has no
material impact on the profit or loss for the fiscal year
ended March 31, 2009.
(c) Accounting Standard for Lease Transactions
Non-transfer ownership finance leases had been accounted
for using the same method as for operating leases.
However, “Accounting Standard for Lease Transactions”
(ASBJ Statement No. 13, issued on March 30, 2007) and
“Implementation Guidance on Accounting Standard for
Lease Transactions” (ASBJ Guidance No. 16, issued on
March 30, 2007) became effective from the fiscal year begin-
ning on and after April 1, 2008. Accordingly, SMFG has
applied them from the fiscal year ended March 31, 2009.
The treatment of non-transfer ownership finance lease
transactions which commenced before April 1, 2008 was as
follows:
SMFG 2010 81
SMFG
Notes to Consolidated Financial Statements
(i) Lessee side
Future minimum lease payments, excluding the interest
portion, at March 31, 2008 are considered as acquisition
cost and recorded as lease assets in either “Tangible fixed
assets” or “Intangible fixed assets,” assuming they had been
acquired at the beginning of the fiscal year.
(ii) Lessor side
Appropriate book value, net of accumulated depreciation,
of lease assets at March 31, 2008 was recorded as the
beginning balance of “Lease receivables and investment
assets.”
Accordingly, this accounting change has the following
impact on the consolidated financial statements as of and
for the fiscal year ended March 31, 2009 as compared with
the previous accounting method:
Millions
of yen
Lease receivables and investment assets ........ ¥1,968,347
Tangible fixed assets:
Lease assets ..............................................
7,206
Intangible fixed assets:
Lease assets ..............................................
Loans and bills discounted ...........................
Lease assets ..................................................
Other assets .................................................
Other liabilities ...........................................
480
(138,788)
(1,205,021)
(662,005)
(32,205)
Interest income:
Interest on lease transactions .................... ¥ 77,772
(7,659)
Interest on loans and discounts ................
Interest expenses:
Other interest expenses ............................
(639)
Other operating income:
Lease-related income ................................
Installment-related income ......................
Other .......................................................
(503,389)
(242,763)
(810)
Other operating expenses:
Lease-related expenses ..............................
Installment-related expenses ....................
General and administrative expenses ............
(472,005)
(206,456)
(178)
As a result, income before income taxes and minority
interests for the fiscal year ended March 31, 2009 increased
by ¥2,423 million.
(21) Changes in presentation
(a) Lease assets related to operating leases on lessor side (March
31, 2009: ¥180,273 million) had been included in “Lease
assets.” From the fiscal year ended March 31, 2009, they
are included in the following items because they have been
immaterial:
March 31
Tangible fixed assets:
Millions
of yen
2009
Buildings .................................................
Land ........................................................
Other tangible fixed assets .......................
¥52,681
68,131
59,460
Intangible fixed assets:
Software ...................................................
0
82
SMFG 2010
(b) “Losses (gains) on sale of subsidiaries’ shares and gains on
change in equity of subsidiary” which had been reported
in “Net cash provided by operating activities” in the fiscal
year ended March 31, 2008, were ¥(5,622) million in the
fiscal year ended March 31, 2009. They are included in
“Other” from the fiscal year ended March 31, 2009 because
they have been immaterial.
(22) Issuance of new shares
On June 22, 2009, SMFG issued 219,700 thousand new
shares of common stock at ¥3,766 per share (issue price) for
final allocation by underwriters at ¥3,928 per share (offer
price). Furthermore, in connection with the over-allotment
of 15,300 thousand shares of common stock offered for sale
at ¥3,928 per share (sales price) in the public offering, SMFG
issued 8,931 thousand new shares of common stock at ¥3,766
per share (issue price) through third-party allocation to the
underwriter who conducted the over-allotment on July 27,
2009. The purchase agreement for the offering prescribes that
the total amount of issue price be treated as the total amount
of subscription price and no underwriting commission be
paid. Accordingly, other expenses do not include the amount
equivalent to the underwriting commission for the offering
in the amount of ¥37,038 million. Out of the issue price per
share, ¥1,883 is accounted for as capital stock and ¥1,883 as
capital surplus.
On January 27, 2010, SMFG issued 340,000 thousand new
shares of common stock at ¥2,702.81 per share (issue price)
for final allocation by underwriters at ¥2,804 per share (offer
price). Furthermore, in connection with the over-allotment
of 20,000 thousand shares of common stock offered for sale
at ¥2,804 per share (sales price) in the public offering, SMFG
issued 20,000 thousand new shares of common stock at
¥2,702.81 per share (issue price) through third-party alloca-
tion to the underwriter who conducted the over-allotment on
February 10, 2010. The purchase agreement for the offering
prescribes that the total amount of issue price be treated as the
total amount of subscription price and no underwriting com-
mission be paid. Accordingly, other expenses do not include
the amount equivalent to the underwriting commission for the
offering in the amount of ¥36,428 million. Out of the issue
price per share, ¥1,351.405 is accounted for as capital stock
and ¥1,351.405 as capital surplus.
Equity of ¥11,075 million attributable to SMFG, which
a consolidated subsidiary and an equity method affiliated
company of SMFG recorded as earnings under the purchase
agreement for the offering, was accounted for as “Capital
surplus.”
(23) Change in method of valuation of certain securities
Floating-rate Japanese government bonds which SMFG Group
held as “Other securities — AFS securities” had been carried
on the consolidated balance sheet at market values. From
the fiscal year ended March 31, 2009, such bonds have been
carried at their reasonably estimated amounts in accordance
with the “Practical Solution on Measurement of Fair Value for
Financial Assets” (ASBJ Practical Issues Task Force No. 25,
issued on October 28, 2008). As a result of this accounting
change, compared with the former accounting method at
March 31, 2009, “Securities,” “Net unrealized gains on other
Notes to Consolidated Financial Statements
SMFG
securities” and “Minority interests” increased by ¥117,757
million, ¥67,741 million and ¥2,508 million, respectively,
and “Deferred tax assets” decreased by ¥47,508 million.
SMFG has rationally calculated the fair values of floating-
rate Japanese government bonds by discounting future cash
flows estimated from their yields and other factors, using
discount rates determined based on their yields. Yield and
volatility are the main parameters for calculating the fair
value.
(24) Transactions with related parties
SMFG has applied “Accounting Standard for Related Party
Disclosures” (ASBJ Statement No. 11, issued on October 17,
2006) and “Guidance on Accounting Standard for Related
Party Disclosures” (ASBJ Guidance No. 13, issued on October
17, 2006) from the fiscal year ended March 31, 2009. There
are no material transactions with related parties to be reported
in the fiscal years ended March 31, 2010 and 2009.
3. Trading Assets
Trading assets at March 31, 2010 and 2009 consisted of the following:
March 31
Trading securities ................................................................................................
Derivatives of trading securities ...........................................................................
Derivatives of securities related to trading transactions ........................................
Trading-related financial derivatives ....................................................................
Other trading assets .............................................................................................
4. Securities
Securities at March 31, 2010 and 2009 consisted of the following:
March 31
Japanese government bonds*1 ..............................................................................
Japanese local government bonds .........................................................................
Japanese corporate bonds*2 ..................................................................................
Japanese stocks*1, 3, 4 ............................................................................................
Other*1, 3, 4 ..........................................................................................................
Millions of yen
2010
¥2,779,725
1,246
6,931
3,642,477
278,307
¥6,708,688
2009
¥ 293,956
470
13,428
4,052,928
564,178
¥4,924,961
Millions of yen
2010
¥16,738,321
422,648
3,548,359
2,967,641
4,946,997
¥28,623,968
2009
¥14,734,419
338,688
3,899,189
2,755,683
6,970,184
¥28,698,164
Millions of
U.S. dollars
2010
$29,874
13
75
39,145
2,991
$72,098
Millions of
U.S. dollars
2010
$179,885
4,542
38,134
31,893
53,165
$307,619
*1 Unsecured loaned securities for which borrowers have the right to sell or pledge in the amount of ¥41,826 million ($450 million) are included in Japanese government bonds in
Securities and in trading securities in Trading assets at March 31, 2010 and such securities in the amount of ¥33,312 million are included in Japanese government bonds and other in
Securities at March 31, 2009.
SMBC has the right to sell or pledge, some of the unsecured borrowed securities, securities under resale agreements and securities borrowed with cash collateral. Of these securities,
¥3,840,308 million ($41,271 million) are pledged, and ¥133,566 million ($1,435 million) are held in hand at March 31, 2010. The respective amounts at March 31, 2009 were
¥1,717,335 million and ¥188,715 million.
*2 Japanese corporate bonds include privately placed bonds (stipulated by Article 2-3 of the Financial Instruments and Exchange Act) which are guaranteed by banking subsidiaries in
the amount of ¥2,136,145 million ($22,957 million) and ¥2,304,890 million at March 31, 2010 and 2009, respectively.
*3 Japanese stocks and other include investments in unconsolidated subsidiaries and affiliates of ¥321,897 million ($3,459 million) and ¥469,965 million at March 31, 2010 and 2009,
respectively.
*4 Japanese stocks and other include investments in jointly controlled entities of ¥94,369 million ($1,014 million) and ¥14,756 million at March 31, 2010 and 2009, respectively.
5. Loans and Bills Discounted
(1) Loans and bills discounted at March 31, 2010 and 2009 consisted of the following:
March 31
Bills discounted ...............................................................................................
Loans on notes .................................................................................................
Loans on deeds .................................................................................................
Overdrafts .......................................................................................................
Millions of yen
2010
¥ 196,382
2,324,520
52,839,032
7,341,097
¥62,701,033
2009
¥ 257,759
2,852,998
53,489,947
8,534,613
¥65,135,319
Millions of
U.S. dollars
2010
$ 2,111
24,981
567,856
78,894
$673,842
SMFG 2010 83
SMFG
Notes to Consolidated Financial Statements
(2) Loans and bills discounted included the following “Risk-monitored loans” stipulated in the Banking Act:
March 31
Risk-monitored loans:
Bankrupt loans*1..........................................................................................
Non-accrual loans*2 .....................................................................................
Past due loans (3 months or more)*3.............................................................
Restructured loans*4 ....................................................................................
Millions of yen
2010
2009
¥ 165,131
1,075,782
38,315
250,256
¥1,529,484
¥ 292,088
1,019,352
36,162
238,713
¥1,586,317
Millions of
U.S. dollars
2010
$ 1,775
11,561
412
2,689
$16,437
*1 “Bankrupt loans” are loans, after write-off, to legally bankrupt borrowers as defined in Articles 96-1-3 and 96-1-4 of the Enforcement Ordinance No. 97 of the Japanese Corporate
Tax Law (issued in 1965) and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest
because they are past due for a considerable period of time or for other reasons.
*2 “Non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to
support the borrowers’ recovery from financial difficulties.
*3 “Past due loans (3 months or more)” are loans on which the principal or interest is past due for 3 months or more, excluding “Bankrupt loans” and “Non-accrual loans.”
*4 “Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of interest
payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Bankrupt loans,” “Non-accrual
loans” and “Past due loans (3 months or more).”
(3) Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee Report No. 24. SMFG’s
banking subsidiaries have rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary bills and foreign
exchanges bought without restrictions. The total face value at March 31, 2010 and 2009 was ¥617,381 million ($6,635 million) and
¥686,407 million, respectively.
(4) Commitment line contracts on overdrafts and loans are agreements to lend to customers, up to a prescribed amount, as long as there
is no violation of any condition established in the contracts. The amounts of unused commitments at March 31, 2010 and 2009 were
¥41,957,592 million ($450,914 million) and ¥39,983,526 million, respectively, and the amounts of unused commitments whose origi-
nal contract terms are within 1 year or unconditionally cancelable at any time at March 31, 2010 and 2009 were ¥36,373,235 million
($390,900 million) and ¥34,012,566 million, respectively.
Since many of these commitments are expected to expire without being drawn upon, the total amount of unused commitments does
not necessarily represent actual future cash flow requirements. Many of these commitments include clauses under which SMBC and
other consolidated subsidiaries can reject an application from customers or reduce the contract amounts in the event that economic
conditions change, SMBC and other consolidated subsidiaries need to secure claims, or other events occur. In addition, SMBC and other
consolidated subsidiaries may request the customers to pledge collateral such as premises and securities at the time of the contracts, and
take necessary measures such as monitoring customers’ financial positions, revising contracts when such need arises and securing claims
after the contracts are made.
6. Other Assets
Other assets at March 31, 2010 and 2009 consisted of the following:
March 31
Prepaid expenses ..................................................................................................
Accrued income ...................................................................................................
Deferred assets .....................................................................................................
Financial derivatives* ..........................................................................................
Other ..................................................................................................................
* Referred to in Note 30
Millions of yen
2010
¥ 30,643
239,422
488,712
1,079,708
1,771,559
¥3,610,046
2009
¥ 35,305
265,015
868,188
1,406,092
1,682,648
¥4,257,251
Millions of
U.S. dollars
2010
$ 329
2,573
5,252
11,604
19,039
$38,797
84
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
7. Tangible Fixed Assets
Tangible fixed assets at March 31, 2010 and 2009 consisted of the following:
Millions of yen
March 31
Buildings ............................................................................................................
Land* ..................................................................................................................
Lease assets ..........................................................................................................
Construction in progress ......................................................................................
Other tangible fixed assets ...................................................................................
Total ....................................................................................................................
Accumulated depreciation ...................................................................................
2010
¥ 314,461
544,075
8,159
8,206
206,222
¥1,081,125
¥ 671,298
2009
¥ 296,219
531,726
7,206
3,527
170,121
¥1,008,801
¥ 616,324
* Includes land revaluation excess referred to in Note 15.
8. Intangible Fixed Assets
Intangible fixed assets at March 31, 2010 and 2009 consisted of the following:
March 31
Software ..............................................................................................................
Goodwill .............................................................................................................
Lease assets ..........................................................................................................
Other intangible fixed assets ................................................................................
9. Assets Pledged as Collateral
Assets pledged as collateral at March 31, 2010 and 2009 consisted of the following:
March 31
Assets pledged as collateral:
Millions of yen
2010
¥215,563
363,507
367
46,809
¥626,248
2009
¥163,522
186,793
480
11,087
¥361,884
Millions of yen
2010
2009
Cash and due from banks and Deposits with banks ..........................................
Call loans and bills bought ..............................................................................
Monetary claims bought ..................................................................................
Trading assets ..................................................................................................
Securities .........................................................................................................
Loans and bills discounted ...............................................................................
Lease receivables and investment assets ............................................................
Tangible fixed assets ........................................................................................
Other assets (installment account receivable, etc.) ............................................
Liabilities corresponding to assets pledged as collateral:
Deposits ..........................................................................................................
Call money and bills sold .................................................................................
Payables under repurchase agreements .............................................................
Payables under securities lending transactions ..................................................
Trading liabilities ............................................................................................
Borrowed money ..............................................................................................
Other liabilities ...............................................................................................
Acceptances and guarantees .............................................................................
¥ 703
367,035
1,870
2,337,389
4,649,170
1,631,290
15,478
16,165
3,087
24,992
642,100
1,120,860
3,664,591
365,974
1,468,005
14,611
123,733
¥ 339,948
259,186
2,020
610,146
8,049,756
3,062,015
41,993
11,153
2,165
27,060
1,266,265
778,993
6,332,775
594,121
1,970,209
4,587
134,530
Millions of
U.S. dollars
2010
$ 3,380
5,847
88
88
2,216
$11,619
$ 7,214
Millions of
U.S. dollars
2010
$2,317
3,906
4
503
$6,730
Millions of
U.S. dollars
2010
$ 8
3,944
20
25,120
49,964
17,531
166
174
33
269
6,901
12,046
39,383
3,933
15,777
157
1,330
SMFG 2010 85
SMFG
Notes to Consolidated Financial Statements
In addition to the assets presented above, the following assets were pledged as collateral for cash settlements, variation margins of futures
market transactions and certain other purposes at March 31, 2010 and 2009:
March 31
Cash and due from banks and Deposits with banks ..............................................
Trading assets ......................................................................................................
Securities .............................................................................................................
Loans and bills discounted ...................................................................................
2010
¥ 25,804
111,283
14,233,542
1,171,863
2009
¥ 19,380
52,843
11,172,095
284,157
Millions of yen
Millions of
U.S. dollars
2010
$ 277
1,196
152,967
12,594
At March 31, 2010, other assets included surety deposits of ¥102,085 million ($1,097 million), variation margins of futures market transac-
tions of ¥8,457 million ($91 million) and other variation margins of ¥83,768 million ($900 million). At March 31, 2009, other assets included
surety deposits of ¥85,892 million and variation margins of futures market transactions of ¥6,252 million.
10. Deposits
Deposits at March 31, 2010 and 2009 consisted of the following:
March 31
Current deposits ..................................................................................................
Ordinary deposits ................................................................................................
Savings deposits ...................................................................................................
Deposits at notice ................................................................................................
Time deposits ......................................................................................................
Negotiable certificates of deposit .........................................................................
Other deposits .....................................................................................................
11. Trading Liabilities
Trading liabilities at March 31, 2010 and 2009 consisted of the following:
March 31
Trading securities sold for short sales ...................................................................
Derivatives of trading securities ...........................................................................
Derivatives of securities related to trading transactions ........................................
Trading-related financial derivatives ....................................................................
Millions of yen
2010
¥ 6,871,401
35,153,531
750,961
5,363,534
26,888,129
6,995,619
3,621,037
¥85,644,215
2009
¥ 6,588,074
34,078,361
815,336
5,162,137
25,039,089
7,461,284
3,886,497
¥83,030,782
Millions of yen
2010
¥1,582,808
2,367
6,961
3,474,589
¥5,066,727
2009
¥ 7,473
407
13,997
3,575,780
¥3,597,658
Millions of
U.S. dollars
2010
$ 73,846
377,792
8,071
57,642
288,964
75,181
38,915
$920,411
Millions of
U.S. dollars
2010
$17,010
26
75
37,341
$54,452
12. Borrowed Money
Borrowed money at March 31, 2010 and 2009 consisted of the following:
March 31
Borrowed money*2 ...................................................... ¥5,470,578
2010
2009
¥4,644,699
Millions of yen
Millions of
U.S. dollars
2010
$58,792
Average
interest rate*1
2010
0.65%
Due
Jan. 2010 — Perpetual
*1 Average interest rate represents the weighted average interest rate based on the balances and rates at respective year-end of SMBC and other consolidated subsidiaries.
*2 Includes subordinated borrowings of ¥378,729 million ($4,070 million) and ¥436,000 million at March 31, 2010 and 2009, respectively.
The repayment schedule over the next 5 years on borrowed money at March 31, 2010 was as follows:
March 31
Within 1 year .....................................................................................................................
After 1 year through 2 years ...............................................................................................
After 2 years through 3 years ..............................................................................................
After 3 years through 4 years ..............................................................................................
After 4 years through 5 years ..............................................................................................
Millions of yen
2010
¥4,156,807
325,880
262,602
140,698
263,870
Millions of U.S. dollars
2010
$44,673
3,502
2,822
1,512
2,836
86
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
13. Bonds
Bonds at March 31, 2010 and 2009 consisted of the following:
March 31
Issuer
Description
SMBC:
Short-term bonds, payable in Yen ..........................
Straight bonds, payable in Yen ..............................
Straight bonds, payable in Euroyen ........................
Straight bonds, payable in Australian dollars ............
Subordinated bonds, payable in Yen ......................
Subordinated bonds, payable in Euroyen ................
Subordinated bonds, payable in U.S. dollars ............
Subordinated bonds, payable in Euro .....................
Subordinated bonds, payable in Euro .....................
Other consolidated subsidiaries:
Straight bonds, payable in Yen ..............................
Straight bonds, payable in U.S. dollars ..................
Subordinated bonds, payable in Yen ......................
Subordinated bonds, payable in U.S. dollars ............
Short-term bonds, payable in Yen ..........................
Millions of yen*1
2010
2009
Millions of
U.S. dollars
2010
Interest rate*2
(%)
2010
Due
¥ 164,678
[164,678]
1,032,907
[149,198]
20,900
46,031
(A$539,895 thousand)
1,383,521
[149,798]
593,800
102,371
($1,100,179 thousand)
41,162
(€329,591 thousand)
—
89,738
[62,842]
—
112,239
[140]
—
1,047,500
[1,047,500]
¥4,634,851
¥ 114,242
[114,242]
1,249,142
[398,291]
25,400
—
$ 1,770
0.105–0.14 Apr. 2010–Jun. 2010
11,101
0.10–2.60 Apr. 2010–May 2025
225
495
0.00–4.55944 Mar. 2012–Feb. 2037
Mar. 2013
5.76
885,875
14,869
1.15–2.80
Jun. 2010–Jul. 2019
690,800
207,782
($2,115,273 thousand)
90,312
(€695,570 thousand)
162,234
(€1,249,496 thousand)
126,342
[65,621]
910
($10,000 thousand)
[910]
146,451
[23,815]
98,230
($1,000,000 thousand)
[98,230]
905,100
[905,100]
¥4,702,826
6,381
1,100
0.50313–2.97 May 2015–Perpetual
5.625–8.00 Nov. 2011–Perpetual
442
—
4.375
—
Perpetual
—
964
0.26868–3.50 Mar. 2010–Jul. 2017
—
—
—
1,206
1.0475–4.95 Mar. 2011–Perpetual
—
—
—
11,257
0.112–0.79367 Apr. 2010–Dec. 2010
$49,810
*1 Figures in ( ) are the balances in the original currency of the foreign currency denominated bonds, and figures in [ ] are the amounts to be redeemed within 1 year.
*2 Interest rates indicate nominal interest rates which are applied at the consolidated balance sheet dates. Therefore, they may differ from actual interest rates.
The redemption schedule over the next 5 years on bonds at March 31, 2010 was as follows:
March 31
Within 1 year ....................................................................................................................
After 1 year through 2 years ...............................................................................................
After 2 years through 3 years ..............................................................................................
After 3 years through 4 years ..............................................................................................
After 4 years through 5 years ..............................................................................................
Millions of yen
2010
¥1,574,202
261,143
383,327
267,070
269,494
Millions of U.S. dollars
2010
$16,918
2,806
4,120
2,870
2,896
SMFG 2010 87
SMFG
Notes to Consolidated Financial Statements
14. Other Liabilities
Other liabilities at March 31, 2010 and 2009 consisted of the following:
March 31
Accrued expenses .................................................................................................
Unearned income .................................................................................................
Income taxes payable ...........................................................................................
Financial derivatives*1 .........................................................................................
Lease liabilities*2 .................................................................................................
Other ..................................................................................................................
Millions of yen
2010
¥ 144,338
174,931
56,708
818,105
58,742
1,940,320
¥3,193,146
2009
¥ 268,050
177,998
45,105
1,317,303
23,594
1,970,993
¥3,803,046
Millions of
U.S. dollars
2010
$ 1,551
1,880
610
8,792
631
20,852
$34,316
*1 Referred to in Note 30
*2 Average interest rate on lease liabilities for the year ended March 31, 2010 was 3.52%. Non-transfer ownership finance lease with the lease term commenced before April 1, 2008 is
excluded from calculations of average interest rate.
The repayment schedule over the next 5 years on lease liabilities at March 31, 2010 was as follows:
March 31
Within 1 year .....................................................................................................................
After 1 year through 2 years ...............................................................................................
After 2 years through 3 years ..............................................................................................
After 3 years through 4 years ..............................................................................................
After 4 years through 5 years ..............................................................................................
Millions of yen
2010
¥18,371
14,033
10,175
6,327
3,510
Millions of U.S. dollars
2010
$197
151
109
68
38
15. Land Revaluation Excess
SMBC and another consolidated subsidiary revaluated their own
land for business activities in accordance with the “Law Concerning
Land Revaluation” (the “Law”) effective March 31, 1998 and the law
concerning amendment of the Law effective March 31, 2001. The
income taxes corresponding to the net unrealized gains are reported
in “Liabilities” as “Deferred tax liabilities for land revaluation,” and
the net unrealized gains, net of deferred taxes, are reported as “Land
revaluation excess” in “Net assets.”
A certain affiliate revaluated its own land for business activities in
accordance with the Law. The net unrealized gains, net of deferred
taxes, are reported as “Land revaluation excess” in “Net assets.”
Date of the revaluation
SMBC:
March 31, 1998 and March 31, 2002
Another consolidated subsidiary and an affiliate:
March 31, 1999 and March 31, 2002
Method of revaluation (stipulated in Article 3-3 of the Law)
SMBC:
Fair values were determined by applying appropriate adjust-
ments for land shape and timing of appraisal to the values
stipulated in Articles 2-3, 2-4 or 2-5 of the Enforcement
Ordinance of the Law Concerning Land Revaluation (the
Enforcement Ordinance No. 119) effective March 31, 1998.
Another consolidated subsidiary and an affiliate:
Fair values were determined based on the values stipulated in
Articles 2-3 and 2-5 of the Enforcement Ordinance
No. 119.
88
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
16. Capital Stock
Capital stock consists of common stock and preferred stock. Common stock and preferred stock at March 31, 2010 and 2009 were as follows:
Number of shares
2010
2009*
Authorized
March 31
Common stock ........................................................................................ 1,500,000,000 1,414,055,625
—
Preferred stock (Type 4) ...........................................................................
—
Preferred stock (Type 5) ...........................................................................
70,001
Preferred stock (Type 6) ...........................................................................
—
Preferred stock (Type 7) ...........................................................................
—
Preferred stock (Type 8) ...........................................................................
—
Preferred stock (Type 9) ...........................................................................
Total ........................................................................................................ 1,500,684,101 1,414,125,626
50,100
167,000
70,001
167,000
115,000
115,000
Issued
Authorized
1,500,000,000
50,100
167,000
70,001
167,000
115,000
115,000
1,500,684,101
Issued
789,080,477
33,400
—
70,001
—
—
—
789,183,878
* SMFG implemented a 100-for-1 stock split of shares of common stock effective on January 4, 2009.
All of the preferred stock is noncumulative and nonparticipating
for dividend payments, and shareholders of the preferred stock are
not entitled to vote at a general meeting of shareholders except when
the proposal to pay the prescribed dividends to shareholders is not
submitted to the general meeting of shareholders or is rejected at the
general meeting of shareholders.
In the event that SMFG pays dividends, SMFG shall pay to
holders of shares of its preferred stock, in preference to the holders
of its common stock, cash dividends in the amounts as described
below. If preferred interim dividends stipulated in the Articles of
Incorporation of SMFG were paid during the relevant fiscal year, the
amount of such preferred interim dividends shall be subtracted from
such amount of annual preferred dividends. Preferred stock (Type 6)
bears an annual noncumulative dividend of ¥88,500 per share and,
in the event SMFG pays an interim dividend, holders are entitled to
receive ¥44,250 in preference to common shareholders. Holders of
preferred stock are not entitled to any further dividends in excess of
the amount as described above.
In the event of SMFG’s voluntary or involuntary liquidation, hold-
ers of its preferred stock will be entitled, equally in rank as among
themselves and in preference over shares of its common stock, to
receive out of SMFG’s residual assets upon liquidation a distribution
of ¥3,000,000 per share in the case of Type 6 preferred stock. Holders
of preferred stock are not entitled to any further dividends or other
participation or distribution of SMFG’s residual assets upon SMFG’s
liquidation.
SMFG may, subject to the requirements provided in the Company
Act, purchase any shares of the preferred stock then outstanding at
any time and retire such preferred stock out of distributable amounts
of SMFG. SMFG may also, subject to the requirements provided in
the Company Act, redeem all or some of preferred stock (Type 6) out
of distributable amounts of SMFG at any time on and after March 31,
2011 at a price of ¥3,000,000 per share.
Preferred stock (Type 6) is non-convertible.
SMFG 2010 89
SMFG
Notes to Consolidated Financial Statements
17. Fees and Commissions
Fees and commissions for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Millions of yen
2010
2009
Millions of
U.S. dollars
2010
Year ended March 31
Fees and commissions:
Deposits and loans ...........................................................................................
Remittances and transfers ................................................................................
Securities-related business ................................................................................
Agency ............................................................................................................
Safe deposits ....................................................................................................
Guarantees .......................................................................................................
Credit card business .........................................................................................
Investment trusts .............................................................................................
Other ...............................................................................................................
Fees and commissions payments:
Remittances and transfers ................................................................................
Other ...............................................................................................................
¥ 70,592
125,792
54,363
14,763
6,684
49,365
143,770
96,243
167,789
¥729,364
¥ 31,050
89,697
¥120,748
¥ 77,840
131,455
33,872
14,673
6,914
50,852
141,117
37,370
178,654
¥672,752
¥ 30,211
85,362
¥115,574
18. Trading Income
Trading income for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Year ended March 31
Gains on trading securities ..................................................................................
Gains on securities related to trading transactions ................................................
Gains on trading-related financial derivatives ......................................................
Other ..................................................................................................................
Millions of yen
2010
¥ 63,424
2,254
127,833
576
¥194,087
2009
¥ 23,876
1,221
179,255
7,386
¥211,738
19. Other Operating Income
Other operating income for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Year ended March 31
Gains on sale of bonds .........................................................................................
Gains on redemption of bonds .............................................................................
Lease-related income ............................................................................................
Gains on financial derivatives ..............................................................................
Other ..................................................................................................................
Millions of yen
2010
¥ 90,942
10
243,237
—
118,823
¥453,012
2009
¥149,037
57
252,966
7,142
120,396
¥529,599
20. Other Operating Expenses
Other operating expenses for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Year ended March 31
Losses on sale of bonds .........................................................................................
Losses on redemption of bonds .............................................................................
Losses on devaluation of bonds .............................................................................
Bond issuance costs ..............................................................................................
Lease-related expenses ..........................................................................................
Losses on foreign exchange transactions ...............................................................
Losses on financial derivatives ..............................................................................
Other ..................................................................................................................
Millions of yen
2010
¥ 30,122
17,401
331
1,197
201,932
1,591
17,011
132,186
¥401,773
2009
¥ 68,882
45,852
7,049
606
194,349
14,984
—
141,487
¥473,212
90
SMFG 2010
$ 759
1,352
584
159
72
530
1,545
1,034
1,803
$7,838
$ 334
964
$1,298
Millions of
U.S. dollars
2010
$ 682
24
1,374
6
$2,086
Millions of
U.S. dollars
2010
$ 978
0
2,614
—
1,277
$4,869
Millions of
U.S. dollars
2010
$ 324
187
3
13
2,170
17
183
1,421
$4,318
Notes to Consolidated Financial Statements
SMFG
21. Other Income
Other income for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Year ended March 31
Gains on sale of stocks and other securities ..........................................................
Gains on money held in trust ...............................................................................
Gains on disposal of fixed assets ...........................................................................
Recoveries of written-off claims ...........................................................................
Other ..................................................................................................................
Millions of yen
2010
¥ 57,231
130
17,179
968
35,128
¥110,638
2009
¥15,242
98
1,297
1,708
34,627
¥52,973
22. Other Expenses
Other expenses for the fiscal years ended March 31, 2010 and 2009 consisted of the following:
Year ended March 31
Write-off of loans.................................................................................................
Losses on sale of stocks and other securities ..........................................................
Losses on devaluation of stocks and other securities ..............................................
Losses on money held in trust ..............................................................................
Losses on sale of delinquent loans .........................................................................
Equity in losses of affiliates ..................................................................................
Losses on disposal of fixed assets ..........................................................................
Losses on impairment of fixed assets* ..................................................................
Other ..................................................................................................................
*Losses on impairment of fixed assets consisted of the following:
Millions of yen
2010
¥176,672
34,814
32,495
375
76,439
21,542
6,003
12,856
65,052
¥426,252
2009
¥302,353
7,802
191,117
232
62,549
94,876
12,144
7,363
44,692
¥723,131
Millions of
U.S. dollars
2010
$ 615
1
185
10
378
$1,189
Millions of
U.S. dollars
2010
$1,899
374
349
4
821
232
65
138
699
$4,581
Year ended
March 31
Tokyo metropolitan area ........................................ Branch (1 branch)
Area
Purpose of use
2010
Type
Land and buildings, etc.
Corporate assets (6 items)
Idle assets (31 items)
Other (4 items)
Kinki area ............................................................. Branch (1 branch)
Land and buildings, etc.
Corporate assets (2 items)
Idle assets (38 items)
Other (2 items)
Other .................................................................... Corporate assets (3 items) Land and buildings, etc.
Idle assets (10 items)
Other (2 items)
Millions of yen
2010
¥ 13
8,295
1,511
335
164
35
1,436
256
21
281
503
2009
¥ 57
4,700
664
444
389
—
607
318
—
179
—
Millions of
U.S. dollars
2010
$ 0
89
16
4
2
0
15
3
0
3
5
At SMBC, a branch, which continuously manages and determines its income and expenses, is the smallest unit of asset group for recognition
and measurement of impairment loss of fixed assets. Assets such as corporate headquarters facilities, training facilities, data and system centers,
and health and recreational facilities which do not produce cash flows that can be attributed to individual assets are treated as corporate assets.
As for idle assets, impairment loss is measured individually. At other consolidated subsidiaries, a branch or other group is the smallest asset
grouping unit as well.
SMBC and other subsidiaries reduced the carrying amounts of long-lived assets of which investments are not expected to be fully recovered
to their recoverable amounts, and recognized the losses as “losses on impairment of fixed assets,” which is included in “Other expenses.” SMBC
reduced the carrying amounts of corporate assets and idle assets, and other consolidated subsidiaries reduced the carrying amounts of long-lived
assets of their branches, corporate assets and idle assets. The recoverable amount is calculated using net realizable value which is basically
determined by subtracting the expected disposal cost from the appraisal value based on the Real Estate Appraisal Standard.
SMFG 2010 91
SMFG
Notes to Consolidated Financial Statements
23. Deferred Tax Assets and Liabilities
(1) Significant components of deferred tax assets and liabilities at March 31, 2010 and 2009 were as follows:
March 31
Deferred tax assets:
Millions of yen
2010
2009
Net operating loss carryforwards ............................................................
Write-off of securities ............................................................................
Reserve for possible loan losses ...............................................................
Write-off of loans ...................................................................................
Net unrealized gains (losses) on other securities .....................................
Reserve for employee retirement benefits ...............................................
Net deferred losses on hedges .................................................................
Depreciation ..........................................................................................
Other .....................................................................................................
Subtotal .................................................................................................
Valuation allowance ...............................................................................
Total deferred tax assets .........................................................................
Deferred tax liabilities:
Net unrealized gains (losses) on other securities .....................................
Leveraged lease ......................................................................................
Gains on securities contributed to employee retirement benefits trust ....
Securities returned from employee retirement benefits trust ...................
Undistributed earnings of overseas subsidiaries ......................................
Other .....................................................................................................
Total deferred tax liabilities ...................................................................
Net deferred tax assets ...............................................................................
¥ 485,533
282,386
438,537
140,597
20,707
74,489
27,290
12,392
245,743
1,727,678
(739,555)
988,123
(169,312)
(28,392)
(42,261)
(13,956)
(3,388)
(28,746)
(286,057)
¥ 702,065
¥ 718,553
354,168
307,586
141,102
72,185
64,968
14,125
9,058
132,911
1,814,660
(851,725)
962,935
(26,133)
(29,167)
(42,263)
(14,711)
(2,206)
(18,082)
(132,564)
¥ 830,370
Millions of
U.S. dollars
2010
$ 5,218
3,035
4,713
1,511
223
800
293
133
2,641
18,567
(7,948)
10,619
(1,820)
(305)
(454)
(150)
(36)
(309)
(3,074)
$ 7,545
(2) SMFG and its domestic consolidated subsidiaries are subject to Japanese national and local income taxes, which, in the aggregate, would
result in an effective statutory tax rate of approximately 40.69% for the years ended March 31, 2010 and 2009. A reconciliation of the
effective income tax rate reflected in the accompanying consolidated statements of operations to the statutory tax rate for the years ended
March 31, 2010 and 2009 was as follows:
Statutory tax rate ...............................................................................................................................
Valuation allowance .......................................................................................................................
Equity in losses of affiliates ............................................................................................................
Undistributed earnings of overseas subsidiaries ..............................................................................
Dividends exempted for income tax purposes .................................................................................
Other .............................................................................................................................................
Effective income tax rate ....................................................................................................................
2010
40.69%
(10.81)
1.91
—
—
0.26
32.05%
2009
40.69%
1,033.93
130.88
(34.92)
(6.24)
(29.80)
1,134.54%
92
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
24. Changes in Net Assets
(1) Type and number of shares issued and treasury shares are as follows:
Year ended March 31, 2010
Shares issued
Common stock ...................................................
Preferred stock (1st series Type 4) ......................
Preferred stock (2nd series Type 4) .....................
Preferred stock (3rd series Type 4) ......................
Preferred stock (4th series Type 4) ......................
Preferred stock (9th series Type 4) ......................
Preferred stock (10th series Type 4) ....................
Preferred stock (11th series Type 4) ....................
Preferred stock (12th series Type 4) ....................
Preferred stock (1st series Type 6) ......................
Total ..............................................................
Treasury shares
Common stock ...................................................
Preferred stock (1st series Type 4) ......................
Preferred stock (2nd series Type 4) .....................
Preferred stock (3rd series Type 4) ......................
Preferred stock (4th series Type 4) ......................
Preferred stock (9th series Type 4) ......................
Preferred stock (10th series Type 4) ....................
Preferred stock (11th series Type 4) ....................
Preferred stock (12th series Type 4) ....................
Total ..............................................................
March 31,
2009
789,080,477
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
70,001
789,183,878
17,028,466
—
—
—
—
—
—
—
—
17,028,466
Number of shares
Increase
Decrease
624,975,148*1
—
—
—
—
—
—
—
—
—
624,975,148
54,672*3
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
88,072
—
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
—
33,400
13,038*3
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
4,175*2
46,438
March 31,
2010
1,414,055,625
—
—
—
—
—
—
—
—
70,001
1,414,125,626
17,070,100
—
—
—
—
—
—
—
—
17,070,100
*1 Increase in number of common shares issued:
(cid:129) 559,700,000 shares due to issuance of new shares by way of public offering on June 22, 2009 and January 27, 2010
(cid:129) 28,931,300 shares due to issuance of new shares by way of third-party allotment on July 27, 2009 and February 10, 2010
(cid:129) 36,343,848 shares due to exercising of rights to request acquisition of common shares with respect to preferred stock (1st through 4th and 9th through 12th series Type
4) on January 28, 2010
*2 Increase in number of treasury preferred shares (Type 4):
(cid:129) 4,175 shares due to acquisition of own shares on January 28, 2010 as a result of exercising of rights to request acquisition of common shares
Decrease in number of shares issued and treasury shares of preferred stock (1st through 4th and 9th through 12th series Type 4):
(cid:129) 4,175 shares due to retirement of treasury shares on February 8, 2010
*3 Increase in number of treasury common shares:
(cid:129) 54,672 shares due to purchase of fractional shares
Decrease in number of treasury common shares:
(cid:129) 12,990 shares due to sale of fractional shares
(cid:129) 48 shares due to sale by affiliates accounted for by the equity method
SMFG 2010 93
SMFG
Notes to Consolidated Financial Statements
Year ended March 31, 2009
Shares issued
Common stock ...................................................
Preferred stock (1st series Type 4) ......................
Preferred stock (2nd series Type 4) .....................
Preferred stock (3rd series Type 4) ......................
Preferred stock (4th series Type 4) ......................
Preferred stock (5th series Type 4) ......................
Preferred stock (6th series Type 4) ......................
Preferred stock (7th series Type 4) ......................
Preferred stock (8th series Type 4) ......................
Preferred stock (9th series Type 4) ......................
Preferred stock (10th series Type 4) ....................
Preferred stock (11th series Type 4) ....................
Preferred stock (12th series Type 4) ....................
Preferred stock (1st series Type 6) ......................
Total ..............................................................
Treasury shares
Common stock ...................................................
Preferred stock (5th series Type 4) ......................
Preferred stock (6th series Type 4) ......................
Preferred stock (7th series Type 4) ......................
Preferred stock (8th series Type 4) ......................
Total ..............................................................
*1 Increase in number of common shares issued:
March 31,
2008
7,733,653.77
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
4,175
70,001
7,853,754.77
168,997.41
—
—
—
—
168,997.41
Number of shares
Increase
Decrease
781,346,823.23*1
—
—
—
—
—
—
—
—
—
—
—
—
—
781,346,823.23
16,887,475.04*3
4,175*2
4,175*2
4,175*2
4,175*2
16,904,175.04
—
—
—
—
—
4,175*2
4,175*2
4,175*2
4,175*2
—
—
—
—
—
16,700
28,006.45*3
4,175*2
4,175*2
4,175*2
4,175*2
44,706.45
March 31,
2009
789,080,477
4,175
4,175
4,175
4,175
—
—
—
—
4,175
4,175
4,175
4,175
70,001
789,183,878
17,028,466
—
—
—
—
17,028,466
(cid:129) 157,151 shares due to exercising of rights to request acquisition of common shares with respect to preferred stock (5th through 8th series Type 4) on April 30, 2008
(cid:129) 781,189,672.23 shares due to the stock split implemented on January 4, 2009
*2 Increase in number of treasury preferred shares (Type 4):
(cid:129) 4,175 shares due to acquisition of own shares on April 30, 2008 as a result of exercising of rights to request acquisition of common shares
Decrease in number of shares issued and treasury shares of preferred stock (5th through 8th series Type 4):
(cid:129) 4,175 shares due to retirement of treasury shares on May 16, 2008
*3 Increase in number of treasury common shares:
(cid:129) 68,904.66 shares due to purchase of fractional shares and shares less than 1 unit
(cid:129) 539 shares due to acquisition of shares owned by shareholders who opposed the exchange of subsidiary company shares for SMFG shares
(cid:129) 16,818,031.38 shares due to the stock split implemented on January 4, 2009
Decrease in number of treasury common shares:
(cid:129) 28,006.45 shares due to sale of fractional shares and shares less than 1 unit
(2) Information on stock acquisition rights is as follows:
Year ended March 31, 2010
SMFG ..............................
Consolidated subsidiary ...
Total ................................
Year ended March 31, 2009
SMFG ..............................
Consolidated subsidiary ...
Total ................................
Detail of stock
acquisition rights
Stock options
—
Type of
shares
—
—
March 31,
2009
—
—
Number of shares
Increase
—
—
Decrease
—
—
March 31,
2010
—
—
Detail of stock
acquisition rights
Stock options
—
Type of
shares
—
—
March 31,
2008
—
—
Number of shares
Increase
—
—
Decrease
—
—
March 31,
2009
—
—
Millions of
U.S. dollars
March 31,
2010
$—
1
$ 1
Millions of yen
March 31,
2010
¥—
81
¥81
Millions of yen
March 31,
2009
¥—
66
¥66
94
SMFG 2010
(3) Information on dividends is as follows:
(a) Dividends paid in the fiscal year ended March 31, 2009
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 4) ..........................
Preferred stock (2nd series Type 4) .........................
Preferred stock (3rd series Type 4) .........................
Preferred stock (4th series Type 4) .........................
Preferred stock (5th series Type 4) .........................
Preferred stock (6th series Type 4) .........................
Preferred stock (7th series Type 4) .........................
Preferred stock (8th series Type 4) .........................
Preferred stock (9th series Type 4) .........................
Preferred stock (10th series Type 4) .......................
Preferred stock (11th series Type 4) .......................
Preferred stock (12th series Type 4) .......................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥53,655
281
281
281
281
281
281
281
281
281
281
281
281
3,097
Date of resolution: Ordinary general meeting of shareholders held on June 27, 2008
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 4) ..........................
Preferred stock (2nd series Type 4) .........................
Preferred stock (3rd series Type 4) .........................
Preferred stock (4th series Type 4) .........................
Preferred stock (9th series Type 4) .........................
Preferred stock (10th series Type 4) .......................
Preferred stock (11th series Type 4) .......................
Preferred stock (12th series Type 4) .......................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥54,753
281
281
281
281
281
281
281
281
3,097
Date of resolution: Meeting of the Board of Directors held on November 14, 2008
(b) Dividends paid in the fiscal year ended March 31, 2010
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 4) ..........................
Preferred stock (2nd series Type 4) .........................
Preferred stock (3rd series Type 4) .........................
Preferred stock (4th series Type 4) .........................
Preferred stock (9th series Type 4) .........................
Preferred stock (10th series Type 4) .......................
Preferred stock (11th series Type 4) .......................
Preferred stock (12th series Type 4) .......................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥15,707
281
281
281
281
281
281
281
281
3,097
Date of resolution: Ordinary general meeting of shareholders held on June 26, 2009
Notes to Consolidated Financial Statements
SMFG
Millions of yen, except per share amount
Cash dividends
per share
¥ 7,000
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
44,250
Record date
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
March 31, 2008
Effective date
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
June 27, 2008
Effective date
Record date
Millions of yen, except per share amount
Cash dividends
per share
¥ 7,000
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
44,250
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
September 30, 2008 December 5, 2008
Millions of yen, except per share amount
Cash dividends
per share
¥ 20
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
44,250
Record date
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
March 31, 2009
Effective date
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
June 26, 2009
SMFG 2010 95
SMFG
Notes to Consolidated Financial Statements
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 4) ..........................
Preferred stock (2nd series Type 4) .........................
Preferred stock (3rd series Type 4) .........................
Preferred stock (4th series Type 4) .........................
Preferred stock (9th series Type 4) .........................
Preferred stock (10th series Type 4) .......................
Preferred stock (11th series Type 4) .......................
Preferred stock (12th series Type 4) .......................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥45,629
281
281
281
281
281
281
281
281
3,097
Date of resolution: Meeting of the Board of Directors held on November 13, 2009
Record date
Effective date
Millions of yen, except per share amount
Cash dividends
per share
¥ 45
67,500
67,500
67,500
67,500
67,500
67,500
67,500
67,500
44,250
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
September 30, 2009 December 4, 2009
(c) Dividends to be paid in the fiscal year ending March 31, 2011
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥77,567
3,097
Date of resolution: Ordinary general meeting of shareholders held on June 29, 2010
25. Cash Flows
Fiscal year ended March 31, 2010
Millions of yen, except per share amount
Source
of dividends
Retained earnings
Retained earnings
Cash dividends
per share
¥ 55
44,250
Record date
Effective date
March 31, 2010 June 29, 2010
March 31, 2010 June 29, 2010
(1) Reconciliation of the opening balance and the net cash payment for acquisition with respect to acquisition of 18 companies including
Nikko Cordial Securities Inc. is as follows:
Assets ...................................................................................................................................
Trading assets ...................................................................................................................
Liabilities .............................................................................................................................
Call money and bills sold ..................................................................................................
Borrowed money ...............................................................................................................
Minority interests .................................................................................................................
Goodwill ..............................................................................................................................
Acquisition costs for the 18 companies’ stocks ......................................................................
The 18 companies’ cash and due from banks .........................................................................
Net cash payment for acquisition of the 18 companies ..........................................................
Millions of yen
¥ 1,953,475
786,535
¥(1,552,271)
(321,000)
(295,020)
(711)
167,607
568,099
(58,246)
¥ (509,853)
Millions of U.S. dollars
$ 20,994
8,453
$(16,682)
(3,450)
(3,171)
(8)
1,801
6,105
(626)
$ (5,479)
(2) The major assets and liabilities which were acquired due to a merger between Kansai Urban Banking Corporation and The Biwako
Bank, Limited are as follows:
Assets ...................................................................................................................................
Loans and bills discounted ................................................................................................
Securities ..........................................................................................................................
Millions of yen
¥1,113,801
795,445
89,968
Millions of U.S. dollars
$11,970
8,549
967
Liabilities .............................................................................................................................
Deposits ...........................................................................................................................
¥1,078,769
1,033,256
$11,593
11,104
(3) QUOQ Inc. and 1 other company were excluded from the scope of consolidation due to a merger with OMC Card, Inc. Their major
assets and liabilities are as follows:
Assets ...................................................................................................................................
Other assets ......................................................................................................................
Customers’ liabilities for acceptances and guarantees .........................................................
Millions of yen
¥730,001
401,031
258,620
Millions of U.S. dollars
$7,845
4,310
2,779
Liabilities .............................................................................................................................
Borrowed money ...............................................................................................................
Acceptances and guarantees ..............................................................................................
¥714,850
343,002
258,620
$7,682
3,686
2,779
96
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
26. Employee Retirement Benefits
(1) Outline of employee retirement benefits
Consolidated subsidiaries in Japan have contributory funded defined benefit pension plans such as employee pension plans, qualified
pension plans and lump-sum severance indemnity plans. Consolidated subsidiaries in Japan have adopted the defined-contribution pen-
sion plan. Certain domestic consolidated subsidiaries have a general type of employee pension plans. They may grant additional benefits
in cases where certain requirements are met when employees retire.
Some overseas consolidated subsidiaries adopt defined benefit pension plans and defined-contribution pension plans. SMBC and some
consolidated subsidiaries in Japan contributed some of their marketable equity securities to employee retirement benefits trusts.
(2) Projected benefit obligation
Millions of yen
March 31
Projected benefit obligation
Plan assets
Unfunded projected benefit obligation
Unrecognized net actuarial gain or loss
Unrecognized prior service cost
Net amount recorded on the consolidated
balance sheet
Prepaid pension cost
Reserve for employee retirement benefits
(A) ...................................
(B) ...................................
(C)=(A)+(B).....................
(D) ..................................
(E) ...................................
(F)=(C)+(D)+(E) ..............
(G) ..................................
(F)–(G) ............................
2010
¥(938,161)
891,366
(46,794)
226,268
(15,234)
164,240
205,931
¥ (41,691)
Note: Some consolidated subsidiaries adopt the simple method in calculating the projected benefit obligation.
2009
¥(918,081)
742,917
(175,164)
382,151
(26,420)
180,566
216,209
¥ (35,643)
(3) Pension expenses
Millions of yen
Year ended March 31
Service cost ................................................................................................
Interest cost on projected benefit obligation ..............................................
Expected return on plan assets ...................................................................
Amortization of unrecognized net actuarial gain or loss .............................
Amortization of unrecognized prior service cost .........................................
Other (nonrecurring additional retirement allowance paid and other) ........
Total ..........................................................................................................
2010
¥21,052
22,459
(23,883)
60,456
(11,167)
4,229
¥73,146
Notes: 1. Pension expenses of consolidated subsidiaries which adopt the simple method are included in “Service cost.”
2. Premium paid to defined-contribution pension is included in “Other.”
2009
¥20,574
22,445
(31,192)
33,301
(11,159)
3,934
¥37,902
(4) Assumptions
Millions of
U.S. dollars
2010
$(10,082)
9,579
(503)
2,432
(164)
1,765
2,213
$ (448)
Millions of
U.S. dollars
2010
$226
241
(257)
650
(120)
46
$786
The principal assumptions used in determining benefit obligation and pension expenses at or for the fiscal years ended March 31, 2010
and 2009 were as follows:
Year ended March 31
Discount rate .................................................................................................................
Expected rate of return on plan assets ............................................................................
2010
1.4% to 2.5%
0% to 4.0%
2009
1.4% to 2.5%
0% to 4.1%
Estimated amounts of retirement benefits are allocated to each period by the straight-line method.
Unrecognized prior service cost is amortized using the straight-line method within the employees’ average remaining service period
from the fiscal year of its incurrence, over mainly 9 years for the fiscal years ended March 31, 2010 and 2009.
Unrecognized net actuarial gain or loss is amortized using the straight-line method within the employees’ average remaining service
period, commencing from the next fiscal year of incurrence, over mainly 9 years for the fiscal years ended March 31, 2010 and 2009.
27. Lease Transactions
(1) Financing leases
(a) Lessee side
(i) Lease assets
Tangible fixed assets mainly consisted of branches and equipment. Intangible fixed assets are software.
(ii) Depreciation method of lease assets
Depreciation method of lease assets is reported in Note 2. (5) Depreciation.
SMFG 2010 97
SMFG
Notes to Consolidated Financial Statements
(b) Lessor side
(i) Breakdown of lease investment assets
March 31
Lease receivables ...................................................................................
Residual value ......................................................................................
Unearned interest income .....................................................................
Total .....................................................................................................
2010
¥1,343,868
103,095
(233,640)
¥1,213,323
2009
¥1,444,731
111,273
(247,788)
¥1,308,216
Millions of yen
(ii) The scheduled collections of lease receivables and investment assets are as follows:
Lease payments receivable related to lease receivables
Millions of yen
March 31
Within 1 year .......................................................................................
More than 1 year to 2 years ...................................................................
More than 2 years to 3 years .................................................................
More than 3 years to 4 years .................................................................
More than 4 years to 5 years .................................................................
More than 5 years .................................................................................
Total .....................................................................................................
2010
¥242,087
173,269
109,219
75,511
32,981
73,660
¥706,728
2009
¥244,758
179,297
129,660
79,425
49,624
56,683
¥739,450
Lease payments receivable related to investment assets
Millions of yen
March 31
Within 1 year .......................................................................................
More than 1 year to 2 years ...................................................................
More than 2 years to 3 years .................................................................
More than 3 years to 4 years .................................................................
More than 4 years to 5 years .................................................................
More than 5 years .................................................................................
Total .....................................................................................................
2010
¥ 407,746
306,937
220,648
152,399
79,417
176,720
¥1,343,868
2009
¥ 445,841
324,231
232,671
155,177
91,276
195,533
¥1,444,731
Millions of
U.S. dollars
2010
$14,442
1,108
(2,511)
$13,039
Millions of
U.S. dollars
2010
$2,602
1,862
1,174
811
354
792
$7,595
Millions of
U.S. dollars
2010
$ 4,382
3,299
2,371
1,638
853
1,899
$14,442
(iii) Non-transfer ownership finance leases, which commenced in fiscal years beginning before April 1, 2008, are valued at their
appropriate book value, net of accumulated depreciation, as of March 31, 2008, and recorded as the beginning balance of fiscal 2008
of “Lease receivables and investment assets.” Moreover, interest on such non-transfer ownership finance leases during the remaining
term of the leases is allocated over the lease term using the straight-line method. As a result of this accounting treatment, “Income
before income taxes and minority interests” for the fiscal year ended March 31, 2010 was ¥13,282 million ($143 million) more than
it would have been if such transactions had been treated in a similar way to sales of the underlying assets.
(2) Operating leases
(a) Lessee side
Future minimum lease payments on operating leases which were not cancelable at March 31, 2010 and 2009 were as follows:
March 31
Due within 1 year .................................................................................
Due after 1 year ....................................................................................
Total .....................................................................................................
2010
¥17,153
69,742
¥86,895
2009
¥13,122
52,925
¥66,047
Millions of yen
Millions of
U.S. dollars
2010
$184
750
$934
(b) Lessor side
Future minimum lease payments on operating leases which were not cancelable at March 31, 2010 and 2009 were as follows:
March 31
Due within 1 year .................................................................................
Due after 1 year ....................................................................................
Total .....................................................................................................
2010
¥ 23,585
122,599
¥146,185
2009
¥18,435
79,007
¥97,442
Millions of yen
Millions of
U.S. dollars
2010
$ 253
1,318
$1,571
Future lease payments receivable on operating leases which were not cancelable amounting to ¥0 million ($0 million) on the lessor
side were pledged as collateral for borrowings.
98
SMFG 2010
28. Financial Instruments
(1) Status of financial instruments
(a) Policies on financial instruments
SMFG conducts banking and other financial services such
as leasing, securities, credit card, asset management and
venture capital. Its banking business includes deposit
taking, lending, securities trading and investment, remit-
tance, foreign exchange, custody of funds and other assets
related to financial futures transactions, bond subscription
agent, trust business, over-the-counter sales of securities
investment trusts and insurance products, and securities
intermediation.
These services entail holding of financial assets such as
loans and bills discounted, bonds, and stocks. Meanwhile,
SMFG raises funds through deposit taking, borrowing,
bond offering, etc. Furthermore, it undertakes derivative
transactions to meet customers’ hedging needs, to control
market risk associated with deposit taking and lending
(“ALM purposes”), and to make profit on short-term
fluctuations in interest rates, foreign exchange rates, etc.
(“trading purposes”).
(b) Details of financial instruments and associated risks
i) Financial assets
The main financial assets held by SMFG include loans
to foreign and domestic companies and domestic
individuals, and securities such as bonds (government
and corporate bonds) and stocks (foreign and domestic
stocks), etc. Bonds such as government bonds are held
for both trading and ALM purposes, and certain bonds
are held as held-to-maturity securities. Stocks are held
mainly for strategic purposes. These assets expose
SMFG to credit risk, market risk and liquidity risk.
Credit risk is the risk of loss arising from nonperfor-
mance of obligations by the borrower or issuer due to
factors such as deterioration in the borrower’s/issuer’s
financial conditions. Market risk is the risk stemming
from fluctuations in interest rates, exchange rates, or
share prices. Liquidity risk is the risk arising from
difficulty executing transactions in desired quantities
at appropriate prices due to low market liquidity. These
risks are properly monitored and managed based on
“(c) Risk management framework for financial instru-
ments” below.
ii) Financial liabilities
Financial liabilities of SMFG include borrowed money
and bonds, etc. in addition to deposits. Deposits mainly
comprise deposits of domestic and foreign companies
and domestic individuals. Borrowed money and bonds
include subordinated borrowings and subordinated
bonds. Also, financial liabilities, like financial assets,
expose SMFG to not only market risk but also funding
liquidity risk: the risk of SMFG not being able to
raise funds due to market turmoil, deterioration in
its creditworthiness or other factors. These risks are
properly monitored and managed based on “(c) Risk
management framework for financial instruments”
below.
Notes to Consolidated Financial Statements
SMFG
iii) Derivative transactions
Derivatives handled by SMFG include foreign exchange
futures; futures, forwards, swaps and options related to
interest rates, currencies, equities, bonds and commodi-
ties; and credit and weather derivatives.
Major risks associated with derivatives include
market risk, liquidity risk, and credit risk arising
from nonperformance of contractual obligations due to
deterioration in the counterparty’s financial conditions.
These risks are properly monitored and managed based
on “(c) Risk management framework for financial
instruments” below.
Hedge accounting is applied to derivative transac-
tions executed for ALM purposes, as necessary. Hedging
instruments, hedged items, hedging policy and the
method to assess the effectiveness of hedging are
described in “2. Significant Accounting Policies,
(15) Hedge accounting.”
(c) Risk management framework for financial instruments
The fundamental matters on risk management for
SMFG are set forth in “Risk Management Regulations.”
SMFG’s Management Committee establishes the basic
risk management policy, based on the Regulations, which
is then approved by the Board of Directors. SMFG has a
risk management system based on the basic policy. The
Corporate Risk Management Department, which, together
with the Corporate Planning Department, controls risk
management across SMFG by monitoring the development
and implementation of SMFG’s risk management system,
and gives appropriate guidance as needed. Under this
framework, SMFG comprehensively and systematically
manages risks.
i) Management of credit risk
SMFG conducts integrated management of credit risk
according to its operational characteristics, and the
credit risk inherent in its entire portfolio as well as the
risk in individual credits are managed quantitatively
and continuously.
i. Credit risk management system
At SMBC, basic policies on credit risk management
and other significant matters require the resolution of
the Management Committee and the approval of the
Board of Directors.
The Credit & Investment Planning Department
of the Risk Management Unit is responsible for the
comprehensive management of credit risk. This depart-
ment establishes, revises or abolishes credit policies,
the internal rating system, credit authority regulations,
credit application regulations, and manages non-
performing loans and other aspects of credit portfolio
management. The department also controls SMBC’s
total credit risk by quantifying credit risk (i.e. calculat-
ing risk capital and risk-weighted assets) in cooperation
with the Corporate Risk Management Department.
The department also monitors risk situations and
regularly reports to the Management Committee and
the Board of Directors.
SMFG 2010 99
SMFG
Notes to Consolidated Financial Statements
Moreover, the Credit Portfolio Management
Department within the Credit & Investment Planning
Department works to stabilize SMBC’s overall credit
portfolio through market transactions such as loan
securitization. In the Corporate Services Unit, the
Corporate Research Department analyzes industries
as well as investigates the borrower’s business situ-
ation to detect early signs of problems. The Credit
Administration Department is responsible for formu-
lating and implementing measures to reduce SMBC’s
exposures mainly to borrowers classified as potentially
bankrupt or lower.
The Credit Departments of Consumer Banking Unit,
Middle Market Banking Unit and other business units
play a central role in credit screening and managing
their units’ credit portfolios. Each business unit estab-
lishes its credit limits based on the baseline amounts
for each borrower grading category. Borrowers or loans
perceived to have high credit risk undergo intensive
evaluation and administration by the unit’s Credit
Department.
Moreover, the Credit Risk Committee, a consultative
body straddling the business units, rounds out SMBC’s
oversight system for undertaking flexible and efficient
control of credit risk and ensuring the overall soundness
of the bank’s loan operations.
In addition to these, the Internal Audit Unit,
operating independently from the business units, audits
asset quality, grading accuracy, self-assessment, and
appropriateness of credit risk management system, and
reports the results directly to the Board of Directors
and the Management Committee.
ii. Method of credit risk management
SMBC properly manages the credit risk inherent in
individual loans and the entire portfolio by assessing
and quantifying the credit risk of each borrower/
loan using the internal rating system. In addition to
management of individual loans through credit screen-
ing and monitoring, it manages the credit portfolio
as described below in order to secure and improve
the credit portfolio’s soundness and medium-term
profitability.
— Appropriate risk-taking within the scope of capital
To limit credit risks to a permissible level relative to
capital, “credit risk capital limit” has been established
for internal control purposes. Under this limit, a
general guideline and designated guidelines for real
estate finance, investment in funds and securitization
products, etc. are set for each business unit. Regular
monitoring is conducted to ensure that these guidelines
are being followed.
— Controlling concentration risk
Concentration of risk in specific borrowers/industries/
countries could severely reduce a bank’s capital should
it materialize. SMBC therefore implements measures
to prevent concentration of credit risk in specific
industries, and control large exposures to individual
borrowers by setting guidelines for maximum loan
amounts and conducting thorough loan reviews. To
manage country risk, SMBC also has credit limit
guidelines based on each country’s creditworthiness.
— Greater understanding of actual corporate condi-
tions and balancing returns and risks
SMBC runs credit operations on the basic principle of
thoroughly understanding actual corporate conditions
and gaining profit commensurate with the level of
credit risk entailed, and makes every effort to improve
profit at after-cost (credit cost, capital cost and
overhead) level.
— Reduction and prevention of non-performing loans
On non-performing loans and potential non-performing
loans, SMBC carries out loan reviews to clarify credit
policies and action plans, enabling it to swiftly imple-
ment measures to prevent deterioration of borrowers’
business situations, support business recoveries, collect
on loans, and enhance loan security.
— Approaches to active portfolio management
SMBC is committed to agile portfolio management,
such as using credit derivatives and selling loan claims,
to stabilize its credit portfolio.
In regards to financial instruments such as invest-
ments in certain funds, securitized products and credit
derivatives that indirectly retain risks related to assets
such as corporate bonds and loan claims (underlying
assets), such instruments entail market and liquidity
risks in addition to credit risk, since such instruments
are traded on the market. Credit risk management for
these instruments involving detailed analysis and evalu-
ation of characteristics of underlying assets is performed
while market risk is comprehensively managed within
the framework for managing market and liquidity
risks. Moreover, guidelines have been established based
on the characteristics of each type of risk.
In regards to credit risk of derivative transactions,
the potential exposure based on the market price is
regularly calculated and properly managed. When
the counterparty is a financial institution with whom
SMBC frequently conducts derivative transactions,
measures such as a close-out netting provision, which
provide that offsetting credit exposures between the
2 parties will be combined into a single net payment
from 1 party to the other in case of bankruptcy or other
default event, are implemented to reduce credit risk.
ii) Management of market and liquidity risks
SMFG manages market and liquidity risks by setting
allowable risk limits; ensuring the transparency of the
risk management process; and clearly separating front-
office, middle-office, and back-office operations for a
highly efficient system of mutual checks and balances.
i. Market and liquidity risk management systems
At SMBC, important matters such as basic policies for
managing market and liquidity risks and risk manage-
ment framework are determined by the Management
Committee and then approved by the Board of
Directors.
The aforementioned Corporate Risk Management
Department, which is independent from the business
100
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
units that directly handle business transactions,
manages market and liquidity risks in an integrated
manner. The department also monitors market and
liquidity risk situations and regularly reports to the
Management Committee and the Board of Directors.
Furthermore, SMBC’s cross-departmental “ALM
Committee” reports on the state of observance of
market risk capital and liquidity risk capital limits, and
deliberates on administration of ALM policies. SMBC
also has a system whereby front-office departments,
middle-office departments and back-office departments
check each other’s work in order to prevent clerical
errors, unauthorized transactions, etc.
In addition, SMBC’s Internal Audit Unit, which
is independent from other departments, periodically
performs comprehensive internal audits to verify that
the risk management framework is properly function-
ing and reports the audit results to the Management
Committee, the Board of Directors and other concerned
committees and departments.
ii. Market and liquidity risk management methodology
— Market risk management
SMBC manages market risk by setting maximum loss
and VaR (value at risk: maximum potential loss for a
given probability) within the market risk capital limit
that is set taking into account stockholders’ equity
and other factors and in accordance with the market
transaction policies.
SMBC uses the historical simulation method (a
method for estimating the maximum loss by running
simulations of changes in profit and loss on market
fluctuation scenarios based on historical data) to
measure VaR.
Regarding risks associated with foreign exchange
rates, interest rates, equity risk, option prices and
other market risk factors, SMBC manages such risks by
setting a maximum limit on the indicator suited for
each market risk factor such as BPV (basis point value:
denotes the change in value of a financial instrument
resulting from a 0.01 percentage-point change in the
yield).
— Liquidity risk management
At SMBC, funding liquidity risk is managed based on
a framework consisting of setting funding gap limits
and guidelines, maintaining a system of highly liquid
supplementary funding sources, and establishing con-
tingency plans. SMBC tries to avoid excessive reliance
on short-term funds by managing funding gap limits
and guidelines and has established a contingency plan
covering emergency action plans such as reducing fund-
ing gap limits and guidelines. In addition, to ensure
smooth fulfillment of transactions in face of market
turmoil, SMBC holds assets such as U.S. treasuries that
can be sold immediately and emergency committed
lines as supplemental liquidity.
Moreover, to manage the liquidity risk of marketable
instruments, derivative transactions, etc., SMBC has
trading limits for each business office classified by
currency, instrument, transaction period, etc. As for
financial futures, etc., risks are managed by restricting
positions within a certain percentage of open interest in
the entire market.
(d) Supplementary explanations about matters concerning fair
value of financial instruments
Fair values of financial instruments are based on their
market prices and, in cases where market prices are not
available, reasonably calculated prices. Such prices have
been calculated using certain assumptions, and may differ
if calculated based on different assumptions.
SMFG 2010 101
SMFG
Notes to Consolidated Financial Statements
(2) Fair value of financial instruments
(a) Consolidated balance sheet amounts, fair values and net unrealized gains (losses) of financial instruments as of March 31, 2010 are as
follows. The amounts shown in the following table do not include financial instruments whose fair values are extremely difficult to
determine, such as unlisted stocks classified as “other securities,” and stocks of subsidiaries and affiliates.
March 31
1) Cash and due from banks and Deposits with banks*1 .......................
2) Call loans and bills bought*1 ...........................................................
3) Receivables under resale agreements ................................................
4) Receivables under securities borrowing transactions ........................
5) Monetary claims bought*1 ...............................................................
6) Trading assets
Securities classified as trading purposes ........................................
7) Money held in trust .........................................................................
8) Securities
Bond classified as held-to-maturity ..............................................
Other securities ...........................................................................
9) Loans and bills discounted ...............................................................
Reserve for possible loan losses*1 .................................................
10) Foreign exchanges*1 ........................................................................
11) Lease receivables and investment assets*1 .........................................
Total assets ......................................................................................
1) Deposits ..........................................................................................
2) Negotiable certificates of deposit .....................................................
3) Call money and bills sold .................................................................
4) Payables under repurchase agreements .............................................
5) Payables under securities lending transactions .................................
6) Commercial paper ...........................................................................
7) Trading liabilities
Trading securities sold for short sales ...........................................
8) Borrowed money .............................................................................
9) Foreign exchanges ...........................................................................
10) Short-term bonds .............................................................................
11) Bonds ..............................................................................................
12) Due to trust account ........................................................................
Total liabilities ................................................................................
Derivative transactions*2
Consolidated balance
sheet amount
¥ 5,838,781
1,119,705
25,226
5,440,622
997,290
3,058,033
18,734
3,272,012
24,383,712
62,701,033
(801,234)
61,899,799
1,101,719
1,824,961
¥108,980,596
¥ 78,648,595
6,995,619
2,119,557
1,120,860
4,315,774
310,787
1,582,808
5,470,578
192,299
1,212,178
3,422,672
159,554
¥105,551,287
Hedge accounting not applied .....................................................
Hedge accounting applied ...........................................................
Total ................................................................................................
¥ 245,128
183,211
¥ 428,339
Millions of yen
2010
Fair value
¥ 5,839,844
1,121,304
25,226
5,440,622
1,010,523
3,058,033
18,734
3,330,623
24,383,712
62,891,684
1,105,607
1,933,129
¥110,159,045
¥ 78,674,772
6,995,575
2,119,557
1,120,860
4,315,774
310,787
1,582,808
5,489,347
192,299
1,212,178
3,514,970
159,554
¥105,688,486
¥ 245,128
183,211
¥ 428,339
Net unrealized gains
(losses)
¥ 1,063
1,598
—
—
13,233
—
—
58,610
—
991,885
3,888
108,168
¥1,178,449
¥ 26,176
(43)
(0)
—
—
—
—
18,768
—
—
92,298
—
¥ 137,199
¥ —
—
¥ —
102
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
Millions of U.S. dollars
2010
March 31
1) Cash and due from banks and Deposits with banks*1 .......................
2) Call loans and bills bought*1 ...........................................................
3) Receivables under resale agreements ................................................
4) Receivables under securities borrowing transactions ........................
5) Monetary claims bought*1 ...............................................................
6) Trading assets
Securities classified as trading purposes ........................................
7) Money held in trust .........................................................................
8) Securities
Bond classified as held-to-maturity ..............................................
Other securities ...........................................................................
9) Loans and bills discounted ...............................................................
Reserve for possible loan losses*1 .................................................
10) Foreign exchanges*1 ........................................................................
11) Lease receivables and investment assets*1 .........................................
Total assets ......................................................................................
1) Deposits ..........................................................................................
2) Negotiable certificates of deposit .....................................................
3) Call money and bills sold .................................................................
4) Payables under repurchase agreements .............................................
5) Payables under securities lending transactions .................................
6) Commercial paper ...........................................................................
7) Trading liabilities
Trading securities sold for short sales ...........................................
8) Borrowed money .............................................................................
9) Foreign exchanges ...........................................................................
10) Short-term bonds .............................................................................
11) Bonds ..............................................................................................
12) Due to trust account ........................................................................
Total liabilities ................................................................................
Derivative transactions*2
Hedge accounting not applied .....................................................
Hedge accounting applied ...........................................................
Total ................................................................................................
Consolidated balance
sheet amount
$ 62,749
12,033
271
58,470
10,718
32,864
201
35,164
262,050
673,842
(8,610)
665,232
11,840
19,613
$1,171,205
$ 845,229
75,181
22,779
12,046
46,381
3,340
17,010
58,792
2,067
13,027
36,783
1,715
$1,134,350
$ 2,634
1,969
$ 4,603
Fair value
$ 62,760
12,051
271
58,470
10,860
32,864
201
35,794
262,050
675,891
11,882
20,775
$1,183,869
$ 845,511
75,181
22,779
12,046
46,381
3,340
17,010
58,994
2,067
13,027
37,775
1,715
$1,135,825
$ 2,634
1,969
$ 4,603
Net unrealized gains
(losses)
$ 11
18
—
—
142
—
—
630
—
10,659
42
1,162
$12,664
$ 282
(0)
(0)
—
—
—
—
202
—
—
992
—
$ 1,475
$ —
—
$ —
*1 Loans and bills discounted do not include general reserve for possible loan losses and specific reserve for possible loan losses. The reserves for possible losses on “Cash and
due from banks,” “Call loans and bills bought,” “Monetary claims bought,” “Foreign exchanges,” and “Lease receivables and investment assets” are deducted directly from
“Consolidated balance sheet amount” since they are immaterial.
*2 The amounts collectively represent the derivative transactions which are recorded on “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis.
(b) Fair value calculation methodology for financial
instruments
Assets
1) Cash and due from banks, 2) Call loans and bills bought,
3) Receivables under resale agreements, 4) Receivables
under securities borrowing transactions, 9) Loans and
bills discounted, 10) Foreign exchanges, and 11) Lease
receivables and investment assets:
Of these transactions, the book values of dues from banks
without maturity and overdrafts with no specified repay-
ment dates are regarded to approximate their fair values;
thus, their fair values are their book values.
For short-term transactions with remaining life as of the
end of the fiscal year not exceeding 6 months, their fair
values are, in principle, their book value as book values are
regarded to approximate fair values.
The fair value of those with a remaining life of more
than 6 months is, in principle, the present value of
future cash flows (calculated by discounting estimated
future cash flows, taking into account factors such as the
borrower’s internal rating and pledged collateral, using a
rate comprising of a risk-free interest rate and an overhead
ratio). Certain consolidated subsidiaries of SMFG calculate
the present value by discounting the estimated future cash
flows computed based on the contractual interest rate,
using a rate comprising a risk-free rate and a credit risk
premium.
Regarding claims on bankrupt borrowers, effectively
SMFG 2010 103
SMFG
Notes to Consolidated Financial Statements
bankrupt borrowers and potentially bankrupt borrowers,
expected losses on such claims are calculated based on
either the present value of expected future cash flows or the
expected recoverable amount from collateral or guarantees.
Since the claims’ balance sheet amounts at the closing
date minus the current expected amount of loan losses
approximate their fair values, such amounts are regarded as
their fair values.
5) Monetary claims bought:
The fair values of monetary claims bought with market
prices, such as beneficial interests in commodities invest-
ment trusts, are based on their market prices as of the end
of the fiscal year. The fair values of subordinated trust
beneficiary interests related to securitized housing loans
are based on the assessed value of underlying assets minus
the assessed value of senior beneficial interests, etc. The
fair values of other transactions are, in principle, based on
prices calculated using methods similar to the methods
applied to 9) Loans and bills discounted.
6) Trading assets:
The fair values of bonds and other securities held for trad-
ing purposes are, in principle, based on their market price
at the final date of the fiscal year.
7) Money held in trust:
The fair values of money held in trust are, in principle,
based on the market prices of securities held in trust
calculated using methods similar to the methods applied to
8) Securities.
8) Securities:
In principle, the fair values of stocks (including foreign
stocks) are based on the average market price during 1
month before the end of the fiscal year. The fair values of
bonds and securities with market prices other than stocks
are prices calculated based on their market prices on the
final date of the fiscal year.
In light of the “Practical Solution on Measurement of
Fair Value for Financial Assets” (ASBJ Practical Issue Task
Force No. 25), the fair values of floating-rate Japanese
government bonds are based on the present value of future
cash flows (the government bond yield is used to discount
and estimate future cash flows). Bond yield and yield
volatility are the main price parameters. The fair values
of those without market prices, such as private-placement
bonds, are based on the present value of future cash flows
calculated by discounting estimated future cash flows tak-
ing into account the borrower’s internal rating and pledged
collateral by a rate comprising a risk-free interest rate and
an overhead ratio. However, the fair values of bonds issued
by bankrupt borrowers, effectively bankrupt borrowers and
potentially bankrupt borrowers are based on the bond’s face
value after the deduction of the expected amount of a loss
on the bond computed by using the same method applied
to the estimation of a loan loss. Meanwhile, the fair values
of publicly offered investment trusts are calculated based
on the published net asset value (NAV) per share, while
those of private placement investment trusts are calculated
based on the NAV published by securities firms and other
financial institutions.
104
SMFG 2010
Liabilities
1) Deposits, 2) Negotiable certificates of deposit and
12) Due to trust account:
The fair values of demand deposits and deposits without
maturity are based on their book values as at the end of the
fiscal year. The fair values of short-term transactions with
remaining life as of the end of the fiscal year not exceeding
6 months are also based on their book values, as their book
values are regarded to approximate their market values.
The fair values of transactions with a remaining life of
more than 6 months are, in principle, based on the present
value of future cash flows calculated using the rate applied
to the same type of deposits that are newly accepted until
the end of the remaining life.
3) Call money and bills sold, 4) Payables under repurchase
agreements, 5) Payables under securities lending transac-
tions, 6) Commercial paper, 8) Borrowed money,
10) Short-term bonds and 11) Bonds:
The fair values of short-term transactions with remaining
life as of the end of the fiscal year not exceeding 6 months
are based on their book values, as their book values are
regarded to approximate their fair values. For transactions
with a remaining life of more than 6 months, their fair
values are, in principle, based on the present value of future
cash flows calculated using the refinancing rate applied to
the same type of instruments for the remaining life. The
fair values of bonds are based on the present value of future
cash flows calculated using the rate derived from the data
on the yields of benchmark bonds and publicly-offered
subordinated bonds published by securities firms.
7) Trading liabilities:
The fair values of bonds sold for short sales and other
securities for trading purposes are, in principle, based on
their market prices on the final date of the fiscal year.
9) Foreign exchanges:
The fair values of foreign currency-denominated deposits
without maturity received from other banks are based on
their book values as at the end of the fiscal year.
The fair values of foreign exchange related short-term
borrowings are based on their book values, as their book
values are regarded to approximate their fair values.
Derivatives transactions
The fair values of exchange-traded derivatives are based on
their closing prices. With regard to OTC transactions, the
fair values of interest rate, currency, stock, bond and credit
derivatives are based on their settlement prices as at the
end of the fiscal year calculated based on the present value
of the expected future cash flows or using valuation tech-
niques such as the option pricing model. The fair values
of commodity derivatives transactions are based on their
settlement prices as at the end of the fiscal year, calculated
based on the derivative instrument’s components, includ-
ing price and contract term.
Notes to Consolidated Financial Statements
SMFG
(3) Consolidated balance sheet amounts of financial instruments whose fair values are extremely difficult to determine are as follows:
March 31
Monetary claims bought:
Millions of yen
2010
Millions of U.S. dollars
2010
Monetary claims bought without market prices*1 ........................................................
¥ 7,889
Securities:
Unlisted stocks, etc.*2, 4 ..............................................................................................
Investments in partnership, etc.*3, 4 .............................................................................
Total ................................................................................................................................
291,922
354,422
¥654,234
$ 85
3,137
3,809
$7,031
*1 Beneficiary claims that (a) behave more like equity than debt, (b) do not have market prices, and (c) for which it is difficult to rationally estimate fair values. They include com-
modity investments and beneficiary claims on loan trusts.
*2 Not included in the scope of fair value disclosure since there are no market prices and it is extremely difficult to determine their fair values.
*3 Capital contributions with no market prices. The above-stated amount includes the book value amount of investments in the partnership of which the SMFG records net changes
in their balance sheets and statements of income.
*4 Unlisted stocks and investments in partnership totaling ¥26,770 million ($288 million) was written-off in the fiscal year ended March 31, 2010.
(4) Redemption schedule of monetary claims bought and securities with maturities
March 31
Deposits with banks .....................................................
Call loans and bills bought ...........................................
Receivables under resale agreements .............................
Receivables under securities borrowing transactions .....
Monetary claims bought*1 ............................................
Securities*1 ..................................................................
Bonds classified as held-to-maturity ..........................
Japanese government bonds ..................................
Japanese local government bonds ..........................
Japanese corporate bonds .......................................
Other ....................................................................
Other securities with maturity ..................................
Japanese government bonds ..................................
Japanese local government bonds ..........................
Japanese corporate bonds .......................................
Other ....................................................................
Loans and bills discounted*1, 2 ......................................
Foreign exchanges*1 .....................................................
Lease receivables and investment assets*1 ......................
Total .............................................................................
Within 1 year
¥ 4,728,741
1,120,590
25,226
5,440,622
649,799
9,638,321
69,571
65,000
1,595
2,976
—
9,568,749
8,226,690
25,723
675,629
640,706
13,552,411
1,101,482
565,311
¥36,822,506
Millions of yen
2010
After 1 year
through 5 years
¥ 2,685
555
—
—
93,698
11,344,537
2,713,680
2,410,000
113,592
188,087
2,000
8,630,856
3,456,218
216,764
2,130,381
2,827,491
22,297,810
2,520
1,000,911
¥34,742,718
After 5 years
through 10 years
¥ —
—
—
—
62,313
3,138,161
483,955
390,000
38,972
50,283
4,700
2,654,206
1,712,053
20,276
363,670
558,206
7,923,621
—
114,874
¥11,238,970
After 10 years
¥ —
—
—
—
189,786
717,074
—
—
—
—
—
717,074
364,500
46
60,592
291,934
10,884,978
—
40,375
¥11,832,214
SMFG 2010 105
SMFG
Notes to Consolidated Financial Statements
March 31
Deposits with banks .....................................................
Call loans and bills bought ...........................................
Receivables under resale agreements .............................
Receivables under securities borrowing transactions .....
Monetary claims bought*1 ............................................
Securities*1 ..................................................................
Bonds classified as held-to-maturity ..........................
Japanese government bonds ..................................
Japanese local government bonds ..........................
Japanese corporate bonds .......................................
Other ....................................................................
Other securities with maturity ..................................
Japanese government bonds ..................................
Japanese local government bonds ..........................
Japanese corporate bonds .......................................
Other ....................................................................
Loans and bills discounted*1, 2 ......................................
Foreign exchanges*1 .....................................................
Lease receivables and investment assets*1 ......................
Total .............................................................................
Within 1 year
$ 50,819
12,043
271
58,470
6,983
103,582
748
699
17
32
—
102,834
88,411
276
7,261
6,886
145,647
11,838
6,075
$395,728
Millions of U.S. dollars
2010
After 1 year
through 5 years
$ 29
6
—
—
1,007
121,919
29,164
25,900
1,221
2,021
22
92,755
37,144
2,329
22,895
30,387
239,632
27
10,757
$373,377
After 5 years
through 10 years
$ —
—
—
—
670
33,725
5,201
4,191
419
540
51
28,525
18,399
219
3,908
5,999
85,154
—
1,235
$120,784
After 10 years
$ —
—
—
—
2,040
7,706
—
—
—
—
—
7,706
3,917
1
651
3,137
116,980
—
434
$127,160
*1 The amounts shown in the table above do not include amounts for claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers and other
claims for which redemption is unlikely. The amounts for such claims are as follows:
March 31
Monetary claims bought ....................................................................................................................................
Securities ...........................................................................................................................................................
Loans and bills discounted .................................................................................................................................
Foreign exchanges .............................................................................................................................................
Lease receivables and investment assets ..............................................................................................................
*2 Does not include loans without tenure totaling ¥6,829,836 million ($73,400 million).
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
Millions of U.S. dollars
2010
$ 34
183
13,043
35
108
Millions of yen
2010
¥ 3,196
16,989
1,213,627
3,286
10,048
Millions of yen
2010
March 31
Deposits* ....................................................................
Negotiable certificates of deposit ..................................
Call money and bills sold ..............................................
Payables under repurchase agreements ..........................
Payables under securities lending transactions ..............
Commercial paper ........................................................
Borrowed money ..........................................................
Foreign exchanges ........................................................
Short-term bonds ..........................................................
Bonds ...........................................................................
Due to trust account .....................................................
Total .............................................................................
Within 1 year
¥73,936,151
6,959,781
2,119,557
1,120,860
4,315,774
310,787
4,156,807
192,299
1,212,200
362,002
159,554
¥94,845,775
After 1 year
through 5 years
¥4,093,970
35,838
—
—
—
—
993,051
—
—
1,181,035
—
¥6,303,896
After 5 years
through 10 years
¥ 365,131
—
—
—
—
—
172,326
—
—
1,471,394
—
¥2,008,852
After 10 years
¥251,172
—
—
—
—
—
148,392
—
—
408,790
—
¥808,356
106
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
Millions of U.S. dollars
2010
After 1 year
through 5 years
$43,998
385
—
—
—
—
10,672
—
—
12,692
—
$67,747
After 5 years
through 10 years
$ 3,924
—
—
—
—
—
1,852
—
—
15,813
—
$21,589
After 10 years
$2,699
—
—
—
—
—
1,595
—
—
4,393
—
$8,687
March 31
Deposits* .....................................................................
Negotiable certificates of deposit ..................................
Call money and bills sold ..............................................
Payables under repurchase agreements ..........................
Payables under securities lending transactions ..............
Commercial paper ........................................................
Borrowed money ..........................................................
Foreign exchanges ........................................................
Short-term bonds ..........................................................
Bonds ...........................................................................
Due to trust account .....................................................
Total .............................................................................
Within 1 year
$ 794,585
74,796
22,779
12,046
46,381
3,340
44,673
2,067
13,027
3,890
1,715
$1,019,299
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
29. Fair Value Information
(1) Securities
The amounts shown in the following tables include trading securities and short-term bonds classified as “Trading assets,” negotiable
certificates of deposit bought classified as “Deposits with banks,” and beneficiary claims on loan trusts classified as “Monetary claims
bought,” in addition to “Securities” stated in the consolidated balance sheets.
Fiscal year ended March 31, 2010
(a) Securities classified as trading purposes
March 31
Valuation gains included in the earnings for the fiscal year .......................................
Millions of yen
2010
¥(2,583)
Millions of U.S. dollars
2010
$(28)
(b) Bonds classified as held-to-maturity
March 31
Bonds with unrealized gains:
Consolidated balance
sheet amount
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Bonds with unrealized losses:
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Total ...................................................................................................
¥2,551,114
151,580
239,417
2,195
¥2,944,308
¥ 320,098
2,700
411
15,121
¥ 338,331
¥3,282,639
Millions of yen
2010
Fair value
¥2,600,336
154,660
246,457
2,199
¥3,003,653
¥ 319,472
2,697
410
15,017
¥ 337,596
¥3,341,250
Net unrealized
gains (losses)
¥49,221
3,079
7,039
4
¥59,344
¥ (626)
(2)
(1)
(104)
¥ (734)
¥58,610
SMFG 2010 107
SMFG
Notes to Consolidated Financial Statements
Millions of U.S. dollars
2010
March 31
Bonds with unrealized gains:
Consolidated balance
sheet amount
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Bonds with unrealized losses:
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Total ...................................................................................................
$27,417
1,629
2,573
23
$31,642
$ 3,440
29
4
163
$ 3,636
$35,278
(c) Other securities
March 31
Other securities with unrealized gains:
Consolidated balance
sheet amount
Stocks .................................................................................................
Bonds .................................................................................................
Japanese government bonds ............................................................
Japanese local government bonds ....................................................
Japanese corporate bonds .................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Other securities with unrealized losses:
Stocks .................................................................................................
Bonds .................................................................................................
Japanese government bonds ............................................................
Japanese local government bonds ....................................................
Japanese corporate bonds .................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Total ...................................................................................................
¥ 1,604,127
13,863,729
10,769,980
196,170
2,897,578
2,494,792
¥17,962,649
¥ 786,294
3,580,276
3,097,128
72,197
410,951
2,542,531
¥ 6,909,102
¥24,871,752
Fair value
$27,946
1,662
2,649
23
$32,280
$ 3,433
29
4
162
$ 3,628
$35,908
Millions of yen
2010
Acquisition cost
¥ 1,060,381
13,731,907
10,707,770
194,047
2,830,090
2,371,004
¥17,163,293
¥ 919,055
3,588,439
3,099,871
72,313
416,253
2,614,548
¥ 7,122,043
¥24,285,337
Net unrealized
gains (losses)
$529
33
76
0
$638
$ (7)
(0)
(0)
(1)
$ (8)
$630
Net unrealized
gains (losses)
¥ 543,745
131,821
62,209
2,123
67,488
123,788
¥ 799,355
¥(132,761)
(8,163)
(2,743)
(116)
(5,302)
(72,017)
¥(212,941)
¥ 586,414
March 31
Other securities with unrealized gains:
Stocks .................................................................................................
Bonds .................................................................................................
Japanese government bonds ............................................................
Japanese local government bonds ....................................................
Japanese corporate bonds .................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Other securities with unrealized losses:
Stocks .................................................................................................
Bonds .................................................................................................
Japanese government bonds ............................................................
Japanese local government bonds ....................................................
Japanese corporate bonds .................................................................
Other ..................................................................................................
Subtotal ..........................................................................................
Total ...................................................................................................
Millions of U.S. dollars
2010
Consolidated balance
sheet amount
Acquisition cost
Net unrealized
gains (losses)
$ 17,240
148,992
115,744
2,108
31,140
26,811
$193,043
$ 8,450
38,477
33,285
776
4,416
27,324
$ 74,251
$267,294
$ 11,396
147,575
115,075
2,085
30,415
25,481
$184,452
$ 9,877
38,565
33,314
777
4,474
28,098
$ 76,540
$260,992
$ 5,844
1,417
669
23
725
1,330
$ 8,591
$(1,427)
(88)
(29)
(1)
(58)
(774)
$(2,289)
$ 6,302
Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥105 million ($1 million) that are recognized in the fiscal year’s earnings by applying
fair value hedge accounting.
108
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
2. Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:
Millions of yen
2010
¥285,123
369,111
¥654,234
March 31
Stocks ............................................................................................................................................
Other ............................................................................................................................................
Total ..............................................................................................................................................
Millions of U.S. dollars
2010
$3,064
3,967
$7,031
These amounts are not included in “(c) Other securities” since there are no market prices and it is extremely difficult to determine their fair values.
(d) Held-to-maturity bonds sold during the year ended March 31, 2010
There are no corresponding transactions.
(e) Other securities sold during the year ended March 31, 2010
Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................
Sales amount
¥ 107,588
20,061,150
19,422,804
196,472
441,872
12,193,240
¥32,361,979
Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................
Sales amount
$ 1,156
215,595
208,735
2,111
4,749
131,040
$347,791
(f) Change of classification of securities
There are no corresponding transactions.
(g) Write-down of securities
Millions of yen
2010
Gains on sales
¥ 50,898
35,397
32,937
634
1,825
61,872
¥148,167
Millions of U.S. dollars
2010
Gains on sales
$ 547
380
354
7
19
665
$1,592
Losses on sales
¥ (3,556)
(6,154)
(5,915)
(103)
(136)
(24,367)
¥(34,079)
Losses on sales
$ (38)
(66)
(64)
(1)
(1)
(262)
$(366)
Securities (excluding stocks of subsidiaries and affiliates) with fair value are considered as impaired if the fair value declines materi-
ally below the acquisition cost and such decline is not considered as recoverable. In such a case, the fair value is recognized as the
consolidated balance sheet amount and the amount of write-down is accounted for as valuation loss for the fiscal year. Valuation loss
for the fiscal year was ¥19,519 million ($210 million). The rule for determining “material decline” is as follows and is based on the
classification of issuers under self-assessment of assets.
Bankrupt/Effectively bankrupt/Potentially bankrupt issuers:
Issuers requiring caution:
Normal issuers:
Bankrupt issuers: Issuers that are legally bankrupt or formally declared bankrupt.
Effectively bankrupt issuers: Issuers that are not legally bankrupt but regarded as substantially bankrupt.
Potentially bankrupt issuers: Issuers that are not bankrupt now, but are perceived to have a high risk of falling into bankruptcy.
Issuers requiring caution: Issuers that are identified for close monitoring.
Normal issuers: Issuers other than the above 4 categories of issuers.
Fair value is lower than acquisition cost.
Fair value is 30% or more lower than acquisition cost.
Fair value is 50% or more lower than acquisition cost.
Fiscal year ended March 31, 2009
(a) Securities classified as trading purposes
March 31
Consolidated balance sheet amount .............................................................................................................................
Valuation gains included in the earnings for the fiscal year .........................................................................................
Millions of yen
2009
¥858,134
502
SMFG 2010 109
SMFG
Notes to Consolidated Financial Statements
(b) Bonds classified as held-to-maturity with fair value
Consolidated
balance sheet
amount
March 31
Japanese government bonds ............................................... ¥1,574,004
96,312
Japanese local government bonds .......................................
392,209
Japanese corporate bonds ...................................................
Other ................................................................................
9,181
Total .................................................................................. ¥2,071,708
Fair value
¥1,596,291
97,265
396,215
8,676
¥2,098,449
Note: Fair value is calculated using market prices at the fiscal year-end.
(c) Other securities with fair value
Acquisition
cost
Consolidated
balance sheet
amount
March 31
Stocks ................................................................................ ¥ 1,978,015 ¥ 1,985,078
14,008,076
Bonds ................................................................................ 14,010,902
13,160,414
Japanese government bonds ........................................... 13,158,932
242,376
242,419
Japanese local government bonds ...................................
609,550
Japanese corporate bonds ...............................................
605,286
6,010,732
6,048,145
Other ................................................................................
Total .................................................................................. ¥22,037,063 ¥22,003,887
Millions of yen
2009
Net unrealized
gains (losses)
¥22,286
953
4,006
(504)
¥26,741
Millions of yen
2009
Net unrealized
gains (losses)
¥ 7,062
(2,826)
1,482
(43)
(4,264)
(37,412)
¥(33,176)
Unrealized
gains
¥22,582
962
4,611
—
¥28,155
Unrealized
losses
¥ 295
9
605
504
¥1,414
Unrealized
gains
¥287,380
21,534
20,029
499
1,005
47,920
¥356,834
Unrealized
losses
¥280,317
24,360
18,547
542
5,270
85,332
¥390,011
Notes: 1. Consolidated balance sheet amount is calculated as follows:
Stocks (including foreign stocks): Average market prices during 1 month before the fiscal year-end
Bonds and other: Market prices at the fiscal year-end or fair value based on the DCF method on certain Japanese government bonds
2. Other securities with fair value are considered as impaired if the fair value declines materially below the acquisition cost and such decline is not considered as recover-
able. In such a case, the fair value is recognized as the consolidated balance sheet amount and the amount of write-down is accounted for as valuation loss for the fiscal
year. Valuation loss for the fiscal year ended March 31, 2009 was ¥156,721 million. The rule for determining “material decline” is as follows and is based on the
classification of issuers under self-assessment of assets.
Bankrupt/Effectively bankrupt/Potentially bankrupt issuers:
Issuers requiring caution:
Normal issuers:
Bankrupt issuers: Issuers that are legally bankrupt or formally declared bankrupt.
Effectively bankrupt issuers: Issuers that are not legally bankrupt but regarded as substantially bankrupt.
Potentially bankrupt issuers: Issuers that are not bankrupt now, but are perceived to have a high risk of falling into bankruptcy.
Fair value is lower than acquisition cost.
Fair value is 30% or more lower than acquisition cost.
Fair value is 50% or more lower than acquisition cost.
Issuers requiring caution: Issuers that are identified for close monitoring.
Normal issuers: Issuers other than the above 4 categories of issuers.
(d) Held-to-maturity bonds sold during the year ended March 31, 2009
There are no corresponding transactions.
(e) Other securities sold during the year ended March 31, 2009
Year ended March 31
Sales amount ..............................................................................................................................................................
Gains on sales .............................................................................................................................................................
Losses on sales .............................................................................................................................................................
(f) Securities with no available market value
March 31
Bonds classified as held-to-maturity:
Millions of yen
2009
¥34,610,449
158,285
75,997
Millions of yen
Consolidated
balance sheet
amount
2009
Beneficiary claims on accounts receivable, etc. .......................................................................................................
¥ 9,996
Other securities:
Unlisted stocks (excluding OTC stocks) ..................................................................................................................
Unlisted bonds .......................................................................................................................................................
Unlisted foreign securities ......................................................................................................................................
Other ......................................................................................................................................................................
332,450
2,901,693
800,543
564,348
110
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
(g) Change of classification of securities
There are no corresponding transactions.
(h) Redemption schedule of other securities with maturities and held-to-maturity bonds
March 31
Bonds ........................................................................................
Japanese government bonds ...................................................
Japanese local government bonds ...........................................
Japanese corporate bonds .......................................................
Other ........................................................................................
Total ..........................................................................................
Within 1 year
¥3,416,761
2,802,254
32,001
582,504
1,077,576
¥4,494,337
(2) Money held in trust
(a) Money held in trust classified as trading purposes
Millions of yen
2009
After 1 year
through 5 years
¥11,895,495
9,376,045
232,744
2,286,704
4,272,647
¥16,168,143
After 5 years
through 10 years
¥1,987,483
1,133,529
73,889
780,064
788,691
¥2,776,174
After 10 years
¥1,659,495
1,422,588
52
236,853
609,101
¥2,268,597
March 31
Consolidated balance sheet amount ............................................................
Valuation gains (losses) included in the earnings for the fiscal year .............
2010
¥1,483
13
2009
¥1,416
(3)
Millions of yen
(b) Money held in trust classified as held-to-maturity
There are no corresponding transactions.
(c) Other money held in trust
March 31
Acquisition cost .........................................................................................
Consolidated balance sheet amount ............................................................
Net unrealized gains (losses) ......................................................................
Unrealized gains ....................................................................................
Unrealized losses ....................................................................................
2010
¥17,188
17,250
62
157
(95)
Note: Consolidated balance sheet amount is calculated using market prices at the fiscal year-end.
2009
¥7,830
7,568
(262)
—
(262)
Millions of yen
(3) Net unrealized gains (losses) on other securities and other money held in trust
Millions of yen
March 31
Net unrealized gains (losses) ......................................................................
Other securities .....................................................................................
Other money held in trust .....................................................................
(–) Deferred tax liabilities ..........................................................................
Net unrealized gains (losses) on other securities
(before following adjustment) ..................................................................
(–) Minority interests .................................................................................
(+) SMFG’s interest in net unrealized gains (losses) on valuation of other
securities held by affiliates accounted for by the equity method ..........
Net unrealized gains (losses) on other securities .........................................
2010
¥586,154
586,091
62
168,758
417,396
7,991
3,304
¥412,708
2009
¥(34,044)
(33,781)
(262)
14,428
(48,472)
(5,400)
28,422
¥(14,649)
Millions of
U.S. dollars
2010
$16
0
Millions of
U.S. dollars
2010
$184
185
1
2
(1)
Millions of
U.S. dollars
2010
$6,299
6,299
0
1,813
4,486
86
35
$4,435
Notes: 1. Net unrealized gains (losses) on other securities as of March 31, 2010 included gains of ¥105 million ($1 million) that are recognized in the fiscal year’s earnings by
applying fair value hedge accounting.
2. Net unrealized gains (losses) included foreign currency translation adjustments on non-marketable securities denominated in foreign currencies.
30. Derivative Transactions
Fiscal year ended March 31, 2010
(1) Derivative transactions to which the hedge accounting method is not applied
The following tables set forth the contract amount or the amount equivalent to the principal, fair value, valuation gains (losses) and cal-
culation method of the relevant commodities by category with respect to derivative transactions to which the hedge accounting method
is not applied at the end of the fiscal year. Contract amount does not indicate the market risk relating to derivative transactions.
SMFG 2010 111
SMFG
Notes to Consolidated Financial Statements
(a) Interest rate derivatives
March 31
Listed
Interest rate futures:
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ 27,455,094
32,231,909
¥ 1,429,658
1,234,295
¥ (26,886)
30,344
¥ (26,886)
30,344
Over-the-counter
Forward rate agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Interest rate swaps: .................................................................................
Receivable fixed rate/payable floating rate ..........................................
Receivable floating rate/payable fixed rate ..........................................
Receivable floating rate/payable floating rate ......................................
—
25,246,604
364,973,058
168,753,817
170,326,998
25,798,196
—
907,098
264,226,831
124,132,310
122,682,985
17,317,488
Interest rate swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
2,691,761
2,467,679
Caps:
Sold ....................................................................................................
Bought ...............................................................................................
24,121,287
11,007,401
Floors:
Sold ...................................................................................................
Bought ...............................................................................................
1,761,137
10,689,965
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
732,102
2,526,134
/
1,954,642
2,051,889
7,413,055
3,766,465
659,758
2,103,435
342,078
1,235,256
/
—
(340)
125,966
4,254,072
(4,118,551)
(6,016)
(59,016)
64,750
(13,228)
7,726
(18,523)
11,058
—
(340)
125,966
4,254,072
(4,118,551)
(6,016)
(59,016)
64,750
(13,228)
7,726
(18,523)
11,058
(23,327)
81,184
¥ 179,707
(23,327)
81,184
¥ 179,707
March 31
Listed
Interest rate futures:
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
$ 295,057
346,393
$ 15,364
13,265
$ (289)
326
$ (289)
326
Over-the-counter
Forward rate agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Interest rate swaps: .................................................................................
Receivable fixed rate/payable floating rate ..........................................
Receivable floating rate/payable fixed rate ..........................................
Receivable floating rate/payable floating rate ......................................
—
271,323
3,922,333
1,813,582
1,830,489
277,251
Interest rate swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Caps:
Sold ....................................................................................................
Bought ...............................................................................................
Floors:
Sold ...................................................................................................
Bought ...............................................................................................
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
28,928
26,520
259,229
118,296
18,927
114,884
7,868
27,148
/
—
9,749
2,839,622
1,334,039
1,318,463
186,109
21,006
22,051
79,667
40,478
7,090
22,605
3,676
13,275
/
—
(4)
1,354
45,718
(44,262)
(65)
(634)
696
(142)
83
(199)
119
—
(4)
1,354
45,718
(44,262)
(65)
(634)
696
(142)
83
(199)
119
(251)
872
$ 1,931
(251)
872
$ 1,931
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Financial Exchange and others.
Fair value of OTC transactions is calculated using discounted present value and option pricing models.
112
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥22,944,557
¥15,000,880
¥(197,861)
¥ (37,404)
(b) Currency derivatives
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Sold ....................................................................................................
Bought ...............................................................................................
3,855,995
3,850,518
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
51
42
/
—
—
/
1
0
¥ 8,620
812,380
962,113
34,515,123
787,350
861,923
3,923,138
2,479,933
2,378,255
(14,820)
30,552
116,047
(313,707)
388,407
(14,820)
30,552
116,047
(313,707)
388,407
1
0
¥169,077
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Sold ....................................................................................................
Bought ...............................................................................................
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$246,583
$161,213
$(2,126)
$ (402)
8,731
10,340
370,931
41,440
41,381
1
0
/
8,462
9,263
42,162
26,652
25,559
—
—
/
(159)
328
1,247
(3,371)
4,174
0
0
$ 93
(159)
328
1,247
(3,371)
4,174
0
0
$1,817
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value is calculated using discounted present value and option pricing models.
(c) Equity derivatives
March 31
Listed
Equity price index futures:
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ 57,478
35,779
¥ —
—
¥ (1,416)
955
¥ (1,416)
955
Equity price index options:
Sold ....................................................................................................
Bought ...............................................................................................
1,825
225
—
—
(1)
1
(1)
1
Over-the-counter
Equity options:
Sold ....................................................................................................
Bought ...............................................................................................
226,398
233,424
152,641
225,474
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
114
294
/
—
—
/
(45,488)
45,680
(0)
16
¥ (253)
(45,488)
45,680
(0)
16
¥ (253)
SMFG 2010 113
SMFG
Notes to Consolidated Financial Statements
March 31
Listed
Equity price index futures:
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
$ 618
385
Equity price index options:
Sold ....................................................................................................
Bought ...............................................................................................
20
2
Over-the-counter
Equity options:
Sold ....................................................................................................
Bought ...............................................................................................
2,433
2,509
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
1
3
/
$ —
—
—
—
1,640
2,423
—
—
/
$ (15)
10
(0)
0
(489)
491
(0)
0
$ (3)
$ (15)
10
(0)
0
(489)
491
(0)
0
$ (3)
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Stock Exchange and others.
Fair value of OTC transactions is calculated using option pricing models.
(d) Bond derivatives
March 31
Listed
Bond futures:
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥1,320,583
1,232,748
¥ —
—
¥5,799
(6,710)
¥5,799
(6,710)
Bond futures options:
Sold ....................................................................................................
Bought ...............................................................................................
8,652
209,652
—
—
Over-the-counter
Forward bond agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Bond options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
—
42,092
270,000
270,000
/
—
39,082
—
—
/
5
256
—
919
5
256
—
919
(247)
262
¥ 285
(247)
262
¥ 285
March 31
Listed
Bond futures:
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
$14,192
13,248
Bond futures options:
Sold ....................................................................................................
Bought ...............................................................................................
93
2,253
Over-the-counter
Forward bond agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Bond options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
—
452
2,902
2,902
/
$ —
—
—
—
—
420
—
—
/
$62
(72)
0
3
—
10
(3)
3
$ 3
$62
(72)
0
3
—
10
(3)
3
$ 3
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Stock Exchange and others.
Fair value of OTC transactions is calculated using discounted present value and option pricing models.
114
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
(e) Commodity derivatives
March 31
Listed
Commodity futures:
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ 11,998
12,235
¥ —
—
¥ (160)
154
¥ (160)
154
Over-the-counter
Commodity swaps:
Receivable fixed price/payable floating price.......................................
Receivable floating price/payable fixed price.......................................
Receivable floating price/payable floating price ..................................
Commodity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
213,634
172,127
7
22,674
25,623
/
199,442
159,140
7
16,019
16,355
/
(48,721)
101,006
0
(198)
1,821
¥ 53,902
(48,721)
101,006
0
(198)
1,821
¥ 53,902
March 31
Listed
Commodity futures:
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
$ 129
131
$ —
—
$ (2)
2
$ (2)
2
Over-the-counter
Commodity swaps:
Receivable fixed price/payable floating price.......................................
Receivable floating price/payable fixed price.......................................
Receivable floating price/payable floating price ..................................
Commodity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
2,296
1,850
0
244
275
/
2,143
1,710
0
172
176
/
(524)
1,086
0
(2)
19
$ 579
(524)
1,086
0
(2)
19
$ 579
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the New York Mercantile Exchange and others.
Fair value of OTC transactions is calculated based on factors such as price of the relevant commodity and contract term.
3. Commodity derivatives are transactions on fuel and metal.
(f) Credit derivative transactions
March 31
Over-the-counter
Credit default options:
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
¥1,174,089
1,362,339
/
¥1,079,228
1,078,463
/
¥(73,555)
76,421
¥ 2,865
¥(73,555)
76,421
¥ 2,865
March 31
Over-the-counter
Credit default options:
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
$12,618
14,641
/
$11,598
11,590
/
$(790)
821
$ 31
$(790)
821
$ 31
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
2. Fair value is calculated using discounted present value and option pricing models.
3. “Sold” represents transactions in which the credit risk is accepted; “Bought” represents transactions in which the credit risk is transferred.
SMFG 2010 115
SMFG
Notes to Consolidated Financial Statements
(2) Derivative transactions to which the hedge accounting method is applied
The following tables set forth the contract amount or the amount equivalent to the principal, fair value and calculation method of the
relevant commodities by category with respect to derivative transactions to which the hedge accounting method is applied at the end of
the fiscal year. Contract amount does not indicate the market risk relating to derivative transactions.
(a) Interest rate derivatives
Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposits
March 31
Hedge accounting method
Deferral hedge method
Type of derivative
Interest rate futures:
Sold .................................................................
Bought ............................................................
Interest rate swaps: ..............................................
Receivable fixed rate/payable floating rate .......
Receivable floating rate/payable fixed rate .......
Receivable floating rate/payable floating rate ...
Interest rate swaptions:
Sold .................................................................
Bought ............................................................
Caps:
Sold .................................................................
Bought ............................................................
Floors:
Sold .................................................................
Bought ............................................................
Recognition of gain or loss
on the hedging instrument
Special treatment for
interest rate swaps
Interest rate swaps: .............................................. Loans and bills discounted;
Receivable floating rate/payable fixed rate .......
other securities (bonds)
Interest rate swaps: .............................................. Loans and bills discounted;
Receivable fixed rate/payable floating rate .......
Receivable floating rate/payable fixed rate .......
Receivable floating rate/payable floating rate ...
Total ....................................................................
borrowed money;
Bonds
Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposits
March 31
Hedge accounting method
Deferral hedge method
Type of derivative
Interest rate futures:
Sold .................................................................
Bought ............................................................
Interest rate swaps: ..............................................
Receivable fixed rate/payable floating rate .......
Receivable floating rate/payable fixed rate .......
Receivable floating rate/payable floating rate ...
Interest rate swaptions:
Sold .................................................................
Bought ............................................................
Caps:
Sold .................................................................
Bought ............................................................
Floors:
Sold .................................................................
Bought ............................................................
Recognition of gain or loss
on the hedging instrument
Special treatment for
interest rate swaps
Interest rate swaps: .............................................. Loans and bills discounted;
Receivable floating rate/payable fixed rate .......
other securities (bonds)
Interest rate swaps: .............................................. Loans and bills discounted;
Receivable fixed rate/payable floating rate .......
Receivable floating rate/payable fixed rate .......
Receivable floating rate/payable floating rate ...
Total ....................................................................
borrowed money;
Bonds
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
¥ 687,343
15,799,182
33,670,699
22,949,812
10,661,052
59,833
¥ 372,196
—
27,749,612
18,482,089
9,237,689
29,833
¥ (126)
1,862
23,415
321,049
(298,913)
1,278
470,930
751
460,558
—
—
600
—
—
171
7,850
72,655
72,655
9,135,218
25,500
9,077,718
32,000
/
—
7,850
69,368
69,368
9,105,823
14,500
9,063,623
27,700
/
(605)
(1)
—
0
(0)
0
(4,662)
(4,662)
(Note 3)
¥ 19,880
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
$ 7,387
169,792
361,856
246,640
114,573
643
$ 4,000
—
298,223
198,625
99,277
321
$ (1)
20
252
3,450
(3,212)
14
5,061
8
—
6
2
84
781
781
98,175
274
97,557
344
/
4,950
—
—
—
—
84
745
745
97,859
156
97,406
297
/
(7)
(0)
—
0
(0)
0
(50)
(50)
(Note 3)
$ 214
Notes: 1. SMFG applies deferred hedge accounting stipulated in “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in
Banking Industry” (JICPA Industry Audit Committee Report No. 24).
116
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Financial Exchange and others.
Fair value of OTC transactions is calculated using discounted present value and option pricing models.
3. Interest rate swap amounts measured by the special treatment for interest rate swaps are treated with the borrowed money or other transaction that is subject to the
hedge. Therefore such fair value is included in the fair value of the relevant transaction subject to the hedge in “28. Financial Instruments.”
(b) Currency derivatives
March 31
Hedge accounting method
Deferral hedge method
Recognition of gain or loss
on the hedging instrument
Allocation method
March 31
Hedge accounting method
Deferral hedge method
Recognition of gain or loss
on the hedging instrument
Allocation method
Type of derivative
Principal items hedged
Currency swaps. ................................................... Foreign currency denomi-
Forward foreign exchange ....................................
nated loans and bills
discounted; other securities
(bonds); deposits; foreign
currency exchange, etc.
Millions of yen
2010
Contract amount
Total
¥2,058,317
10,152
Over 1 year
¥1,849,783
—
Fair value
¥163,796
111
Currency swaps. ................................................... Deposits
19,785
—
(301)
Currency swaps. ................................................... Deposits; borrowed money
Forward foreign exchange ....................................
Total ....................................................................
7,866
124,361
/
6,635
—
/
(Note 3)
¥163,607
Type of derivative
Principal items hedged
Currency swaps. ................................................... Foreign currency denomi-
Forward foreign exchange ....................................
nated loans and bills
discounted; other securities
(bonds); deposits; foreign
currency exchange, etc.
Currency swaps. ................................................... Deposits
Currency swaps. ................................................... Deposits; borrowed money
Forward foreign exchange ....................................
Total ....................................................................
Millions of U.S. dollars
2010
Contract amount
Total
$22,121
109
Over 1 year
$19,879
—
Fair value
$1,760
1
213
85
1,336
/
—
71
—
/
(3)
(Note 3)
$1,758
Notes: 1. SMFG applies deferred hedge accounting stipulated in “Treatment for Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in
Banking Industry” (JICPA Industry Audit Committee Report No. 25).
2. Fair value is calculated using discounted present value.
3. Foreign forward exchange amounts treated by the allocation method are treated with the deposit or other transaction that is subject to the hedge. Therefore such fair
value is included in the fair value of the relevant transaction subject to the hedge in “28. Financial Instruments.”
(c) Equity derivatives
March 31
Hedge accounting method
Recognition of gain or loss
on the hedging instrument
March 31
Hedge accounting method
Recognition of gain or loss
on the hedging instrument
Type of derivative
Equity price index swaps:
Principal items hedged
Other securities (equity)
Receivable equity index/payable floating rate ...
Receivable floating rate/payable equity index ...
Total ....................................................................
Type of derivative
Equity price index swaps:
Principal items hedged
Other securities (equity)
Receivable equity index/payable floating rate ...
Receivable floating rate/payable equity index ...
Total ....................................................................
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
¥ —
9,534
/
¥ —
9,534
/
¥ —
(276)
¥(276)
Millions of U.S. dollars
2010
Contract amount
Total
Over 1 year
Fair value
$ —
102
/
$ —
102
/
$—
(3)
$ (3)
Note: Fair value is calculated using discounted present value.
SMFG 2010 117
SMFG
Notes to Consolidated Financial Statements
Fiscal year ended March 31, 2009
(1) Interest rate derivatives
March 31
Listed
Interest rate futures:
Millions of yen
2009
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ 17,636,094
19,571,966
¥ 1,254,229
1,557,621
¥ (41,578)
51,493
¥ (41,578)
51,493
Over-the-counter
Forward rate agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Interest rate swaps: .................................................................................
Receivable fixed rate/payable floating rate ..........................................
Receivable floating rate/payable fixed rate ..........................................
Receivable floating rate/payable floating rate ......................................
—
15,742,690
395,948,961
186,295,438
186,981,391
22,579,384
—
97,966
283,809,494
135,517,151
132,487,292
15,712,303
Interest rate swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
2,690,323
2,802,501
1,789,900
2,143,328
Caps:
Sold ....................................................................................................
Bought ...............................................................................................
27,834,072
13,867,378
12,451,630
6,122,525
Floors:
Sold ...................................................................................................
Bought ...............................................................................................
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
3,351,169
5,116,400
1,177,521
3,454,028
/
1,816,123
2,810,008
575,022
2,000,040
/
—
114
207,729
4,508,393
(4,300,450)
4,399
(65,983)
65,627
(5,342)
3,263
(21,272)
8,036
—
114
207,729
4,508,393
(4,300,450)
4,399
(65,983)
65,627
(5,342)
3,263
(21,272)
8,036
(32,707)
100,656
¥ 270,036
(32,707)
100,656
¥ 270,036
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
Derivative transactions to which the deferred hedge accounting method is applied are not included in the amounts above.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Financial Exchange and others.
Fair value of OTC transactions is calculated using discounted present value and option pricing models.
(2) Currency derivatives
Millions of yen
2009
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥22,343,204
¥14,918,715
¥(138,309)
¥(107,046)
863,862
964,627
44,250,845
4,448,659
4,356,557
/
863,862
955,373
4,431,723
2,475,706
2,411,169
/
(13,907)
30,040
108,517
(269,220)
303,847
¥ 20,967
(13,907)
30,040
108,517
(269,220)
303,847
¥ 52,231
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations. The amounts above do
not include the following:
(a) Derivative transactions to which the deferred hedge accounting method is applied;
(b) Those that are allotted to financial assets/liabilities denominated in foreign currencies and whose fair values are already reflected in the consolidated balance
sheets; and
(c) Those that are allotted to financial assets/liabilities denominated in foreign currencies, and the financial assets/liabilities are eliminated in the process of
consolidation.
2. Fair value is calculated using discounted present value and option pricing models.
118
SMFG 2010
(3) Equity derivatives
March 31
Listed
Equity price index futures:
Notes to Consolidated Financial Statements
SMFG
Millions of yen
2009
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ 14,239
14,533
¥ —
—
¥ (632)
636
¥ (632)
636
Equity price index options:
Sold ....................................................................................................
Bought ...............................................................................................
2,218
144
—
—
(17)
3
(17)
3
Over-the-counter
Equity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
219,238
219,238
/
145,209
145,209
/
(63,785)
63,785
¥ (9)
(63,785)
63,785
¥ (9)
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
Derivative transactions to which the deferred hedge accounting method is applied are not included in the amounts above.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Stock Exchange and others.
Fair value of OTC transactions is calculated using option pricing models.
(4) Bond derivatives
March 31
Listed
Bond futures:
Millions of yen
2009
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥976,285
964,958
Bond futures options:
Sold ....................................................................................................
Bought ...............................................................................................
15,000
—
Over-the-counter
Forward bond agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Bond options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
—
44,076
450,000
450,000
/
¥ —
—
—
—
—
44,059
—
—
/
¥(9,158)
8,638
¥(9,158)
8,638
1
—
—
561
1
—
—
561
—
1
¥ 44
—
1
¥ 44
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
Derivative transactions to which the deferred hedge accounting method is applied are not included in the amounts above.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the Tokyo Stock Exchange and others.
Fair value of OTC transactions is calculated using discounted present value and option pricing models.
SMFG 2010 119
SMFG
Notes to Consolidated Financial Statements
(5) Commodity derivatives
March 31
Listed
Commodity futures:
Millions of yen
2009
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
¥ —
156
¥ —
—
¥ —
25
¥ —
25
Over-the-counter
Commodity swaps:
Receivable fixed price/payable floating price.......................................
Receivable floating price/payable fixed price.......................................
295,434
243,608
Commodity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
14,335
39,276
/
246,531
194,760
11,786
33,637
/
37,408
27,707
(779)
2,015
¥66,376
37,408
27,707
(779)
2,015
¥66,376
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
Derivative transactions to which the deferred hedge accounting method is applied are not included in the amounts above.
2. Fair value of transactions listed on exchange is calculated using the closing prices on the New York Mercantile Exchange and others.
Fair value of OTC transactions is calculated based on factors such as price of the relevant commodity and contract term.
3. Commodity derivatives are transactions on fuel and metal.
(6) Credit derivative transactions
March 31
Over-the-counter
Credit default options:
Millions of yen
2009
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
¥1,179,621
1,325,430
/
¥1,167,801
1,308,288
/
¥(209,630)
229,275
¥ 19,644
¥(209,630)
229,275
¥ 19,644
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of operations.
Derivative transactions to which the deferred hedge accounting method is applied are not included in the amounts above.
2. Fair value is calculated using discounted present value and option pricing models.
3. “Sold” represents transactions in which the credit risk is accepted; “Bought” represents transactions in which the credit risk is transferred.
31. Stock Options
1. Share-based compensation expenses which were accounted for as general and administrative expenses in the fiscal years ended March 31,
2010 and 2009 are as follows:
Year ended March 31
Share-based compensation expenses .................................................................
2010
¥15
2009
¥22
Millions of yen
Millions of
U.S. dollars
2010
¥0
2. Outline of stock options and changes is as follows:
(1) SMFG
(a) Outline of stock options
Date of resolution
Title and number of grantees ............................................................... Directors and employees of SMFG and SMBC: 677
Number of stock options* ...................................................................
Grant date ...........................................................................................
Condition for vesting ...........................................................................
Requisite service period .......................................................................
Exercise period ....................................................................................
Common shares: 162,000
August 30, 2002
N.A.
N.A.
June 28, 2004 to June 27, 2012
June 27, 2002
* “Number of stock options” is reported in consideration of the 100-for-1 stock split implemented on January 4, 2009.
120
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
(b) Stock options granted and changes
Number of stock options
Date of resolution
Before vested
Previous fiscal year-end ....................................................................
Granted ...........................................................................................
Forfeited ..........................................................................................
Vested..............................................................................................
Outstanding ....................................................................................
After vested ........................................................................................
Previous fiscal year-end* ..................................................................
Vested..............................................................................................
Exercised .........................................................................................
Forfeited ..........................................................................................
Exercisable .......................................................................................
June 27, 2002
—
—
—
—
—
108,100
—
—
—
108,100
* Number of stock as of the previous fiscal year-end is reported in consideration of the 100-for-1 stock split implemented on January 4, 2009.
Price information (Yen)
Date of resolution
Exercise price .......................................................................................
Average exercise price ..........................................................................
Fair value at the grant date ..................................................................
June 27, 2002
¥6,649
—
—
(2) Kansai Urban Banking Corporation
June 28, 2001 June 27, 2002 June 27, 2003 June 29, 2004 June 29, 2005 June 29, 2006
(a) Outline of stock options
Date of resolution
Title and number of grantees ........................................... Directors and
employees
45
Number of stock options ................................................. Common shares
238,000
Grant date ....................................................................... July 31, 2001
Condition for vesting .......................................................
Requisite service period ...................................................
Exercise period ................................................................ June 29, 2003
to June 28,
2011
N.A.
N.A.
Directors and
employees
44
Directors and
employees
65
Directors and
employees
174
Directors and
employees
183
Directors
9
Common shares
234,000
Common shares
306,000
Common shares
399,000
Common shares
464,000
Common shares
162,000
July 31, 2002
July 31, 2003
July 30, 2004
July 29, 2005
July 31, 2006
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
June 28, 2004
to June 27,
2012
June 28, 2005
to June 27,
2013
June 30, 2006
to June 29,
2014
June 30, 2007
to June 29,
2015
June 30, 2008
to June 29,
2016
Date of resolution
Title and number of grantees .......................................... Officers not
doubling as
directors 14
Employees 46
June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
Officers not
Directors 11
doubling as
Officers not
directors 14
doubling as
Employees 48
directors 14
Employees 57
Directors 9
Officers not
doubling as
directors 16
Employees 45
Directors
10
Number of stock options ................................................. Common shares
115,000
Grant date ....................................................................... July 31, 2006
Condition for vesting .......................................................
Requisite service period ...................................................
Exercise period ................................................................ June 30, 2008
to June 29,
2016
N.A.
N.A.
Common shares
174,000
Common shares
112,000
Common shares
289,000
Common shares
350,000
July 31, 2007
July 31, 2007
July 31, 2008
July 31, 2009
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
June 29, 2009
to June 28,
2017
June 29, 2009
to June 28,
2017
June 28, 2010
to June 27,
2018
June 27, 2011
to June 26,
2019
SMFG 2010 121
SMFG
Notes to Consolidated Financial Statements
(b) Stock options granted and changes
Number of stock options
Date of resolution
Before vested
June 28, 2001 June 27, 2002 June 27, 2003 June 29, 2004 June 29, 2005 June 29, 2006
Previous fiscal year-end ................................................
Granted .......................................................................
Forfeited ......................................................................
Vested..........................................................................
Outstanding ................................................................
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
After vested
Previous fiscal year-end ................................................ 112,000
—
Vested..........................................................................
8,000
Exercised .....................................................................
—
Forfeited ......................................................................
Exercisable ................................................................... 104,000
158,000
—
20,000
—
138,000
228,000
—
6,000
—
222,000
329,000
—
—
4,000
325,000
451,000
—
—
—
451,000
162,000
—
—
—
162,000
Date of resolution
Before vested
June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
Previous fiscal year-end ................................................
Granted .......................................................................
Forfeited ......................................................................
Vested..........................................................................
Outstanding ................................................................
— 174,000
—
—
—
—
— 174,000
—
—
After vested
112,000
—
—
112,000
289,000
—
— 350,000
—
—
—
—
350,000
— 289,000
Previous fiscal year-end ................................................ 115,000
—
Vested..........................................................................
— 174,000
—
Exercised .....................................................................
—
—
—
Forfeited ......................................................................
174,000
Exercisable ................................................................... 115,000
—
112,000
—
—
112,000
—
—
—
—
—
—
—
—
—
—
Price information (Yen)
Date of resolution
Exercise price ...................................................................
Average exercise price ......................................................
Fair value at the grant date ..............................................
Date of resolution
Exercise price ...................................................................
Average exercise price ......................................................
Fair value at the grant date ..............................................
June 28, 2001 June 27, 2002 June 27, 2003 June 29, 2004 June 29, 2005 June 29, 2006
¥155
200
—
¥131
163
—
¥179
200
—
¥202
—
—
¥313
—
—
¥490
—
138
June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
¥461
—
96
¥490
—
138
¥193
—
51
¥461
—
96
¥302
—
37
(c) Valuation technique used for valuating fair value of stock options
Stock options granted in the fiscal year ended March 31, 2010 were valued using the Black-Scholes option pricing model and the
principal parameters were as follows:
Date of resolution
Expected volatility *1 ........................................................................
Average expected life *2 .....................................................................
Expected dividends *3 ........................................................................
Risk-free interest rate *4 ....................................................................
*1 Calculated based on the actual stock prices during the 5 years from June 2004 to June 2009
*2 The average expected life could not be estimated rationally due to an insufficient amount of data. Therefore, it was estimated assuming that the options were exercised at the
June 26, 2009
49.10%
5 years
¥3 per share
0.70%
midpoint of the exercise period.
*3 The actual dividends on common stock for the fiscal year ended March 31, 2009
*4 Japanese government bond yield corresponding to the average expected life
(d) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock
options that will be forfeited in the future.
122
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
32. Segment Information
(1) Business segment information
Year ended March 31
I. Ordinary income
(1) External customers ......................
(2) Intersegment ..............................
Total ................................................
Ordinary expenses ................................
Ordinary profit .....................................
II. Assets, depreciation, losses on impairment
of fixed assets and capital expenditure
Millions of yen
2010
Banking business Leasing business Other business
Total
Elimination
Consolidated
¥ 2,281,797
46,765
2,328,562
1,880,076
¥ 448,486
¥ 322,691
5,484
328,176
284,948
¥ 43,228
¥ 561,976
242,343
804,319
683,373
¥ 120,946
¥ 3,166,465
294,593
3,461,058
2,848,397
¥ 612,661
¥ —
(294,593)
(294,593)
(240,700)
¥ (53,892)
¥ 3,166,465
—
3,166,465
2,607,696
¥ 558,769
Assets ..............................................
Depreciation ....................................
Losses on impairment of fixed assets ...
Capital expenditure ..........................
¥111,831,177
78,608
11,396
108,434
¥2,735,416
28,501
988
88,583
¥13,570,744
29,746
470
41,424
¥128,137,338
136,856
12,856
238,441
¥(4,977,824)
4
—
0
¥123,159,513
136,860
12,856
238,441
Year ended March 31
I. Ordinary income
(1) External customers ......................
(2) Intersegment ..............................
Total ................................................
Ordinary expenses ................................
Ordinary profit .....................................
II. Assets, depreciation, losses on impairment
of fixed assets and capital expenditure
Millions of yen
2009
Banking business Leasing business Other business
Total
Elimination
Consolidated
¥ 2,773,183
65,756
2,838,940
2,800,453
¥ 38,486
¥ 332,465
5,511
337,976
306,585
¥ 31,391
¥ 447,194
306,084
753,279
681,077
¥ 72,201
¥ 3,552,843
377,352
3,930,196
3,788,116
¥ 142,080
¥ —
(377,352)
(377,352)
(280,583)
¥ (96,769)
¥ 3,552,843
—
3,552,843
3,507,532
¥ 45,311
Assets ..............................................
Depreciation ....................................
Losses on impairment of fixed assets ...
Capital expenditure ..........................
¥114,704,051
70,803
6,541
124,546
¥2,918,254
25,491
—
102,240
¥8,222,027
26,722
821
23,326
¥125,844,333
123,017
7,363
250,113
¥(6,207,109)
7
—
7
¥119,637,224
123,025
7,363
250,121
Banking business Leasing business Other business
Total
Elimination
Consolidated
Millions of U.S. dollars
2010
Year ended March 31
I. Ordinary income
(1) External customers ......................
(2) Intersegment ..............................
Total ................................................
Ordinary expenses ................................
Ordinary profit .....................................
II. Assets, depreciation, losses on impairment
of fixed assets and capital expenditure
$ 24,522
503
25,025
20,205
$ 4,820
Assets ..............................................
Depreciation ....................................
Losses on impairment of fixed assets ...
Capital expenditure ..........................
$1,201,840
845
122
1,165
$ 3,468
59
3,527
3,063
$ 464
$29,397
306
11
952
$ 6,040
2,604
8,644
7,344
$ 1,300
$145,843
320
5
445
$ 34,030
3,166
37,196
30,612
$ 6,584
$1,377,080
1,471
138
2,562
$ —
(3,166)
(3,166)
(2,587)
$ (579)
$(53,496)
0
—
0
$ 34,030
—
34,030
28,025
$ 6,005
$1,323,584
1,471
138
2,562
Notes: 1. The business segmentation is classified based on SMFG’s internal management purpose. Ordinary income and ordinary profit are presented as counterparts of sales
and operating profit of companies in other industries.
2. “Other business” includes securities, credit card, investment banking, loans, venture capital, system development and information processing.
3. Assets in Elimination include unallocated corporate assets of ¥6,214,065 million ($66,782 million) and ¥4,117,977 million at March 31, 2010 and 2009, respec-
tively, which mainly consist of investments in subsidiaries and affiliates.
4. Ordinary income represents total income excluding gains on disposal of fixed assets, recoveries of written-off claims and other extraordinary gains. Ordinary expenses
represent total expenses excluding losses on disposal of fixed assets, losses on impairment of fixed assets and other extraordinary expenses.
5. As mentioned in Note 2. (20) (a), “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, partially revised on March 10, 2008) and
“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued on March 10, 2008) became effective from
the fiscal year ending on and after March 31, 2010, and SMFG has applied them from the fiscal year ended March 31, 2010. As a result of the accounting change,
Ordinary expenses of “Banking business” for the year ended March 31, 2010 decreased by ¥19,251 million ($207 million) and Ordinary profit of “Banking business”
increased by ¥19,251 million ($207 million) as compared with the former method. Assets of “Banking business” increased by ¥59,270 million ($637 million) and
Assets of “Other business” decreased by ¥703 million ($8 million).
SMFG 2010 123
SMFG
Notes to Consolidated Financial Statements
6. As mentioned in Note 2. (20) (c), non-transfer ownership finance leases were formerly accounted for using the same method as for operating leases. “Accounting
Standard for Lease Transactions” (ASBJ Statement No. 13, issued on March 30, 2007) and “Implementation Guidance on Accounting Standard for Lease
Transactions” (ASBJ Guidance No. 16, issued on March 30, 2007) became effective from the fiscal year beginning on and after April 1, 2008, and SMFG has applied
them from the fiscal year ended March 31, 2009. As a result of the accounting change, Ordinary income of “Leasing business” for the year ended March 31, 2009
decreased by ¥691,719 million as compared with the former method. Ordinary expenses of “Banking business” and “Other business” increased by ¥22 million and
¥1 million, respectively, and Ordinary expenses of “Leasing business” decreased by ¥694,173 million. In terms of Ordinary profit, “Banking business” decreased by
¥22 million and “Other business” decreased by ¥1 million, while “Leasing business” increased by ¥2,453 million. Assets of “Banking business” and “Other business”
increased by ¥7,447 million and ¥27,348 million, respectively, while Assets of “Leasing business” decreased by ¥36,473 million.
(2) Geographic segment information
Year ended March 31
I. Ordinary income
Japan
The Americas
(1) External customers ......... ¥ 2,707,111
21,793
(2) Intersegment .................
2,728,905
Total ...................................
Ordinary expenses ...................
2,344,349
Ordinary profit ........................ ¥ 384,555
II. Assets ...................................... ¥107,412,125
¥ 205,016
106,215
311,232
171,438
¥ 139,794
¥8,255,658
Year ended March 31
I. Ordinary income
Japan
The Americas
(1) External customers ......... ¥ 2,886,164
125,334
(2) Intersegment .................
3,011,499
Total ...................................
Ordinary expenses ...................
3,026,816
Ordinary profit (loss) ............... ¥ (15,317)
II. Assets ...................................... ¥102,162,307
¥ 230,755
95,462
326,218
282,617
¥ 43,600
¥10,054,434
Year ended March 31
I. Ordinary income
Japan
The Americas
Millions of yen
2010
Asia and
Oceania
Total
Elimination
Consolidated
¥ 128,216
3,856
132,072
69,893
¥ 62,178
¥5,638,760
¥ 3,166,465
134,507
3,300,973
2,700,774
¥ 600,198
¥126,238,444
¥ — ¥ 3,166,465
—
3,166,465
2,607,696
¥ 558,769
¥123,159,513
(134,507)
(134,507)
(93,077)
¥ (41,429)
¥(3,078,930)
Millions of yen
2009
Asia and
Oceania
Total
Elimination
Consolidated
¥ 190,644
22,639
213,284
172,847
¥ 40,436
¥5,157,482
¥ 3,552,843
250,396
3,803,239
3,737,825
¥ 65,414
¥122,911,244
¥ — ¥ 3,552,843
—
3,552,843
3,507,532
¥ 45,311
¥119,637,224
(250,396)
(250,396)
(230,293)
¥ (20,102)
¥(3,274,020)
Europe and
Middle East
¥ 126,121
2,641
128,763
115,093
¥ 13,669
¥4,931,900
Europe and
Middle East
¥ 245,279
6,959
252,238
255,544
¥ (3,305)
¥5,537,019
Millions of U.S. dollars
2010
Asia and
Oceania
Europe and
Middle East
Total
Elimination
Consolidated
(1) External customers .........
(2) Intersegment .................
Total ...................................
Ordinary expenses ...................
Ordinary profit ........................
II. Assets ......................................
$ 29,093
234
29,327
25,194
$ 4,133
$1,154,348
$ 2,203
1,142
3,345
1,843
$ 1,502
$88,723
$ 1,356
28
1,384
1,237
$ 147
$53,003
$ 1,378
41
1,419
751
$ 668
$60,599
$ 34,030
1,445
35,475
29,025
$ 6,450
$1,356,673
$ —
(1,445)
(1,445)
(1,000)
$ (445)
$(33,089)
$ 34,030
—
34,030
28,025
$ 6,005
$1,323,584
Notes: 1. The geographic segmentation is classified based on the degrees of the following factors: geographic proximity, similarity of economic activities and relationship of
business activities among regions. Ordinary income and ordinary profit are presented as counterparts of sales and operating profit of companies in other industries.
2. The Americas includes the United States, Brazil, Canada and others; Europe and Middle East includes the United Kingdom, Germany, France and others; Asia and
Oceania includes China, Singapore, Australia and others except Japan.
3. Assets in Elimination include unallocated corporate assets of ¥6,214,065 million ($66,782 million) and ¥4,117,977 million at March 31, 2010 and 2009, respec-
tively, which mainly consist of investments in subsidiaries and affiliates.
4. Ordinary income represents total income excluding gains on disposal of fixed assets, recoveries of written-off claims and other extraordinary gains. Ordinary expenses
represent total expenses excluding losses on disposal of fixed assets, losses on impairment of fixed assets and other extraordinary expenses.
5. As mentioned in Note 2. (20) (a), “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, partially revised on March 10, 2008) and
“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, issued on March 10, 2008) became effective from
the fiscal year ending on and after March 31, 2010, and SMFG has applied them from the fiscal year ended March 31, 2010. As a result of the accounting change,
Ordinary expenses of “Japan” for the year ended March 31, 2010 decreased by ¥19,251 million ($207 million) and Ordinary profit of “Japan” increased by ¥19,251
million ($207 million) as compared with the former method. Assets of “Japan,” “Europe and Middle East” and “Asia and Oceania” increased by ¥58,612 million
($630 million), ¥341 million ($4 million) and ¥181 million ($2 million), respectively. Assets of “The Americas” decreased by ¥567 million ($6 million).
6. As mentioned in Note 2. (20) (c), non-transfer ownership finance leases were formerly accounted for using the same method as for operating leases. “Accounting
Standard for Lease Transactions” (ASBJ Statement No. 13, issued on March 30, 2007) and “Implementation Guidance on Accounting Standard for Lease
Transactions” (ASBJ Guidance No. 16, issued on March 30, 2007) became effective from the fiscal year beginning on and after April 1, 2008, and SMFG has applied
them from the fiscal year ended March 31, 2009. As a result of the accounting change, Ordinary income of “Japan” and Ordinary expenses of “Japan” for the year
ended March 31, 2009 decreased by ¥676,849 million and ¥679,279 million as compared with the former method; Ordinary profit of “Japan” increased by ¥2,430
million. Assets of “Japan” decreased by ¥29,782 million.
124
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
(3) Ordinary income from overseas operations
Year ended March 31
Consolidated ordinary income from overseas operations (A) .......................
Consolidated ordinary income (B) ..............................................................
(A) / (B) .....................................................................................................
Millions of yen
2010
¥ 459,354
3,166,465
2009
¥ 666,679
3,552,843
Millions of
U.S. dollars
2010
¥ 4,937
34,030
14.5%
18.8%
14.5%
Notes: 1. Consolidated ordinary income from overseas operations is presented as a counterpart of overseas sales of companies in other industries.
2. The table above shows ordinary income from transactions of overseas branches of SMBC and transactions of overseas consolidated subsidiaries, excluding internal
income. These extensive transactions are not categorized by transaction party and the geographic segment information is not presented because such information is
not available.
33. Business Combinations
Fiscal year ended March 31, 2010
A merger of subsidiary bank
Kansai Urban Banking Corporation (“KUBC”), a consolidated sub-
sidiary of SMFG, merged with The Biwako Bank, Limited (“Biwako
Bank”) on March 1, 2010. The outline of the merger is as follows:
1. Outline of the business combination
(1) Name of the acquired company and its business
Biwako Bank (Banking business)
(2) Reason for the business combination
KUBC and Biwako Bank merged in order to become a
regional bank with top-level financial soundness and a broad
operating base in the Kansai area with a view to realizing a
more stable operation as a regional financial institution.
(3) Date of the business combination
March 1, 2010
(4) Legal form of business combination
The merger was a merger by absorption with KUBC as the
surviving company. (Name of the new company: Kansai Urban
Banking Corporation)
and Biwako Bank appointed Daiwa Securities Capital
Markets Co. Ltd. and The Goldman Sachs Group, Inc.,
respectively, as their financial advisors and requested
them to calculate the merger ratio of common stock.
After conducting negotiations and discussions taking into
account factors such as their financial conditions, asset
quality and future prospects, the analysis of the merger
ratio provided by each financial advisor and results of due
diligence they carried out on each other, the 2 banks agreed
and decided on the above merger ratio of common stock as
being appropriate.
(b) Preferred stocks (Type 1 and Type 2)
Market prices of preferred stocks (Type 1 and Type 2) issued
by Biwako Bank were not available (in contrast to common
stock which market price was available). KUBC therefore
decided to set the same conditions as those of Biwako Bank’s
preferred stocks on KUBC’s newly-issued preferred stocks,
taking the merger ratio of common stock into account.
(5) Name of the controlling entity after the business combination
(3) Number of shares delivered and value
Sumitomo Mitsui Financial Group, Inc.
(6) Percentage share of voting rights SMFG has acquired
56%
2. Period of the acquired company’s financial results included in the
consolidated financial statements
From March 1, 2010 to March 31, 2010
3. Acquisition cost of the acquired company
Millions of yen
Millions of
U.S. dollars
SMFG’s interest in
KUBC’s common stock ............
SMFG’s interest in
KUBC’s preferred stock ...........
Acquisition cost .........................
¥ 7,182
40,000
¥47,182
$ 77
430
$507
4. Merger ratio, calculation method, number of shares delivered and
valuation
(1) Merger ratio
Common stock
KUBC 1 : Biwako Bank 0.75
Preferred stock (Type 1) KUBC 1 : Biwako Bank 1
Preferred stock (Type 2) KUBC 1 : Biwako Bank 1
(2) Basis for calculation of the merger ratio
(a) Common stock
In order to ensure the fairness of the merger ratio, KUBC
Number of shares delivered
Common stock of KUBC
Preferred stock of KUBC (Type 1)
Preferred stock of KUBC (Type 2)
Value
103,532,913 shares
27,500,000 shares
23,125,000 shares
Common stock of
KUBC
Preferred stock
(Type 1) of KUBC
Preferred stock
(Type 2) of KUBC
¥12,803 million ($138 million)
¥19,025 million ($204 million)
¥16,500 million ($177 million)
5. Goodwill, reason for recognizing goodwill, amortization method
and amortization period
(1) Amount of goodwill
¥11,056 million ($119 million)
(2) Reason for recognizing goodwill
SMFG accounted for the difference between the acquisition
cost and the equivalent amount of SMFG’s interests in Biwako
Bank as goodwill.
(3) Method and term to amortize goodwill
Straight-line method over 20 years
SMFG 2010 125
SMFG
Notes to Consolidated Financial Statements
6. Amounts of assets and liabilities acquired on the day of the busi-
ness combination
(1) Assets
Millions of yen
Total assets ................................ ¥1,113,801
795,445
Loans and bills discounted .........
89,968
Securities ...................................
(2) Liabilities
Total liabilities .......................... ¥1,078,769
1,033,256
Deposits ....................................
Millions of yen
Millions of
U.S. dollars
$11,970
8,549
967
Millions of
U.S. dollars
$11,593
11,104
7. Approximate amounts of impact on the consolidated statement of
operations for the fiscal year ended March 31, 2010, assuming that
the business combinations had been completed on the commence-
ment date of the fiscal year
(1) The difference between the ordinary income and other income
data estimated, assuming that the business combinations had
been completed on the commencement date of the fiscal year
and the actual ordinary income and other income data that are
recorded in the consolidated statement of income is as follows:
Ordinary income .......................
Ordinary profit ..........................
Net income ...............................
Millions of yen
¥25,832
705
183
Millions of
U.S. dollars
$278
8
2
Note: Ordinary income is presented as counterparts of sales of companies in other
industries.
(2) Calculation method of the approximate amounts and material
assumptions
The approximate amounts were calculated retroactively to the
commencement date of the fiscal year based on the amounts
stated in Biwako Bank’s statement of income for the period from
April 1, 2009 to February 28, 2010, including the amount of
amortization of goodwill for the same period and are different
from results of operation if the business combination had been
completed on the commencement date of the fiscal year.
The information mentioned above has not been audited by
KPMG AZSA & Co.
A merger of credit card companies
A consolidated subsidiary, QUOQ Inc. (“QUOQ”) and equity
method affiliates, Central Finance Co., Ltd. (“CF”) and OMC Card,
Inc. (“OMC Card”) merged on April 1, 2009. The new company was
named Cedyna Financial Corporation and became an equity method
affiliate of SMFG. The outline of the merger is as follows:
1. Outline of the business combination
(1) Company profiles
Surviving company: OMC Card (Credit card business)
Merged company: CF (Shopping credit business
and general credit business)
Merged company: QUOQ (Shopping credit business
and general credit business)
(2) Reasons for the business combination
The credit card market is growing steadily, propelled by the
126
SMFG 2010
expansion into new areas of settlement, such as for small
purchases, the growing popularity of reward point programs,
and other developments. Further substantial growth of the
industry is anticipated with the greater use of credit cards to
pay for public services charges and in other fields. At the same
time, the business environment surrounding the industry is
changing dramatically — development of new technologies
and new services, such as electronic money; investment
in systems that can respond to customers’ needs for more
in-depth, sophisticated and diverse services; enactment of
laws on money lending business; etc. — and the industry is
at a major turning point. In the shopping credit business,
the Installment Sales Act is being revised amid the trend to
strengthen consumer protection. Under these circumstances,
the companies need to restructure their operations in order to
establish new business models.
On April 1, 2009, CF, OMC Card and QUOQ merged to
create one of the largest consumer finance companies in Japan
with a high level of specialization and flexibility in its core
businesses of credit cards and shopping credit by combining
the customer bases, marketing capabilities, know-how and
other resources of the 3 companies.
(3) Date of business combination
April 1, 2009
(4) Legal form of the business combination
The merger was a merger by absorption with OMC Card as
the surviving company. (Name of the new company: Cedyna
Financial Corporation)
2. Outline of accounting method
SMFG applies the accounting procedures stipulated by Articles 39,
42 and 48 of the “Accounting Standard for Business Divestitures”
(ASBJ Statement No. 7).
3. Name of the business segment, in which the subsidiary was
included, in the segment information
Other business
4. Approximate amounts of the subsidiary’s earnings included in
the consolidated statement of operations for the fiscal year ended
March 31, 2010
SMFG did not record profit or loss of QUOQ and its subsidiaries
because they were excluded from the scope of consolidation at the
beginning of the fiscal year.
5. Status after the business combination
QUOQ and its subsidiaries are excluded from the scope of consoli-
dation, and Cedyna Financial Corporation has become an affiliated
company accounted for by the equity method.
Fiscal year ended March 31, 2009
There is no material information to be reported.
Notes to Consolidated Financial Statements
SMFG
34. Per Share Data
March 31
Net assets per share .............................................................................................
2010
¥3,391.75
2009
¥2,790.27
Yen
Yen
Year ended March 31
Net income (loss) per share ..................................................................................
Net income per share (diluted) ............................................................................
2010
¥248.40
244.18
2009
¥(497.39)
—
U.S. dollars
2010
$36.45
U.S. dollars
2010
$2.67
2.62
Notes: 1. Net income (loss) per share and Net income per share (diluted) are calculated based on the following. Net income per share (diluted) for the fiscal year ended March 31, 2009
is not reported due to a net loss.
Year ended March 31
Net income (loss) per share:
Millions of yen, except number of shares
2010
2009
Millions of U.S. dollars
2010
Net income (loss) .................................................................................................................
Amount not attributable to common stockholders ...............................................................
Dividends on preferred stock...........................................................................................
Net income (loss) attributable to common stock ..................................................................
Average number of common stock during the year (in thousands) ........................................
Net income per share (diluted):
Adjustment for net income ..................................................................................................
Dividends on preferred stock...........................................................................................
Stock acquisition rights issued by subsidiaries and affiliates ............................................
Increase in number of common stock (in thousands) ............................................................
Preferred stock ................................................................................................................
¥271,559
8,449
8,449
¥263,109
1,059,227
¥ 1,931
2,254
(322)
26,191
26,191
¥(373,456)
10,704
10,704
¥(384,160)
772,348
¥ —
—
—
—
—
$2,919
91
91
$2,828
/
$ 21
24
(3)
/
/
Outline of dilutive securities which were not included in the calculation of “Net income per share (diluted)” for the fiscal year ended March 31, 2010 because they do not have
dilutive effect:
2. Net assets per share is calculated based on the following:
March 31
Net assets .................................................................................................................................
Amounts excluded from Net assets ...........................................................................................
Preferred stock .....................................................................................................................
Dividends on preferred stock ...............................................................................................
Stock acquisition rights .......................................................................................................
Minority interests ................................................................................................................
Net assets attributable to common stock at the fiscal year-end ..................................................
Number of common stock at the fiscal year-end used for the calculation of
Net assets per share (in thousands) ..........................................................................................
Stock acquisition rights: 1 type
(Number of stock acquisition rights: 1,081 units)
Millions of yen, except number of shares
2010
¥7,000,805
2,262,582
210,003
3,097
81
2,049,400
¥4,738,223
2009
¥4,611,764
2,457,530
310,203
5,352
66
2,141,908
¥2,154,233
Millions of U.S. dollars
2010
$75,237
24,316
2,257
33
1
22,025
$50,921
1,396,985
772,052
/
SMFG 2010 127
SMFG
Notes to Consolidated Financial Statements
35. Parent Company
(1) Nonconsolidated Balance Sheets
Sumitomo Mitsui Financial Group, Inc.
March 31
Assets
Current assets ...........................................................................................
Cash and due from banks .....................................................................
Prepaid expenses ..................................................................................
Deferred tax assets................................................................................
Accrued income ....................................................................................
Accrued income tax refunds .................................................................
Other current assets ..............................................................................
Fixed assets ..............................................................................................
Tangible fixed assets .............................................................................
Buildings ............................................................................................
Equipment..........................................................................................
Intangible fixed assets ...........................................................................
Software .............................................................................................
Investments and other assets ...............................................................
Investments in subsidiaries and affiliates ..........................................
Deferred tax assets ............................................................................
Total assets ...............................................................................................
Liabilities and net assets
Liabilities
Current liabilities ........................................................................................
Short-term borrowings ..........................................................................
Accounts payable ..................................................................................
Accrued expenses .................................................................................
Income taxes payable ...........................................................................
Business office taxes payable ...............................................................
Reserve for employees bonuses ...........................................................
Reserve for executive bonuses .............................................................
Other current liabilities ...........................................................................
Fixed liabilities ...........................................................................................
Bonds ....................................................................................................
Reserve for executive retirement benefits .............................................
Total liabilities ...........................................................................................
¥ 111,033
86,283
26
—
223
24,065
435
6,041,740
1
0
1
8
8
6,041,729
6,041,729
—
¥6,152,774
¥ 954,073
948,030
1,541
3,299
3
5
101
71
1,020
393,126
392,900
226
1,347,199
Net assets
Stockholders’ equity
Capital stock ..........................................................................................
Capital surplus .......................................................................................
Capital reserve ...................................................................................
Other capital surplus..........................................................................
Retained earnings ..................................................................................
Other retained earnings
Voluntary reserve ...........................................................................
Retained earnings brought forward ...............................................
Treasury stock .......................................................................................
Total stockholders’ equity ........................................................................
Total net assets .........................................................................................
Total liabilities and net assets ..................................................................
2,337,895
1,833,073
1,559,374
273,699
678,042
30,420
647,622
(43,437)
4,805,574
4,805,574
¥6,152,774
128
SMFG 2010
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
¥ 23,730
1,281
22
39
19
21,844
522
4,033,583
2
0
2
11
11
4,033,568
4,028,093
5,475
¥4,057,313
¥1,079,566
1,078,030
298
120
372
5
102
—
637
199
—
199
1,079,766
1,420,877
916,163
642,355
273,808
683,907
30,420
653,487
(43,400)
2,977,547
2,977,547
¥4,057,313
$ 1,193
927
0
—
2
259
5
64,930
0
0
0
0
0
64,930
64,930
—
$66,123
$10,253
10,188
17
35
0
0
1
1
11
4,225
4,223
2
14,478
25,125
19,700
16,759
2,941
7,287
327
6,960
(467)
51,645
51,645
$66,123
Notes to Consolidated Financial Statements
SMFG
(2) Nonconsolidated Statements of Income
Sumitomo Mitsui Financial Group, Inc.
Millions of yen
Year ended March 31
Operating income .....................................................................................
Dividends on investments in subsidiaries and affiliates ........................
Fees and commissions received from subsidiaries ...............................
Operating expenses .................................................................................
General and administrative expenses ...................................................
Interest on bonds...................................................................................
Operating profit ........................................................................................
Nonoperating income ...............................................................................
Interest income on deposits ..................................................................
Fees and commissions ..........................................................................
Other nonoperating income ...................................................................
Nonoperating expenses ...........................................................................
Interest on borrowings ...........................................................................
Fees and commissions payments .........................................................
Amortization of stock issuance cost .....................................................
Amortization of bond issuance cost ......................................................
Other nonoperating expenses ...............................................................
Ordinary profit ...........................................................................................
Extraordinary loss .....................................................................................
Losses on sales of stocks of affiliate .....................................................
2010
¥133,379
118,818
14,560
16,641
8,353
8,287
116,737
369
347
2
19
22,572
9,115
4,104
9,324
28
0
94,534
22,688
22,688
2009
¥134,772
117,051
17,721
8,790
8,790
—
125,982
151
110
14
27
23,824
11,910
11,912
—
—
0
102,309
—
—
Income before income taxes ...................................................................
Income taxes:
71,846
102,309
Current ...................................................................................................
Deferred .................................................................................................
Net income ................................................................................................
154
5,514
¥ 66,176
2,393
(3,552)
¥103,468
Millions of
U.S. dollars (Note 1)
2010
$1,434
1,277
157
179
90
89
1,255
4
4
0
0
243
98
44
100
1
0
1,016
244
244
772
2
59
$ 711
Per share data:
Net income ............................................................................................
Net income — diluted ............................................................................
¥53.82
—
¥118.43
—
$0.58
—
Yen
2010
2009
U.S. dollars (Note 1)
2010
SMFG 2010 129
SMFG
Notes to Consolidated Financial Statements
(3) Nonconsolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc.
Year ended March 31
Stockholders’ equity
Capital stock
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
¥1,420,877
¥1,420,877
$15,270
Issuance of new shares .....................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
917,018
917,018
¥2,337,895
—
—
¥1,420,877
9,855
9,855
$25,125
Capital surplus
Capital reserve
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
642,355
642,355
6,903
Issuance of new shares .................................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
917,018
917,018
¥1,559,374
—
—
¥ 642,355
9,855
9,855
$16,758
Other capital surplus
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
273,808
288,031
2,943
Disposal of treasury stock .............................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
(108)
(108)
¥ 273,699
(14,222)
(14,222)
¥ 273,808
(1)
(1)
$ 2,942
Total capital surplus
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
916,163
930,386
9,846
Issuance of new shares .................................................................
Disposal of treasury stock .............................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
917,018
(108)
916,909
¥1,833,073
—
(14,222)
(14,222)
¥ 916,163
9,855
(1)
9,854
$19,700
130
SMFG 2010
Notes to Consolidated Financial Statements
SMFG
Millions of yen
2010
2009
Millions of
U.S. dollars (Note 1)
2010
(Continued)
Year ended March 31
Stockholders’ equity
Retained earnings
Other retained earnings
Voluntary reserve
Balance at the end of the previous fiscal year ...............................
Changes in the fiscal year:
¥ 30,420
¥ 30,420
$ 327
Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................
—
¥ 30,420
—
¥ 30,420
—
$ 327
Retained earnings brought forward
Balance at the end of the previous fiscal year ...............................
Changes in the fiscal year:
653,487
670,259
7,023
Cash dividends ..........................................................................
Net income .................................................................................
Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................
(72,041)
66,176
(5,865)
¥ 647,622
(120,240)
103,468
(16,772)
¥ 653,487
(774)
711
(63)
$ 6,960
Total retained earnings
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
683,907
700,679
7,350
Cash dividends ..............................................................................
Net income .....................................................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
(72,041)
66,176
(5,865)
¥ 678,042
(120,240)
103,468
(16,772)
¥ 683,907
(774)
711
(63)
$ 7,287
Treasury stock
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
(43,400)
(83,194)
(467)
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
(189)
152
(37)
¥ (43,437)
(943)
40,736
39,793
¥ (43,400)
(2)
2
(0)
$ (467)
Total stockholders’ equity
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
Issuance of new shares .....................................................................
Cash dividends ..................................................................................
Net income ........................................................................................
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
Total net assets
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
Issuance of new shares .....................................................................
Cash dividends ..................................................................................
Net income ........................................................................................
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
2,977,547
2,968,749
31,999
1,834,037
(72,041)
66,176
(189)
43
1,828,026
¥4,805,574
—
(120,240)
103,468
(943)
26,513
8,798
¥2,977,547
19,710
(774)
711
(2)
1
19,646
$51,645
2,977,547
2,968,749
31,999
1,834,037
(72,041)
66,176
(189)
43
1,828,026
¥4,805,574
—
(120,240)
103,468
(943)
26,513
8,798
¥2,977,547
19,710
(774)
711
(2)
1
19,646
$51,645
SMFG 2010 131
SMFG
Independent Auditors’ Report
Independent Auditors’ Report
To the Board of Directors of
Sumitomo Mitsui Financial Group, Inc.:
We have audited the accompanying consolidated balance sheets of Sumitomo Mitsui Financial Group, Inc. (“SMFG”)
and subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in
net assets and cash flows for the years then ended, expressed in Japanese yen. These consolidated financial statements
are the responsibility of SMFG’s management. Our responsibility is to independently express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of SMFG and subsidiaries as of March 31, 2010 and 2009, and the consolidated
results of their operations and their cash flows for the years then ended, in conformity with accounting principles
generally accepted in Japan.
The consolidated financial statements as of and for the year ended March 31, 2010 have been translated into United
States dollars solely for convenience of the readers. We have recomputed the translation, and, in our opinion, the
consolidated financial statements expressed in Japanese yen have been translated into United States dollars on the
basis set forth in Note 1 to the consolidated financial statements.
Tokyo, Japan
June 29, 2010
132
SMFG 2010
SMBC
Supplemental Information
Consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
March 31
Assets
Cash and due from banks ...................................................................................
Deposits with banks .............................................................................................
Call loans and bills bought ...................................................................................
Receivables under resale agreements .................................................................
Receivables under securities borrowing transactions ..........................................
Monetary claims bought .......................................................................................
Trading assets ......................................................................................................
Money held in trust ...............................................................................................
Securities ..............................................................................................................
Loans and bills discounted ..................................................................................
Foreign exchanges ...............................................................................................
Lease receivables and investment assets ............................................................
Other assets .........................................................................................................
Tangible fixed assets ............................................................................................
Intangible fixed assets ..........................................................................................
Deferred tax assets ..............................................................................................
Customers’ liabilities for acceptances and guarantees .......................................
Reserve for possible loan losses ..........................................................................
Total assets ..........................................................................................................
Millions of yen
2010
2009
¥ 3,358,994
2,424,160
1,106,145
25,226
5,414,500
956,024
6,619,258
18,734
28,422,362
63,406,825
1,107,289
123,706
2,415,605
812,334
404,338
679,380
3,753,642
(1,007,160)
¥120,041,369
¥ 3,771,699
1,383,618
633,655
10,487
1,815,195
964,849
4,836,484
8,985
28,295,724
66,082,719
885,082
131,869
2,670,337
786,755
141,522
792,081
3,650,162
(1,011,845)
¥115,849,385
Millions of
U.S. dollars
2010
$ 36,099
26,052
11,888
271
58,189
10,274
71,137
201
305,453
681,428
11,900
1,330
25,960
8,730
4,345
7,301
40,340
(10,824)
$1,290,074
SMFG 2010 133
SMBC
Supplemental Information
(Continued)
March 31
Liabilities and net assets
Liabilities
Deposits ...............................................................................................................
Call money and bills sold .....................................................................................
Payables under repurchase agreements ..............................................................
Payables under securities lending transactions ...................................................
Commercial paper ................................................................................................
Trading liabilities ...................................................................................................
Borrowed money ..................................................................................................
Foreign exchanges ...............................................................................................
Short-term bonds .................................................................................................
Bonds ...................................................................................................................
Due to trust account ............................................................................................
Other liabilities ......................................................................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for employee retirement benefits............................................................
Reserve for executive retirement benefits ............................................................
Reserve for reimbursement of deposits ...............................................................
Reserve under the special laws ............................................................................
Deferred tax liabilities ...........................................................................................
Deferred tax liabilities for land revaluation ...........................................................
Acceptances and guarantees ...............................................................................
Total liabilities ......................................................................................................
Net assets
Capital stock ........................................................................................................
Capital surplus .....................................................................................................
Retained earnings ................................................................................................
Total stockholders’ equity ...................................................................................
Net unrealized gains (losses) on other securities .................................................
Net deferred losses on hedges ............................................................................
Land revaluation excess .......................................................................................
Foreign currency translation adjustments ............................................................
Total valuation and translation adjustments ......................................................
Stock acquisition rights ........................................................................................
Minority interests ..................................................................................................
Total net assets ....................................................................................................
Total liabilities and net assets .............................................................................
Notes: 1. Amounts less than 1 million yen have been omitted.
Millions of yen
2010
2009
Millions of
U.S. dollars
2010
¥ 85,792,098
2,119,557
1,120,860
4,313,334
310,787
5,042,720
4,030,914
192,299
381,678
3,339,672
159,554
2,441,434
35,415
1,808
19,259
6,863
11,734
34
26,167
46,966
3,753,642
113,146,805
1,770,996
2,709,682
668,074
5,148,753
377,456
(38,516)
34,897
(99,481)
274,356
81
1,471,373
6,894,564
¥120,041,369
¥ 83,124,568
2,499,113
778,993
7,577,109
—
3,606,319
2,908,479
281,145
114,242
3,565,376
60,918
3,037,797
19,963
167
13,506
6,613
11,767
0
27,275
47,217
3,650,162
111,330,737
664,986
1,603,672
448,750
2,717,409
(60,148)
(20,306)
35,099
(120,606)
(165,961)
66
1,967,133
4,518,647
¥115,849,385
$ 922,000
22,779
12,046
46,355
3,340
54,194
43,320
2,067
4,102
35,891
1,715
26,238
380
19
207
74
126
0
281
505
40,340
1,215,979
19,033
29,120
7,180
55,333
4,056
(414)
375
(1,069)
2,948
1
15,813
74,095
$1,290,074
2. For the convenience of readers, the accompanying U.S. dollar financial statements have been translated from Japanese yen, as a matter of
arithmetical computation only, at the rate of ¥93.05 to US$1, the exchange rate prevailing at March 31, 2010.
134
SMFG 2010
Supplemental Information
SMBC
Millions of yen
2010
2009
Millions of
U.S. dollars
2010
Consolidated Statements of Operations (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Year ended March 31
Income
Interest income .....................................................................................................
Interest on loans and discounts .......................................................................
Interest and dividends on securities .................................................................
Interest on receivables under resale agreements .............................................
Interest on receivables under securities borrowing transactions .....................
Interest on deposits with banks .......................................................................
Interest on lease transactions ...........................................................................
Other interest income .......................................................................................
Trust fees ..............................................................................................................
Fees and commissions .........................................................................................
Trading income .....................................................................................................
Other operating income .......................................................................................
Other income .......................................................................................................
Total income ........................................................................................................
Expenses
Interest expenses .................................................................................................
Interest on deposits ..........................................................................................
Interest on borrowings and rediscounts ...........................................................
Interest on payables under repurchase agreements ........................................
Interest on payables under securities lending transactions .............................
Interest on bonds and short-term bonds .........................................................
Other interest expenses ...................................................................................
Fees and commissions payments ........................................................................
Other operating expenses ....................................................................................
General and administrative expenses ..................................................................
Provision for reserve for possible loan losses ......................................................
Other expenses ....................................................................................................
Total expenses .....................................................................................................
Income before income taxes and minority interests .........................................
Income taxes:
¥1,598,464
1,264,688
238,944
902
5,394
14,650
4,088
69,795
1,736
580,142
156,570
156,355
104,405
2,597,675
295,635
180,433
28,383
1,381
6,120
70,129
9,186
127,756
112,560
988,409
173,073
341,859
2,039,296
558,379
¥1,986,520
1,544,701
297,938
1,748
4,496
42,446
3,962
91,227
2,074
518,688
191,842
250,475
42,238
2,991,839
721,585
374,568
66,617
7,261
59,958
81,380
131,798
124,611
196,656
900,572
389,786
607,796
2,941,009
50,830
Current ..............................................................................................................
Deferred ............................................................................................................
Minority interests in net income ...........................................................................
Net income (loss) .................................................................................................
69,246
75,282
81,352
¥ 332,497
35,294
277,961
54,882
¥ (317,306)
$17,179
13,592
2,568
10
58
157
44
750
18
6,235
1,683
1,680
1,122
27,917
3,177
1,939
305
15
66
753
99
1,373
1,210
10,622
1,860
3,674
21,916
6,001
744
809
875
$ 3,573
Per share data:
Net income (loss) ..............................................................................................
Net income — diluted .......................................................................................
¥4,240.20
4,236.01
¥(5,740.34)
—
$45.57
45.52
Notes: 1. Amounts less than 1 million yen have been omitted.
2. For the convenience of readers, the accompanying U.S. dollar financial statements have been translated from Japanese yen, as a matter of
arithmetical computation only, at the rate of ¥93.05 to US$1, the exchange rate prevailing at March 31, 2010.
Yen
U.S. dollars
SMFG 2010 135
SMBC
Supplemental Information
Nonconsolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation
March 31
Assets
Cash and due from banks ....................................................................................
Deposits with banks .............................................................................................
Call loans and bills bought ...................................................................................
Receivables under resale agreements .................................................................
Receivables under securities borrowing transactions ..........................................
Monetary claims bought .......................................................................................
Trading assets ......................................................................................................
Money held in trust ...............................................................................................
Securities ..............................................................................................................
Loans and bills discounted ..................................................................................
Foreign exchanges ...............................................................................................
Other assets .........................................................................................................
Tangible fixed assets ............................................................................................
Intangible fixed assets ..........................................................................................
Deferred tax assets ..............................................................................................
Customers’ liabilities for acceptances and guarantees .......................................
Reserve for possible loan losses ..........................................................................
Reserve for possible losses on investments ........................................................
Total assets ..........................................................................................................
Liabilities and net assets
Liabilities
Deposits ...............................................................................................................
Call money and bills sold .....................................................................................
Payables under repurchase agreements ..............................................................
Payables under securities lending transactions ...................................................
Commercial paper ................................................................................................
Trading liabilities ...................................................................................................
Borrowed money ..................................................................................................
Foreign exchanges ...............................................................................................
Short-term bonds .................................................................................................
Bonds ...................................................................................................................
Due to trust account .............................................................................................
Other liabilities ......................................................................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for executive retirement benefits ............................................................
Reserve for point service program .......................................................................
Reserve for reimbursement of deposits ...............................................................
Reserve under the special laws ............................................................................
Deferred tax liabilities for land revaluation ...........................................................
Acceptances and guarantees ...............................................................................
Total liabilities ......................................................................................................
Net assets
Capital stock ........................................................................................................
Capital surplus .....................................................................................................
Retained earnings ................................................................................................
Total stockholders’ equity ...................................................................................
Net unrealized gains (losses) on other securities .................................................
Net deferred gains (losses) on hedges .................................................................
Land revaluation excess .......................................................................................
Total valuation and translation adjustments ......................................................
Total net assets ....................................................................................................
Total liabilities and net assets .............................................................................
Notes: 1. Amounts less than 1 million yen have been omitted.
Millions of yen
2010
2009
¥ 2,863,985
2,408,004
514,179
45,594
1,703,828
435,027
3,670,091
10,724
28,536,200
56,619,058
743,446
1,823,647
705,036
133,323
456,556
3,625,868
(758,178)
—
¥103,536,394
¥ 77,630,639
1,554,374
492,311
3,407,301
310,787
2,909,131
2,747,767
214,526
164,678
3,245,992
159,554
1,600,879
10,207
426
5,147
1,862
10,634
—
46,352
3,625,868
98,138,445
1,770,996
2,473,558
704,485
4,949,040
379,353
48,020
21,535
448,909
5,397,949
¥103,536,394
¥ 2,597,429
2,697,579
255,095
48,113
1,815,195
396,183
3,885,704
8,985
28,000,515
60,241,266
748,149
2,259,982
696,680
126,070
668,343
3,826,694
(791,885)
(1,888)
¥107,478,218
¥ 76,905,708
2,479,743
773,534
7,561,013
—
2,705,478
4,663,553
282,360
114,242
3,319,693
60,918
2,163,237
10,720
—
4,992
2,359
10,873
0
46,599
3,826,694
104,931,725
664,986
1,367,548
499,666
2,532,201
(52,741)
45,359
21,673
14,291
2,546,493
¥107,478,218
Millions of
U.S. dollars
2010
$ 30,779
25,879
5,526
490
18,311
4,675
39,442
115
306,676
608,480
7,990
19,598
7,577
1,433
4,906
38,967
(8,148)
—
$1,112,696
$ 834,290
16,705
5,291
36,618
3,340
31,264
29,530
2,305
1,770
34,884
1,715
17,204
110
5
55
20
114
—
498
38,967
1,054,685
19,033
26,583
7,571
53,187
4,077
516
231
4,824
58,011
$1,112,696
2. For the convenience of readers, the accompanying U.S. dollar financial statements have been translated from Japanese yen, as a matter of
arithmetical computation only, at the rate of ¥93.05 to US$1, the exchange rate prevailing at March 31, 2010.
136
SMFG 2010
Supplemental Information
SMBC
Millions of yen
2010
2009
Millions of
U.S. dollars
2010
Nonconsolidated Statements of Operations (Unaudited)
Sumitomo Mitsui Banking Corporation
Year ended March 31
Income
Interest income .....................................................................................................
Interest on loans and discounts .......................................................................
Interest and dividends on securities .................................................................
Interest on receivables under resale agreements .............................................
Interest on receivables under securities borrowing transactions .....................
Interest on deposits with banks .......................................................................
Other interest income .......................................................................................
Trust fees ..............................................................................................................
Fees and commissions .........................................................................................
Trading income .....................................................................................................
Other operating income .......................................................................................
Other income ........................................................................................................
Total income ........................................................................................................
Expenses
Interest expenses .................................................................................................
Interest on deposits ..........................................................................................
Interest on borrowings and rediscounts ...........................................................
Interest on payables under repurchase agreements ........................................
Interest on payables under securities lending transactions .............................
Interest on bonds and short-term bonds .........................................................
Other interest expenses ...................................................................................
Fees and commissions payments ........................................................................
Other operating expenses ....................................................................................
General and administrative expenses ..................................................................
Provision for reserve for possible loan losses ......................................................
Other expenses ....................................................................................................
Total expenses .....................................................................................................
Income before income taxes ..............................................................................
Income taxes:
¥1,380,280
1,067,390
229,411
193
4,061
13,863
65,360
1,736
412,960
115,356
85,788
91,654
2,087,777
333,919
146,198
107,927
982
6,103
64,598
8,107
126,246
80,703
735,181
85,084
271,891
1,633,026
454,750
¥1,758,423
1,346,185
293,992
1,341
4,488
38,040
74,376
2,074
415,228
175,038
163,277
34,029
2,548,073
740,065
320,243
152,905
7,066
59,885
68,418
131,546
121,404
127,747
722,285
260,749
548,033
2,520,286
27,786
Current ..............................................................................................................
Deferred ............................................................................................................
Net income (loss) .................................................................................................
44,997
91,757
¥ 317,995
23,748
305,154
¥ (301,116)
$14,834
11,471
2,466
2
44
149
702
18
4,438
1,240
922
985
22,437
3,589
1,571
1,160
11
66
694
87
1,357
867
7,901
914
2,922
17,550
4,887
484
986
$ 3,417
Per share data:
Net income (loss) ..............................................................................................
Net income — diluted .......................................................................................
¥4,051.75
—
¥(5,453.06)
—
$43.54
—
Notes: 1. Amounts less than 1 million yen have been omitted.
2. For the convenience of readers, the accompanying U.S. dollar financial statements have been translated from Japanese yen, as a matter of
arithmetical computation only, at the rate of ¥93.05 to US$1, the exchange rate prevailing at March 31, 2010.
Yen
U.S. dollars
SMFG 2010 137
SMFG
Income Analysis (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Year ended March 31
Domestic
operations
Interest income ..................................................... ¥1,392,919
297,268
Interest expenses ..................................................
Net interest income ................................................... 1,095,650
1,778
Trust fees ...................................................................
651,331
Fees and commissions .........................................
111,320
Fees and commissions payments ........................
540,011
Net fees and commissions ........................................
186,117
Trading income......................................................
8,313
Trading losses .......................................................
177,804
Net trading income ....................................................
401,898
Other operating income ........................................
355,904
Other operating expenses.....................................
45,993
Net other operating income (expenses) ....................
Millions of yen
2010
Overseas
operations Elimination
Total
¥405,558
118,923
286,634
—
80,655
10,923
69,731
28,902
12,619
16,283
51,325
45,967
5,358
¥(102,672) ¥1,695,805
314,872
1,380,933
1,778
729,364
120,748
608,616
194,087
—
194,087
453,012
401,773
51,238
(101,319)
(1,352)
—
(2,622)
(1,495)
(1,126)
(20,932)
(20,932)
—
(210)
(98)
(112)
Domestic
operations
¥1,561,085
495,194
1,065,890
2,122
592,845
105,882
486,962
194,201
3,449
190,751
503,422
438,969
64,453
2009
Overseas
operations Elimination
¥618,228
341,615
276,613
—
80,926
10,590
70,335
29,779
8,791
20,987
26,403
34,574
(8,171)
¥(91,965)
(87,945)
(4,019)
—
(1,019)
(899)
(119)
(12,241)
(12,241)
—
(226)
(331)
105
Total
¥2,087,348
748,863
1,338,484
2,122
672,752
115,574
557,178
211,738
—
211,738
529,599
473,212
56,386
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest expenses” are
shown after deduction of expenses (2010, ¥20 million; 2009, ¥30 million) related to the management of money held in trust.
3. Intersegment transactions are reported in the “Elimination” column.
Average Balance, Interest and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Millions of yen
Year ended March 31
Interest-earning assets ..............................................
Loans and bills discounted ...................................
Securities ..............................................................
Call loans and bills bought ....................................
Receivables under resale agreements ..................
Average balance
¥86,229,707
55,382,826
24,828,351
343,760
13,958
Receivables under securities
borrowing transactions .......................................
Deposits with banks ..............................................
Lease receivables and investment assets ............
Interest-bearing liabilities ..........................................
Deposits ...............................................................
Negotiable certificates of deposit .........................
Call money and bills sold ......................................
Payables under repurchase agreements ..............
Payables under securities lending transactions ...
Commercial paper.................................................
Borrowed money ...................................................
Short-term bonds ..................................................
Bonds ....................................................................
2,293,522
319,399
1,763,180
¥91,491,665
68,495,143
6,939,707
1,857,443
612,826
2,859,188
—
5,842,252
1,084,084
3,591,097
2010
Interest
¥1,392,919
1,058,896
218,390
2,499
15
5,413
1,819
66,477
¥ 297,268
106,542
17,939
2,855
677
6,165
—
117,900
2,902
69,577
Earnings yield
1.62%
1.91
0.88
0.73
0.11
0.24
0.57
3.77
0.32%
0.16
0.26
0.15
0.11
0.22
—
2.02
0.27
1.94
Average balance
¥80,327,278
53,272,205
21,707,712
392,838
17,008
687,341
848,609
1,837,506
¥87,827,514
66,460,734
4,072,822
2,727,860
436,712
4,182,183
—
5,463,776
765,144
3,481,382
2009
Interest
¥1,561,085
1,145,251
270,374
5,403
89
4,506
11,257
70,747
¥ 495,194
196,916
24,331
12,527
2,066
59,962
—
125,225
6,678
65,248
Earnings yield
1.94%
2.15
1.25
1.38
0.53
0.66
1.33
3.85
0.56%
0.30
0.60
0.46
0.47
1.43
—
2.29
0.87
1.87
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some domestic consolidated subsidiaries use weekly, monthly or
semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥965,438 million; 2009, ¥824,712
million).
4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets”
are shown after deduction of the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million). “Interest-bearing liabilities”
are shown after deduction of amounts equivalent to the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million) and
corresponding interest (2010, ¥20 million; 2009, ¥30 million).
138
SMFG 2010
Income Analysis (Consolidated)
SMFG
Overseas Operations
Year ended March 31
Interest-earning assets ..............................................
Loans and bills discounted ...................................
Securities ..............................................................
Call loans and bills bought ....................................
Receivables under resale agreements ..................
Average balance
¥16,461,908
11,059,619
1,656,478
812,878
13,963
Receivables under securities
borrowing transactions .......................................
Deposits with banks ..............................................
Lease receivables and investment assets ............
Interest-bearing liabilities ..........................................
Deposits ................................................................
Negotiable certificates of deposit .........................
Call money and bills sold ......................................
Payables under repurchase agreements ..............
Payables under securities lending transactions ...
Commercial paper.................................................
Borrowed money ...................................................
Short-term bonds ..................................................
Bonds ....................................................................
—
2,154,320
195,486
¥11,816,818
7,472,668
1,811,253
1,205,537
364,451
—
82,513
440,869
—
158,169
2010
Interest
¥405,558
314,641
31,115
5,158
887
—
14,078
8,065
¥118,923
40,606
16,102
3,416
713
—
194
11,669
—
9,459
Millions of yen
Earnings yield
2.46%
2.84
1.88
0.63
6.36
Average balance
¥16,094,115
11,650,846
1,350,840
384,028
103,425
—
0.65
4.13
1.01%
0.54
0.89
0.28
0.20
—
0.24
2.65
—
5.98
—
1,936,988
160,047
¥ 9,633,089
6,968,130
710,309
580,174
546,903
—
—
452,531
—
265,035
2009
Interest
¥618,228
486,109
35,424
9,283
1,661
—
35,982
7,025
¥341,615
134,070
23,579
9,996
5,232
—
—
20,929
—
17,328
Earnings yield
3.84%
4.17
2.62
2.42
1.61
—
1.86
4.39
3.55%
1.92
3.32
1.72
0.96
—
—
4.62
—
6.54
Notes: 1. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some overseas consolidated subsidiaries use weekly, monthly,
quarterly or semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥156,583 million; 2009, ¥89,200
million).
Total of Domestic and Overseas Operations
Year ended March 31
Interest-earning assets .............................................. ¥100,773,612
64,723,468
26,505,349
1,156,638
27,922
Loans and bills discounted ...................................
Securities ..............................................................
Call loans and bills bought ....................................
Receivables under resale agreements ..................
Average balance
2010
Interest
¥1,695,805
1,280,297
241,216
7,657
902
Receivables under securities
borrowing transactions .......................................
Deposits with banks ..............................................
Lease receivables and investment assets ............
2,293,522
2,259,797
1,958,655
5,413
14,757
74,542
Interest-bearing liabilities .......................................... ¥101,186,263
75,750,461
8,750,961
3,062,980
977,278
2,859,188
82,513
4,580,881
1,084,084
3,552,249
Deposits ................................................................
Negotiable certificates of deposit .........................
Call money and bills sold ......................................
Payables under repurchase agreements ..............
Payables under securities lending transactions ...
Commercial paper.................................................
Borrowed money ...................................................
Short-term bonds ..................................................
Bonds ....................................................................
¥ 314,872
145,979
34,042
6,271
1,390
6,165
194
37,708
2,902
70,749
Millions of yen
Earnings yield
1.68%
1.98
0.91
0.66
3.23
0.24
0.65
3.81
0.31%
0.19
0.39
0.20
0.14
0.22
0.24
0.82
0.27
1.99
Average balance
¥94,925,190
63,459,263
23,342,579
776,867
120,433
687,341
2,470,670
1,997,553
¥95,678,084
73,111,647
4,783,132
3,308,035
983,616
4,182,183
—
4,452,520
765,144
3,746,418
2009
Interest
¥2,087,348
1,550,081
299,616
14,686
1,750
4,506
42,738
77,772
¥ 748,863
326,447
47,911
22,524
7,298
59,962
—
62,750
6,678
82,577
Earnings yield
2.20%
2.44
1.28
1.89
1.45
0.66
1.73
3.89
0.78%
0.45
1.00
0.68
0.74
1.43
—
1.41
0.87
2.20
Notes: 1. The figures above comprise totals for domestic and overseas operations after intersegment eliminations.
2. In principle, average balances are calculated by using daily balances. However, some consolidated subsidiaries use weekly, monthly, quarterly or
semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥1,123,299 million; 2009,
¥913,415 million).
4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets”
are shown after deduction of the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million). “Interest-bearing liabilities”
are shown after deduction of amounts equivalent to the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million) and
corresponding interest (2010, ¥20 million; 2009, ¥30 million).
SMFG 2010 139
SMFG
Income Analysis (Consolidated)
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥651,331
20,660
118,012
54,380
14,763
6,681
40,468
143,770
Deposits and loans ...............................................
Remittances and transfers ....................................
Securities-related business ...................................
Agency ..................................................................
Safe deposits ........................................................
Guarantees ............................................................
Credit card business .............................................
Millions of yen
2010
Overseas
operations Elimination
¥80,655
49,988
7,782
0
—
2
9,138
—
¥(2,622)
(55)
(2)
(16)
—
—
(242)
—
Total
¥729,364
70,592
125,792
54,363
14,763
6,684
49,365
143,770
Domestic
operations
¥592,845
21,805
123,080
33,872
14,673
6,911
43,792
141,117
2009
Overseas
operations Elimination
¥80,926
56,034
8,535
0
—
3
7,360
—
¥(1,019)
—
(161)
—
—
—
(300)
—
Total
¥672,752
77,840
131,455
33,872
14,673
6,914
50,852
141,117
Fees and commissions payments ............................. ¥111,320
26,285
Remittances and transfers ....................................
¥10,923
4,920
¥(1,495)
(155)
¥120,748
31,050
¥105,882
26,796
¥10,590
3,576
¥ (899)
(161)
¥115,574
30,211
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
Trading Income
2010
2009
Millions of yen
Domestic
Year ended March 31
operations
Trading income .......................................................... ¥186,117
63,212
Gains on trading securities ...................................
Overseas
operations Elimination
¥28,902
211
¥(20,932)
—
Total
¥194,087
63,424
Domestic
operations
¥194,201
23,210
Overseas
operations Elimination
¥29,779
666
¥(12,241)
—
Total
¥211,738
23,876
Gains on securities related to
trading transactions ............................................
Gains on trading-related financial derivatives .......
Others ...................................................................
2,254
120,075
576
—
28,691
—
—
(20,932)
—
2,254
127,833
576
1,174
162,430
7,386
46
29,066
—
—
(12,241)
—
1,221
179,255
7,386
Trading losses............................................................ ¥ 8,313
—
Losses on trading securities .................................
¥12,619
—
¥(20,932)
—
¥ —
—
¥ 3,449
—
¥ 8,791
—
¥(12,241)
—
¥ —
—
Losses on securities related to
trading transactions ............................................
Losses on trading-related financial derivatives .....
Others ...................................................................
—
8,313
—
—
12,619
—
—
(20,932)
—
—
—
—
—
3,449
—
—
8,791
—
—
(12,241)
—
—
—
—
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
140
SMFG 2010
SMFG
Assets and Liabilities (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
Overseas operations:
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
Grand total ......................................................................................................
Millions of yen
2010
2009
¥42,901,390
25,125,350
3,613,206
71,639,946
5,166,704
¥76,806,651
¥ 5,238,038
1,762,779
7,831
7,008,648
1,828,914
¥ 8,837,563
¥85,644,215
¥41,462,895
23,463,313
3,882,490
68,808,699
6,032,611
¥74,841,310
¥ 5,181,014
1,575,776
4,007
6,760,798
1,428,673
¥ 8,189,471
¥83,030,782
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
3. Fixed-term deposits = Time deposits + Installment savings
Balance of Loan Portfolio, Classified by Industry
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
March 31
Domestic operations:
Millions of yen
2009
153,473
1,095,482
Manufacturing...................................... ¥ 6,694,906
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,271,221
and public enterprises .......................
4,497,698
Wholesale and retail ............................
4,299,050
Finance and insurance ........................
8,210,117
Real estate, goods rental and leasing ...
4,077,881
Services ...............................................
1,117,092
Municipalities .......................................
20,606,900
Others ..................................................
Subtotal ............................................... ¥54,023,825
Overseas operations:
Public sector ........................................ ¥ 43,100
543,997
Financial institutions ............................
7,223,161
Commerce and industry ......................
866,948
Others ..................................................
Subtotal ............................................... ¥ 8,677,208
Total ......................................................... ¥62,701,033
12.39%
0.28
2.03
6.05
8.33
7.96
15.20
7.55
2.07
38.14
100.00%
0.50%
6.27
83.24
9.99
100.00%
—
149,678
1,274,948
Manufacturing...................................... ¥ 6,992,808
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,387,724
and public enterprises .......................
5,051,330
Wholesale and retail ............................
4,306,969
Finance and insurance ........................
7,627,384
Real estate ...........................................
5,605,333
Services ...............................................
1,058,239
Municipalities .......................................
Others ..................................................
19,409,786
Subtotal ............................................... ¥54,864,204
Overseas operations:
Public sector ........................................ ¥ 35,350
501,739
Financial institutions ............................
8,602,419
Commerce and industry ......................
Others ..................................................
1,131,605
Subtotal ............................................... ¥10,271,115
Total ......................................................... ¥65,135,319
12.75%
0.27
2.32
6.17
9.21
7.85
13.90
10.22
1.93
35.38
100.00%
0.34%
4.88
83.75
11.03
100.00%
—
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
3. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from the fiscal year beginning on April 1, 2009,
the sector classification has been partly changed. “Goods rental and leasing” is included in others in fiscal 2008.
SMFG 2010 141
SMFG
Assets and Liabilities (Consolidated)
Reserve for Possible Loan Losses
March 31
General reserve ...............................................................................................
Specific reserve ...............................................................................................
Loan loss reserve for specific overseas countries ..........................................
Reserve for possible loan losses .....................................................................
Amount of direct reduction ..............................................................................
2010
¥ 702,606
365,087
636
¥1,068,329
¥ 843,781
Risk-Monitored Loans
March 31
Bankrupt loans ................................................................................................
Non-accrual loans ...........................................................................................
Past due loans (3 months or more) .................................................................
Restructured loans ..........................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
Notes: Definition of risk-monitored loan categories
2010
¥ 165,131
1,075,782
38,315
250,256
¥1,529,484
¥ 727,633
Millions of yen
Millions of yen
2009
¥ 691,539
385,050
1,261
¥1,077,852
¥ 717,010
2009
¥ 292,088
1,019,352
36,162
238,713
¥1,586,317
¥ 607,936
1. Bankrupt loans: Credits for which accrued interest is not accounted in revenue; credits extended to borrowers that are undergoing bankruptcy,
corporate reorganization and rehabilitation proceedings or debtors receiving orders of disposition by suspension of business at bill clearinghouses
2. Non-accrual loans: Credits for which accrued interest is not accounted in revenue; credits, excluding loans to bankrupt borrowers and loans with
grace for interest payment to assist in corporate reorganization or to support business
3. Past due loans (3 months or more): Loans with payment of principal or interest in arrears for more than 3 months, calculated from the day following
the contractual due date, excluding borrowers in categories 1. and 2.
4. Restructured loans: Loans to borrowers in severe financial condition given certain favorable terms and conditions to assist in corporate rehabilitation
or to support business, excluding borrowers in categories 1. through 3.
Problem Assets Based on the Financial Reconstruction Law
March 31
Bankrupt and quasi-bankrupt assets ..............................................................
Doubtful assets ...............................................................................................
Substandard loans ..........................................................................................
Total of problem assets ...................................................................................
Normal assets .................................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
Notes: Definition of problem asset categories
2010
¥ 392,424
881,239
298,179
1,571,842
68,431,335
¥70,003,177
¥ 843,781
Millions of yen
2009
¥ 505,666
865,603
281,917
1,653,186
70,894,602
¥72,547,788
¥ 717,010
1. Bankrupt and quasi-bankrupt assets: Credits to borrowers undergoing bankruptcy, corporate reorganization, and rehabilitation proceedings, as well
as claims of a similar nature
2. Doubtful assets: Credits for which final collection of principal and interest in line with original agreements is highly improbable due to deterioration of
financial position and business performance, but not insolvency of the borrower
3. Substandard loans: Past due loans (3 months or more) and restructured loans, excluding 1. and 2.
4. Normal assets: Credits to borrowers with good business performance and in financial standing without identified problems and not classified into the
3 categories above
142
SMFG 2010
Assets and Liabilities (Consolidated)
SMFG
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
2009
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Overseas operations:
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Unallocated corporate assets:
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
¥16,738,321
422,648
3,548,359
2,924,446
3,492,404
¥27,126,180
¥ —
—
—
—
1,454,593
¥ 1,454,593
¥ —
—
—
43,194
—
¥ 43,194
¥28,623,968
¥14,734,419
338,688
3,899,189
2,536,410
5,136,736
¥26,645,444
¥ —
—
—
—
1,833,447
¥ 1,833,447
¥ —
—
—
219,272
—
¥ 219,272
¥28,698,164
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. “Others” include foreign bonds and foreign stocks.
Trading Assets and Liabilities
Domestic
March 31
operations
Trading assets ........................................................... ¥6,156,853
Trading securities .................................................. 2,747,496
1,246
Derivatives of trading securities ............................
—
Securities related to trading transactions .............
Derivatives of securities related to
6,931
trading transactions ............................................
Trading-related financial derivatives ..................... 3,123,235
277,943
Other trading assets..............................................
2010
2009
Millions of yen
Overseas
operations Elimination
¥(36,046)
¥587,881
32,229
—
—
Overseas
operations Elimination
Total
¥6,708,688
— 2,779,725
1,246
—
—
—
Domestic
operations
¥3,934,682 ¥1,011,003
6,931
—
—
287,025
470
—
¥(20,723)
—
—
—
Total
¥4,924,961
293,956
470
—
—
555,288
363
—
(36,046)
—
6,931
3,642,477
278,307
13,428
3,069,579
564,178
—
1,004,072
—
—
(20,723)
—
13,428
4,052,928
564,178
Trading liabilities ........................................................ ¥4,470,010
Trading securities sold for short sales .................. 1,582,808
2,367
Derivatives of trading securities ............................
¥632,763
—
—
¥(36,046)
¥5,066,727
— 1,582,808
2,367
—
¥2,684,086 ¥ 934,296
341
—
7,131
407
¥(20,723)
—
—
¥3,597,658
7,473
407
Securities related to trading transactions
sold for short sales ..............................................
—
—
—
—
—
—
—
—
Derivatives of securities related to
6,961
trading transactions ............................................
Trading-related financial derivatives ..................... 2,877,873
—
Other trading liabilities ..........................................
—
632,763
—
—
(36,046)
—
6,961
3,474,589
—
13,997
2,662,549
—
—
933,954
—
—
(20,723)
—
13,997
3,575,780
—
Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking
subsidiaries and overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
SMFG 2010 143
SMFG
Capital (Nonconsolidated)
Sumitomo Mitsui Financial Group, Inc.
Change in Number of Shares Issued and Capital Stock
Number of shares issued
Capital stock
Capital reserve
Millions of yen
Changes
922,593.28
80,000
40,700
(68,000)
—
249,015
(67,000)
(439,534)
(195,000)
157,151
(16,700)
April 1, 2005 — March 31, 2006*1 ...........
January 31, 2006*2 ..................................
February 28, 2006*3 .................................
May 17, 2006*4 ........................................
August 11, 2006*5 ....................................
September 1, 2006*6 ...............................
September 6, 2006*7 ...............................
September 29, 2006*8 .............................
October 11, 2006*9 ..................................
April 30, 2008*10 ......................................
May 16, 2008*11 .......................................
January 4, 2009*12 ................................... 781,189,672.23
June 22, 2009*13 ...................................... 219,700,000
July 27, 2009*14 .......................................
8,931,300
January 27, 2010*15 ................................. 340,000,000
January 28, 2010*16 .................................
36,343,848
February 8, 2010*17 .................................
(33,400)
February 10, 2010*18 ...............................
20,000,000
Balances
8,253,573.77
8,333,573.77
8,374,273.77
8,306,273.77
8,306,273.77
8,555,288.77
8,488,288.77
8,048,754.77
7,853,754.77
8,010,905.77
7,994,205.77
789,183,878
1,008,883,878
1,017,815,178
1,357,815,178
1,394,159,026
1,394,125,626
1,414,125,626
Changes
¥ —
45,220
23,005
—
—
—
—
—
—
—
—
—
413,695
16,817
459,477
—
—
27,028
Balances
¥1,352,651
1,397,871
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,420,877
1,834,572
1,851,389
2,310,867
2,310,867
2,310,867
2,337,895
Remarks:
*1 Conversion of 107,087 shares of preferred stock (13th series Type 4) to 1,029,680.28 shares of common stock
*2 Public offering: Common stock: 80,000 shares
Issue price: ¥1,130 thousand Capitalization: ¥565 thousand
*3 Allotment to third parties: Common stock: 40,700 shares
Changes
¥ —
45,220
23,005
—
(1,000,000)
221,365
—
—
—
—
—
—
413,695
16,817
459,477
—
—
27,028
Balances
¥1,352,764
1,397,984
1,420,989
1,420,989
420,989
642,355
642,355
642,355
642,355
642,355
642,355
642,355
1,056,050
1,072,868
1,532,345
1,532,345
1,532,345
1,559,374
Issue price: ¥1,130 thousand Capitalization: ¥565 thousand
*4 Repurchase and cancellation of 35,000 shares of preferred stock (Type 1) and 33,000 shares of preferred stock (Type 2)
*5 Capital reserve was transferred to other capital surplus pursuant to Article 448-1 of the Company Act.
*6 Increase in the number of common stock as a result of share exchange for making SMBC Friend Securities Co., Ltd. our wholly-owned subsidiary (share
exchange ratio: 1-to-0.0008)
*7 Repurchase and cancellation of 67,000 shares of preferred stock (Type 2)
*8 Repurchase and cancellation of 500,000 shares of preferred stock (Type 3) and increase in shares of common stock of 60,466
*9 Repurchase and cancellation of 195,000 shares of preferred stock (Type 3)
*10 Increase in shares of common stock of 157,151 as a result of exercise of rights to purchase all the shares of preferred stock (5th to 8th series Type 4)
*11 Decrease in shares of preferred stock (Type 4) of 16,700 as a result of cancellation of all the shares of preferred stock (5th to 8th series Type 4)
*12 Increase in shares of common stock of 781,189,672.23 as a result of 100-for-1 stock split
*13 Public offering: Common stock: 219,700,000 shares
*14 Allotment to third parties: Common stock: 8,931,300 shares
Issue price: ¥3,766 Capitalization: ¥1,883
*15 Public offering: Common stock: 340,000,000 shares
Issue price: ¥2,702.81 Capitalization: ¥1,351.405
Issue price: ¥3,766 Capitalization: ¥1,883
*16 Increase in shares of common stock of 36,343,848 as a result of exercise of rights to purchase all the shares of preferred stock (1st to 4th and 9th to 12th
series Type 4)
*17 Decrease in shares of preferred stock (Type 4) of 33,400 as a result of cancellation of all the shares of preferred stock (1st to 4th and 9th to 12th series
Type 4)
*18 Allotment to third parties: Common stock: 20,000,000 shares
Issue price: ¥2,702.81 Capitalization: ¥1,351.405
Number of Shares Issued
March 31, 2010
Common stock ...............................................................................................................................................................
Preferred stock (1st series Type 6) .................................................................................................................................
Total ................................................................................................................................................................................
Number of shares issued
1,414,055,625
70,001
1,414,125,626
144
SMFG 2010
Capital (Nonconsolidated)
SMFG
Stock Exchange Listings
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Nagoya Stock Exchange (First Section)
Number of Common Shares, Classified by Type of Shareholders
March 31, 2010
Japanese government and local government ..................................................................
Financial institutions .........................................................................................................
Securities companies .......................................................................................................
Other institutions ..............................................................................................................
Foreign institutions ...........................................................................................................
Foreign individuals ...........................................................................................................
Individuals and others ......................................................................................................
Total ..................................................................................................................................
Fractional shares (shares) .................................................................................................
Notes: 1. Of 3,730,100 shares in treasury stock, 37,301 units are included in “Individuals and others.”
2. “Other institutions” include 28 units held by the Securities Custody Association.
3. The number of shares constituting 1 unit is 100.
Number of
shareholders
8
430
110
9,819
964
147
356,146
367,624
—
Number of
units
4,926
4,033,863
519,408
1,554,454
5,848,545
1,190
2,157,496
14,119,882
2,067,425
Percentage of
total
0.03%
28.57
3.68
11.01
41.42
0.01
15.28
100.00%
—
Principal Shareholders
a. Common Stock
March 31, 2010
Japan Trustee Services Bank, Ltd. (Trust Account) ......................................................................................
The Master Trust Bank of Japan, Ltd. (Trust Account) .................................................................................
Japan Trustee Services Bank, Ltd. (Trust Account 9) ...................................................................................
The Chase Manhattan Bank, N.A. London SECS Lending Omnibus Account* ...........................................
SSBT OD05 Omnibus Account China Treaty Clients** .................................................................................
State Street Bank and Trust Company 505223* ..........................................................................................
State Street Bank and Trust Company 505225* ..........................................................................................
Nippon Life Insurance Company ..................................................................................................................
Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension* .....................................................
The Chase Manhattan Bank 385036* ...........................................................................................................
Total ..............................................................................................................................................................
* Standing agent: Mizuho Corporate Bank, Ltd.
** Standing agent: The HongKong and Shanghai Banking Corporation Limited’s Tokyo Branch
Number of
shares
87,907,618
71,826,900
26,442,000
21,990,703
18,141,191
17,697,920
17,664,774
15,466,682
14,761,477
14,565,800
306,465,065
Percentage of
shares outstanding
6.21%
5.07
1.86
1.55
1.28
1.25
1.24
1.09
1.04
1.03
21.67%
b. Preferred Stock (1st series Type 6)
March 31, 2010
Sumitomo Life Insurance Company .............................................................................................................
Nippon Life Insurance Company ...................................................................................................................
MITSUI LIFE INSURANCE COMPANY LIMITED ..........................................................................................
Mitsui Sumitomo Insurance Company, Limited ...........................................................................................
Total ..............................................................................................................................................................
Number of
shares
23,334
20,000
16,667
10,000
70,001
Percentage of
shares outstanding
33.33%
28.57
23.81
14.29
100.00%
Note: Pursuant to Article 67 of the Enforcement Ordinance of the Company Act, the exercise of voting rights of common shares held by our subsidiary SMBC
is restricted.
SMFG 2010 145
SMFG
Capital (Nonconsolidated)
Stock Options
March 31
Number of shares granted............................................................................................................
Type of stock ................................................................................................................................
Issue price ....................................................................................................................................
Amount capitalized when shares are issued ................................................................................
Exercise period of stock options ..................................................................................................
2010
108,100 shares
Common stock
¥6,649 per share
¥3,325 per share
From June 28, 2004 to June 27, 2012
Note: Former SMBC issued and granted stock options to certain directors and employees pursuant to the resolution of the ordinary general meeting of share-
holders held on June 27, 2002. SMFG succeeded the obligations related to the stock options at the time of its establishment pursuant to the resolution of
the preferred shareholders’ meeting held on September 26, 2002 and the extraordinary shareholders’ meeting held on September 27, 2002.
Common Stock Price Range
Stock Price Performance
Year ended March 31
High .......................................................................................
Low ........................................................................................
2010
¥4,520
2,591
2009
¥9,640
2,585
Notes: 1. Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
Yen
2008
¥1,210,000
633,000
2007
¥1,390,000
1,010,000
2006
¥1,370,000
659,000
2. SMFG implemented 100-for-1 stock split on January 4, 2009. Stock prices for the year ended March 31, 2009 are reported assuming that the stock
split had been effective from April 1, 2008.
3. Preferred stocks (1st series Type 6) are not listed on exchanges.
Six-Month Performance
Yen
High ..............................................................
Low ...............................................................
October 2009
¥3,500
2,960
November 2009
¥3,290
2,610
December 2009
¥3,080
2,630
January 2010
¥3,160
2,591
February 2010
¥2,982
2,767
March 2010
¥3,150
2,848
Notes: 1. Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
2. Preferred stocks (1st series Type 6) are not listed on exchanges.
146
SMFG 2010
SMBC
Income Analysis (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Year ended March 31
Domestic
operations
Interest income ..................................................... ¥1,302,315
272,565
Interest expenses ..................................................
Net interest income ................................................... 1,029,750
1,736
Trust fees ...................................................................
502,032
Fees and commissions .........................................
118,326
Fees and commissions payments ........................
383,705
Net fees and commissions ........................................
148,600
Trading income......................................................
8,313
Trading losses .......................................................
140,287
Net trading income ....................................................
140,284
Other operating income ........................................
103,485
Other operating expenses.....................................
36,799
Net other operating income (expenses) ....................
Millions of yen
2010
Overseas
operations Elimination
¥(93,427)
¥389,577
(93,407)
116,457
(19)
273,119
—
—
(2,549)
80,658
(1,493)
10,923
(1,055)
69,735
(20,932)
28,902
(20,932)
12,619
—
16,283
(12)
16,083
—
9,074
(12)
7,008
Total
¥1,598,464
295,615
1,302,849
1,736
580,142
127,756
452,385
156,570
—
156,570
156,355
112,560
43,795
Domestic
operations
¥1,466,092
469,307
996,784
2,074
438,721
114,918
323,803
174,304
3,449
170,854
230,448
170,926
59,521
2009
Overseas
operations Elimination
¥(89,841)
¥610,270
(83,661)
335,909
(6,179)
274,360
—
—
(962)
80,929
(897)
10,590
70,338
(65)
(12,241)
29,779
(12,241)
8,791
—
20,987
(24)
20,051
—
25,730
(24)
(5,678)
Total
¥1,986,520
721,554
1,264,966
2,074
518,688
124,611
394,077
191,842
—
191,842
250,475
196,656
53,818
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest expenses” are
shown after deduction of expenses (2010, ¥20 million; 2009, ¥30 million) related to the management of money held in trust.
3. Intersegment transactions are reported in the “Elimination” column.
Average Balance, Interest and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Millions of yen
Year ended March 31
Average balance
Interest-earning assets ................................... ¥85,101,802
56,291,108
24,649,455
337,927
13,958
Loans and bills discounted .........................
Securities ....................................................
Call loans and bills bought .........................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................
2010
Interest
¥1,302,315
1,036,964
216,124
2,495
15
Earnings yield
1.53%
1.84
0.88
0.74
0.11
Average balance
¥79,343,082
54,408,361
21,519,840
375,755
16,674
2009
Interest
¥1,466,092
1,124,991
268,696
5,287
87
Earnings yield
1.85%
2.07
1.25
1.41
0.52
2,277,769
268,117
5,394
1,704
0.24
0.64
684,275
801,981
4,496
10,986
0.66
1.37
Interest-bearing liabilities ............................... ¥89,290,815
68,567,643
7,227,930
1,855,873
607,324
Deposits......................................................
Negotiable certificates of deposit ...............
Call money and bills sold ............................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Commercial paper ......................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
2,829,428
—
4,462,011
238,247
3,292,435
¥ 272,565
106,566
18,280
2,853
668
6,120
—
104,896
468
60,201
0.31%
0.16
0.25
0.15
0.11
0.22
—
2.35
0.20
1.83
¥85,639,021
66,523,917
4,094,711
2,736,245
430,988
¥ 469,307
196,972
24,451
12,571
2,028
4,179,957
—
4,036,960
67,214
3,332,131
59,958
—
107,661
478
63,573
0.55%
0.30
0.60
0.46
0.47
1.43
—
2.67
0.71
1.91
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some domestic consolidated subsidiaries use weekly, monthly or
semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥946,938 million; 2009, ¥818,050
million).
4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets”
are shown after deduction of the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million). “Interest-bearing liabilities”
are shown after deduction of amounts equivalent to the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million) and
corresponding interest (2010, ¥20 million; 2009, ¥30 million).
SMFG 2010 147
SMBC
Income Analysis (Consolidated)
Overseas Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥16,085,915
10,971,078
1,459,443
812,878
13,963
Loans and bills discounted .........................
Securities ....................................................
Call loans and bills bought .........................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................
—
2,152,553
—
14,066
Interest-bearing liabilities ............................... ¥11,763,523
7,472,669
1,811,253
1,205,537
364,451
Deposits .....................................................
Negotiable certificates of deposit ...............
Call money and bills sold ............................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Commercial paper ......................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
—
82,513
387,573
—
158,169
¥116,457
40,606
16,102
3,416
713
—
194
9,308
—
9,459
Millions of yen
2010
Interest
¥389,577
312,374
22,821
5,158
887
Earnings yield
2.42%
2.85
1.56
0.63
6.36
Average balance
¥15,945,396
11,584,510
1,350,798
384,028
103,425
2009
Interest
¥610,270
484,291
35,424
9,283
1,661
Earnings yield
3.83%
4.18
2.62
2.42
1.61
—
0.65
0.99%
0.54
0.89
0.28
0.20
—
0.24
2.40
—
5.98
—
1,930,859
—
35,964
¥ 9,534,917
6,968,130
710,309
580,174
546,903
¥335,909
134,070
23,579
9,996
5,232
—
—
354,359
—
265,035
—
—
15,544
—
17,328
—
1.86
3.52%
1.92
3.32
1.72
0.96
—
—
4.39
—
6.54
Notes: 1. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some overseas consolidated subsidiaries use weekly, monthly,
quarterly or semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥156,324 million; 2009, ¥88,670
million).
Total of Domestic and Overseas Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥99,271,616
65,563,988
26,108,898
1,150,805
27,922
Loans and bills discounted .........................
Securities ....................................................
Call loans and bills bought .........................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................
Millions of yen
2010
Interest
¥1,598,464
1,257,034
238,944
7,653
902
Earnings yield
1.61%
1.92
0.92
0.67
3.23
Average balance
¥93,549,650
64,569,148
22,870,639
759,784
120,099
2009
Interest
¥1,986,520
1,530,130
297,938
14,570
1,748
Earnings yield
2.12%
2.37
1.30
1.92
1.46
2,277,769
2,208,380
5,394
14,650
0.24
0.66
684,275
2,419,248
4,496
42,446
0.66
1.75
Interest-bearing liabilities ............................... ¥99,138,171
75,827,957
9,039,183
3,061,410
971,775
Deposits......................................................
Negotiable certificates of deposit ...............
Call money and bills sold ............................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Commercial paper ......................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
2,829,428
82,513
3,151,386
238,247
3,450,605
¥ 295,615
146,051
34,382
6,270
1,381
6,120
194
21,919
468
69,660
0.30%
0.19
0.38
0.20
0.14
0.22
0.24
0.70
0.20
2.02
¥93,434,902
73,178,249
4,805,020
3,316,420
977,892
¥ 721,554
326,538
48,030
22,567
7,261
4,179,957
—
2,967,596
67,214
3,597,166
59,958
—
44,050
478
80,902
0.77%
0.45
1.00
0.68
0.74
1.43
—
1.48
0.71
2.25
Notes: 1. The figures above comprise totals for domestic and overseas operations after intersegment eliminations.
2. In principle, average balances are calculated by using daily balances. However, some consolidated subsidiaries use weekly, monthly, quarterly or
semiannual balances instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥1,103,197 million; 2009,
¥906,513 million).
4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets”
are shown after deduction of the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million). “Interest-bearing liabilities”
are shown after deduction of amounts equivalent to the average balance of money held in trust (2010, ¥12,392 million; 2009, ¥8,583 million) and
corresponding interest (2010, ¥20 million; 2009, ¥30 million).
148
SMFG 2010
Income Analysis (Consolidated)
SMBC
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥502,032
21,425
119,075
48,897
14,782
6,681
39,475
6,179
Deposits and loans ...............................................
Remittances and transfers ....................................
Securities-related business ...................................
Agency ..................................................................
Safe deposits ........................................................
Guarantees ............................................................
Credit card business .............................................
Millions of yen
2010
Overseas
operations Elimination
¥80,658
49,988
7,782
0
—
2
9,138
—
¥(2,549)
(55)
(1)
—
—
—
(232)
—
Total
¥580,142
71,357
126,856
48,897
14,782
6,684
48,381
6,179
Domestic
operations
¥438,721
22,533
124,143
20,291
14,691
6,911
41,790
6,493
¥80,929
56,034
8,535
0
—
3
7,360
—
2009
Overseas
operations Elimination
¥(962)
—
(161)
—
—
—
(276)
—
¥(897)
(161)
Total
¥518,688
78,568
132,518
20,291
14,691
6,915
48,875
6,493
¥124,611
30,211
Fees and commissions payments ............................. ¥118,326
26,285
Remittances and transfers ....................................
¥10,923
4,920
¥(1,493)
(155)
¥127,756
31,050
¥114,918
26,796
¥10,590
3,576
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
Trading Income
2010
2009
Millions of yen
Domestic
Year ended March 31
operations
Trading income .......................................................... ¥148,600
25,694
Gains on trading securities ...................................
Overseas
operations Elimination
¥(20,932)
—
¥28,902
211
Total
¥156,570
25,906
Domestic
operations
¥174,304
3,313
Overseas
operations Elimination
¥(12,241)
—
¥29,779
666
Total
¥191,842
3,979
Gains on securities related to
trading transactions ............................................
Gains on trading-related financial derivatives .......
Others ...................................................................
2,254
120,075
576
—
28,691
—
—
(20,932)
—
2,254
127,833
576
1,174
162,430
7,386
46
29,066
—
—
(12,241)
—
1,221
179,255
7,386
Trading losses............................................................ ¥ 8,313
—
Losses on trading securities .................................
¥12,619
—
¥(20,932)
—
¥ —
—
¥ 3,449
—
¥ 8,791
—
¥(12,241)
—
¥ —
—
Losses on securities related to
trading transactions ............................................
Losses on trading-related financial derivatives .....
Others ...................................................................
—
8,313
—
—
12,619
—
—
(20,932)
—
—
—
—
—
3,449
—
—
8,791
—
—
(12,241)
—
—
—
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
SMFG 2010 149
SMBC
Assets and Liabilities (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
Overseas operations:
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
Grand total ......................................................................................................
Millions of yen
2010
2009
¥42,959,169
25,125,800
3,617,857
71,702,827
5,246,004
¥76,948,832
¥ 5,243,318
1,763,200
7,831
7,014,351
1,828,914
¥ 8,843,265
¥85,792,098
¥41,544,906
23,465,803
3,884,852
68,895,562
6,035,411
¥74,930,974
¥ 5,185,137
1,575,776
4,007
6,764,920
1,428,673
¥ 8,193,594
¥83,124,568
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
3. Fixed-term deposits = Time deposits + Installment savings
Balance of Loan Portfolio, Classified by Industry
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
March 31
Domestic operations:
Millions of yen
2009
153,199
1,094,835
Manufacturing...................................... ¥ 6,689,718
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,261,007
and public enterprises .......................
4,475,464
Wholesale and retail ............................
5,271,565
Finance and insurance ........................
8,179,721
Real estate, goods rental and leasing ...
4,192,580
Services ...............................................
1,117,092
Municipalities .......................................
20,374,612
Others ..................................................
Subtotal ............................................... ¥54,809,798
12.20%
0.28
2.00
5.95
8.17
9.62
14.92
7.65
2.04
37.17
100.00%
149,268
1,274,261
Manufacturing...................................... ¥ 6,986,393
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,380,038
and public enterprises .......................
5,030,129
Wholesale and retail ............................
5,496,504
Finance and insurance ........................
7,598,081
Real estate ...........................................
5,762,527
Services ...............................................
1,058,239
Municipalities .......................................
Others ..................................................
19,133,674
Subtotal ............................................... ¥55,869,119
12.50%
0.28
2.28
6.05
9.00
9.84
13.60
10.31
1.89
34.25
100.00%
Overseas operations:
Overseas operations:
Public sector ........................................ ¥ 43,100
543,997
Financial institutions ............................
7,142,983
Commerce and industry ......................
866,945
Others ..................................................
Subtotal ............................................... ¥ 8,597,027
Total ......................................................... ¥63,406,825
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
Public sector ........................................ ¥ 35,350
501,739
Financial institutions ............................
8,544,905
Commerce and industry ......................
Others ..................................................
1,131,604
Subtotal ............................................... ¥10,213,599
Total ......................................................... ¥66,082,719
0.35%
4.91
83.66
11.08
100.00%
—
0.50%
6.33
83.09
10.08
100.00%
—
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
3. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from the fiscal year beginning on April 1, 2009,
the sector classification has been partly changed. “Goods rental and leasing” is included in others in fiscal 2008.
150
SMFG 2010
Assets and Liabilities (Consolidated)
SMBC
Risk-Monitored Loans
March 31
Bankrupt loans ................................................................................................
Non-accrual loans ...........................................................................................
Past due loans (3 months or more) .................................................................
Restructured loans ..........................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
Notes: Definition of risk-monitored loan categories
2010
¥ 162,969
1,047,913
38,249
249,139
¥1,498,271
¥ 710,815
Millions of yen
2009
¥ 290,237
997,888
36,119
237,579
¥1,561,824
¥ 590,174
1. Bankrupt loans: Credits for which accrued interest is not accounted in revenue; credits extended to borrowers that are undergoing bankruptcy,
corporate reorganization and rehabilitation proceedings or debtors receiving orders of disposition by suspension of business at bill clearinghouses
2. Non-accrual loans: Credits for which accrued interest is not accounted in revenue; credits, excluding loans to bankrupt borrowers and loans with
grace for interest payment to assist in corporate reorganization or to support business
3. Past due loans (3 months or more): Loans with payment of principal or interest in arrears for more than 3 months, calculated from the day following
the contractual due date, excluding borrowers in categories 1. and 2.
4. Restructured loans: Loans to borrowers in severe financial condition given certain favorable terms and conditions to assist in corporate rehabilitation
or to support business, excluding borrowers in categories 1. through 3.
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
2009
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
¥16,738,321
422,648
3,531,793
2,843,148
3,431,856
¥26,967,768
Overseas operations:
¥14,734,414
338,688
3,878,294
2,407,718
5,103,160
¥26,462,276
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
¥ —
—
—
—
1,833,447
¥ 1,833,447
¥28,295,724
¥ —
—
—
—
1,454,593
¥ 1,454,593
¥28,422,362
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. “Others” include foreign bonds and foreign stocks.
Trading Assets and Liabilities
Domestic
March 31
operations
Trading assets ........................................................... ¥6,067,423
Trading securities .................................................. 2,656,782
1,244
Derivatives of trading securities ............................
—
Securities related to trading transactions .............
Derivatives of securities related to
6,931
trading transactions ............................................
Trading-related financial derivatives ..................... 3,124,521
277,943
Other trading assets..............................................
2010
2009
Millions of yen
Overseas
operations Elimination
¥(36,046)
¥587,881
32,229
—
—
Total
¥6,619,258
— 2,689,011
1,244
—
—
—
Domestic
operations
¥3,846,205 ¥1,011,003
6,931
—
—
Overseas
operations Elimination
¥(20,723)
—
—
—
185,122
455
—
Total
¥4,836,484
192,053
455
—
—
555,288
363
—
(36,046)
—
6,931
3,643,763
278,307
13,428
3,083,019
564,178
—
1,004,072
—
—
(20,723)
—
13,428
4,066,368
564,178
Trading liabilities ........................................................ ¥4,446,003
Trading securities sold for short sales .................. 1,557,587
2,296
Derivatives of trading securities ............................
¥632,763
—
—
¥(36,046)
¥5,042,720
— 1,557,587
2,296
—
¥2,692,747 ¥ 934,296
341
—
2,370
389
¥(20,723)
—
—
¥3,606,319
2,711
389
Securities related to trading transactions
sold for short sales ..............................................
—
—
—
—
—
—
—
—
Derivatives of securities related to
6,961
trading transactions ............................................
Trading-related financial derivatives ..................... 2,879,158
—
Other trading liabilities ..........................................
—
632,763
—
—
(36,046)
—
6,961
3,475,875
—
13,997
2,675,989
—
—
933,954
—
—
(20,723)
—
13,997
3,589,220
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas opera-
tions comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
SMFG 2010 151
SMBC
Income Analysis (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Gross Banking Profit, Classified by Domestic and International Operations
Millions of yen
Year ended March 31
Domestic
operations
Interest income ........................................... ¥1,063,182
2010
International
operations
¥323,681
Interest expenses .......................................
153,247
187,233
Domestic
operations
¥1,184,053
2009
International
operations
¥583,654
253,773
495,545
Total
¥1,380,280
[6,583]
333,898
[6,583]
1,046,382
1,736
412,960
126,246
286,714
115,356
—
115,356
85,788
80,703
5,085
¥1,455,275
Total
¥1,758,423
[9,284]
740,034
[9,284]
1,018,389
2,074
415,228
121,404
293,824
175,038
—
175,038
163,277
127,747
35,530
¥1,524,856
1.76%
909,934
Net interest income ........................................
1,736
Trust fees ........................................................
321,837
Fees and commissions ...............................
108,603
Fees and commissions payments ..............
213,233
Net fees and commissions .............................
2,424
Trading income ...........................................
—
Trading losses .............................................
2,424
Net trading income .........................................
30,585
Other operating income ..............................
40,690
Other operating expenses ..........................
(10,104)
Net other operating income (expenses) .........
Gross banking profit ....................................... ¥1,117,224
Gross banking profit rate (%) .........................
Notes: 1. Domestic operations include yen-denominated transactions by domestic branches, while international operations include foreign-currency-
930,279
2,074
322,455
102,214
220,241
10,763
—
10,763
46,440
62,596
(16,156)
¥1,147,202
136,448
—
91,123
17,643
73,480
112,932
—
112,932
55,202
40,012
15,190
¥338,050
88,109
—
92,772
19,190
73,582
164,275
—
164,275
116,837
65,150
51,686
¥377,654
1.96%
1.50%
1.60%
1.98%
1.65%
denominated transactions by domestic branches and operations by overseas branches. Yen-denominated nonresident transactions and Japan
offshore banking accounts are included in international operations.
2. “Interest expenses” are shown after deduction of amounts equivalent to interest expenses on money held in trust (2010, ¥20 million; 2009, ¥30
million).
3. Figures in brackets [ ] indicate interest payments between domestic and international operations. As net interest figures are shown for interest rate
swaps and similar instruments, some figures for domestic and international operations do not add up to their sums.
4. Gross banking profit rate = Gross banking profit / Average balance of interest-earning assets ✕ 100
Average Balance, Interest and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ................................... ¥74,033,481
[563,457]
49,843,442
21,750,902
59,440
95
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
1,397,584
36,110
105,873
4,059
1,266
929
2010
Interest
¥1,063,182
[6,583]
866,832
174,752
382
0
Interest-bearing liabilities ............................... ¥74,843,531
59,829,387
7,376,192
1,533,682
390,348
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
1,039,464
2,095,517
165,447
2,265,856
¥ 153,247
77,419
18,792
1,662
465
1,472
11,532
303
35,766
Earnings yield
1.43%
1.73
0.80
0.64
0.13
0.29
3.50
0.87
0.20%
0.12
0.25
0.10
0.11
0.14
0.55
0.18
1.57
Average balance
¥69,174,259
[2,101,755]
48,534,275
17,380,685
102,047
1,806
2009
Interest
¥1,184,053
[9,284]
962,176
190,320
851
8
682,464
54,955
45,750
4,488
1,074
422
¥70,686,399
57,747,050
4,062,350
2,661,112
434,189
¥ 253,773
123,812
24,063
10,653
2,043
1,877,785
1,716,288
67,214
2,020,588
8,422
17,185
478
27,771
Earnings yield
1.71%
1.98
1.09
0.83
0.49
0.65
1.95
0.92
0.35%
0.21
0.59
0.40
0.47
0.44
1.00
0.71
1.37
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥875,040 million; 2009, ¥756,651
million). “Interest-bearing liabilities” are shown after deduction of amounts equivalent to the average balance of money held in trust (2010, ¥10,191
million; 2009, ¥8,583 million) and corresponding interest (2010, ¥20 million; 2009, ¥30 million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international
operations and related interest expenses. As net interest figures are shown for interest rate swaps and similar instruments, some figures for domestic
and international operations do not add up to their sums.
152
SMFG 2010
Income Analysis (Nonconsolidated)
SMBC
2010
Interest
¥323,681
196,060
54,658
2,849
193
2
—
12,933
¥187,233
[6,583]
34,424
15,562
2,241
517
Millions of yen
Earnings yield
1.90%
Average balance
¥19,248,223
2.12
1.26
0.94
0.42
0.85
—
0.58
1.11%
0.39
0.89
0.36
0.14
10,196,514
5,079,312
279,225
116,634
—
—
2,370,678
¥19,236,867
[2,101,755]
8,892,776
693,692
654,909
545,774
2009
Interest
¥583,654
375,128
103,672
6,953
1,332
—
—
37,617
¥495,545
[9,284]
149,683
22,685
11,920
5,022
Earnings yield
3.03%
3.67
2.04
2.49
1.14
—
—
1.58
2.57%
1.68
3.27
1.82
0.92
International Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥17,035,222
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
9,241,539
4,330,491
300,991
45,582
257
—
2,220,451
Interest-bearing liabilities ............................... ¥16,725,582
[563,457]
8,610,028
1,746,135
610,090
346,279
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Bonds .........................................................
4,631
92,296
28,527
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥138,379 million; 2009, ¥92,824
2,281,411
2,536,355
1,316,342
1,579,701
1,954,454
1,046,437
51,463
113,145
40,168
0.29
4.72
2.72
2.25
4.46
3.05
million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international
operations and related interest expenses. As net interest figures are shown for interest rate swaps and similar instruments, some figures for domestic
and international operations do not add up to their sums.
3. The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly
current method, under which the TT middle rate at the end of the previous month is applied to nonexchange transactions of the month concerned.
Total of Domestic and International Operations
Average balance
Year ended March 31
Interest-earning assets ................................... ¥90,505,247
59,084,981
26,081,394
360,432
45,678
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
1,397,842
36,110
2,326,324
4,061
1,266
13,863
Interest-bearing liabilities ............................... ¥91,005,657
68,439,416
9,122,327
2,143,773
736,627
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
2,619,166
4,049,972
165,447
3,312,293
6,103
103,829
303
64,294
¥ 333,898
111,844
34,354
3,903
982
Millions of yen
2010
Interest
¥1,380,280
1,062,893
229,411
3,231
193
Earnings yield
1.52%
1.79
0.87
0.89
0.42
Average balance
¥86,320,727
58,730,789
22,459,998
381,273
118,440
2009
Interest
¥1,758,423
1,337,305
293,992
7,805
1,341
Earnings yield
2.03%
2.27
1.30
2.04
1.13
0.29
3.50
0.59
0.36
0.16
0.37
0.18
0.13
0.23
2.56
0.18
1.94
682,464
54,955
2,416,428
4,488
1,074
38,040
¥87,821,511
66,639,826
4,756,043
3,316,021
979,963
¥ 740,034
273,495
46,748
22,573
7,066
4,159,197
4,252,644
67,214
3,336,931
59,885
130,331
478
67,939
0.65
1.95
1.57
0.84%
0.41
0.98
0.68
0.72
1.43
3.06
0.71
2.03
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2010, ¥1,013,420 million; 2009,
¥849,475 million). “Interest-bearing liabilities” are shown after deduction of amounts equivalent to the average balance of money held in trust (2010,
¥10,191 million; 2009, ¥8,583 million) and corresponding interest (2010, ¥20 million; 2009, ¥30 million).
2. Figures in the table above indicate the net average balances of amounts adjusted for interdepartmental lending and borrowing activities between
domestic and international operations and related interest expenses.
SMFG 2010 153
SMBC
Income Analysis (Nonconsolidated)
Breakdown of Interest Income and Interest Expenses
Domestic Operations
Millions of yen
Year ended March 31
Interest income ...............................................
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
Interest expenses ...........................................
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
International Operations
Year ended March 31
Interest income ...............................................
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................
Volume-related
increase
(decrease)
¥69,782
22,767
35,111
(303)
(4)
2,077
(368)
528
¥ 8,512
2,694
8,442
(3,303)
(187)
(2,744)
2,087
180
3,596
2010
Rate-related
increase
(decrease)
¥(190,653)
(118,112)
(50,678)
(166)
(3)
(2,506)
560
(20)
Net
increase
(decrease)
¥(120,871)
(95,344)
(15,567)
(469)
(8)
(429)
191
507
¥(109,038)
(49,086)
(13,713)
(5,687)
(1,390)
¥(100,526)
(46,392)
(5,271)
(8,991)
(1,578)
(4,205)
(7,739)
(355)
4,399
(6,949)
(5,652)
(175)
7,995
Volume-related
increase
(decrease)
¥61,677
36,842
24,720
(1,608)
(115)
(1,915)
652
272
¥12,243
937
9,020
2,251
1,524
3,506
(1,875)
478
(1,020)
Volume-related
increase
(decrease)
¥(61,205)
(32,439)
(13,658)
206
(560)
2010
Rate-related
increase
(decrease)
¥(198,767)
(146,629)
(35,355)
(4,310)
(578)
Millions of yen
Net
increase
(decrease)
¥(259,972)
(179,068)
(49,013)
(4,104)
(1,139)
Volume-related
increase
(decrease)
¥88,656
96,517
31,654
(3,473)
(1,579)
2009
Rate-related
increase
(decrease)
¥(50,476)
(19,368)
(26,693)
90
(13)
(551)
(178)
115
¥(16,696)
(3,681)
260
(1,788)
(112)
(956)
(676)
—
3,494
2009
Rate-related
increase
(decrease)
¥(207,277)
(102,964)
(57,976)
(6,607)
(713)
Net
increase
(decrease)
¥11,200
17,473
(1,972)
(1,517)
(128)
(2,467)
474
388
¥ (4,453)
(2,743)
9,281
463
1,412
2,550
(2,552)
478
2,473
Net
increase
(decrease)
¥(118,621)
(6,447)
(26,322)
(10,080)
(2,292)
2
(2,246)
—
(22,437)
2
(24,683)
Interest expenses ...........................................
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Bonds .........................................................
¥(57,830)
(4,613)
9,379
(764)
(1,368)
(12,231)
(25,958)
(7,658)
Total of Domestic and International Operations
Year ended March 31
Interest income ...............................................
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
Interest expenses ...........................................
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
Volume-related
increase
(decrease)
¥63,817
6,371
31,853
(405)
(568)
2,078
(368)
(1,368)
¥11,683
2,940
16,443
(6,077)
(1,420)
(16,479)
(5,982)
180
(498)
¥(250,481)
(110,644)
(16,502)
(8,914)
(3,136)
(34,600)
5,109
(3,982)
2010
Rate-related
increase
(decrease)
¥(441,960)
(280,784)
(96,434)
(4,168)
(579)
(2,505)
560
(22,808)
¥(417,819)
(164,591)
(28,837)
(12,592)
(4,662)
(37,302)
(20,519)
(355)
(3,146)
Note: Volume/rate variance is prorated according to changes in volume and rate.
154
SMFG 2010
—
(23,542)
¥76,854
3,740
2,796
5,802
3,302
30,157
42,043
(5,153)
¥(308,311)
(115,258)
(7,122)
(9,678)
(4,504)
(46,831)
(20,849)
(11,641)
Millions of yen
Net
increase
(decrease)
¥(378,142)
(274,412)
(64,580)
(4,573)
(1,148)
(427)
191
(24,176)
¥(406,136)
(161,651)
(12,393)
(18,669)
(6,083)
(53,781)
(26,501)
(175)
(3,645)
Volume-related
increase
(decrease)
¥134,713
102,052
49,850
(7,154)
(1,796)
(1,915)
652
(22,770)
¥ 54,601
2,706
15,816
5,999
4,924
30,506
23,057
478
(5,033)
—
(31,751)
—
(55,294)
¥(227,391)
(154,348)
(12,797)
(7,628)
(3,838)
(18,317)
(12,147)
(5,843)
2009
Rate-related
increase
(decrease)
¥(242,567)
(91,025)
(78,146)
(4,443)
(624)
(551)
(178)
(32,135)
¥(210,025)
(156,058)
(16,536)
(7,362)
(4,047)
(16,117)
4,285
—
(3,489)
¥(150,537)
(150,607)
(10,000)
(1,826)
(536)
11,839
29,895
(10,997)
Net
increase
(decrease)
¥(107,853)
11,026
(28,295)
(11,598)
(2,421)
(2,467)
474
(54,905)
¥(155,423)
(153,351)
(719)
(1,363)
876
14,389
27,343
478
(8,523)
Income Analysis (Nonconsolidated)
SMBC
Fees and Commissions
Year ended March 31
Fees and commissions ...................................
Deposits and loans .....................................
Remittances and transfers .........................
Securities-related business ........................
Agency ........................................................
Safe deposits ..............................................
Guarantees .................................................
Domestic
operations
¥321,837
11,114
92,857
13,280
11,611
6,249
20,934
2010
International
operations
¥91,123
36,137
24,162
1,125
—
—
14,434
Fees and commissions payments ..................
Remittances and transfers .........................
¥108,603
20,479
¥17,643
8,000
Trading Income
Millions of yen
Total
¥412,960
47,252
117,019
14,405
11,611
6,249
35,368
¥126,246
28,479
Domestic
operations
¥322,455
10,866
96,014
17,256
11,777
6,472
21,005
¥102,214
20,385
Millions of yen
Domestic
operations
¥2,424
1,309
2010
International
operations
¥112,932
—
Total
¥115,356
1,309
—
2,254
2,254
110,677
0
110,677
1,115
Domestic
operations
¥10,763
3,313
—
—
7,449
Year ended March 31
Trading income ...............................................
Gains on trading securities .........................
Gains on securities related to
trading transactions ..................................
Gains on trading-related
financial derivatives ..................................
Others .........................................................
Trading losses ................................................
Losses on trading securities .......................
Losses on securities related to
trading transactions ..................................
Losses on trading-related
financial derivatives ..................................
Others .........................................................
—
1,114
¥ —
—
—
—
—
2009
International
operations
¥92,772
40,973
27,122
2,818
—
—
9,679
¥19,190
7,770
2009
International
operations
¥164,275
—
Total
¥415,228
51,840
123,136
20,075
11,777
6,472
30,684
¥121,404
28,155
Total
¥175,038
3,313
1,221
1,221
163,054
—
163,054
7,449
¥ —
—
¥ —
—
¥ —
—
¥ —
—
¥ —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Note: Figures represent net gains after offsetting income against expenses.
Net Other Operating Income (Expenses)
Year ended March 31
Net other operating income (expenses) .........
Gains (losses) on bonds .............................
Gains (losses) on derivatives ......................
Losses on foreign exchange transactions ...
General and Administrative Expenses
Millions of yen
Domestic
operations
¥(10,104)
9,070
(15,682)
—
2010
International
operations
¥15,190
28,199
(629)
(9,635)
Total
¥ 5,085
37,270
(16,310)
(9,635)
Domestic
operations
¥(16,156)
(32,420)
12,680
—
2009
International
operations
¥51,686
58,548
898
(2,472)
Total
¥35,530
26,128
13,578
(2,472)
Millions of yen
Year ended March 31
Salaries and related expenses ........................................................................
Retirement benefit cost ...................................................................................
Welfare expenses ............................................................................................
Depreciation ....................................................................................................
Rent and lease expenses ................................................................................
Building and maintenance expenses ..............................................................
Supplies expenses ..........................................................................................
Water, lighting, and heating expenses.............................................................
Traveling expenses ..........................................................................................
Communication expenses ...............................................................................
Publicity and advertising expenses .................................................................
Taxes, other than income taxes.......................................................................
Deposit insurance ............................................................................................
Others ..............................................................................................................
Total .................................................................................................................
Note: Because expenses in the table above exclude nonrecurring losses, they are reconciled with the figures reported on page 28.
2010
¥206,536
14,146
31,479
68,855
50,809
5,377
5,856
5,084
2,658
7,420
7,307
36,759
48,892
194,569
¥685,752
2009
¥205,624
6,084
31,835
60,889
50,647
8,373
6,812
5,441
3,765
7,455
11,349
38,282
48,763
216,154
¥701,479
SMFG 2010 155
SMBC
Deposits (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
2009
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
¥40,457,064
20,973,648
1,119,778
62,550,491
5,431,866
¥67,982,357
International operations:
¥ 4,171,693
Liquid deposits ............................................................................................
1,355,428
Fixed-term deposits ....................................................................................
2,379,653
Others ..........................................................................................................
7,906,775
Subtotal .......................................................................................................
1,741,507
Negotiable certificates of deposit ................................................................
¥ 9,648,282
Total .............................................................................................................
¥77,630,639
Grand total ......................................................................................................
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
59.5%
30.9
1.6
92.0
8.0
100.0%
43.3%
14.0
24.7
82.0
18.0
100.0%
—
¥39,432,942
19,984,641
1,136,752
60,554,335
6,047,604
¥66,601,940
¥ 4,900,826
1,342,381
2,702,454
8,945,662
1,358,105
¥10,303,767
¥76,905,708
59.2%
30.0
1.7
90.9
9.1
100.0%
47.6%
13.0
26.2
86.8
13.2
100.0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2010
2009
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
¥38,899,878
20,484,955
444,553
59,829,387
7,376,192
¥67,205,580
International operations:
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
Grand total ......................................................................................................
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
¥ 4,417,417
1,366,600
2,826,011
8,610,028
1,746,135
¥10,356,164
¥77,561,744
¥38,108,576
19,165,009
473,464
57,747,050
4,062,350
¥61,809,401
¥ 4,623,996
1,104,938
3,163,841
8,892,776
693,692
¥ 9,586,469
¥71,395,870
2. Fixed-term deposits = Time deposits + Installment savings
3. The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly
current method.
Balance of Deposits, Classified by Type of Depositor
March 31
Individual .........................................................................................................
Corporate ........................................................................................................
Total .................................................................................................................
Notes: 1. Figures are before adjustment on interoffice accounts in transit.
Millions of yen
2010
¥35,637,984
31,921,076
¥67,559,060
52.8%
47.2
100.0%
2009
¥34,889,209
31,335,180
¥66,224,389
52.7%
47.3
100.0%
2. Negotiable certificates of deposit are excluded.
3. Accounts at overseas branches and Japan offshore banking accounts are excluded.
156
SMFG 2010
Deposits (Nonconsolidated)
SMBC
Balance of Investment Trusts, Classified by Type of Customer
Millions of yen
March 31
Individual .........................................................................................................
Corporate ........................................................................................................
Total .................................................................................................................
Note: Balance of investment trusts is recognized on a contract basis and measured according to each fund’s net asset balance at the fiscal year-end.
2009
¥2,040,366
201,138
¥2,241,504
2010
¥2,620,727
310,685
¥2,931,412
Balance of Time Deposits, Classified by Maturity
March 31
Less than three months ...................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Three — six months ........................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Six months — one year ...................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
One — two years .............................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Two — three years ...........................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Three years or more ........................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Total .................................................................................................................
Fixed interest rates ......................................................................................
Floating interest rates ..................................................................................
Others ..........................................................................................................
Note: The figures above do not include installment savings.
2010
¥ 8,154,589
6,896,813
32,997
1,224,778
4,330,949
4,185,966
52,536
92,446
5,947,747
5,880,649
42,996
24,102
1,515,226
1,458,697
54,160
2,369
1,202,825
1,136,927
58,720
7,177
1,177,692
487,367
684,927
5,397
¥22,329,032
20,046,421
926,337
1,356,272
Millions of yen
2009
¥ 7,494,172
6,278,535
700
1,214,936
4,045,532
3,963,667
4,500
77,365
5,583,297
5,533,874
21,510
27,911
1,660,255
1,640,874
18,885
495
1,251,850
1,229,574
18,990
3,285
1,291,870
781,847
491,636
18,386
¥21,326,977
19,428,374
556,222
1,342,381
SMFG 2010 157
SMBC
Loans (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Balance of Loans and Bills Discounted
Year-End Balance
March 31
Domestic operations:
Millions of yen
2010
2009
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
International operations:
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
¥ 1,472,451
38,069,787
8,202,796
152,782
¥47,897,818
¥ 416,026
8,223,003
82,210
—
¥ 8,721,240
¥56,619,058
¥ 1,932,245
37,914,257
9,780,746
216,066
¥49,843,316
¥ 454,926
9,853,939
88,613
470
¥10,397,950
¥60,241,266
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2010
2009
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
¥ 1,720,223
38,993,305
8,969,237
160,676
¥49,843,442
International operations:
¥ 1,978,289
36,221,243
10,094,088
240,653
¥48,534,275
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly
¥ 502,065
9,559,202
132,123
3,124
¥10,196,514
¥58,730,789
¥ 444,610
8,704,843
91,980
104
¥ 9,241,539
¥59,084,981
current method.
Balance of Loans and Bills Discounted, Classified by Purpose
March 31
Funds for capital investment ...........................................................................
Funds for working capital ................................................................................
Total .................................................................................................................
2010
¥21,487,115
35,131,942
¥56,619,058
38.0%
62.0
100.0%
2009
¥21,398,268
38,842,997
¥60,241,266
35.5%
64.5
100.0%
Millions of yen
Balance of Loans and Bills Discounted, Classified by Collateral
Millions of yen
March 31
Securities .........................................................................................................
Commercial claims ..........................................................................................
Commercial goods ..........................................................................................
Real estate .......................................................................................................
Others ..............................................................................................................
Subtotal ...........................................................................................................
Guaranteed ......................................................................................................
Unsecured .......................................................................................................
Total .................................................................................................................
2010
¥ 562,243
996,719
—
6,895,988
603,538
9,058,490
21,075,681
26,484,887
¥56,619,058
2009
¥ 496,562
974,977
—
6,700,496
527,776
8,699,811
21,371,798
30,169,656
¥60,241,266
158
SMFG 2010
Loans (Nonconsolidated)
SMBC
Balance of Loans and Bills Discounted, Classified by Maturity
Millions of yen
March 31
One year or less ..............................................................................................
One — three years ..........................................................................................
Floating interest rates ..................................................................................
Fixed interest rates ......................................................................................
Three — five years ...........................................................................................
Floating interest rates ..................................................................................
Fixed interest rates ......................................................................................
Five — seven years .........................................................................................
Floating interest rates ..................................................................................
Fixed interest rates ......................................................................................
More than seven years ....................................................................................
Floating interest rates ..................................................................................
Fixed interest rates ......................................................................................
No designated term .........................................................................................
Floating interest rates ..................................................................................
Fixed interest rates ......................................................................................
Total .................................................................................................................
Note: Loans with a maturity of one year or less are not classified by floating or fixed interest rates.
2010
¥ 8,933,280
9,765,902
7,597,080
2,168,821
7,973,882
6,035,859
1,938,023
2,479,598
2,035,407
444,190
19,181,387
18,171,664
1,009,722
8,285,006
8,285,006
—
¥56,619,058
2009
¥ 9,736,533
9,926,623
7,543,515
2,383,107
8,815,570
6,797,016
2,018,554
3,470,099
2,629,283
840,816
18,423,079
17,261,520
1,161,559
9,869,360
9,869,360
—
¥60,241,266
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2010
March 31
Domestic operations:
Millions of yen
2009
146,765
897,987
Manufacturing...................................... ¥ 6,308,200
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,067,711
and public enterprises .......................
4,061,267
Wholesale and retail ............................
5,907,426
Finance and insurance ........................
6,809,580
Real estate, goods rental and leasing ...
3,769,330
Services ...............................................
984,186
Municipalities .......................................
17,573,287
Others ..................................................
Subtotal ............................................... ¥49,525,741
12.7%
0.3
1.8
6.2
8.2
11.9
13.8
7.6
2.0
35.5
100.0%
143,591
1,088,910
Manufacturing...................................... ¥ 6,632,207
Agriculture, forestry,
fisheries and mining ...........................
Construction ........................................
Transportation, communications
3,208,281
and public enterprises .......................
4,632,637
Wholesale and retail ............................
5,967,376
Finance and insurance ........................
6,222,052
Real estate ...........................................
5,260,544
Services ...............................................
970,577
Municipalities .......................................
17,115,639
Others ..................................................
Subtotal ............................................... ¥51,241,816
12.9%
0.3
2.1
6.3
9.0
11.7
12.1
10.3
1.9
33.4
100.0%
Overseas operations:
Overseas operations:
Public sector ........................................ ¥ 21,320
0.3%
484,892
5.8
Financial institutions ............................
6,026,280
Commerce and industry ......................
85.7
560,823
Others ..................................................
8.2
Subtotal ............................................... ¥ 7,093,316
100.0%
Total ......................................................... ¥56,619,058
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches). Overseas operations comprise the operations of SMBC’s
Public sector ........................................ ¥ 25,567
524,236
Financial institutions ............................
7,708,512
Commerce and industry ......................
Others ..................................................
741,134
Subtotal ............................................... ¥ 8,999,450
Total ......................................................... ¥60,241,266
0.3%
6.8
85.0
7.9
100.0%
—
overseas branches.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
3. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from the fiscal year beginning on April 1, 2009,
the sector classification has been partly changed. “Goods rental and leasing” is included in others in fiscal 2008.
Loans to Individuals/Small and Medium-Sized Enterprises
Millions of yen
March 31
Total domestic loans (A) ..................................................................................
Loans to individuals, and small and medium-sized enterprises (B) ................
(B) / (A) .............................................................................................................
Notes: 1. The figures above exclude the outstanding balance of loans at overseas branches and of Japan offshore banking accounts.
2010
¥49,525,741
34,457,098
69.6%
2009
¥51,241,816
35,667,854
69.6%
2. Small and medium-sized enterprises are individuals or companies with capital stock of ¥300 million or less, or an operating staff of 300 or fewer
employees. (Exceptions to these capital stock and staff restrictions include wholesalers: ¥100 million, 100 employees; retailers: ¥50 million, 50
employees; and service industry companies: ¥50 million, 100 employees.)
SMFG 2010 159
SMBC
Loans (Nonconsolidated)
Consumer Loans Outstanding
March 31
Consumer loans ..............................................................................................
Housing loans ..............................................................................................
Residential purpose .................................................................................
Others ..........................................................................................................
2010
¥15,400,531
14,497,508
11,010,697
903,023
2009
¥15,002,856
14,077,130
10,509,845
925,726
Note: Housing loans include general-purpose loans used for housing purposes as well as housing loans and apartment house acquisition loans.
Millions of yen
Breakdown of Reserve for Possible Loan Losses
Year ended March 31, 2010
General reserve for possible loan losses..................
Specific reserve for possible loan losses .................
For nonresident loans ...........................................
Loan loss reserve for specific overseas countries ...
Total ..........................................................................
Amount of direct reduction .......................................
Balance at beginning
of the fiscal year
¥504,379
[2,270]
284,799
[18]
71,028
[10]
417
¥789,596
[2,288]
¥477,529
[1,954]
Millions of yen
Increase during
the fiscal year
¥497,582
Decrease during the fiscal year
Objectives
Others
¥ —
¥506,310*1, 2
Balance at end
of the fiscal year
¥495,650
267,351
109,562
180,245*1, 2
262,343
35,393
35,048
40,988*1, 2
30,385
184
¥765,118
—
¥109,562
417*1
¥686,973
184
¥758,178
¥478,042
*1 Transfer from reserves by reversal or origination method
*2 “Others” under “Decrease during the fiscal year” include the amount transferred to Sumitomo Mitsui Banking Corporation (China) Limited in connection
with a business transfer. The transferred amount comprises ¥1,931 million for the general reserve for possible loan losses and ¥5,008 million for the specific
reserve for possible loan losses for nonresident loans.
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
Year ended March 31, 2009
General reserve for possible loan losses..................
Specific reserve for possible loan losses .................
For nonresident loans ...........................................
Loan loss reserve for specific overseas countries ...
Total ..........................................................................
Amount of direct reduction .......................................
Balance at beginning
of the fiscal year
¥428,663
[2,256]
188,975
[109]
28,307
[86]
0
¥617,639
[2,365]
¥332,924
[886]
*Transfer from reserves by reversal or origination method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
Millions of yen
Increase during
the fiscal year
¥506,649
Decrease during the fiscal year
Others
Objectives
¥428,663*
¥ —
Balance at end
of the fiscal year
¥506,649
284,818
86,503
102,471*
284,818
71,309
15,005
13,301*
71,039
417
¥791,885
—
¥86,503
0*
¥531,135
417
¥791,885
¥479,484
Write-Off of Loans
Year ended March 31
Write-off of loans .............................................................................................
Note: Write-off of loans include amount of direct reduction.
Millions of yen
2010
¥102,663
2009
¥231,412
Specific Overseas Loans
March 31
Ukraine ............................................................................................................
Iceland .............................................................................................................
Pakistan ...........................................................................................................
Argentina .........................................................................................................
Total .................................................................................................................
Ratio of the total amounts to total assets .......................................................
Number of countries ........................................................................................
2010
¥ 160
1,112
61
4
¥1,339
0.00%
4
Millions of yen
2009
¥3,456
1,160
64
4
¥4,686
0.00%
4
160
SMFG 2010
Loans (Nonconsolidated)
SMBC
Risk-Monitored Loans
March 31
Bankrupt loans ................................................................................................
Non-accrual loans ...........................................................................................
Past due loans (3 months or more) .................................................................
Restructured loans ..........................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
Notes: Definition of risk-monitored loan categories
2010
¥ 112,973
776,364
22,889
155,790
¥1,068,017
¥ 411,715
Millions of yen
2009
¥ 196,062
744,692
32,549
163,753
¥1,137,058
¥ 419,511
1. Bankrupt loans: Credits for which accrued interest is not accounted in revenue; credits extended to borrowers that are undergoing bankruptcy,
corporate reorganization and rehabilitation proceedings or debtors receiving orders of disposition by suspension of business at bill clearinghouses
2. Non-accrual loans: Credits for which accrued interest is not accounted in revenue; credits, excluding loans to bankrupt borrowers and loans with
grace for interest payment to assist in corporate reorganization or to support business
3. Past due loans (3 months or more): Loans with payment of principal or interest in arrears for more than 3 months, calculated from the day following
the contractual due date, excluding borrowers in categories 1. and 2.
4. Restructured loans: Loans to borrowers in severe financial condition given certain favorable terms and conditions to assist in corporate rehabilitation
or to support business, excluding borrowers in categories 1. through 3.
Problem Assets Based on the Financial Reconstruction Law
March 31
Bankrupt and quasi-bankrupt assets ..............................................................
Doubtful assets ...............................................................................................
Substandard loans ..........................................................................................
Total of problem assets ...................................................................................
Normal assets .................................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
Notes: Definition of problem asset categories
2010
¥ 224,335
697,670
178,679
1,100,685
62,116,059
¥63,216,745
¥ 478,042
Millions of yen
2009
¥ 319,627
678,240
196,303
1,194,170
66,028,576
¥67,222,747
¥ 479,484
These assets are disclosed based on the provisions of Article 7 of the Financial Reconstruction Law (Law No. 132 of 1998) and classified into the 4
categories based on financial position and business performance of obligors in accordance with Article 6 of the Law. Assets in question include private
placement bonds, loans and bills discounted, foreign exchanges, accrued interest, and advance payment in “other assets,” customers’ liabilities for
acceptances and guarantees, and securities lent under the loan for consumption or leasing agreements.
Privately-placed bonds guaranteed by SMBC have been recorded with fair value since March 31, 2010, in accordance with the revision of
“Accounting Standard for Financial Instruments.”
1. Bankrupt and quasi-bankrupt assets: Credits to borrowers undergoing bankruptcy, corporate reorganization, and rehabilitation proceedings, as well
as claims of a similar nature
2. Doubtful assets: Credits for which final collection of principal and interest in line with original agreements is highly improbable due to deterioration of
financial position and business performance, but not insolvency of the borrower
3. Substandard loans: Past due loans (3 months or more) and restructured loans, excluding 1. and 2.
4. Normal assets: Credits to borrowers with good business performance and in financial standing without identified problems and not classified into the
3 categories above
Problem Assets Based on the Financial Reconstruction Law, and Risk-Monitored Loans
Category of borrowers under
self-assessment
Problem assets based on the Financial
Reconstruction Law
Risk-monitored loans
Total loans
Other assets
Total loans
Other assets
Bankrupt Borrowers
Effectively Bankrupt Borrowers
Bankrupt and
quasi-bankrupt assets
Potentially Bankrupt Borrowers
Doubtful assets
Borrowers Requiring Caution
Substandard loans
Normal Borrowers
(Normal assets)
A
Bankrupt loans
Non-accrual loans
Past due loans (3 months or more)
Restructured loans
B
C
C
SMFG 2010 161
SMBC
Loans (Nonconsolidated)
Classification under Self-Assessment, Disclosure of Problem Assets, and Write-Offs/Reserves
March 31, 2010
Category of
borrowers under
self-assessment
Bankrupt Borrowers
Effectively Bankrupt
Borrowers
Potentially
Bankrupt
Borrowers
Borrowers
Requiring
Caution
Problem assets based on
the Financial Reconstruction Law
Classification under self-assessment
Classification I Classification II Classification III
Classification IV
(Billions of yen)
Reserve for possible
loan losses
Reserve ratio
Bankrupt and
quasi-bankrupt assets (1)
Portion of claims secured by
collateral or guarantees, etc. (5) Fully reserved
¥224.3
¥206.0
¥18.3
Direct
write-offs
(Note 1)
¥24.4
(Note 2)
100%
(Note 3)
Doubtful assets (2)
Portion of claims secured by
collateral or guarantees, etc. (6)
¥697.7
¥415.7
Necessary
amount
reserved
¥282.0
Substandard loans (3)
¥178.7
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥62,116.0
Portion of substandard loans
secured by collateral or
guarantees, etc. (7)
¥75.9
Claims to borrowers requiring
caution, excluding claims to
substandard borrowers
Claims to normal
borrowers
Total
(4)
¥63,216.7
(A) = (1) + (2) + (3)
¥1,100.7
Loan loss reserve for specific overseas countries
NPL ratio (A) / (4)
1.74%
(Note 6)
Total reserve for possible loan losses
(B) Specific reserve + General reserve
for substandard loans
Portion secured by collateral or
guarantees, etc. (C) = (5) + (6) + (7) ¥697.6
Unsecured portion
(D) = (A) – (C)
Specific
reserve
General
reserve
¥221.6
(Note 2)
78.58%
(Note 3)
General reserve
for substandard
loans ¥53.2
¥512.0
(Note 5)
¥0.1
¥758.1
¥299.2
¥403.1
16.81%
(Note 3)
53.50%
(Note 3)
7.30%
[14.37%]
(Note 4)
0.24%
(Note 4)
Reserve ratio
(B) / (D)
74.22%
(Note 7)
Coverage ratio { (B) + (C) } / (A)
90.56%
Notes: 1. Includes amount of direct reduction totaling ¥478.0 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Law. (Bankrupt/Effectively Bankrupt Borrowers:
¥6.0 billion; Potentially Bankrupt Borrowers: ¥11.6 billion)
3. Reserve ratios for claims on Bankrupt/Effectively Bankrupt Borrowers, Potentially Bankrupt Borrowers, Substandard Borrowers, and Borrowers
Requiring Caution: The proportion of each category’s total unsecured claims covered by reserve for possible loan losses.
4. Reserve ratios for claims on Normal Borrowers and Borrowers Requiring Caution (excluding claims to Substandard Borrowers): The proportion of
each category’s total claims covered by reserve for possible loan losses. The reserve ratio for unsecured claims on Borrowers Requiring Caution
(excluding claims to Substandard Borrowers) is shown in brackets.
5. Includes amount of specific reserve for Borrowers Requiring Caution totaling ¥16.3 billion.
6. Ratio of problem assets to total assets subject to the Financial Reconstruction Law
7. Reserve ratio = (Specific reserve + General reserve for substandard loans) / (Bankrupt and quasi-bankrupt assets + Doubtful assets + Substandard
loans – Portion secured by collateral or guarantees, etc.)
Off-Balancing Problem Assets
Bankrupt and quasi-bankrupt assets ...
Doubtful assets ....................................
Total ......................................................
March 31, 2008
➀
¥117.8
402.0
¥519.8
Fiscal 2008
New occurrences Off-balanced
¥ (63.9)
(382.7)
¥(446.6)
¥265.7
659.0
¥924.7
March 31, 2009
➁
¥319.6
678.3
¥997.9
Fiscal 2009
New occurrences Off-balanced
¥(181.4)
(509.9)
¥(691.3)
¥ 86.1
529.3
¥615.4
March 31, 2010
➂
¥224.3
697.7
¥922.0
Billions of yen
Increase/
Decrease
➂ – ➁
¥(95.3)
Bankrupt and quasi-bankrupt assets ...
19.4
Doubtful assets ....................................
¥(75.9)
Total ......................................................
Notes: 1. The off-balancing (also known as “final disposal”) of problem assets refers to the removal of such assets from the bank’s balance sheet by way of
Increase/
Decrease
➁ – ➀
¥201.8
276.3
¥478.1
sale, direct write-off or other means.
2. The figures shown in the above table under “new occurrences” and “off-balanced” are simple additions of the figures for the first and second halves
of the 2 periods reviewed. Amounts of ¥201.2 billion for fiscal 2008 and ¥179.6 billion in fiscal 2009, recognized as “new occurrences” in the first
halves of the terms, were included in the amounts off-balanced in the respective second halves.
162
SMFG 2010
Securities (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
SMBC
Millions of yen
2010
2009
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Subtotal .......................................................................................................
International operations:
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
¥16,085,664
221,206
3,102,608
3,661,722
316,286
/
/
¥23,387,488
¥ —
—
—
—
5,148,712
3,680,136
1,468,576
¥ 5,148,712
¥28,536,200
¥14,156,993
230,074
3,461,950
2,674,474
299,183
/
/
¥20,822,677
¥ —
—
—
—
7,177,837
5,909,304
1,268,533
¥ 7,177,837
¥28,000,515
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2010
2009
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Subtotal .......................................................................................................
International operations:
¥14,930,938
189,976
3,282,013
2,995,811
352,162
/
/
¥21,750,902
¥10,443,471
291,620
3,417,624
2,787,330
440,638
/
/
¥17,380,685
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly
¥ —
—
—
—
5,079,312
3,781,077
1,298,234
¥ 5,079,312
¥22,459,998
¥ —
—
—
—
4,330,491
2,952,764
1,377,727
¥ 4,330,491
¥26,081,394
current method.
SMFG 2010 163
SMBC
Securities (Nonconsolidated)
Balance of Securities Held, Classified by Maturity
March 31
One year or less
Millions of yen
2010
2009
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
¥ 8,305,240
5,051
244,651
487,627
461,065
—
¥ 2,766,864
6,583
459,270
769,913
747,013
32
One — three years
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Three — five years
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Five — seven years
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Seven — 10 years
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
More than 10 years
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
No designated term
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Total
2,332,761
23,156
909,752
1,869,529
1,821,487
—
3,194,614
145,341
1,188,567
835,749
799,999
—
223,828
46,320
408,874
266,636
245,407
—
1,675,402
1,285
266,342
298,386
298,386
—
353,817
48
84,420
167,416
53,790
113,625
—
—
—
3,661,722
1,539,653
—
1,354,951
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
¥16,085,664
221,206
3,102,608
3,661,722
5,464,999
3,680,136
1,468,576
5,382,532
34,858
827,275
2,929,003
2,874,357
—
3,633,747
120,299
1,180,058
1,277,275
1,249,202
—
361,833
67,956
374,270
345,942
313,155
—
639,034
323
384,222
442,824
418,981
—
1,372,980
52
236,853
443,260
306,593
136,666
—
—
—
2,674,474
1,268,801
—
1,131,834
¥14,156,993
230,074
3,461,950
2,674,474
7,477,021
5,909,304
1,268,533
164
SMFG 2010
Ratios (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Income Ratio
SMBC
Percentage
Year ended March 31
Ordinary profit to total assets ..........................................................................
Ordinary profit to stockholders’ equity ............................................................
Net income to total assets ..............................................................................
Net income to stockholders’ equity ................................................................
Notes: 1. Ordinary profit (net income) to total assets = Ordinary profit (net income) / Average balance of total assets excluding customers’ liabilities for
2009
0.03%
1.06
—
—
12.13
0.30
8.28
2010
0.44%
acceptances and guarantees ✕ 100
2. Ordinary profit (net income) to stockholders’ equity = (Ordinary profit (net income) – Preferred dividends) / {(Stockholders’ equity at the beginning
of the fiscal year – Number of shares of preferred stock outstanding at the beginning of the fiscal year ✕ Issue price) + (Net assets at the end of the
fiscal year – Number of shares of preferred stock outstanding at the end of the fiscal year ✕ Issue price)} divided by 2 ✕ 100
3. Net income to total assets and net income to stockholders’ equity for the year ended March 31, 2009 are not reported due to a net loss.
Yield/Interest Rate
Year ended March 31
Domestic operations:
Percentage
2010
2009
Interest-earning assets (A) ...........................................................................
Interest-bearing liabilities (B) .......................................................................
(A) – (B) ........................................................................................................
International operations:
Interest-earning assets (A) ...........................................................................
Interest-bearing liabilities (B) .......................................................................
(A) – (B) ........................................................................................................
Total:
Interest-earning assets (A) ...........................................................................
Interest-bearing liabilities (B) .......................................................................
(A) – (B) ........................................................................................................
1.43%
1.02
0.41
1.90%
1.54
0.36
1.52%
1.11
0.41
1.71%
1.23
0.48
3.03%
2.99
0.04
2.03%
1.63
0.40
Loan-Deposit Ratio
March 31
Domestic operations:
Millions of yen
2010
2009
Loans and bills discounted (A) ....................................................................
Deposits (B) .................................................................................................
Loan-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
International operations:
Loans and bills discounted (A) ....................................................................
Deposits (B) .................................................................................................
Loan-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
Total:
Loans and bills discounted (A) ....................................................................
Deposits (B) .................................................................................................
Loan-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
Note: Deposits include negotiable certificates of deposit.
¥47,897,818
67,982,357
70.45%
74.16
¥ 8,721,240
9,648,282
90.39%
89.23
¥56,619,058
77,630,639
72.93%
76.17
¥49,843,316
66,601,940
74.83%
78.52
¥10,397,950
10,303,767
100.91%
106.36
¥60,241,266
76,905,708
78.33%
82.26
SMFG 2010 165
SMBC
Ratios (Nonconsolidated)
Securities-Deposit Ratio
March 31
Domestic operations:
Millions of yen
2010
2009
Securities (A) ................................................................................................
Deposits (B) .................................................................................................
Securities-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
International operations:
Securities (A) ................................................................................................
Deposits (B) .................................................................................................
Securities-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
Total:
Securities (A) ................................................................................................
Deposits (B) .................................................................................................
Securities-deposit ratio (%)
(A) / (B) .....................................................................................................
Ratio by average balance for the fiscal year ............................................
Note: Deposits include negotiable certificates of deposit.
¥23,387,488
67,982,357
34.40%
32.36
¥ 5,148,712
9,648,282
53.36%
41.81
¥28,536,200
77,630,639
36.75%
33.62
¥20,822,677
66,601,940
31.26%
28.11
¥ 7,177,837
10,303,767
69.66%
52.98
¥28,000,515
76,905,708
36.40%
31.45
166
SMFG 2010
Capital (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Changes in Number of Shares Issued and Capital Stock
August 9, 2005*1 .......................................
May 17, 2006*2 .........................................
September 6, 2006*3 ................................
September 29, 2006*4 ..............................
October 11, 2006*5 ...................................
October 31, 2006*6 ...................................
September 10, 2009*7 ..............................
September 29, 2009*8 ..............................
November 26, 2009*9 ...............................
February 16, 2010*10 ................................
Number of shares issued
Changes
Balances
— 56,112,948
56,327,142
56,500,912
57,102,669
57,255,850
56,425,850
77,098,364
85,309,933
86,302,386
106,318,401
214,194
173,770
601,757
153,181
(830,000)
20,672,514
8,211,569
992,453
20,016,015
SMBC
Millions of yen
Capital stock
Capital reserve
Changes
Balances
¥ — ¥ 664,986
664,986
664,986
664,986
664,986
664,986
1,092,959
1,262,959
1,286,959
1,770,996
—
—
—
—
—
427,972
170,000
23,999
484,037
Changes
¥(344,900)
—
—
—
—
—
427,972
170,000
23,999
484,037
Balances
¥ 665,033
665,033
665,033
665,033
665,033
665,033
1,093,006
1,263,006
1,287,006
1,771,043
Remarks:
*1 Capital reserve was transferred to other capital surplus pursuant to Article 289-2 of the Commercial Code and Article 18-2 of the Banking Act
*2 Conversion of 35,000 shares of preferred stock (Type 1) and 33,000 shares of preferred stock (Type 2) to 214,194 shares of common stock
*3 Conversion of 67,000 shares of preferred stock (Type 2) to 173,770 shares of common stock
*4 Conversion of 500,000 shares of preferred stock (Type 3) to 601,757 shares of common stock
*5 Conversion of 195,000 shares of preferred stock (Type 3) to 153,181 shares of common stock
*6 Cancellation of 35,000 shares of preferred stock (Type 1), 100,000 shares of preferred stock (Type 2) and 695,000 shares of preferred stock (Type 3)
*7 Allotment to third parties: Common stock: 20,672,514 shares
Issue price: ¥41,405 Capitalization: ¥20,702.5
*8 Allotment to third parties: Common stock: 8,211,569 shares
Issue price: ¥41,405 Capitalization: ¥20,702.5
*9 Allotment to third parties: Common stock: 992,453 shares
*10 Allotment to third parties: Common stock: 20,016,015 shares
Issue price: ¥48,365 Capitalization: ¥24,182.5
Issue price: ¥48,365 Capitalization: ¥24,182.5
Number of Shares Issued
March 31, 2010
Common stock ...................................................................................................................................................
Preferred stock (1st series Type 6) .....................................................................................................................
Total ....................................................................................................................................................................
Number of shares issued
106,248,400
70,001
106,318,401
Note: The shares above are not listed on any stock exchange.
Principal Shareholders
a. Common Stock
March 31, 2010
Sumitomo Mitsui Financial Group, Inc. ..........................................................
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2010
Sumitomo Mitsui Financial Group, Inc. ..........................................................
Number of shares
70,001
Percentage of
shares outstanding
100.00%
Percentage of
shares outstanding
100.00%
SMFG 2010 167
SMBC
Others (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Employees
March 31
Number of employees .....................................................................................
Average age (years–months) ...........................................................................
Average length of employment (years–months) ..............................................
Average annual salary (thousands of yen) .......................................................
Notes: 1. Temporary and part-time staff are excluded from the above calculations but includes overseas local staff. Executive officers who do not concurrently
2009
21,816
35–6
12–5
¥8,258
2010
22,460
33–10
10–6
¥7,336
serve as Directors are excluded from “Number of employees.”
2. “Average annual salary” includes bonus, overtime pay and other fringe benefits.
3. Overseas local staff are excluded from the above calculations other than “Number of employees.”
Number of Offices
March 31
Domestic network:
Main offices and branches ..........................................................................
Subbranches ...............................................................................................
Agency .........................................................................................................
Overseas network:
2010
494
164
1
2009
482
159
1
Branches .....................................................................................................
Subbranches ...............................................................................................
Representative offices .................................................................................
Total .................................................................................................................
Note: “Main offices and branches” includes the International Business Operations Dept. (2010, 2 branches; 2009, 2 branches), specialized deposit account
20
7
16
685
15
6
13
693
branches (2010, 38 branches; 2009, 38 branches) and ATM administration branches (2010, 17 branches; 2009, 17 branches).
Number of Automated Service Centers
March 31
Automated service centers..............................................................................
2010
32,391
2009
30,112
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2010
2009
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
407,093
¥ 653,586,914
Received from various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
300,189
¥ 804,727,712
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
2,679
¥ 6,396,030
Received from various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
Total .................................................................................................................
1,006
¥ 2,722,318
¥1,467,432,974
418,744
¥ 752,361,420
303,475
¥ 842,122,120
3,121
¥ 8,345,032
1,163
¥ 2,933,632
¥1,605,762,205
168
SMFG 2010
Others (Nonconsolidated)
SMBC
Foreign Exchange Transactions
Year ended March 31
Outward exchanges:
Foreign bills sold..........................................................................................
Foreign bills bought .....................................................................................
Incoming exchanges:
Foreign bills payable ....................................................................................
Foreign bills receivable ................................................................................
Total .................................................................................................................
Note: The figures above include foreign exchange transactions by overseas branches.
Millions of U.S. dollars
2010
$1,463,062
992,185
$ 699,127
21,821
$3,176,196
Breakdown of Collateral for Customers’ Liabilities for Acceptances and Guarantees
Millions of yen
March 31
Securities .........................................................................................................
Commercial claims ..........................................................................................
Commercial goods ..........................................................................................
Real estate .......................................................................................................
Others ..............................................................................................................
Subtotal ...........................................................................................................
Guaranteed ......................................................................................................
Unsecured .......................................................................................................
Total .................................................................................................................
2010
¥ 19,578
22,672
—
52,716
5,857
¥ 100,824
459,711
3,065,332
¥3,625,868
2009
$1,285,824
696,353
$ 735,705
30,633
$2,748,515
2009
¥ 7,291
17,762
5,292
53,769
6,945
¥ 91,061
396,284
3,339,348
¥3,826,694
SMFG 2010 169
SMBC
Trust Assets and Liabilities (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Statements of Trust Assets and Liabilities
March 31
Assets:
Loans and bills discounted ..........................................................................
Loans on deeds .......................................................................................
Securities .....................................................................................................
Japanese government bonds ..................................................................
Corporate bonds......................................................................................
Japanese stocks ......................................................................................
Foreign securities.....................................................................................
Other securities ........................................................................................
Securities held in custody accounts ............................................................
Monetary claims ..........................................................................................
Monetary claims for housing loans ..........................................................
Other monetary claims ............................................................................
Tangible fixed assets ...................................................................................
Equipment................................................................................................
Intangible fixed assets .................................................................................
Other intangible fixed assets ...................................................................
Other claims ................................................................................................
Call loans .....................................................................................................
Due from banking account ..........................................................................
Cash and due from banks ...........................................................................
Deposits with banks ................................................................................
Others ..........................................................................................................
Others ......................................................................................................
Total assets ..................................................................................................
Liabilities:
Designated money trusts.............................................................................
Specified money trusts ................................................................................
Money in trusts other than money trusts .....................................................
Security trusts..............................................................................................
Monetary claims trusts ................................................................................
Equipment trusts .........................................................................................
Composite trusts .........................................................................................
Other trusts ..................................................................................................
Total liabilities ..............................................................................................
2010
¥ 221,970
221,970
457,585
293,082
16,067
4,766
143,419
250
3,070
465,734
22,773
442,960
19
19
8
8
2,918
52,302
159,554
40,072
40,072
—
—
¥1,403,236
¥ 537,388
163,750
220,008
3,082
458,273
51
20,681
—
¥1,403,236
Notes: 1. Amounts less than 1 million yen have been omitted.
2. SMBC has no co-operative trusts under any other trust bank’s administration as of the year-end.
3. SMBC does not deal with any trusts with principal indemnification.
4. Excludes trusts whose monetary values are difficult to calculate.
Millions of yen
2009
¥ 222,030
222,030
392,812
222,231
39,629
128
130,522
300
3,096
501,399
73,967
427,431
45
45
33
33
4,329
54,687
60,918
22,179
22,179
1,462
1,462
¥1,262,993
¥ 359,986
161,817
220,287
3,102
437,734
10
78,569
1,485
¥1,262,993
170
SMFG 2010
SMFG
Capital Ratio Information
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
The consolidated capital ratio is calculated using the method stipulated in “Standards for Bank Holding Company to Examine the Adequacy of
Its Capital Based on Assets, Etc. Held by It and Its Subsidiaries Pursuant to Article 52-25 of the Banking Law” (Notification 20 issued by the
Japanese Financial Services Agency in 2006; hereinafter referred to as “the Notification”).
In addition to the method stipulated in the Notification to calculate the consolidated capital ratio (referred to as “First Standard” in the
Notification), SMFG has adopted the advanced internal ratings-based (IRB) approach for calculating credit risk-weighted asset amounts.
Further, SMFG has implemented market risk controls, and, in calculating the amount corresponding to operational risk, the Advanced
Measurement Approach (AMA).
“Capital Ratio Information” was prepared based on the Notification, and the terms and details in the section may differ from the terms and
details in other sections of this report.
■ Scope of Consolidation
1. Consolidated Capital Ratio Calculation
(cid:129) Number of consolidated subsidiaries: 307
Please refer to “Principal Subsidiaries and Affiliates” on page 210 for their names and business outline.
(cid:129) Scope of consolidated subsidiaries for calculation of the consolidated capital ratio is based on the scope of consolidated subsidiaries for
preparing consolidated financial statements.
(cid:129) There are no affiliates to which the proportionate consolidation method is applied.
(cid:129) There are no companies engaged exclusively in ancillary banking business or in developing new businesses as stipulated in Article 52-23
of the Banking Law.
2. Deduction from Capital
(cid:129) Number of nonconsolidated subsidiaries subject to deduction from capital: 218
Principal subsidiaries:
SMLC MAHOGANY CO., LTD. (Office rental, etc.)
SBCS Co., Ltd. (Venture capital and consulting)
(cid:129) Number of financial affiliates subject to deduction from capital: 83
Please refer to “Principal Subsidiaries and Affiliates” on page 210 for their names and business outline.
3. Restrictions on Movement of Funds and Capital within Holding Company Group
There are no special restrictions on movement of funds and capital among SMFG and its group companies.
4. Companies Subject to Deduction from Capital, with Capital below Basel II Required Amount and Total Shortfall Amount
Not applicable.
SMFG 2010 171
SMFG
Capital Ratio Information
■ Capital Structure Information (Consolidated Capital Ratio (First Standard))
Regarding the calculation of the capital ratio, certain procedures were performed by KPMG AZSA & Co. pursuant to “Treatment of Inspection
of the Capital Ratio Calculation Framework Based on Agreed-Upon Procedures” (JICPA Industry Committee Report No. 30). The certain
procedures performed by the external auditor are not part of the audit of consolidated financial statements. The certain procedures performed
on our internal control framework for calculating the capital ratio are based on procedures agreed upon by SMFG and the external auditor and
are not a validation of appropriateness of the capital ratio itself or opinion on the internal controls related to the capital ratio calculation.
March 31
Tier I capital:
Tier II capital:
Deductions*:
Total qualifying capital:
Risk-weighted assets:
Tier I risk-weighted
capital ratio:
Total risk-weighted
capital ratio:
Required capital:
Capital stock ....................................................................................................
Capital surplus .................................................................................................
Retained earnings ............................................................................................
Treasury stock ..................................................................................................
Cash dividends to be paid ...............................................................................
Unrealized losses on other securities ...............................................................
Foreign currency translation adjustments ........................................................
Stock acquisition rights ....................................................................................
Minority interests ..............................................................................................
Goodwill and others .........................................................................................
Gain on sale on securitization transactions......................................................
Amount equivalent to 50% of expected losses in excess of provision ............
Total Tier I capital (A) ........................................................................................
Unrealized gains on other securities after 55% discount.................................
Land revaluation excess after 55% discount ...................................................
General reserve for possible loan losses..........................................................
Subordinated debt ...........................................................................................
Total Tier II capital ............................................................................................
Tier II capital included as qualifying capital (B) ................................................
(C) .....................................................................................................................
(D) = (A) + (B) – (C) ............................................................................................
On-balance sheet items ...................................................................................
Off-balance sheet items ...................................................................................
Market risk items ..............................................................................................
Operational risk ................................................................................................
Total risk-weighted assets (E) ...........................................................................
Millions of yen
2010
¥ 2,337,895
978,897
1,451,945
(124,061)
(80,665)
—
(101,650)
81
2,042,251
(398,709)
(37,453)
(36,249)
6,032,280
254,032
37,033
69,371
2,203,415
2,563,853
2,563,853
467,906
¥ 8,128,228
¥42,684,693
7,833,411
448,397
3,117,968
¥54,084,471
2009
¥ 1,420,877
57,245
1,245,085
(124,024)
(21,059)
(14,649)
(129,068)
66
2,147,100
(186,792)
(42,102)
(17,590)
4,335,085
—
37,211
80,374
2,303,382
2,420,968
2,420,968
708,241
¥ 6,047,812
¥41,703,547
7,693,647
265,723
3,063,589
¥52,726,507
(A) / (E) ✕ 100 ....................................................................................................
11.15%
8.22%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
15.02%
¥ 4,326,757
11.47%
¥ 4,218,120
* “Deductions” refers to deductions stipulated in Article 8-1 of the Notification and includes willful holding of securities issued by other financial institutions and
securities stipulated in Clause 2.
172
SMFG 2010
■ Capital Requirements
March 31
Capital requirements for credit risk:
Capital Ratio Information
SMFG
Billions of yen
2010
2009
Internal ratings-based approach ............................................................................................................
Corporate exposures: ........................................................................................................................
Corporate exposures (excluding specialized lending) ....................................................................
Sovereign exposures ......................................................................................................................
Bank exposures ..............................................................................................................................
Specialized lending .........................................................................................................................
Retail exposures: ................................................................................................................................
Residential mortgage exposures ....................................................................................................
Qualifying revolving retail exposures ..............................................................................................
Other retail exposures .....................................................................................................................
Equity exposures: ...............................................................................................................................
Grandfathered equity exposures ....................................................................................................
PD/LGD approach ..........................................................................................................................
Market-based approach .................................................................................................................
Simple risk weight method..........................................................................................................
Internal models method ..............................................................................................................
Credit risk-weighted assets under Article 145 of the Notification ......................................................
Securitization exposures ....................................................................................................................
Other exposures .................................................................................................................................
Standardized approach ..........................................................................................................................
Total capital requirements for credit risk ................................................................................................
Capital requirements for market risk:
Standardized measurement method ......................................................................................................
Interest rate risk ..................................................................................................................................
Equity position risk .............................................................................................................................
Foreign exchange risk.........................................................................................................................
Commodities risk ................................................................................................................................
Options ...............................................................................................................................................
Internal models method ..........................................................................................................................
Total capital requirements for market risk ..............................................................................................
Capital requirements for operational risk:
¥5,194.2
3,381.4
2,950.7
37.4
139.7
253.6
905.4
434.6
110.9
359.9
336.6
191.6
81.4
63.6
46.6
17.0
183.6
107.7
279.5
570.0
5,764.2
21.1
15.3
1.9
2.6
0.1
1.2
14.7
35.9
¥4,909.4
3,200.6
2,782.6
28.4
161.6
228.1
833.1
345.6
95.0
392.5
287.7
160.8
55.5
71.4
71.1
0.3
180.5
125.7
281.7
656.5
5,565.9
4.2
3.1
0.4
0.7
—
—
17.0
21.3
Advanced measurement approach ........................................................................................................
Basic indicator approach ........................................................................................................................
Total capital requirements for operational risk........................................................................................
Total amount of capital requirements .......................................................................................................
232.2
17.2
249.4
¥6,049.5
223.5
21.6
245.1
¥5,832.3
Notes: 1. Capital requirements for credit risk are capital equivalents to “credit risk-weighted assets ✕ 8%” under the standardized approach and “credit risk-weighted assets ✕ 8% +
expected loss amount” under the IRB approach. Regarding exposures to be deducted from capital, the deduction amount is added to the amount of required capital.
2. Portfolio classification is after CRM.
3. “Securitization exposures” includes such exposures based on the standardized approach.
4. “Other exposures” includes estimated lease residual values, purchased receivables (including exposures to qualified corporate enterprises and others), long settlement
transactions and other assets.
■ Internal Ratings-Based (IRB) Approach
1. Scope
SMFG and the following consolidated subsidiaries have adopted the advanced IRB approach for exposures as of March 31, 2009.
(1) Domestic Operations
Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card Company, Limited and SMBC Guarantee Co., Ltd.
(2) Overseas Operations
Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking Corporation (China) Limited, Sumitomo Mitsui
Banking Corporation of Canada, Banco Sumitomo Mitsui Brasileiro S.A., ZAO Sumitomo Mitsui Rus Bank, PT Bank Sumitomo Mitsui
Indonesia, SMBC Leasing and Finance, Inc., SMBC Capital Markets, Inc., SMBC Capital Markets Limited, SMBC Derivative Products
Limited and SMBC Capital Markets (Asia) Limited
THE MINATO BANK, LTD. and SMBC Finance Service Co., Ltd. have adopted the foundation IRB approach.
Among consolidated subsidiaries that have adopted the standardized approach for exposures as of March 31, 2010, Sumitomo Mitsui
Finance and Leasing Co., Ltd. is scheduled to adopt the foundation IRB approach from March 31, 2012, and Kansai Urban Banking
Corporation from March 31, 2013. Both companies reviewed their schedules for adoption of the approach which was originally planned.
Note: Directly controlled SPCs and limited partnerships for investment of consolidated subsidiaries using the advanced IRB approach have also adopted the advanced IRB
approach. Further, the advanced IRB approach is applied to equity exposures on a group basis, including equity exposures of consolidated subsidiaries applying the
standardized approach.
SMFG 2010 173
SMFG
Capital Ratio Information
2. Exposures by Asset Class
(1) Corporate Exposures
A. Corporate, Sovereign and Bank Exposures
(A) Rating Procedures
(cid:129) “Corporate, sovereign and bank exposures” includes credits to domestic and overseas commercial/industrial (C&I) companies,
individuals for business purposes (domestic only), sovereigns, public sector entities, and financial institutions. Business loans
such as apartment construction loans, and small and medium-sized enterprises (SME) loans with standardized screening process
(hereinafter referred to as “standardized SME loans”) are, in principle, included in “retail exposures.” However, credits of more
than ¥100 million are treated as corporate exposures in accordance with the Notification.
(cid:129) An obligor is assigned an obligor grade by first assigning a financial grade using a financial strength grading model and data
obtained from the obligor’s financial statements. The financial grade is then adjusted taking into account the actual state of the
obligor’s balance sheet and qualitative factors to derive the obligor grade (for details, please refer to “Credit Risk Assessment
and Quantification” on page 37). Different rating series are used for domestic and overseas obligors — J1 ~ J10 for domestic
obligors and G1 ~ G10 for overseas obligors — as shown below due to differences in actual default rate levels and portfolios’ grade
distribution. Different Probability of Default (PD) values are applied also.
(cid:129) In addition to the above basic rating procedure which builds on the financial grade assigned at the beginning, in some cases, the
obligor grade is assigned based on the parent company’s credit quality or credit ratings published by external rating agencies. The
Japanese government, local authorities and other public sector entities with special basis for existence and unconventional financial
statements are assigned obligor grades based on their attributes (for example, “local municipal corporations”), as the data on these
obligors are not suitable for conventional grading models. Further, credits to individuals for business purposes, business loans and
standardized SME loans are assigned obligor grades using grading models developed specifically for these exposures.
(cid:129) PDs used for calculating credit risk-weighted assets are estimated based on the default experience for each grade and taking into
account the possibility of estimation errors. In addition to internal data, external data are used to estimate and validate PDs. The
definition of default is the definition stipulated in the Notification (an event that would lead to an exposure being classified as
“substandard loans,” “doubtful assets” or “bankrupt and quasi-bankrupt assets” occurring to the obligor).
(cid:129) Loss given defaults (LGDs) used in the calculation of credit risk-weighted assets are estimated based on historical loss experience
of credits in default, taking into account the possibility of estimation errors.
Obligor Grade
Domestic
Corporate
J1
J2
J3
J4
Overseas
Corporate
G1
G2
G3
G4
Definition
Very high certainty of debt repayment
High certainty of debt repayment
Satisfactory certainty of debt repayment
Debt repayment is likely but this could change in cases of
significant changes in economic trends or business environment
No problem with debt repayment over the short term, but not
satisfactory over the mid to long term and the situation could
change in cases of significant changes in economic trends or
business environment
Currently no problem with debt repayment, but there are unstable
business and financial factors that could lead to debt repayment
problems
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrower Category
Normal Borrowers
Borrowers Requiring Caution
G5
G6
G7
G7R Of which Substandard Borrowers
G8
G9
G10
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly likely to
go bankrupt
Though not yet legally or formally bankrupt, has serious business
difficulties and rehabilitation is unlikely; thus, effectively bankrupt
Legally or formally bankrupt
Substandard Borrowers
Potentially Bankrupt Borrowers
Effectively Bankrupt Borrowers
Bankrupt Borrowers
J5
J6
J7
J7R
J8
J9
J10
174
SMFG 2010
Capital Ratio Information
SMFG
(B) Portfolio
a. Domestic Corporate, Sovereign and Bank Exposures
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Undrawn
March 31, 2010
amount
J1-J3 ................................... ¥18,017.3 ¥12,663.0 ¥5,354.3 ¥4,012.5
1,064.0
J4-J6 ................................... 15,045.7 11,722.7
16.4
2,146.4
J7 (excluding J7R) ...............
Japanese government and
0.8
local municipal corporations .... 22,671.2 22,406.6
133.0
5,030.6
5,547.9
Others ..................................
1.7
1,379.2
1,429.6
Default (J7R, J8-J10) ...........
Total ..................................... ¥65,112.3 ¥55,348.6 ¥9,763.7 ¥5,228.4
264.6
517.3
50.3
3,322.9
254.2
2,400.6
Weighted
average
CCF
75.00%
75.00
75.00
Weighted
average
LGD
Weighted
average
PD
0.07% 35.32%
1.63
16.54
31.40
30.14
Weighted
average
ELdefault
Weighted
average
risk weight
—% 16.75%
—
58.82
— 134.64
75.00
75.00
100.00
—
0.00
1.34
100.00
—
35.09
38.01
53.74
—
—
—
52.98
—
0.09
56.63
9.54
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Undrawn
March 31, 2009
amount
J1-J3 ................................... ¥22,896.4 ¥16,440.3 ¥ 6,456.0 ¥4,124.9
510.4
J4-J6 ................................... 11,785.4
J7 (excluding J7R) ...............
78.4
2,241.2
Japanese government and
10.6
local municipal corporations .... 20,025.1 19,936.9
136.7
5,348.4
4,767.9
Others ..................................
Default (J7R, J8-J10) ...........
6.2
1,243.6
1,315.4
Total ..................................... ¥63,611.9 ¥53,480.3 ¥10,131.7 ¥4,867.3
Note: “Others” includes exposures guaranteed by credit guarantee corporations, exposures to public sector entities and voluntary organizations, and exposures to obligors
—
0.18
— 63.05
20.64
—
0.00
1.50
100.00
—
75.00
75.00
100.00
—
35.04
38.41
54.85
—
88.2
580.5
71.9
9,153.6
1,938.0
2,631.8
303.3
53.20
—
29.16
30.38
Weighted
average
LGD
Weighted
average
PD
0.09% 34.11%
1.32
11.86
Weighted
average
ELdefault
Weighted
average
risk weight
—% 18.11%
— 50.90
— 126.04
Weighted
average
CCF
75.00%
75.00
75.00
not assigned obligor grades because they have yet to close their books (for example, newly established companies), as well as business loans and standardized SME
loans of more than ¥100 million.
b. Overseas Corporate, Sovereign and Bank Exposures
Billions of yen
Exposure amount
On-balance
sheet assets
Off-balance
sheet assets
Undrawn
amount
Total
March 31, 2010
G1-G3 .................................. ¥17,929.1 ¥11,601.0 ¥6,328.1 ¥2,928.6
168.0
946.2
G4-G6 ..................................
102.6
459.1
G7 (excluding G7R) .............
4.4
152.5
Others ..................................
7.2
212.0
Default (G7R, G8-G10) ........
Total ..................................... ¥19,698.8 ¥12,953.9 ¥6,744.9 ¥3,210.9
768.1
280.3
105.5
199.0
178.1
178.8
47.0
13.0
Billions of yen
Exposure amount
On-balance
sheet assets
Off-balance
sheet assets
Undrawn
amount
Total
March 31, 2009
G1-G3 .................................. ¥22,863.0 ¥14,594.6 ¥8,268.4 ¥3,062.3
145.6
975.9
G4-G6 ..................................
63.1
459.2
G7 (excluding G7R) .............
20.3
107.0
Others ..................................
Default (G7R, G8-G10) ........
1.5
270.7
Total ..................................... ¥24,675.9 ¥16,003.9 ¥8,672.0 ¥3,292.7
207.6
142.3
43.8
9.9
768.3
316.9
63.2
260.8
Weighted
average
CCF
75.00%
75.00
75.00
75.00
100.00
—
Weighted
average
CCF
75.00%
75.00
75.00
75.00
100.00
—
Weighted
average
LGD
Weighted
average
PD
0.18% 29.84%
2.32
24.59
1.55
100.00
—
29.39
29.26
40.66
71.52
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 17.54%
—
73.64
— 158.78
86.53
—
89.89
64.33
—
—
Weighted
average
LGD
Weighted
average
PD
0.14% 30.24%
1.76
19.85
1.09
100.00
—
34.30
32.42
40.16
73.74
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 17.28%
— 81.87
— 170.42
— 86.42
94.41
—
66.19
—
SMFG 2010 175
SMFG
Capital Ratio Information
B. Specialized Lending (SL)
(A) Rating Procedures
(cid:129) “Specialized lending” is sub-classified into “project finance,” “object finance,” “commodity finance,” “income-producing real
estate” (IPRE) and “high-volatility commercial real estate” (HVCRE) in accordance with the Notification. Project finance is
financing of a single project, such as a power plant or transportation infrastructure, and cash flows generated by the project are the
primary source of repayment. Object finance includes aircraft finance and ship finance, and IPRE and HVCRE include real estate
finance (a primary example is non-recourse real estate finance). There were no commodity finance exposures as of March 31, 2010.
(cid:129) Each SL product is classified as either a facility assigned a PD grade and LGD grade or a facility assigned a grade based primarily
on the expected loss ratio, both using grading models and qualitative assessment. The former has the same grading structure as
that of corporate, and the latter has ten grade levels as with obligor grades but the definition of each grade differs from that of the
obligor grade which is focused on PD.
For the credit risk-weighted asset amount for the SL category, the former facility is calculated in a manner similar to corporate
exposures, while the latter facility is calculated by mapping the expected loss-based facility grades to the below five categories
(hereinafter the “slotting criteria”) of the Notification because it does not satisfy the requirements for PD application specified in
the Notification.
(B) Portfolio
a. Slotting Criteria Applicable Portion
(a) Project Finance and Object Finance
March 31
Strong:
Risk
weight
Billions of yen
2010
2009
Project finance
Object finance
Project finance
Object finance
Residual term less than 2.5 years ....................
Residual term 2.5 years or more ......................
50%
70%
Good:
Residual term less than 2.5 years ....................
Residual term 2.5 years or more ......................
Satisfactory ..........................................................
Weak .....................................................................
Default .................................................................. —
Total ......................................................................
70%
90%
115%
250%
¥ 125.6
746.9
23.3
169.9
42.1
61.5
18.0
¥1,187.0
Note: A portion of object finance has been calculated using the PD/LGD approach.
¥ 0.6
41.0
—
4.1
—
—
—
¥45.7
¥ 107.2
771.1
22.5
187.2
23.8
68.0
3.6
¥1,183.3
¥ 8.3
163.1
—
—
—
—
—
¥171.4
(b) HVCRE
March 31
Strong:
Risk
weight
Billions of yen
2010
2009
Residual term less than 2.5 years ....................
Residual term 2.5 years or more ......................
70%
95%
Good:
Residual term less than 2.5 years ....................
Residual term 2.5 years or more ......................
Satisfactory ..........................................................
Weak .....................................................................
Default .................................................................. —
Total ......................................................................
95%
120%
140%
250%
¥ —
—
32.5
10.8
152.9
11.1
6.5
¥213.6
¥ —
—
46.6
79.9
162.0
22.1
3.1
¥313.6
b. PD/LGD Approach Applicable Portion, Other Than Slotting Criteria Applicable Portion
(a) Object Finance
March 31, 2010
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
¥103.0
43.8
10.7
—
5.5
¥163.1
Billions of yen
Exposure amount
On-balance
sheet assets
¥ 97.7
34.4
10.7
—
5.5
¥148.2
Off-balance
sheet assets
¥ 5.3
9.5
0.1
—
0.0
¥14.9
Undrawn
amount
¥ 1.8
10.2
0.1
—
—
¥12.1
176
SMFG 2010
Weighted
average
LGD
Weighted
Weighted
average
average
CCF
PD
0.51% 20.86%
75.00%
2.43
75.00
19.75
75.00
—
—
— 100.00
—
—
12.95
29.84
—
65.16
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 41.74%
—
36.56
— 170.29
—
—
89.94
57.96
—
—
Capital Ratio Information
SMFG
March 31, 2009
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
¥ 49.4
30.5
9.2
10.8
3.1
¥103.0
Billions of yen
Exposure amount
On-balance
sheet assets
¥42.2
22.5
9.2
10.7
3.0
¥87.6
Off-balance
sheet assets
¥ 7.2
8.1
0.1
0.0
0.1
¥15.4
Undrawn
amount
¥ 9.5
10.0
0.1
0.0
—
¥19.7
(b) IPRE
Billions of yen
Weighted
average
LGD
Weighted
average
CCF
75.00%
75.00
75.00
75.00
Weighted
average
PD
0.78% 19.17%
1.20
20.08
4.94
— 100.00
—
—
20.39
37.66
19.72
71.45
—
Total
Exposure amount
On-balance
March 31, 2010
sheet assets
J1-J3 ................................... ¥ 447.4 ¥ 433.2
879.1
J4-J6 ...................................
42.0
J7 (excluding J7R) ...............
65.5
Others ..................................
9.6
Default (J7R, J8-J10) ...........
Total ..................................... ¥1,594.2 ¥1,429.4
1,024.4
45.5
67.3
9.6
Off-balance
sheet assets
¥ 14.2
145.3
3.5
1.8
—
¥164.8
Billions of yen
Total
Exposure amount
On-balance
March 31, 2009
sheet assets
J1-J3 ................................... ¥ 925.9 ¥ 820.5
480.1
J4-J6 ...................................
59.5
J7 (excluding J7R) ...............
66.3
Others ..................................
Default (J7R, J8-J10) ...........
—
Total ..................................... ¥1,577.4 ¥1,426.3
523.6
59.6
68.3
—
Off-balance
sheet assets
¥105.4
43.5
0.2
2.0
—
¥151.1
Undrawn
amount
¥ —
4.2
—
2.5
—
¥6.7
Undrawn
amount
¥—
4.2
—
2.7
—
¥6.9
Weighted
average
CCF
—%
Weighted
average
LGD
Weighted
average
PD
0.05% 34.47%
2.26
14.11
8.74
— 100.00
—
—
33.31
34.14
35.23
50.48
—
75.00
—
75.00
Weighted
average
CCF
—%
75.00
—
75.00
—
—
Weighted
average
LGD
Weighted
average
PD
0.10% 36.48%
1.55
13.43
4.23
—
—
32.00
35.10
37.84
—
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 44.23%
— 51.90
— 209.69
— 67.76
94.41
—
63.89
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 12.15%
—
83.85
— 167.65
72.00
—
10.92
49.60
—
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 19.72%
— 72.26
— 158.37
— 116.66
—
—
—
—
(2) Retail Exposures
A. Residential Mortgage Exposures
(A) Rating Procedures
(cid:129) “Residential mortgage exposures” includes mortgage loans to individuals and some real estate loans in which the property consists
of both residential and commercial facilities such as a store or rental apartment units, but excludes apartment construction loans.
(cid:129) Mortgage loans are rated as follows.
Mortgage loans are allocated to a portfolio segment with similar risk characteristics in terms of (a) default risk determined using
loan contract information, results of an exclusive grading model and a borrower category under self-assessment executed in
accordance with the financial inspection manual of the Japanese FSA, and (b) recovery risk at the time of default determined using
Loan To Value (LTV) calculated based on the assessment value of collateral real estate. PDs and LGDs are estimated based on the
default experience for each segment and taking into account the possibility of estimation errors.
Further, the portfolio is subdivided based on the lapse of years from the contract date, and the effectiveness of segmentation in
terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2010
Mortgage loans
PD segment:
Not delinquent
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
Use model ......................... ¥10,633.8
769.8
Others ...............................
106.3
Delinquent .............................
163.2
Default ..........................................
Total .............................................. ¥11,673.1
¥10,565.2
769.8
99.9
162.7
¥11,597.6
¥68.6
—
6.4
0.5
¥75.6
0.37%
0.83
31.53
100.00
—
44.59%
60.25
48.55
45.69
—
—%
—
—
43.23
—
27.60%
73.02
276.96
30.69
—
SMFG 2010 177
SMFG
Capital Ratio Information
March 31, 2009
Mortgage loans
PD segment:
Not delinquent
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
Use model ......................... ¥ 9,551.6
840.5
Others ...............................
63.0
Delinquent .............................
Default ..........................................
121.1
Total .............................................. ¥10,576.1
¥ 9,471.1
840.5
56.8
120.5
¥10,488.9
¥80.5
—
6.1
0.6
¥87.2
0.38%
0.83
35.47
100.00
—
38.94%
56.72
42.47
48.48
—
—%
—
—
45.46
—
24.30%
68.49
242.06
37.79
—
Notes: 1. “Others” includes loans guaranteed by employers.
2. “Delinquent” loans are past due loans and loans to obligors categorized as “Borrowers Requiring Caution” that do not satisfy the definition of default stipulated
in the Notification.
B. Qualifying Revolving Retail Exposures (QRRE)
(A) Rating Procedures
(cid:129) “Qualifying revolving retail exposures” includes card loans and credit card balances.
(cid:129) Card loans and credit card balances are rated as follows.
Card loans and credit card balances are allocated to a portfolio segment with similar risk characteristics determined based, for card
loans, on the credit quality of the loan guarantee company, credit limit, settlement account balance and payment history, and, for
credit card balances, on repayment history and frequency of use.
PDs and LGDs used to calculate credit risk-weighted asset amounts are estimated based on the default experience for each
segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2010
Card loans
PD segment:
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Balance
Increase
Off-balance
sheet
assets
Undrawn
amount
Weighted
average
CCF
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
Not delinquent ........ ¥ 568.2 ¥ 509.0
12.4
Delinquent ...............
12.8
¥ 59.2
0.4
¥ — ¥ 180.4
3.3
—
Credit card balances
PD segment:
32.84% 2.12% 85.76%
12.05
22.22
76.31
—% 54.67%
— 206.05
669.3
Not delinquent ........ 1,010.7
6.6
7.8
Delinquent ...............
26.9
30.6
Default ............................
Total ................................ ¥1,630.3 ¥1,224.1
341.5
1.2
3.8
¥406.1
—
—
—
4,127.7
—
—
¥ — ¥4,311.5
8.27
1.42
—
85.68
— 100.00
—
—
77.93
80.67
86.86
—
—
—
80.65
—
29.52
89.76
77.68
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Balance
Increase
Off-balance
sheet
assets
Undrawn
amount
Weighted
average
CCF
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
March 31, 2009
Card loans
PD segment:
Not delinquent ........ ¥ 542.1 ¥ 477.7
12.4
Delinquent ...............
12.8
¥ 64.4
0.4
¥— ¥ 167.8
3.5
—
38.37% 1.86% 85.89% —% 49.01%
76.35
11.56
— 206.51
22.19
Credit card balances
PD segment:
648.7
Not delinquent ........
6.7
Delinquent ...............
Default ............................
21.0
Total ................................ ¥1,566.1 ¥1,166.3
979.3
7.9
24.0
330.7
1.2
3.1
¥399.7
— 4,008.1
—
—
8.25
1.15
— — 80.05
— — 100.00
—
¥— ¥4,179.4 —
79.86
82.99
89.29
—
— 26.88
— 121.48
86.10
—
82.40
—
Notes: 1. The on-balance sheet exposure amount is estimated by estimating the amount of increase in each transaction balance and not by multiplying the undrawn
amount by the CCF.
2. “Weighted average CCF” is the “On-balance sheet exposure amount ÷ Undrawn amount” and provided for reference only. It is not used for estimating
on-balance sheet exposure amounts.
3. Past due loans of less than three months are recorded in “Delinquent.”
178
SMFG 2010
Capital Ratio Information
SMFG
C. Other Retail Exposures
(A) Rating Procedures
(cid:129) “Other retail exposures” includes business loans such as apartment construction loans, standardized SME loans, and consumer
loans such as My Car Loan.
(cid:129) Business loans, standardized SME loans and consumer loans are rated as follows.
a. Business loans and standardized SME loans are allocated to a portfolio segment with similar risk characteristics in terms of
(a) default risk determined using loan contract information, results of exclusive grading model and borrower category under
self-assessment executed in accordance with the financial inspection manual of the Japanese FSA, and (b) recovery risk
determined based on, for standardized SME loans, obligor attributes and, for business loans, LTV. PDs and LGDs are estimated
based on the default experience for each segment and taking into account the possibility of estimation errors.
b. Rating procedures for consumer loans depends on whether the loan is collateralized. Collateralized consumer loans are allocated
to a portfolio segment using the same standards as for mortgage loans of “A. Residential Mortgage Exposures.” Uncollateralized
consumer loans are allocated to a portfolio segment based on account history. PDs and LGDs are estimated based on the default
experience for each segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2010
Business loans
PD segment:
Not delinquent
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
Use model .........................
Others ...............................
Delinquent .............................
¥1,101.4
360.3
456.4
¥1,088.4
359.2
453.2
¥ 13.0
1.1
3.2
0.92%
0.61
33.13
53.50%
57.28
63.32
—%
—
—
48.62%
26.55
88.08
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
497.7
193.4
51.2
140.9
¥2,801.3
246.4
191.6
51.0
140.8
¥2,530.5
251.3
1.8
0.2
0.2
¥270.8
1.16
1.76
22.36
100.00
—
67.20
62.66
54.27
66.53
—
—
—
—
62.29
—
69.20
77.85
124.64
53.05
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
ELdefault
Weighted
average
risk weight
March 31, 2009
Business loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
¥1,339.0
381.3
551.8
¥1,322.3
380.6
548.5
¥ 16.7
0.8
3.3
1.01%
0.67
25.13
59.94%
61.95
67.72
—%
—
—
56.15%
28.28
98.83
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
342.3
214.9
47.8
153.4
¥3,030.6
260.4
213.0
47.7
151.8
¥2,924.2
81.9
1.9
0.2
1.6
¥106.4
1.33
1.80
24.60
100.00
—
52.18
62.13
46.49
72.99
—
—
—
—
67.26
—
55.55
77.49
111.02
71.59
—
Notes: 1. “Business loans” includes apartment construction loans and standardized SME loans.
2. “Others” includes loans guaranteed by employers.
3. “Delinquent” loans are past due loans and loans to obligors categorized as “Borrowers Requiring Caution” that do not satisfy the definition of default stipulated
in the Notification.
SMFG 2010 179
SMFG
Capital Ratio Information
(3) Equity Exposures and Credit Risk-Weighted Assets under Article 145 of the Notification
A. Equity Exposures
(A) Rating Procedures
When acquiring equities subject to the PD/LGD approach, issuers are assigned obligor grades using the same rules as those of
general credits to C&I companies, sovereigns and financial institutions. The obligors are monitored (for details, please refer to page
39) and their grades are revised if necessary (credit risk-weighted asset amount is set to 1.5 times when they are not monitored
individually). In the case there is no credit transaction with the issuer or it is difficult to obtain financial information, internal
grades are assigned using ratings of external rating agencies if it is a qualifying investment. In the case it is difficult to obtain
financial information and it is not a qualifying investment, the simple risk weight method under the market-based approach is
applied.
(B) Portfolio
a. Equity Exposure Amounts
March 31
Market-based approach ............................................................................................................
Simple risk weight method ....................................................................................................
Listed equities (300%) .......................................................................................................
Unlisted equities (400%) ....................................................................................................
Internal models method .........................................................................................................
PD/LGD approach .....................................................................................................................
Grandfathered equity exposures ...............................................................................................
Total ...........................................................................................................................................
2010
¥ 234.2
149.5
48.0
101.5
84.7
724.6
2,259.6
¥3,218.4
2009
¥ 221.0
219.7
40.6
179.1
1.3
533.3
1,895.6
¥2,650.0
Notes: 1. The above exposures are “equity exposures” stipulated in the Notification and differ from “stocks” described in the consolidated financial statements.
2. “Grandfathered equity exposures” amount was calculated in accordance with Supplementary Provision 13 of the Notification.
Billions of yen
b. PD/LGD Approach
March 31
J1-J3 .......................................................
J4-J6 .......................................................
J7 (excluding J7R) ...................................
Others ......................................................
Default (J7R, J8-J10) ...............................
Total .........................................................
Exposure
amount
¥514.7
79.1
1.6
128.7
0.5
¥724.6
Billions of yen
2010
Weighted
average
PD
0.05%
1.51
12.54
0.40
100.00
—
Weighted
average
risk weight
110.62%
250.79
444.29
121.35
—
—
2009
Weighted
average
PD
0.07%
0.66
10.14
0.17
100.00
—
Weighted
average
risk weight
114.28%
209.86
442.73
106.93
—
—
Exposure
amount
¥472.4
16.1
6.3
38.4
0.0
¥533.3
Notes: 1. The above exposures are “equity exposures” stipulated in the Notification to which the PD/LGD approach is applied and differ from “stocks” described in the
consolidated financial statements.
2. “Others” includes exposures to overseas corporate entities.
B. Credit Risk-Weighted Assets under Article 145 of the Notification
(A) Outline of method for calculating credit risk assets
Exposures under Article 145 of the Notification include credits to funds. In the case of such exposures, in principle, each underlying
asset of the fund is assigned an obligor grade to calculate the asset’s credit risk-weighted asset amount and the amounts are totaled
to derive the credit risk-weighted asset amount of the fund. When equity exposures account for more than half of the underlying
assets of the fund, or it is difficult to directly calculate the credit risk-weighted asset amount of individual underlying assets,
the credit risk-weighted asset amount of the fund is calculated using the simple majority adjustment method, in which credit
risk-weighted assets are calculated using a risk weight of 400% (when the risk-weighted average of individual assets underlying the
portfolio is less than 400%) or a risk weight of 1250% (in other cases).
(B) Portfolio
March 31
Exposures under Article 145 of the Notification ........................................................................
2010
¥667.8
2009
¥743.6
Billions of yen
180
SMFG 2010
Capital Ratio Information
SMFG
(4) Analysis of Actual Losses
A. Year-on-Year Comparison of Actual Losses
SMFG recorded total credit costs (the total of the general provisions, non-performing loan write-offs, and gains on collection of
written-off claims) of ¥473.0 billion on a consolidated basis for fiscal 2009, a year-on-year decrease of ¥294.8 billion.
SMBC recorded ¥254.7 billion in total credit costs on a nonconsolidated basis in fiscal 2009, a year-on-year decrease of ¥295.4
billion. In terms of exposure category, the credit cost for corporate exposures decreased ¥194.8 billion year-on-year, to ¥216.6 billion.
The credit cost for bank exposures decreased ¥19.1 billion year-on-year, to ¥3.5 billion. These results are due primarily to the impact
of the government’s economic stimulus measures; SMBC’s measures to improve the business and financial situation of borrowers
that are tailored to each borrower’s circumstances; and a reduction in credit cost related to non-Japanese corporates due to improved
overseas market conditions.
Total Credit Costs
Billions of yen
Fiscal 2009 (A)
Fiscal 2008 (B)
Fiscal 2007
SMFG (consolidated) total .....................................................
SMBC (consolidated) total ....................................................
SMBC (nonconsolidated) total ..............................................
Corporate exposures .........................................................
Sovereign exposures .........................................................
Bank exposures .................................................................
Residential mortgage exposures .......................................
QRRE .................................................................................
Other retail exposures .......................................................
¥473.0
419.4
254.7
216.6
3.9
3.5
0.7
0.1
61.6
¥767.8
724.4
550.1
411.4
(0.4)
22.7
0.5
0.0
68.1
¥248.6
221.6
147.8
143.2
0.4
0.0
0.1
0.0
59.8
Increase
(decrease)
(A) – (B)
¥(294.8)
(305.0)
(295.4)
(194.8)
4.3
(19.1)
0.1
0.0
(6.5)
Notes: 1. The above amounts do not include gains/losses on equity exposures, exposures on capital market-driven transactions (such as bonds) and exposures under Article 145
of the Notification that were recognized as gains/losses on bonds and stocks in the statements of operations.
2. Exposure category amounts do not include general provisions for Normal Borrowers.
3. Bracketed fiscal year amounts indicate gains generated by the reversal of provisions, etc.
4. Credit costs for residential mortgage exposures and QRRE guaranteed by consolidated subsidiaries are not included in the total credit costs of SMBC
(nonconsolidated).
B. Comparison of Estimated and Actual Losses
Fiscal 2009
Billions of yen
Fiscal 2008
Fiscal 2007
Estimated loss amounts
Estimated loss amounts
Estimated loss amounts
After
deduction
of reserves
Actual
loss
amounts
SMFG (consolidated) total ................ ¥ — ¥ — ¥473.0
419.4
—
SMBC (consolidated) total ................
254.7
SMBC (nonconsolidated) total .......... 1,197.2
216.6
984.0
3.9
5.8
3.5
52.1
0.7
4.0
0.1
0.1
61.6
151.2
Corporate exposures ...................
Sovereign exposures ...................
Bank exposures ..........................
Residential mortgage exposures ...
QRRE .........................................
Other retail exposures ..................
—
354.0
210.0
4.3
34.4
3.4
0.1
107.5
Actual
After
loss
deduction
amounts
of reserves
¥ — ¥ — ¥767.8
— 724.4
550.1
411.4
(0.4)
22.7
0.5
0.0
68.1
—
954.2
806.7
9.0
6.1
4.0
0.1
128.3
323.9
278.6
7.5
5.9
3.6
0.1
65.9
Actual
After
loss
deduction
amounts
of reserves
¥ — ¥ — ¥248.6
— 221.6
147.8
143.2
0.4
0.0
0.1
0.0
59.8
—
887.7
778.6
11.2
5.1
4.6
0.1
88.2
311.4
252.6
9.6
4.9
4.1
0.1
53.1
Notes: 1. Amounts on consumer loans guaranteed by consolidated subsidiaries or affiliates as well as on equity exposures and other exposures under Article 145 of the
Notification are excluded.
2. “Estimated loss amounts” are the EL at the beginning of the term.
3. “After deduction of reserves” represents the estimated loss amounts after deduction of reserves for possible losses on substandard loans or below.
■ Standardized Approach
1. Scope
The following consolidated subsidiaries have adopted the standardized approach for exposures as of March 31, 2010 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 173).
(1) Consolidated subsidiaries planning to adopt phased rollout of the foundation IRB approach
Sumitomo Mitsui Finance and Leasing Co., Ltd. and Kansai Urban Banking Corporation
(2) Other consolidated subsidiaries
These are consolidated subsidiaries judged not to be significant in terms of credit risk management based on the type of business, scale,
and other factors. These subsidiaries will adopt the standardized approach on a permanent basis.
SMFG 2010 181
SMFG
Capital Ratio Information
2. Credit Risk-Weighted Asset Calculation Methodology
A 100% risk weight is applied to claims on corporates in accordance with Article 45 of the Notification, and risk weights corresponding to
country risk scores published by the Organization for Economic Co-operation and Development (OECD) are applied to claims on sovereigns
and financial institutions.
3. Exposure Balance by Risk Weight Segment
March 31
0% ............................................................................................
10% ..........................................................................................
20% ..........................................................................................
35% ..........................................................................................
50% ..........................................................................................
75% ..........................................................................................
100% ........................................................................................
150% ........................................................................................
Capital deduction .....................................................................
Others .......................................................................................
Total ..........................................................................................
¥ 6,454.8
277.8
801.0
1,126.2
210.7
1,352.8
5,567.0
41.1
0.0
0.0
¥15,831.4
Billions of yen
2010
2009
Of which assigned
country risk score
¥ 89.9
—
343.4
—
1.2
—
0.1
—
—
—
¥434.5
¥ 1,681.0
579.8
686.5
1,410.7
188.6
1,670.4
6,247.0
43.5
—
—
¥12,507.4
Of which assigned
country risk score
¥143.0
—
290.0
—
1.1
—
0.1
—
—
—
¥434.1
Notes: 1. The above amounts are exposures after CRM (but before deduction of direct write-offs). Please note that for off-balance sheet assets the amount of exposure has been
included.
2. Securitization exposures have not been included.
■ Credit Risk Mitigation Techniques
1. Risk Management Policy and Procedures
In calculating credit risk-weighted asset amounts, SMFG takes into account credit risk mitigation (CRM) techniques. Specifically, amounts
are adjusted for eligible financial or real estate collateral, guarantees, and credit derivatives or by netting loans against the obligors’ deposits
with SMFG financial institutions. The methods and scope of these adjustments and methods of management are as follows.
(1) Scope and Management
A. Collateral (Eligible Financial or Real Estate Collateral)
SMBC designates deposits and securities as eligible financial collateral, and land and buildings as eligible real estate collateral.
Real estate collateral is evaluated by taking into account its fair value, appraisal value, and current condition, as well as our lien
position. Real estate collateral must maintain sufficient collateral value in the event security rights must be exercised due to delinquency.
However, during the period from acquiring the rights to exercising the rights, the property may deteriorate or suffer damage from
earthquakes or other natural disasters, or there may be changes in the lien position due to, for example, attachment or establishment of
liens by a third party. Therefore, the regular monitoring of collateral is implemented according to the type of property and the type of
security interest.
B. Guarantees and Credit Derivatives
Guarantors are sovereigns, municipal corporations, credit guarantee corporations and other public entities, financial institutions, and
C&I companies. Counterparties to credit derivative transactions are mostly domestic and overseas banks and securities companies.
Credit risk-weighted asset amounts are calculated taking into account credit risk mitigation of guarantees and credit derivatives
acquired from entities with sufficient ability to provide protection such as sovereigns, municipal corporations and other public sector
entities of comparable credit quality, and financial institutions and C&I companies with sufficient credit ratings.
C. Netting of Loans against Deposits
SMBC verifies the legal effectiveness of netting arrangements for loans and deposits for each transaction. Specifically, lending
transactions subject to the netting of loans against deposits are stipulated in the “Agreement on Bank Transactions,” and fixed-term
deposits that have fixed maturity dates and cannot be transferred to third-party entities are subject to netting. Regarding deposits with
us submitted as collateral, their effect as credit risk mitigation is taken into account under the eligible financial collateral framework
described in A. above.
Further, maturity dates and balances (including the post-netting situation) are monitored for subject loans and deposits in
accordance with the Notification. When there is a maturity/currency mismatch, netting is executed after making adjustments as
stipulated in the Notification, and the credit risk-weighted asset amount is calculated after netting.
182
SMFG 2010
Capital Ratio Information
SMFG
(2) Concentration of Credit Risk and Market Risk Accompanying Application of Credit Risk Mitigation Techniques
At SMBC, there is a framework in place for controlling concentration of risk in obligors with large exposures which includes credit limit
guidelines, risk concentration monitoring, and reporting to the Credit Risk Committee (please refer to page 36). Further, exposures to
these obligors are monitored on a group basis, taking into account risk concentration in their parent companies in cases of guaranteed
exposures.
When marketable financial products (for example, credit derivatives) are used as credit risk mitigants, market risk generated by these
products is controlled by setting upper limits.
2. Exposure Balance after CRM
March 31
Advanced IRB approach ..........................................................
Foundation IRB approach ........................................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Standardized approach ............................................................
Total ..........................................................................................
Billions of yen
2010
2009
Eligible financial
collateral
¥ —
85.7
85.7
—
—
1,833.1
¥1,918.7
Other eligible
IRB collateral
¥ —
59.3
59.3
—
—
—
¥59.3
Eligible financial
collateral
¥ —
0.0
0.0
—
—
184.9
¥184.9
Other eligible
IRB collateral
¥ —
84.5
84.5
—
—
—
¥84.5
Billions of yen
2010
2009
March 31
IRB approach ...........................................................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Residential mortgage exposures ..........................................
QRRE ....................................................................................
Other retail exposures ..........................................................
Standardized approach ............................................................
Total ..........................................................................................
Guarantee
¥7,143.3
6,345.8
412.2
182.6
202.5
—
0.1
62.0
¥7,205.3
Credit derivative
¥258.5
258.5
—
—
—
—
—
—
¥258.5
Guarantee
¥7,846.1
7,157.5
249.4
215.5
223.6
—
0.1
290.6
¥8,136.7
Credit derivative
¥281.0
281.0
—
—
—
—
—
—
¥281.0
■ Derivative Transactions and Long Settlement Transactions
1. Risk Management Policy and Procedures
(1) Policy on Collateral Security and Impact of Deterioration of Our Credit Quality
Collateralized derivative is a CRM technique in which collateral is delivered or received regularly in accordance with replacement cost.
The Group conducts collateralized derivative transactions as necessary, thereby reducing credit risk. In the event our credit quality
deteriorates, however, the counterparty may demand additional collateral, but its impact is deemed to be insignificant.
(2) Netting
Netting is another CRM technique, and “close-out netting” is the main type of netting. In close-out netting, when a default event, such
as bankruptcy, occurs to the counterparty, all claims against, and obligations to, the counterparty, regardless of maturity and currency,
are netted out to create a single claim or obligation.
Close-out netting is applied to foreign exchange and swap transactions covered under a master agreement with a net-out clause or
other means of securing legal effectiveness, and the effect of CRM is taken into account only for such claims and obligations.
2. Credit Equivalent Amounts
(1) Derivative Transactions and Long Settlement Transactions
A. Calculation Method
Current exposure method
SMFG 2010 183
SMFG
Capital Ratio Information
B. Credit Equivalent Amounts
March 31
Gross replacement cost ................................................................................................................
Gross add-on amount ...................................................................................................................
Gross credit equivalent amount ....................................................................................................
Foreign exchange related transactions .....................................................................................
Interest rate related transactions ...............................................................................................
Gold related transactions ..........................................................................................................
Equities related transactions .....................................................................................................
Precious metals (excluding gold) related transactions ..............................................................
Other commodity related transactions ......................................................................................
Credit default swaps ..................................................................................................................
Reduction in credit equivalent amount due to netting ..................................................................
Net credit equivalent amount ........................................................................................................
Collateral amount ..........................................................................................................................
Qualifying financial collateral .....................................................................................................
Qualifying other collateral ..........................................................................................................
Net credit equivalent amount
(after taking into account CRM effect of collateral) .....................................................................
Billions of yen
2010
¥4,999.8
3,380.6
8,380.4
3,211.0
4,777.2
—
69.6
—
167.7
154.9
4,574.6
3,805.8
20.2
20.2
—
2009
¥5,963.9
3,638.4
9,602.3
3,912.9
5,290.4
—
1.7
—
206.7
190.7
5,087.1
4,515.2
—
—
—
¥3,785.6
¥4,515.2
(2) Notional Principal Amounts of Credit Derivatives
Credit Default Swaps
Billions of yen
2010
Notional principal amount
2009
Notional principal amount
March 31
Protection purchased .........................................................
Protection provided ............................................................
Total
¥ 841.6
1,147.2
Of which
for CRM
¥258.5
—
Total
¥ 846.8
1,107.5
Of which
for CRM
¥281.0
—
Note: “Notional principal amount” is defined as the total of “amounts subject to calculation of credit equivalents” and “amounts employed for CRM.”
■ Securitization Exposures
1. Risk Management Policy and Procedures
Definition of securitization exposure has been clarified in order to properly identify, measure, evaluate and report risks, and a risk management
department, independent of business units, has been established to centrally manage risks from recognizing securitization exposures to
measuring, evaluating and reporting credit risk-weighted assets.
The Group takes one of the following positions in securitization transactions.
(cid:129) Originator (a direct or indirect originator of underlying assets or a sponsor of an ABCP conduit or a similar program that acquires
exposures from third-party entities)
(cid:129) Investor
(cid:129) Others (for example, provider of swap for preventing a mismatch between the dividend on trust beneficiary rights and cash flows
generated by underlying assets on which the rights are issued)
2. Credit Risk-Weighted Asset Calculation Methodology
There are three methods of calculating the credit risk-weighted asset amount of securitization exposures subject to the IRB approach:
the ratings-based approach, the supervisory formula, and the internal assessment approach. The methods are used as follows.
(cid:129) First, securitization exposures are examined and the ratings-based approach is applied to qualifying exposures.
(cid:129) The remaining exposures are examined and the supervisory formula is applied to qualifying exposures.
(cid:129) The remaining exposures are deducted from capital.
The credit risk-weighted asset amount for securitization exposures subject to the standardized approach is calculated mostly using ratings
published by qualifying rating agencies or based on weighted average risk weights of underlying assets as stipulated in the Notification.
3. Accounting Policy on Securitization Transactions
Accounting treatment of securitization of financial assets is as follows. Extinguishment of financial assets is recognized when the contractual
rights over the financial assets are exercised, forfeited or control over the rights is transferred to a third-party, and the difference between the
book value of the financial assets and the amount received/paid is recorded as the term’s gain/loss. When the control over the contractual
rights is not deemed to have been transferred, the securitization transaction is treated as a financial transaction such as a mortgage loan.
When a portion of financial assets satisfies the extinguishment condition, the extinguishment of the said portion is recognized and the
difference between the book value of the extinguished portion and the amount received/paid is recorded as the term’s gain/loss. The book
184
SMFG 2010
Capital Ratio Information
SMFG
value of the extinguished portion is calculated by allocating the book value of the financial assets based on the proportion of the financial
assets’ fair value that the extinguished portion represents.
Further, the remaining portion whose fair value is available is measured at fair value, and the related valuation differences are reported as
a component of “net assets.” The impairments are measured and recorded as necessary.
4. Qualifying External Ratings Agencies
When computing credit risk-weighted asset amounts for securitization exposures using the rating-based approach under the IRB approach
or standardized approach, the risk weights are determined by mapping the ratings of qualifying rating agencies to the risk weights
stipulated in the Notification. The qualifying rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Ratings Services (S&P), and Fitch Ratings Ltd. (Fitch).
When more than one rating is available for an exposure, the second smallest risk weight is used, in accordance with the Notification.
5. Portfolio
(1) Securitization Transactions as Originator
A. As Originator (excluding as Sponsor)
(A) Underlying Assets
March 31, 2010
Underlying asset amount
Asset
transfer type
¥ 96.6
1,609.6
Synthetic
type
¥ 0.1
—
Total
¥ 96.6
1,609.6
68.4
244.0
¥2,018.7
0.2
54.4
¥1,760.8
68.2
189.7
¥258.0
March 31, 2009
Underlying asset amount
Asset
transfer type
¥ 151.7
1,712.1
Synthetic
type
¥ —
—
Total
¥ 151.7
1,712.1
201.7
284.5
¥2,350.0
80.1
87.2
¥2,031.0
121.7
197.3
¥318.9
Billions of yen
Fiscal 2009
Securitized
amount
¥ —
43.0
—
—
¥43.0
Default
amount
¥ 7.6
1.9
14.1
0.1
¥23.7
Loss
amount
¥ 2.6
0.4
17.8
0.4
¥21.2
Gains/losses
on sales
¥ —
2.5
—
—
¥2.5
Billions of yen
Fiscal 2008
Securitized
amount
¥348.9
91.4
2.4
113.1
¥555.8
Default
amount
¥10.7
1.0
19.6
0.1
¥31.5
Loss
amount
¥ 1.4
0.3
14.5
1.1
¥17.2
Gains/losses
on sales
¥—
5.6
—
0.0
¥5.6
Claims on corporates ................
Mortgage loans .........................
Retail loans
(excluding mortgage loans) .....
Other claims ..............................
Total ...........................................
Claims on corporates ................
Mortgage loans .........................
Retail loans
(excluding mortgage loans) .....
Other claims ..............................
Total ...........................................
Notes: 1. The above amounts include the amount of underlying assets securitized during the term without entailing securitization exposure.
2. “Default amount” is the total of underlying assets which are past due three months or more and defaulted underlying assets.
3. “Other claims” includes claims on Private Finance Initiative (PFI) businesses and lease fees.
4. Following Articles 230 and 248 of the Notification, there were no amounts that represent exposure to products subject to early call provisions to investors.
(B) Securitization Exposures
a. Underlying Assets by Asset Type
March 31
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ...
Other claims ............................................
Total .........................................................
Term-end
balance
¥ 48.9
191.2
21.3
140.0
¥401.4
Billions of yen
2010
To be
deducted
from capital
¥ 3.6
36.6
7.1
7.7
¥55.0
Increase
in capital
equivalent
¥ —
37.5
—
—
¥37.5
2009
To be
deducted
from capital
¥ 1.9
35.1
13.9
9.3
¥60.3
Increase
in capital
equivalent
¥ —
42.1
—
—
¥42.1
Term-end
balance
¥ 52.0
178.4
45.4
147.6
¥423.4
SMFG 2010 185
SMFG
Capital Ratio Information
b. Risk Weights
Billions of yen
2010
2009
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥175.0
13.2
—
—
213.3
¥401.4
Required
capital
¥ 1.1
0.5
—
—
55.0
¥56.6
Term-end
balance
¥194.8
20.0
2.0
—
206.7
¥423.4
Required
capital
¥ 1.4
0.6
0.7
—
60.3
¥63.0
(C) Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification
March 31
Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification ...
2010
¥ —
2009
¥ —
Billions of yen
B. As Sponsor
(A) Underlying Assets
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Billions of yen
March 31, 2010
Underlying asset amount
Asset
transfer type
¥510.4
—
159.7
84.1
¥754.2
Total
¥510.4
—
159.7
84.1
¥754.2
Synthetic
type
¥ —
—
—
—
¥ —
Fiscal 2009
Securitized
amount
¥3,957.1
—
807.5
49.9
¥4,814.4
Default
amount
¥ 91.4
1.9
8.4
8.3
¥110.0
Billions of yen
March 31, 2009
Underlying asset amount
Asset
transfer type
¥ 796.9
—
142.4
116.7
¥1,056.0
Total
¥ 796.9
—
142.4
116.7
¥1,056.0
Synthetic
type
¥ —
—
—
—
¥ —
Fiscal 2008
Securitized
amount
¥6,093.3
—
619.1
163.3
¥6,875.7
Default
amount
¥124.0
0.9
5.4
3.1
¥133.5
Loss
amount
¥ 90.8
1.9
9.2
8.1
¥110.0
Loss
amount
¥121.8
0.9
6.9
3.0
¥132.6
Notes: 1. The above amounts include the amount of underlying assets securitized during the term without entailing securitization exposure.
2. “Default amount” is the total of underlying assets which are past due three months or more and defaulted underlying assets.
3. “Default amount” and “Loss amount” when acting as a sponsor of securitization of customer claims are estimated using the following methods and
alternative data, as in some cases it can be difficult to obtain relevant data in a timely manner because the underlying assets have been recovered by the
customer.
(1) “Default amount” estimation method
(cid:129) For securitization transactions subject to the ratings-based approach, the amount is estimated based on information on underlying assets obtainable from
customers, etc.
(cid:129) For securitization transactions subject to the supervisory formula, the amount is estimated based on obtainable information on, or default rate of, each
obligor. Further, when it is difficult to estimate the amount using either method, it is conservatively estimated by assuming that the underlying asset is a
default asset.
(2) “Loss amount” estimation method
(cid:129) For securitization transactions subject to the ratings-based approach, the amount is the same amount as the default amount estimated conservatively in (1)
above.
(cid:129) For securitization transactions subject to the supervisory formula, when expected loss ratios of defaulted underlying assets can be determined, the amount
is estimated using the ratios. When it is difficult to determine the ratios, the amount is the same amount as the default amount estimated in (1) above.
4. “Other claims” includes lease fees.
5. Following Articles 230 and 248 of the Notification, there were no amounts that represent exposure to products subject to early call provisions to investors.
186
SMFG 2010
Capital Ratio Information
SMFG
(B) Securitization Exposures
a. Underlying Assets by Asset Type
March 31
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Note: “Other claims” includes lease fees.
b. Risk Weights
Billions of yen
2010
To be
deducted
from capital
¥0.4
—
—
—
¥0.4
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥388.8
—
149.4
80.9
¥619.1
2009
To be
deducted
from capital
¥1.2
—
—
—
¥1.2
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥648.4
—
122.4
111.7
¥882.5
Billions of yen
2010
2009
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥547.5
70.3
0.9
—
0.4
¥619.1
Required
capital
¥3.9
2.3
0.1
—
0.4
¥6.7
Term-end
balance
¥826.0
55.3
—
—
1.2
¥882.5
Required
capital
¥6.0
1.6
—
—
1.2
¥8.8
(C) Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification
March 31
Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification ...
2010
¥ —
2009
¥ —
Billions of yen
(2) Securitization Transactions in which the Group is the Investor
Securitization Exposures
(A) Underlying Assets by Asset Type
Billions of yen
2010
To be
deducted
from capital
¥41.0
—
—
0.6
¥41.6
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥257.0
—
0.3
15.3
¥272.6
2009
To be
deducted
from capital
¥50.1
—
—
1.0
¥51.1
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥261.7
—
5.4
15.3
¥282.4
March 31
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Note: “Other claims” includes securitization products.
(B) Risk Weights
Billions of yen
2010
2009
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥144.4
29.8
5.8
—
92.6
¥272.6
Required
capital
¥ 0.2
1.6
1.0
—
41.6
¥44.4
Term-end
balance
¥146.7
26.7
6.7
—
102.3
¥282.4
Required
capital
¥ 0.4
1.7
0.8
—
51.1
¥54.0
(C) Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification
March 31
Amount of credit risk-weighted assets calculated using Supplementary Provision 15 of the Notification ...
2010
¥2.1
2009
¥ —
Billions of yen
SMFG 2010 187
SMFG
Capital Ratio Information
■ Equity Exposures in Banking Book
1. Risk Management Policy and Procedures
Securities in the banking book are properly managed, for example, by setting upper limits on the allowable amount of risk under the market
or credit risk management framework selected according to their holding purpose and risk characteristics.
For securities held as “other securities,” the upper limits are also set in terms of price fluctuation risk.
Regarding stocks of subsidiaries, assets and liabilities of subsidiaries are managed on a consolidated basis, and risks related to stocks of
affiliates are recognized separately. Their risk as equity is not measured as upper limits on the allowable amount of risk are set for stocks
of subsidiaries and affiliates, and the limits are established within the “risk capital limit” of SMFG, taking into account the financial and
business situations of the subsidiaries and affiliates.
2. Valuation of Securities in Banking Book and Other Significant Accounting Policies
Stocks of subsidiaries and affiliates are carried at amortized cost using the moving-average method. Other securities with market prices
(including foreign stocks) are carried at their average market prices during the final month of the fiscal year. Securities other than these
securities are carried at their fiscal year-end market prices (cost of securities sold is calculated using primarily the moving-average method)
and those with no available market prices are carried at cost using the moving-average method.
Net unrealized gains (losses) on other securities and net of income taxes are reported as a component of “net assets.” Derivative transactions
are carried at fair value.
3. Consolidated Balance Sheet Amounts and Fair Values
March 31
Listed equity exposures ...........................................................
Stocks of subsidiaries and affiliates
and equity exposures other than above .................................
Total ..........................................................................................
Billions of yen
2010
2009
Balance sheet amount
¥2,570.5
Fair value
¥2,570.5
Balance sheet amount
¥1,939.1
Fair value
¥1,939.1
629.8
¥3,200.3
—
¥ —
706.7
¥2,645.8
—
¥ —
4. Gains (Losses) on Sale and Devaluation of Stocks of Subsidiaries and Affiliates and Equity Exposures
Gains (losses) .........................................................................................................................................
Gains on sale ..................................................................................................................................
Losses on sale ................................................................................................................................
Devaluation .....................................................................................................................................
Note: The above amounts are gains (losses) on stocks and other securities in the consolidated statements of operations.
Billions of yen
Fiscal 2009
¥(10.1)
57.2
34.8
32.5
Fiscal 2008
¥(183.7)
15.2
7.8
191.1
5. Unrealized Gains (Losses) Recognized on Consolidated Balance Sheets but Not on Consolidated Statements of Operations
March 31
Unrealized gains (losses) recognized on consolidated balance sheets
but not on consolidated statements of operations ..............................................................................
2010
¥483.6
2009
¥6.0
Billions of yen
Note: The above amount is for stocks of Japanese companies and foreign stocks with market prices.
6. Unrealized Gains (Losses) Not Recognized on Consolidated Balance Sheets or Consolidated Statements of Operations
March 31
Unrealized gains (losses) not recognized on
consolidated balance sheets or consolidated statements of operations .............................................
Note: The above amount is for stocks of affiliates with market prices.
Billions of yen
2010
2009
¥(39.7)
¥(49.7)
188
SMFG 2010
Capital Ratio Information
SMFG
■ Exposure Balance by Type of Assets, Geographic Region, Industry and Residual Term
1. Exposure Balance by Type of Assets, Geographic Region and Industry
March 31, 2010
Domestic operations (excluding offshore banking accounts)
Manufacturing............................................................................
Agriculture, forestry, fishery and mining ....................................
Construction ..............................................................................
Transport, information, communications and utilities ................
Wholesale and retail ..................................................................
Financial and insurance .............................................................
Real estate, goods rental and leasing .......................................
Services .....................................................................................
Local municipal corporations ....................................................
Other industries .........................................................................
Subtotal .....................................................................................
Overseas operations and offshore banking accounts
Sovereigns .................................................................................
Financial institutions ..................................................................
C&I companies ..........................................................................
Others ........................................................................................
Subtotal .....................................................................................
Total ...............................................................................................
Loans, etc.
Bonds
Billions of yen
Derivatives
Others
Total
¥ 9,958.8
246.4
1,463.0
4,633.5
5,939.6
14,876.2
8,764.6
4,998.4
2,087.8
22,358.2
¥75,326.7
¥ 2,446.5
2,691.9
9,106.8
1,725.3
¥15,970.5
¥91,297.2
¥ 207.8
0.0
32.5
135.3
80.3
521.1
368.8
124.2
572.1
19,254.3
¥21,296.4
¥ 386.7
408.8
205.5
229.5
¥ 1,230.5
¥22,526.9
¥ 557.1
12.7
10.2
194.7
577.1
1,252.2
63.0
75.8
4.6
35.6
¥2,782.9
¥ 5.6
656.4
327.4
6.8
¥ 996.1
¥3,779.1
¥2,165.3
32.4
169.6
764.4
607.5
288.9
427.4
446.8
6.8
3,994.5
¥8,903.7
¥ 12,889.1
291.6
1,675.2
5,727.9
7,204.5
16,938.4
9,623.8
5,645.2
2,671.3
45,642.6
¥108,309.6
¥ — ¥ 2,838.8
3,779.4
9,639.7
2,485.2
¥ 18,743.1
¥127,052.7
22.4
—
523.6
¥ 546.0
¥9,449.6
March 31, 2009
Domestic operations (excluding offshore banking accounts)
Manufacturing............................................................................
Agriculture, forestry, fishery and mining ....................................
Construction ..............................................................................
Transport, information, communications and utilities ................
Wholesale and retail ..................................................................
Financial and insurance .............................................................
Real estate .................................................................................
Services .....................................................................................
Local municipal corporations ....................................................
Other industries .........................................................................
Subtotal .....................................................................................
Overseas operations and offshore banking accounts
Sovereigns .................................................................................
Financial institutions ..................................................................
C&I companies ..........................................................................
Others ........................................................................................
Subtotal .....................................................................................
Total ...............................................................................................
Notes: 1. The above amounts are exposures after CRM.
Loans, etc.
Bonds
Billions of yen
Derivatives
Others
Total
¥10,224.7
241.6
1,668.8
4,714.2
6,576.8
11,915.5
8,173.3
6,540.2
1,772.1
20,607.4
¥72,434.6
¥ 1,544.9
2,766.4
10,294.4
1,997.4
¥16,603.0
¥89,037.6
¥ 134.5
0.1
47.4
102.0
83.1
981.7
363.0
123.7
468.1
18,948.3
¥21,251.7
¥ 895.1
265.7
213.0
246.1
¥ 1,619.8
¥22,871.6
¥ 605.5
15.7
12.3
191.3
627.3
1,427.4
54.9
89.4
5.8
30.6
¥3,060.2
¥ 5.0
940.1
498.3
11.5
¥1,454.8
¥4,515.0
¥1,872.6
29.4
153.5
697.6
568.7
315.3
170.8
612.0
77.6
4,756.3
¥9,253.8
¥ 12,837.3
286.8
1,882.0
5,705.1
7,855.8
14,639.9
8,762.0
7,365.3
2,323.6
44,342.6
¥106,000.4
¥ — ¥ 2,444.9
4,021.5
11,005.7
2,600.9
¥ 20,073.1
¥126,073.4
49.4
—
346.0
¥ 395.4
¥9,649.2
2. The above amounts do not include securitization exposures and credit risk-weighted assets under Article 145 of the Notification.
3. “Loans, etc.” includes loans, commitments and off-balance sheet assets except derivatives, and “Others” includes equity exposures and standardized approach applied funds.
4. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
5. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from March 31, 2010, the industrial classification has been partly
changed.
SMFG 2010 189
SMFG
Capital Ratio Information
2. Exposure Balance by Type of Assets and Residual Term
March 31, 2010
To 1 year ........................................................................................
More than 1 year to 3 years...........................................................
More than 3 years to 5 years .........................................................
More than 5 years to 7 years .........................................................
More than 7 years ..........................................................................
No fixed maturity ...........................................................................
Total ...............................................................................................
Loans, etc.
¥30,571.7
16,227.0
9,914.1
3,896.4
23,616.6
7,071.4
¥91,297.2
March 31, 2009
To 1 year ........................................................................................
More than 1 year to 3 years...........................................................
More than 3 years to 5 years .........................................................
More than 5 years to 7 years .........................................................
More than 7 years ..........................................................................
No fixed maturity ...........................................................................
Total ...............................................................................................
Loans, etc.
¥28,106.8
15,529.8
11,562.0
5,031.3
22,396.3
6,411.5
¥89,037.6
Notes: 1. The above amounts are exposures after CRM.
Bonds
¥ 8,940.2
4,768.3
5,114.9
696.2
3,007.3
—
¥22,526.9
Bonds
¥ 4,055.7
8,851.1
5,875.1
960.1
3,129.6
—
¥22,871.6
Billions of yen
Derivatives
¥ 477.9
1,059.2
1,117.7
359.0
765.3
—
¥3,779.1
Billions of yen
Derivatives
¥ 600.8
1,413.2
1,106.2
579.0
815.9
—
¥4,515.0
Others
¥ 329.7
873.5
963.9
243.3
217.6
6,821.6
¥9,449.6
Others
¥ 399.4
938.8
1,106.5
277.3
180.6
6,746.7
¥9,649.2
Total
¥ 40,319.4
22,928.1
17,110.5
5,194.9
27,606.7
13,893.0
¥127,052.7
Total
¥ 33,162.7
26,732.9
19,649.7
6,847.7
26,522.3
13,158.2
¥126,073.4
2. The above amounts do not include securitization exposures and credit risk-weighted assets under Article 145 of the Notification.
3. “Loans, etc.” includes loans, commitments and off-balance sheet assets except derivatives, and “Others” includes equity exposures and standardized approach applied funds.
4. “No fixed maturity” includes exposures not classified by residual term.
3. Term-End Balance of Exposures Past Due 3 Months or More or Defaulted and Their Breakdown
(1) By Geographic Region
Billions of yen
March 31
Domestic operations (excluding offshore banking accounts) ........................................................
Overseas operations and offshore banking accounts .....................................................................
Asia ..............................................................................................................................................
North America..............................................................................................................................
Other regions ...............................................................................................................................
Total .................................................................................................................................................
2010
¥2,285.0
220.5
19.1
101.5
99.9
¥2,505.5
2009
¥2,174.3
297.3
23.4
218.3
55.6
¥2,471.6
Notes: 1. The above amounts are credits subject to self-assessment, including mainly off-balance sheet credits to obligors categorized as “Substandard Borrowers” or lower
under self-assessment.
2. The above amounts include partial direct write-offs (direct reductions).
3. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
190
SMFG 2010
Capital Ratio Information
SMFG
(2) By Industry
March 31
Domestic operations (excluding offshore banking accounts)
Manufacturing..............................................................................................................................
Agriculture, forestry, fishery and mining ......................................................................................
Construction ................................................................................................................................
Transport, information, communications and utilities ..................................................................
Wholesale and retail ....................................................................................................................
Financial and insurance ...............................................................................................................
Real estate, goods rental and leasing .........................................................................................
Services .......................................................................................................................................
Other industries ...........................................................................................................................
Subtotal .......................................................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ....................................................................................................................
C&I companies ............................................................................................................................
Subtotal .......................................................................................................................................
Total .................................................................................................................................................
March 31
Domestic operations (excluding offshore banking accounts)
Manufacturing..............................................................................................................................
Agriculture, forestry, fishery and mining ......................................................................................
Construction ................................................................................................................................
Transport, information, communications and utilities ..................................................................
Wholesale and retail ....................................................................................................................
Financial and insurance ...............................................................................................................
Real estate ...................................................................................................................................
Services .......................................................................................................................................
Other industries ...........................................................................................................................
Subtotal .......................................................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ....................................................................................................................
C&I companies ............................................................................................................................
Subtotal .......................................................................................................................................
Total .................................................................................................................................................
Billions of yen
2010
¥ 252.8
7.6
147.0
124.3
278.9
33.0
771.5
349.8
320.1
¥2,285.0
¥ 49.8
170.7
¥ 220.5
¥2,505.5
Billions of yen
2009
¥ 206.5
5.3
166.7
130.6
269.7
60.5
720.3
342.7
272.0
¥2,174.3
¥ 62.3
235.1
¥ 297.3
¥2,471.6
Notes: 1. The above amounts are credits subject to self-assessment, including mainly off-balance sheet credits to obligors categorized as “Substandard Borrowers” or lower
under self-assessment.
2. The above amounts include partial direct write-offs (direct reductions).
3. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries.
4. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from March 31, 2010, the industrial classification has been partly
changed.
4. Term-End Balances of General Reserve for Possible Loan Losses, Specific Reserve for Possible Loan Losses and Loan Loss
Reserve for Specific Overseas Countries
(1) By Geographic Region
March 31
General reserve for possible loan losses.........................................
Loan loss reserve for specific overseas countries ..........................
Specific reserve for possible loan losses ........................................
Domestic operations (excluding offshore banking accounts) .....
Overseas operations and offshore banking accounts .................
Asia ..........................................................................................
North America ..........................................................................
Other regions ...........................................................................
Total .................................................................................................
2010 (A)
¥ 702.6
0.6
1,208.9
1,126.3
82.6
20.0
25.1
37.5
¥1,912.1
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
Billions of yen
2009 (B)
¥ 691.5
1.3
1,102.1
970.4
131.7
19.3
75.8
36.5
¥1,794.9
2008
¥ 593.7
0.0
819.6
738.5
81.1
10.1
68.1
2.9
¥1,413.3
Increase (decrease)
(A) – (B)
¥ 11.1
(0.7)
106.8
155.9
(49.1)
0.7
(50.7)
1.0
¥117.2
2. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
SMFG 2010 191
SMFG
Capital Ratio Information
(2) By Industry
March 31
General reserve for possible loan losses............................................................
Loan loss reserve for specific overseas countries .............................................
Specific reserve for possible loan losses ...........................................................
Domestic operations (excluding offshore banking accounts) ........................
Manufacturing .............................................................................................
Agriculture, forestry, fishery and mining .....................................................
Construction ...............................................................................................
Transport, information, communications and utilities .................................
Wholesale and retail....................................................................................
Financial and insurance ..............................................................................
Real estate, goods rental and leasing ........................................................
Services ......................................................................................................
Other industries ..........................................................................................
Overseas operations and offshore banking accounts ....................................
Financial institutions ...................................................................................
C&I companies ...........................................................................................
Total ....................................................................................................................
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
2010
¥ 702.6
0.6
1,208.9
1,126.3
143.5
3.3
86.0
74.7
169.3
14.8
336.7
161.0
137.0
82.6
36.7
45.9
¥1,912.1
Billions of yen
2009
¥ 691.5
1.3
1,102.1
970.4
128.1
1.2
91.2
45.9
173.3
21.1
225.4
145.8
138.4
131.7
32.0
99.7
¥1,794.9
Increase (decrease)
¥ 11.1
(0.7)
106.8
155.9
15.4
2.1
(5.2)
28.8
(4.0)
(6.3)
111.3
15.1
(1.4)
(49.1)
4.7
(53.8)
¥117.2
2. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries.
3. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from March 31, 2010, the industrial classification has been partly
changed. Accordingly, the amendments have been retroactively applied to the data of the previous term (ended March 31, 2009), so as to allow comparison.
March 31
General reserve for possible loan losses............................................................
Loan loss reserve for specific overseas countries .............................................
Specific reserve for possible loan losses ...........................................................
Domestic operations (excluding offshore banking accounts) ........................
Manufacturing .............................................................................................
Agriculture, forestry, fishery and mining .....................................................
Construction ...............................................................................................
Transport, information, communications and utilities .................................
Wholesale and retail....................................................................................
Financial and insurance ..............................................................................
Real estate ..................................................................................................
Services ......................................................................................................
Other industries ..........................................................................................
Overseas operations and offshore banking accounts ....................................
Financial institutions ...................................................................................
C&I companies ...........................................................................................
Total ....................................................................................................................
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
2009
¥ 691.5
1.3
1,102.1
970.4
128.1
1.2
91.2
45.9
173.3
21.1
224.1
147.1
138.4
131.7
32.0
99.7
¥1,794.9
Billions of yen
2008
¥ 593.7
0.0
819.6
738.5
76.3
1.3
71.3
49.2
142.7
19.2
110.9
135.2
132.4
81.1
0.9
80.2
¥1,413.3
Increase (decrease)
¥ 97.8
1.3
282.5
231.9
51.8
(0.1)
19.9
(3.3)
30.6
1.9
113.2
11.9
6.0
50.6
31.1
19.5
¥381.6
2. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries.
192
SMFG 2010
Capital Ratio Information
SMFG
5. Loan Write-Offs by Industry
Domestic operations (excluding offshore banking accounts)
Manufacturing.....................................................................................................................................
Agriculture, forestry, fishery and mining .............................................................................................
Construction .......................................................................................................................................
Transport, information, communications and utilities .........................................................................
Wholesale and retail ...........................................................................................................................
Financial and insurance ......................................................................................................................
Real estate, goods rental and leasing ................................................................................................
Services ..............................................................................................................................................
Other industries ..................................................................................................................................
Subtotal ..............................................................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ...........................................................................................................................
C&I companies ...................................................................................................................................
Subtotal ..............................................................................................................................................
Total ........................................................................................................................................................
Domestic operations (excluding offshore banking accounts)
Manufacturing.....................................................................................................................................
Agriculture, forestry, fishery and mining .............................................................................................
Construction .......................................................................................................................................
Transport, information, communications and utilities .........................................................................
Wholesale and retail ...........................................................................................................................
Financial and insurance ......................................................................................................................
Real estate ..........................................................................................................................................
Services ..............................................................................................................................................
Other industries ..................................................................................................................................
Subtotal ..............................................................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ...........................................................................................................................
C&I companies ...................................................................................................................................
Subtotal ..............................................................................................................................................
Total ........................................................................................................................................................
Billions of yen
Fiscal 2009
¥ 19.2
0.3
4.8
6.7
32.2
(4.8)
54.0
16.5
50.2
¥179.1
¥ (3.2)
0.8
¥ (2.4)
¥176.7
Billions of yen
Fiscal 2008
¥ 46.1
0.7
32.4
11.3
54.7
9.6
52.9
28.2
44.6
¥280.5
¥ 5.6
16.3
¥ 21.9
¥302.4
Notes: 1. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
2. In accordance with the revision of the Japan Standard Industrial Classification (in November 2007), from fiscal 2009, the industrial classification has been partly changed.
SMFG 2010 193
SMFG
Capital Ratio Information
■ Market Risk
1. Scope
The following approaches are used to calculate market risk equivalent amounts.
(1) Internal Models Method
General market risk of SMBC, Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking Corporation (China)
Limited, SMBC Capital Markets, Inc., SMBC Capital Markets Limited, SMBC Derivative Products Limited, and SMBC Capital Markets
(Asia) Limited
(2) Standardized Measurement Method
(cid:129) Specific risk
(cid:129) General market risk of consolidated subsidiaries other than SMBC, Sumitomo Mitsui Banking Corporation Europe Limited,
Sumitomo Mitsui Banking Corporation (China) Limited, SMBC Capital Markets, Inc., SMBC Capital Markets Limited, SMBC
Derivative Products Limited, and SMBC Capital Markets (Asia) Limited
(cid:129) A portion of general market risk of SMBC
2. Valuation Method Corresponding to Transaction Characteristics
All assets and liabilities held in the trading book — therefore, subject to calculation of the market risk equivalent amount — are transactions
with high market liquidity. Securities and monetary claims are carried at the fiscal year-end market price, and derivatives such as swaps,
futures and options are stated at amounts that would be settled if the transactions were terminated at the consolidated balance sheet date.
3. VaR Results (Trading Book)
Fiscal year-end .......................................................................................................................................
Maximum ................................................................................................................................................
Minimum .................................................................................................................................................
Average ..................................................................................................................................................
Billions of yen
Fiscal 2009
¥1.5
2.8
1.2
1.6
Fiscal 2008
¥2.0
2.8
1.4
2.0
Notes: 1. The VaR results for a one-day holding period with a one-sided confidence interval of 99.0%, computed daily using the historical simulation method based on four years of
historical observations.
2. Specific risks for the trading book are excluded.
3. Principal consolidated subsidiaries are included.
■ Interest Rate Risk in Banking Book
Interest rate risk in the banking book fluctuates significantly depending on the method of recognizing maturity of demand deposits (such
as current accounts and ordinary deposits from which funds can be withdrawn on demand) and the method of predicting early withdrawal
from fixed-term deposits and prepayment of consumer loans. Key assumptions made by SMBC in measuring interest rate risk in the banking
book are as follows.
1. Method of Recognizing Maturity of Demand Deposits
The total amount of demand deposits expected to remain with the bank for the long term (with 50% of the lowest balance during the past
5 years as the upper limit) is recognized as a core deposit amount and interest rate risk is measured for each maturity with 5 years as the
maximum term (the average is 2.5 years).
2. Method of Estimating Early Withdrawal from Fixed-term Deposits and Prepayment of Consumer Loans
The rate of early withdrawal from fixed-term deposits and the rate of prepayment of consumer loans are estimated and the rates are used to
calculate cash flows used for measuring interest rate risk.
3. VaR Results (Banking Book)
Fiscal year-end .......................................................................................................................................
Maximum ................................................................................................................................................
Minimum .................................................................................................................................................
Average ..................................................................................................................................................
Billions of yen
Fiscal 2009
¥33.8
44.0
31.8
37.7
Fiscal 2008
¥41.4
43.9
26.9
34.2
Notes: 1. The VaR results for a one-day holding period with a one-sided confidence interval of 99.0%, computed daily using the historical simulation method based on four years of
historical observations.
2. Principal consolidated subsidiaries are included.
194
SMFG 2010
Capital Ratio Information
SMFG
■ Operational Risk
1. Operational Risk Equivalent Amount Calculation Methodology
SMFG adopted the Advanced Measurement Approach (AMA) for exposures as of March 31, 2008. As of March 31, 2010, the following
consolidated subsidiaries have also adopted the AMA, and the remaining consolidated subsidiaries have adopted the Basic Indicator
Approach (BIA).
Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card Company, Limited, The Japan Research Institute, Limited, SMBC
Friend Securities Co., Ltd., Sumitomo Mitsui Finance and Leasing Co., Ltd., Kansai Urban Banking Corporation, The Japan Net
Bank, Limited, SMBC Guarantee Co., Ltd., SMBC Finance Service Co., Ltd., THE MINATO BANK, LTD., SMBC Center Service Co.,
Ltd., SMBC Delivery Service Co., Ltd., SMBC Green Service Co., Ltd., SMBC International Business Co., Ltd., SMBC International
Operations Co., Ltd., SMBC Loan Business Service Co., Ltd., SMBC Market Service Co., Ltd., SMBC Loan Administration and
Operations Service Co., Ltd., Sumitomo Mitsui Banking Corporation Europe Limited and Sumitomo Mitsui Banking Corporation
(China) Limited.
Sumitomo Mitsui Banking Corporation (China) Limited, established in April 2009, has adopted the AMA since its foundation.
Among companies which have adopted the BIA, Nikko Cordial Securities Inc. is making preparations to adopt the AMA for exposures as
of September 30, 2011.
2. Outline of the AMA
An outline of the AMA for operational risk management is described in the section on Risk Management. In this section, we would like to
present an explanation of the preparation of data that is input into the quantification model and the verification of scenario assessment using
internal loss data, external loss data, and Business Environment and Internal Control Factors (BEICFs). We will also give an outline of the
methodology for measuring the operational risk equivalent amount (“required capital”) using the quantification model.
Internal Loss Data
External Loss Data
B. Verification
(1) Scenario Analysis through
Risk Control Assessments
A. Data input
(2) Measurement
Using the
Quantification Model
BEICFs
Risk Mitigation Initiatives
(1) Scenario Analysis through Risk Control Assessments
A. Preparation of Data Input into the Quantification Model
In order to estimate the frequency of occurrence of “low-frequency and high-severity” events, which is the purpose of risk control
assessment, we estimate the loss frequency in terms of four loss amounts (¥100 million, ¥1 billion, ¥5 billion, and ¥10 billion) for
each scenario, then input the total amount by loss event type for each entity, namely, SMFG (consolidated), SMBC (consolidated), and
SMBC (nonconsolidated), into the quantification model.
At SMFG and SMBC, by using a different assessment method according to loss event type and organizational classification, we
obtain a proper grasp of operational risk profile of the Group. The following section provides typical calculation examples for scenarios
of SMBC domestic business offices.
SMFG 2010 195
SMFG
Capital Ratio Information
(A) Deriving and Scoring Scenarios
a. Deriving Scenarios
In order to grasp all potential risks of a business/product, we first identify “business processes & /products” stipulated in the
“Common Procedures of Operations.” Then, we derive all possible scenarios for the generation of a loss event of prescribed
magnitude by breaking down the operation process of each “business processes & /products” into “processing types.”
We evaluate each individual scenario on an operation process basis.
Classification of Business, Products and Processing Type (Example)
(Example)
Product
Business
Exchange forward contract
Conclusion of exchange forward contract
Operation process
(a) Explanation to customer
Explanation
(b) Request for preparation of application form
Receipt and check
(c) Presentation of conditions to customer,
conclusion of contract
Agreements and contracts
(d) Conclusion of the deal with Treasury Marketing
Internal transfer
Department
(e) Entry of contract implementation form
System entries
(f) Exchange of forward contract
Issuance, notification and reporting
(a) Explanation
(b) Attribute confirmation
(c) Receipt and check
(d) Issuance, notification and reporting
(e) Internal transfer
Processing type
(f) Application, decision and authorization
(g) Agreements and contracts
(h) Preparation of vouchers, etc. and making entries
(i) System entries
(j) Management during contract period
(k) Safekeeping, depositing and withdrawal
b. Scenario Assessment
In order to assess scenarios, it is necessary to quantify loss frequency and amount for each scenario. At SMBC, in order to quantify
loss frequency for each scenario, we execute risk control assessments on each scenario.
In risk assessment, in order to measure the easiness of loss occurrence in each operation process before taking into account the
risk management (control) situation, we set standards for various assessment items — transaction volume, volatility of transaction
volume, time limits and so on — and the operation process is scored on how well the standards are met.
Risk Scoring (Examples)
Perspective
Risk Items
What to Assess
Score
Easiness of
making an error
(a) Transaction volume
Largeness of annual processing volume
(b) Volatility of transaction volumes
Degree of concentration of processing on specific dates
(c) Time limits
Shortness of deadlines and degree of urgency
(d) Complexity of process
Degree of processing complexity, processing volume per task
(e) Complexity of products
Product complexity
Easiness of an error leading
to a clerical accident
(f) Deal with outside party
(g) Booking of business products
Easiness of error in transferring actual items/funds to customer/other bank leading to
loss accident
Easiness of error in handling of, or in notifying actions to be taken on, products with
market risk leading to loss event
1
0
2
1
0
0
0
196
SMFG 2010
Capital Ratio Information
SMFG
Control assessment is executed from the perspective of preventive control and detection & recovery control. We set standards
for various items — establishment of manuals and procedures, processing authority and pre-process check, post-process check,
and so on — and the operation process is scored on how well the standards are met.
Control Assessment (Examples)
Perspective
Risk Items
What to Assess
Score
Design of procedures
(a) Establishment of manuals and procedures
Whether rules/ procedures/etc. have been documented or updated
(b) Details of manuals and procedures
Whether there are rules for accurate processing execution without omissions and whether
they are effective (excluding those included in below three risk items)
Authority and verification
(c) Processing authority and pre-process check
Assess processing authority, pre-process check
(d) Post-process check
Assess post-process check and accident detection measures
(assess only preventive measures)
System situation
(e) System processing
Degree of system processing
1
0
1
0
0
(B) Quantifying Loss Frequency of Each Scenario
a. Generation of “Average Frequency Table” for Domestic Business Offices
To quantify loss frequency for domestic branches, we assume future loss frequency is similar to historical loss frequency. And we
generate an average frequency table, which is used to estimate future loss frequency. The average frequency table comprises rows
of total risk score and columns of total control score and the number of loss occurrences in a one-year period for each combination
of scores is given.
As risk and control assessment items are expected to have different loss occurrence contribution ratios, we analyze their loss
occurrence contribution ratios for each assessment item by executing a regression analysis and weight each assessment item.
Average Frequency Table (Example)
Total Score
2.0
2.4
2.8
3.2
3.6
4.0
Control
(Times/Year)
Risk
5.5
4.5
3.5
2.5
1.5
0.5
5.5
4.5
3.5
2.5
1.5
0.5
2.40
b. Quantifying Loss Frequency of Each Scenario
Total risk assessment score and total control assessment score are calculated for each scenario taking into account the weight of
each assessment item described above. Then, the loss frequency of each scenario (the number of times the loss event described in
the scenario occurs during a one-year period) is estimated using the average frequency table.
(C) Quantifying Loss Amount for Each Scenario
In order to quantify the loss amount for each scenario, we generate loss distribution for each “business process & product” by using
the historical transaction data of SMBC. Specifically, we assume that the historical transaction volume follows a log-normal
distribution (distribution in which the logarithm of a variable follows the normal distribution) for each “business process & product”
and generate the loss-severity distribution.
SMFG 2010 197
SMFG
Capital Ratio Information
(D) Estimating the Frequency of Occurrence of the “Low-Frequency and High-Severity” Events
In order to estimate the probability of occurrence in terms of four loss amounts (¥100 million, ¥1 billion, ¥5 billion, and ¥10
billion) for each scenario, we use a log-normal distribution function for each scenario.
Because we assume the log-normal distribution to each “business process & product,” in case one loss event occurs in a one-year
period, potential loss can be regarded as likewise arising from log-normal distribution. Therefore, in this case, we estimate the
probability of occurrence of four loss amounts by substituting each loss amount for the loss amount of log-normal distribution.
In case that one loss event occurs in a one-year period, the method described above is followed. However, in case that several
numbers of loss events occur in a one-year period, it is conceivable that the events occurred independently of each other. Therefore,
the probability of occurrence of several loss events can be calculated by the probability of one loss event raised to the power of its loss
frequency.
As we quantify the loss frequency for each scenario using the average frequency table for loss events over a one-year period, we
are able to estimate the probability of four loss amounts by the probability arising from the above log-normal distribution function,
raised to the power of loss frequency derived from the frequency table.
After estimating the loss frequency in terms of the four loss amounts for each scenario, we sum results for each loss event type
and input them into the quantification model for SMFG (consolidated), SMBC (consolidated), and SMBC (nonconsolidated).
B. Verification of Scenarios Using Three Data Elements
At SMFG and SMBC, the verifications of the assessments of scenarios using internal loss data, external loss data, and BEICFs
(hereinafter, “3 data elements”) are implemented periodically. Specifically, SMFG and SMBC use these data and information and use
them to determine, periodically, whether there are any scenarios that have been omitted and whether the assessments of the scenarios
are appropriate to ensure the completeness and appropriateness of the scenarios.
(A) Reassessment of Scenarios Using Internal Loss Data
Both SMFG and SMBC, in principle, compile internal loss data on all gross loss amounts of at least one yen. From the data, internal
loss data which fulfill the established criteria are drawn, and the content of the related loss events is considered; then, a judgment
is made regarding whether or not to review the scenario in question. Specifically, we pose a number of issues to consider, such as
whether the scenario exists at SMBC, and, if so, whether the deviation between the actual loss and the assessed value of the scenario
is within the tolerance range. In considering these issues, we follow a set pattern of logical reasoning in making a decision on
whether the scenario should be revised.
When we decide it is necessary to revise the scenario, we make a reassessment based on the internal loss data. In this process, we
consider redeveloping and reassessing the scenario and other related matters to ensure that the internal loss data is properly reflected
in the scenario.
(B) Reassessment of Scenarios Using External Loss Data
At SMFG and SMBC, we have a database containing more than 7,000 cases of external losses that have been taken from the mass
media, including newspapers, and purchased from data vendors. A framework has been created to enable the sharing of this database
across the Group.
From this database, we draw external loss data which fulfill the established criteria, and the content of the related loss events is
considered; then, a judgment is made regarding whether or not to revise the scenario in question. Specifically, we pose a number
of issues to consider, such as whether the scenarios in question exist at SMBC, and, if so, whether the deviation between the actual
loss and the assessed value of the scenario is within the tolerance range. In considering these issues, we follow a set pattern of logical
reasoning in making a decision on whether the scenario should be reviewed.
When we decide it is necessary for the scenario to be reviewed, we make a reassessment based on the external loss data. In this
process, we consider deriving and reassessing the scenario and other related matters to ensure that the external loss data is properly
reflected in the scenario.
198
SMFG 2010
Capital Ratio Information
SMFG
(C) Reassessment of Scenarios Using BEICFs
At SMFG and SMBC, we compile data related to changes in laws and regulations, changes in internal rules, policies and procedures,
and new business, products and process, all of which are business environment and internal control factors (BEICFs). We use this
information to consider periodically whether our scenarios should be reconsidered, and, even for events other than those listed
previously, when major changes occur in the business environment, our systems provide, as necessary, for the consideration of
whether scenarios should be revised.
When we decide it is necessary for the scenario to be reviewed, we make a reassessment based on the information related to
changes and other factors in BEICFs. In this process, we consider redeveloping and reassessing the scenario and other related matters
to ensure that the changes in BEICFs are properly reflected in our scenarios.
(2) Measurement Using the Quantification Model
When calculating operational risk using the quantification model, firstly, we input seven-year historical internal loss data (realized
risks) and the data on the frequency of “low-frequency and high-severity” events (potential risks) in terms of four loss amounts, which
have been estimated through risk control assessments, and generate a loss distribution. Secondly, we use this distribution to estimate
the maximum loss amount with a 99.0 percentile confidence interval (hereinafter referred to as 99.0% VaR). Thirdly, we multiply this
maximum loss by a number, which we call “the risk capital conversion factor,” to estimate 99.9% VaR. Finally, we calculate required
capital by using a multiplier that has been determined based on the number of times in which actual losses have exceeded predicted
losses through the use of back testing. In estimation of the aggregated loss distribution, we need to estimate the loss severity and
frequency distribution.
In addition, we confirm whether the quantification model is functioning appropriately and conservatively in measuring operational
risk by implementing various types of sensitivity analysis and verification tests.
The following chart puts the main points of this quantification method in order and explains how the results of measurement are
verified.
A. Measurement Using the Quantification Model
(B) Estimation of Loss Frequency
Distribution
Sampling of the number
of losses from
the distribution
Reiteration
Aggregated Loss Distribution
Frequency Severity
Calculation of
annual loss amount
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.4
0.3
0.2
0.1
0
(C)
Times the risk capital
conversion factor
99.0
99.9
Total
Amount of annual loss
(A) Estimation of Loss Severity
Distribution
Sampling of the amount of
losses of the cases drawn
from the distribution
(D) Calculation of Required Capital
B. Verification of the Quantification Model
(A) Verification of Quantification Accuracy
(B) Implementation of Regular Verification Process
(Pre-testing, Back testing)
SMFG 2010 199
SMFG
Capital Ratio Information
A. Measurement Using the Quantification Model
(A) Estimation of Loss Severity Distribution
a. Smoothed Bootstrap Method
We employ the “smoothed bootstrap” method for generating the loss distribution. The smoothed bootstrap method is one of the
methods that connect the distribution, of the realized risk and the potential risk event, smoothly. Under this method, no
assumptions are made about the shape of the distribution as a whole, but assumptions are made on the individual distribution
related to realized individual losses. Therefore, this method takes advantage of the widely known parametric method (method
assuming a distribution) as well as the non-parametric one (method not assuming a distribution).
Under the non-parametric method, if we use historical internal loss data to generate the loss severity distribution, we are not
able to create the samples outside the actual observation points, and also it is particularly difficult to create a distribution with
a fat tail. However, through the use of the method that can combine such data (on actual observations) with data on potential
risks, it becomes possible to create large losses that occur rarely (with a potential impact) and that have not actually been found
in historical internal loss data. In generating the distribution, while “high-frequency low-severity” events are based on sufficient
historical internal loss data volume, for “low-frequency high-severity” events in the tail of the distribution, the historical internal
data volume is insufficient. This approach makes it possible to reflect the severity (frequency of occurrence) of potential risk that
has been assessed in the risk control assessments. In this way, using this model, realized risks and potential risks can be combined
with congruity.
In estimating the loss distribution under this method, the Kernell function (partially assumed function) is applied to the loss
data by the pile-up of functions. In particular, the log-normal distribution is applied as the Kernell function.
b. Supplementing Results of Risk Control Assessments with Extreme Value Theory
In order to capture potential risks, a statistical method known as Extreme Value Theory is used in addition to the results of risk
control assessments. Extreme Value Theory is the statistical assessment method by which risks that may occur in the future
accompanying larger losses than the actually observed ones in the internal loss data can be quantified, and fulfills the role of
supplementing the risk control assessments.
Gaining a grasp of realized risk
Collection of internal loss data
(Example)
Period
Amount of loss
Capturing potential risks
Statistical estimates from internal loss data
(Extreme Value Theory)
Estimates from risk control assessments
Loss occurrence for the last 7
years (or period actually collected)
2003 / 1H
2004 / 1H
2005 / 1H
2005 / 1H
2005 / 2H
5,000,000
10,000,000
8,000,000
15,000,000
7,000,000
Estimates of potential risk
that may emerge
(Example)
Amount of loss
Frequency of occurrence
¥100 million or more
Once in 5 years
¥1 billion or more
Once in 10 years
¥5 billion or more
Once in 50 years
¥10 billion or more
Once in 100 years
Body part of the “high-frequency low-severity”
loss severity distribution
Tail part of the “low-frequency high-severity”
loss severity distribution
Combination of the loss severity distributions
Smoothed bootstrap method
Smoothed bootstrap method
Body part
Tail part
Amount of losses
¥100
million
¥1
billion
¥5
billion
¥10
billion
F
r
e
q
u
e
n
c
y
o
f
o
c
c
u
r
r
e
n
c
e
200
SMFG 2010
Capital Ratio Information
SMFG
(B) Estimation of Loss Frequency Distribution
The Poisson distribution (probability distribution often used in estimating the number of occurrences of rare events) is used for
generating the loss frequency distribution. To estimate the Poisson distribution, it is necessary to estimate the average number of
annual losses, but in this model, we do not simply take the annual average of all cases of losses for the entire period (several fiscal
years) but instead, estimate the annual average number of loss cases for each fiscal year individually. Through this approach, we are
able to take account of the deviations in the historical incidence of losses for different periods and are able to estimate loss cases that
may occur in the future more appropriately.
(C) Risk Capital Conversion Factor γ
We calculate 99.0% VaR from the estimated aggregated loss distribution, and then multiply the risk capital conversion factor
γ (gamma) in order to compute 99.9% VaR. By introducing γ it is unnecessary to estimate 99.9% VaR directly which can be
estimated with lower accuracy, and it provides with stable estimation results by estimating 99.0% VaR which can be estimated with
higher accuracy.
The factor γ means the ratio between 99.9% VaR and 99.0% VaR. In other words, it is the risk profile of the loss distribution
and an indicator for the characteristics of the tail part of the distribution. The risk profile of the loss distribution is different for each
loss event type, by which the calculation is performed. In addition, we have verified statistically that it could differ among SMFG
(consolidated), SMBC (consolidated), and SMBC (nonconsolidated). To reflect their characteristics, we set a different value of γ for
each entity. There is a tendency for γ to become smaller, etc., when there is a distribution of large expected losses or when the tail of
the distribution is highly dense.
When setting γ initially, we conduct an analysis, taking into account the possibility of changes in the risk profiles of many types
of loss distributions, and set values that maintain the stability and the conservativeness of capital. In addition, we assess changes
in the risk profiles of the most recent loss distributions, including the present one, and, when changes are above a certain level,
we conduct a review of the γ values. This makes it possible to keep values of γ appropriate to changes in the risk profile of the loss
distribution and calculate stable values of required capital.
(D) Calculation of Required Capital
We calculate required capital by multiplying the 99.9% VaR calculated in the previous section by the multiplier for each loss
event type that has been determined based on the number of breaches in back testing. As will be mentioned later, back testing
is conducted periodically, and, when realized risk is found to be greater than the risks estimated with the quantification model (back
testing excess), we take necessary steps, such as multiplying by the multiplier determined through prior analysis, to maintain the
conservativeness of required capital estimates.
We then add the required capital amounts calculated for each loss event type to compute the required capital for SMFG
(consolidated), SMBC (consolidated), and SMBC (nonconsolidated).
Please note that in calculating required capital, we do not subtract expected losses.
B. Verification of the Quantification Model
We conduct a range of sensitivity and verification tests to ensure that the measurement results of the quantification model are
appropriate (quantification accuracy) and to confirm that our model is capable of measuring the amounts corresponding to the
maximum losses from operational risk that may be incurred for a one year holding period, with a one-sided 99.9 percentile confidence
interval. In the following paragraphs, we would like to explain the methods for assessing the quantification accuracy of our
measurements and the framework we have in place for regular verifications.
(A) Verification of Quantification Accuracy
We have confirmed the reliability of the quantification model through a verification process from various perspectives. Specifically,
we obtain a quantitative grasp of the possibilities for variation in measurement results that may arise from preconditions or
assumptions made at the time the models were designed. In particular, we assess the possibilities for underestimating required
capital and the possible magnitude of such underestimates. Then, in our periodic verification framework, which is described below,
we make analyses of how to compensate for such underestimates. We apply our understanding of the possibilities for
underestimation to the multiplier derived from back testing, and, if the accuracy of the quantification model deteriorates, we
introduce a framework for making adjustments in the multiplier to avoid underestimating the amount of required capital.
SMFG 2010 201
SMFG
Capital Ratio Information
(B) Implementation of Regular Verification Process
To confirm the appropriateness of the quantification model on a continuing basis, we conduct a regular verification process.
Specifically, there are two types of verifications. One is back testing, which enables us to make a comprehensive judgment on the
appropriateness of measurement results, and the other is pre-testing, in which we verify the accuracy of the quantification model
prior to conducting actual measurements. In the following paragraphs, we present an explanation of these two test types.
a. Back Testing
In conducting back tests, we compare the estimates made by the quantification model with the maximum loss arising from
business activities to verify on an ex post facto basis whether the measurement results obtained from the model are conservative
enough and appropriate. When actual losses become greater than the losses estimated by the model (actual losses exceed the
estimate when back tests are conducted), we apply the multiplier factor in accordance with the number of excesses in order to
ensure conservativeness of quantification results.
Back testing is a well-known method for verifying comprehensively the appropriateness of VaR (statistical) models. We
employ the test to obtain the maximum loss amount with the given confidence interval which the tests work effectively. By
comparing the test results with the losses that actually occur, we increase the effectiveness of back testing.
b. Pre-testing
Pre-testing is conducted periodically, prior to use of the model for actual measurements, to verify whether the possibility of
underestimation is increasing (model risk is rising), since it is possible that the multiplier used in back testing may lead to
underestimation. As a result of pre-test verifications, we are able to confirm, on a continuing basis, whether the multiplier used
in back testing is conservative enough or model risk is emerging.
3. Usage of Insurance to Mitigate Risk
SMFG had not taken measures to mitigate operational risk through insurance coverage for exposures as of March 31, 2010.
4. Required Capital by Operational Risk Measurement Method
March 31
Advanced Measurement Approach ........................................................................................................
Basic Indicator Approach .......................................................................................................................
Total ........................................................................................................................................................
2010
¥232.2
17.2
¥249.4
2009
¥223.5
21.6
¥245.1
Billions of yen
202
SMFG 2010
SMBC
Capital Ratio Information
Sumitomo Mitsui Banking Corporation and Subsidiaries
■ Capital Structure Information (Consolidated Capital Ratio (International Standard))
March 31
Tier I capital:
Tier II capital:
Deductions:
Total qualifying capital:
Risk-weighted assets:
Capital stock ....................................................................................................
Capital surplus .................................................................................................
Retained earnings ............................................................................................
Cash dividends to be paid ...............................................................................
Unrealized losses on other securities ...............................................................
Foreign currency translation adjustments ........................................................
Stock acquisition rights ....................................................................................
Minority interests ..............................................................................................
Goodwill and others .........................................................................................
Gain on sale on securitization transactions......................................................
Amount equivalent to 50% of expected losses in excess of provision ............
Total Tier I capital (A) ........................................................................................
Unrealized gains on other securities after 55% discount.................................
Land revaluation excess after 55% discount ...................................................
General reserve for possible loan losses..........................................................
Subordinated debt ...........................................................................................
Total Tier II capital ............................................................................................
Tier II capital included as qualifying capital (B) ................................................
(C) .....................................................................................................................
(D) = (A) + (B) – (C) ............................................................................................
On-balance sheet items ...................................................................................
Off-balance sheet items ...................................................................................
Market risk items ..............................................................................................
Operational risk ................................................................................................
Amount obtained by multiplying by 12.5 the excess of the amount
obtained by multiplying the old required capital by the rate prescribed
by the Notification over the new required capital ...........................................
Total risk-weighted assets (E) ...........................................................................
Millions of yen
2010
¥ 1,770,996
2,709,682
668,074
(62,702)
—
(99,481)
81
1,470,612
(220,978)
(37,453)
(21,336)
6,177,492
224,106
37,033
49,937
2,203,415
2,514,493
2,514,493
339,212
¥ 8,352,773
¥39,030,287
7,583,421
426,799
3,032,531
2009
¥ 664,986
1,603,672
448,750
(19,947)
(60,148)
(120,606)
66
1,972,044
(0)
(42,102)
(3,207)
4,443,507
—
37,211
58,610
2,303,618
2,399,439
2,399,439
284,199
¥ 6,558,747
¥37,853,376
7,364,078
248,081
2,882,871
—
¥50,073,039
83,273
¥48,431,681
Tier I risk-weighted
capital ratio:
Total risk-weighted
capital ratio:
Required capital:
(A) / (E) ✕ 100 ....................................................................................................
12.33%
9.17%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
16.68%
¥ 4,005,843
13.54%
¥ 3,874,534
SMFG 2010 203
SMBC
Capital Ratio Information
■ Capital Structure Information (Nonconsolidated Capital Ratio (International Standard))
March 31
Tier I capital:
Tier II capital:
Deductions:
Total qualifying capital:
Risk-weighted assets:
Capital stock ....................................................................................................
Capital reserve .................................................................................................
Other capital surplus ........................................................................................
Other retained earnings ....................................................................................
Others ...............................................................................................................
Cash dividends to be paid ...............................................................................
Unrealized losses on other securities ...............................................................
Gain on sale on securitization transactions......................................................
Amount equivalent to 50% of expected losses in excess of provision ............
Deductions of deferred tax assets ...................................................................
Total Tier I capital (A) ........................................................................................
Unrealized gains on other securities after 55% discount.................................
Land revaluation excess after 55% discount ...................................................
Subordinated debt ...........................................................................................
Total Tier II capital ............................................................................................
Tier II capital included as qualifying capital (B) ................................................
(C) .....................................................................................................................
(D) = (A) + (B) – (C) ............................................................................................
On-balance sheet items ...................................................................................
Off-balance sheet items ...................................................................................
Market risk items ..............................................................................................
Operational risk ................................................................................................
Amount obtained by multiplying by 12.5 the excess of the amount
obtained by multiplying the old required capital by the rate prescribed
by the Notification over the new required capital ...........................................
Total risk-weighted assets (E) ...........................................................................
Millions of yen
2010
¥ 1,770,996
1,771,043
702,514
705,991
1,244,635
(62,702)
—
(37,453)
(60,919)
—
6,034,105
222,975
30,549
2,105,726
2,359,251
2,359,251
371,646
¥ 8,021,710
¥34,820,309
6,529,273
169,170
2,351,082
2009
¥ 664,986
665,033
702,514
501,178
813,353
(19,947)
(52,741)
(42,102)
(36,100)
(29,108)
3,167,065
—
30,722
3,171,369
3,202,092
3,167,065
294,838
¥ 6,039,292
¥34,131,307
6,518,178
193,298
2,160,664
—
¥43,869,835
572,410
¥43,575,860
Tier I risk-weighted
capital ratio:
Total risk-weighted
capital ratio:
Required capital:
(A) / (E) ✕ 100 ....................................................................................................
13.75%
7.26%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
18.28%
¥ 3,509,586
13.85%
¥ 3,486,068
204
SMFG 2010
Corporate Data
Sumitomo Mitsui Financial Group, Inc.
*Authorized Management Committee Members
■ Board of Directors, Corporate Auditors, and Executive Officers (as of June 30, 2010)
BOARD OF DIRECTORS
Masayuki Oku
Chairman of the Board and Representative Director
Teisuke Kitayama
President and Representative Director
Wataru Ohara*
Deputy President and Representative Director
Audit Dept.
Hideo Shimada*
Director
IT Planning Dept.
Director of The Japan Research Institute, Limited
Takeshi Kunibe*
Director
Subsidiaries & Affiliates Dept.,
Corporate Planning Dept., Financial Accounting Dept.,
Strategic Financial Planning Dept.
Satoru Nakanishi*
Director
Consumer Business Planning Dept.
Junsuke Fujii*
Director
General Affairs Dept., Human Resources Dept.
Koichi Miyata*
Director
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Strategic Financial Planning Dept.,
Corporate Risk Management Dept.
Shigeru Iwamoto
Director (outside)
■ SMFG Organization (as of June 30, 2010)
Yoshinori Yokoyama
Director (outside)
Kuniaki Nomura
Director (outside)
CORPORATE AUDITORS
Hiroki Nishio
Corporate Auditor
Yoji Yamaguchi
Corporate Auditor
Hideo Sawayama
Corporate Auditor
Hiroshi Araki
Corporate Auditor (outside)
Ikuo Uno
Corporate Auditor (outside)
Satoshi Ito
Corporate Auditor (outside)
EXECUTIVE OFFICERS
Tetsuya Kubo*
Senior Managing Director
Investment Banking Planning Dept.
Kazuya Jono*
Senior Managing Director
Card Business Dept.
President of SMFG Card & Credit, Inc.
Shareholders’
Meeting
Board of Directors
Auditing Committee
Risk Management Committee
Compensation Committee
Nominating Committee
Group Strategy
Committee
Management
Committee
Corporate Auditors/
Board of Corporate
Auditors
Office of Corporate Auditors
Public Relations Dept.
Corporate Planning Dept.
Investor Relations Dept.
Group CSR Dept.
Financial Accounting Dept.
Strategic Financial Planning Dept.
Subsidiaries & Affiliates Dept.
Card Business Dept.
Consumer Business Planning Dept.
Investment Banking Planning Dept.
IT Planning Dept.
General Affairs Dept.
Human Resources Dept.
Corporate Risk Management Dept.
Audit Dept.
Group Business Management Dept.
SMFG 2010 205
Sumitomo Mitsui Banking Corporation
*1 Executive Officers
*2 Authorized Management Committee Members
■ Board of Directors, Corporate Auditors, and Executive Officers (as of June 30, 2010)
BOARD OF DIRECTORS
Chairman of the Board
Teisuke Kitayama
President
Masayuki Oku*1
Deputy Presidents
Yoshinori Kawamura*1 *2
Head of Corporate Banking Unit
Global Advisory Dept.
Hideo Shimada*1 *2
IT Planning Dept., IT Business Strategy Planning Dept., Operations
Planning Dept., Operations Support Dept., Director of The Japan
Research Institute, Limited
Keiichi Ando*1
Located at Osaka (in charge of West Japan),
Deputy Head of Middle Market Banking Unit (Credit Dept. II)
Senior Managing Directors
Takeshi Kunibe*1 *2
Public Relations Dept., Corporate Planning Dept., Financial
Accounting Dept., Strategic Financial Planning Dept., Subsidiaries &
Affiliates Dept.
Tetsuya Kubo*1 *2
Head of Investment Banking Unit
Satoru Nakanishi*1 *2
Head of Consumer Banking Unit
Junsuke Fujii*1 *2
Human Resources Dept., Human Resources Development Dept.,
Quality Management Dept., General Affairs Dept., Legal Dept.,
Administrative Services Dept.
Koichi Miyata*1 *2
Risk Management Unit (Corporate Risk Management Dept.,
Credit & Investment Planning Dept.)
Human Resources Dept., Human Resources Development Dept.
Kazuya Jono*1
Head of Private Advisory Dept.
President of SMFG Card & Credit, Inc.
Yoshihiko Shimizu*1 *2
Head of Middle Market Banking Unit
Corporate Advisory Division, Global Advisory Dept.
Hiroshi Minoura*1 *2
Head of International Banking Unit
Directors (outside)
Shigeru Iwamoto
Yoshinori Yokoyama
Kuniaki Nomura
CORPORATE AUDITORS
Hiroki Yaze
Corporate Auditor
206
SMFG 2010
Yasuyuki Hayase
Corporate Auditor
Hiroshi Araki
Corporate Auditor (outside)
Ikuo Uno
Corporate Auditor (outside)
Satoshi Ito
Corporate Auditor (outside)
Hiroki Nishio
Corporate Auditor
EXECUTIVE OFFICERS
Senior Managing Director
Jun Mizoguchi
Head of Europe Division
President of Sumitomo Mitsui Banking Corporation Europe Limited
Managing Directors
Koichi Minami*2
Corporate Research Dept., Credit Administration Dept.
Deputy Head of Corporate Banking Unit (Credit Dept.) and Investment
Banking Unit (Structured Finance Credit Dept., Trust Services Dept.)
Koichi Danno*2
Internal Audit Dept., Credit Review Dept.
Mitsunori Watanabe
Head of Corporate Advisory Division
Yujiro Ito
General Affairs Dept., Legal Dept., Administrative Services Dept.
Shuichi Kageyama
Osaka Corporate Banking Division (Osaka Corporate Banking Depts.
I, II, and III)
Seiichiro Takahashi*2
Head of Treasury Unit
Hidetoshi Furukawa
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Ikuhiko Morikawa
Deputy Head of Consumer Banking Unit
Nobuaki Kurumatani
Public Relations Dept., Corporate Planning Dept.
Katsunori Okubo
Deputy Head of International Banking Unit, Middle Market Banking
Unit, Corporate Banking Unit
Global Advisory Dept.
Chairman of Sumitomo Mitsui Banking Corporation (China) Limited
Ryosuke Harada
Deputy Head of Middle Market Banking Unit (Credit Dept. I)
Hiroyuki Iwami
(Managing Director without portfolio)
Yuichiro Ueda
Tokyo Corporate Banking Division (Tokyo Corporate Banking Depts.
III, IV, and VI)
Shusuke Kurose
Deputy Head of Middle Market Banking Unit (in charge of East Japan)
Hiroshi Mishima
General Manager, Planning Dept., Treasury Unit
Masaki Tachibana
Head of Americas Division
Jun Ota
General Manager, Planning Dept., Investment Banking Unit
Toru Nagamoto
Deputy Head of Middle Market Banking Unit (in charge of East Japan)
Yasuyuki Kawasaki
General Manager, Planning Dept., International Banking Unit
Kohei Hirota
Deputy Head of Middle Market Banking Unit (in charge of West Japan)
Fumiaki Kurahara
General Manager, Structured Finance Dept.
Yoshimi Miura
Tokyo Corporate Banking Division (Tokyo Corporate Banking Depts. I,
II, and V)
Masahiro Fuchizaki
IT Planning Dept., IT Business Strategy Planning Dept., Operations
Planning Dept., Operations Support Dept.
Directors
Toshimi Tagata
General Manager, Real Estate Finance Dept.
William M. Ginn
General Manager, Corporate Banking Dept.-II, Americas Division
and Specialized Finance Dept., Americas Division
Chairman of SMBC Leasing and Finance, Inc.
Makoto Takashima
General Manager, Corporate Planning Dept.
Ryoji Yukino
General Manager, Planning Dept., Consumer Banking Unit
Kunio Yokoyama
Head of Shinjuku Middle Market Banking Division
Shigeru Sadakari
General Manager, Internal Audit Dept.
Hiroaki Hattori
Head of Kobe Middle Market Banking Division
Kiyoshi Miura
Head of Osaka Kita Middle Market Banking Division
Ichiro Onishi
Deputy Head of Consumer Banking Unit
Masaki Ashibe
General Manager, Credit Dept. II, Middle Market Banking Unit
Kazunori Okuyama
Vice Chairman and President of Sumitomo Mitsui Banking Corporation
(China) Limited
Atsuhiko Inoue
Deputy Head of Corporate Advisory Division
Shogo Sekimoto
General Manager, Tokyo Corporate Banking Dept. I
Toshiyuki Teramoto
General Manager, Credit Dept. I, Middle Market Banking Unit
Manabu Narita
General Manager, Planning Dept., Corporate Banking Unit & Middle
Market Banking Unit
Chan Chi Keung, Chris
General Manager, Corporate Banking Dept., Greater China
Shinichi Hayashida
Deputy Head of International Banking Unit
Shunso Matsuda
Head of Tokyo Toshin Middle Market Banking Division and Saitama
Ikebukuro Middle Market Banking Division
Tadashi Matsuhashi
Head of Tokyo Higashi Middle Market Banking Division
Etsutaka Inoue
Head of Osaka Minami Middle Market Banking Division
Katsuhiko Kanabe
General Manager, IT Planning Dept.
Hisaya Kuroyanagi
Head of Shibuya Middle Market Banking Division and Yokohama
Middle Market Banking Division
Yasushi Sakai
General Manager, Financial Accounting Dept.
Seiichi Ueno
General Manager, Credit Dept., Corporate Banking Unit
Kozo Ogino
General Manager, Tokyo Corporate Banking Dept. IV
Hiromitsu Kawagoe
Deputy Head of Corporate Advisory Division
Masahiro Nakagawa
General Manager, Real Estate Corporate Business Office
Hiroichi Fukuda
General Manager, Electronic Commerce Banking Dept.
Hitoshi Ishii
General Manager, Marunouchi Corporate Business Office
Koji Kimura
General Manager, Corporate Risk Management Dept.
Atsushi Kuroda
General Manager, Tokyo Corporate Banking Dept. V
Seiji Sato
General Manager, Tokyo Corporate Banking Dept. III
Masayuki Shimura
Head of Asia Pacific Division
Katsunori Tanizaki
General Manager, International Treasury Dept.
Tomohiro Nishikawa
Head of Kyoto Hokuriku Middle Market Banking Unit and General
Manager, Kyoto Corporate Business Office-I
Takafumi Yamahiro
General Manager, Operations Planning Dept.
SMFG 2010 207
Consumer
Banking Unit
Middle Market
Banking Unit
Corporate
Banking Unit
International
Banking Unit
Treasury Unit
Investment
Banking Unit
■ SMBC Organization (as of June 30, 2010)
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
CSR Dept.
Financial Accounting Dept.
Equity Portfolio Management Dept.
Strategic Financial Planning Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
IT Business Strategy Planning Dept.
Human Resources Dept.
Training Institute
Counseling Dept.
Diversity and Inclusion Dept.
Human Resources Development Dept.
Quality Management Dept.
Customer Relations Dept.
Risk Management Unit
Corporate Risk Management Dept.
Operational Risk Management Dept.
Risk Management Systems Dept.
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
Compliance Unit
General Affairs Dept.
Antimonopoly Law Monitoring Dept.
Financial Products Compliance Dept.
Financial Crime Prevention Dept.
International Compliance Dept.
Legal Dept.
Corporate Services Unit
Administrative Services Dept.
Secretariat
Operations Planning Dept.
Operations Support Dept.
Corporate Research Dept.
Credit Administration Dept.
Credit Business Dept.
Shareholders’
Meeting
Board of
Directors
Management
Committee
Corporate Auditors/
Corporate Auditors/
Board of Corporate Auditors
Board of Corporate Auditors
Office of Corporate Auditors
208
SMFG 2010
Planning Dept., Consumer Banking Unit
Consumer Compliance Dept.
Marketing Dept.
Next W (cid:129)ing Project Dept.
Consumer Facilitating Financing Dept.
Financial Consulting Dept.
Personal Product Development Dept.
Consumer Loan Dept.
Mass Retail Dept.
Credit Dept., Consumer Banking Unit
Business Promotion & Solution Dept.
Public & Financial Institutions Banking Dept.
Small and Medium Enterprises Marketing Dept.
Small Enterprises Credit Portfolio Administration Dept.
Credit Dept. I, Middle Market Banking Unit
Credit Monitoring Dept.
Credit Dept. II, Middle Market Banking Unit
Credit Monitoring Dept.
Planning Dept., Corporate Banking Unit &
Middle Market Banking Unit
Middle Market Facilitating Financing Dept.
Credit Dept., Corporate Banking Unit
Planning Dept., International Banking Unit
IT & Business Administration Planning Dept.
Asia Pacific Training Dept.
Planning Dept., Americas Division
Credit Dept., Americas Division
Risk Management Dept., Americas Division
Compliance Dept., Americas Division
Planning Dept., Europe Division
Credit Dept., Europe Division
Risk Management Dept., Europe Division
Planning Dept., Asia Pacific Division
Asia Credit Dept., International Banking Unit
Credit Management Dept., International Banking Unit
Environment Analysis Dept.
Planning Dept., Treasury Unit
Treasury Dept.
International Treasury Dept.
Trading Dept.
Treasury Marketing Dept.
Planning Dept., Investment Banking Unit
Securities Business Planning Dept.
Strategic Products Dept.
Syndication Dept.
Structured Finance Dept.
Shipping Finance Dept.
Environmental Products Dept.
Real Estate Finance Dept.
M&A Advisory Services Dept.
Merchant Banking Dept.
Financial Products Dept.
Securities Direct Sales Dept.
Structured Finance Credit Dept.
Trust Services Dept.
Trust Business Operations Dept.
Stock Execution Dept.
Financial Products Marketing Dept.
Settlement Finance Unit
Electronic Commerce Banking Dept.
Global Transaction Banking Dept.
Asset Finance Dept.
Global Securities Business Dept.
Block Consumer Business Office
Middle Market Banking Division
Branch
Consumer Loan Promotion Office
Apartment House Loan Promotion Office
Loan Support Office
Private Banking Dept.
Direct Banking Dept.
Consumer Finance Promotion Office
Corporate Business Office
Business Promotion Office
Financial Development Office
Real Estate Corporate Business Office
Public Institutions Business Office
Business Support Office
Corporate Advisory Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Corporate Banking Dept.
Americas Division
Europe Division
Asia Pacific Division
Global Institutional Banking Dept.
Global Client Business Dept.
Global Corporate Investment Dept.
Global Trade Finance Dept.
Branches/Representative Offices
in North East Asia
Departments of Americas Division
Departments of Europe Division
Branches/Representative Offices
in Asia Pacific Division
Universal Banking Dept.
Private Advisory Dept.
Private Advisory Business Dept.
Corporate Employees Business Dept.
Defined Contribution Dept.
Global Advisory Dept.
Branch Service Office
Head /Main Service Office
Public Institutions Operations Office
SMFG 2010 209
Principal Subsidiaries and Affiliates (as of March 31, 2010)
All companies shown hereunder are consolidated subsidiaries or affiliates of Sumitomo Mitsui Financial Group, Inc.
Those printed in green ink are consolidated subsidiaries or affiliates of Sumitomo Mitsui Banking Corporation.
■ Principal Domestic Subsidiaries
Company Name
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
Sumitomo Mitsui Banking Corporation
1,770,996
100
Sumitomo Mitsui Card Company, Limited
34,000
0
(65.99)
Sumitomo Mitsui Finance and Leasing Company, Limited
The Japan Research Institute, Limited
SMBC Friend Securities Co., Ltd.
SMFG Card & Credit, Inc.
Nikko Cordial Securities Inc.
SAKURA CARD CO., LTD.
ORIX CREDIT CORPORATION
SMM Auto Finance, Inc.
The Japan Net Bank, Limited
SMBC Loan Business Planning Co., Ltd.
SMBC Loan Adviser Co., Ltd.
SMBC Guarantee Co., Ltd.
SMBC Finance Business Planning Co., Ltd.
SMBC Finance Service Co., Ltd.
SMBC Business Support Co., Ltd.
Financial Link Co., Ltd.
SMBC Consulting Co., Ltd.
SMBC Support & Solution Co., Ltd.
SMBC Servicer Co., Ltd.
SAKURA KCS Corporation
THE MINATO BANK, LTD.
Kansai Urban Banking Corporation
SMBC Staff Service Co., Ltd.
SMBC Learning Support Co., Ltd.
SMBC PERSONNEL SUPPORT CO., LTD.
SMBC Center Service Co., Ltd.
SMBC Delivery Service Co., Ltd.
SMBC Green Service Co., Ltd.
SMBC International Business Co., Ltd.
SMBC International Operations Co., Ltd.
SMBC Loan Business Service Co., Ltd.
SMBC Principal Finance Co., Ltd.
SMBC Market Service Co., Ltd.
SMBC Loan Administration and Operations Service Co., Ltd.
SMBC Property Research Service Co., Ltd.
Japan Pension Navigator Co., Ltd.
SMBC Electronic Monetary Claims Recording
Co., Ltd.
SMBC Barclays Wealth Service Co., Ltd.*1
15,000
10,000
27,270
100
10,000
7,438
22,170
7,700
37,250
100,010
10
187,720
10
71,705
10
160
1,100
10
1,000
2,054
27,484
47,039
90
10
10
100
30
30
20
40
70
100
10
10
30
1,600
500
30
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
—
—
—
—
—
—
Jun. 6, 1996
Commercial banking
Dec. 26, 1967 Credit card services
Feb. 4, 1963
Leasing
Nov. 1, 2002
System engineering, data processing,
management consulting, and economic research
Mar. 2, 1948
Securities
Oct. 1, 2008
Business management
60
100
100
100
(100)
100
Jun. 15, 2009 Securities
(95.74) 85.14 (10.59)
Feb. 23, 1983 Credit card services
(50.99)
50.99
Jun. 21, 1979 Consumer loans
(56)
41
Sep. 17, 1993 Automotive financing
(59.70)
59.70
Sep. 19, 2000 Commercial banking
100
Apr. 1, 2004 Management support services
(100)
Apr. 1, 1998
Consulting and agency services for
consumer loans
(100)
Jul. 14, 1976
Credit guarantee
100
Apr. 1, 2004 Management support services
(100)
Dec. 5, 1972
Loans, collecting agent and factoring
(100)
Jul. 1, 2004
Clerical work outsourcer
(100)
(100)
(100)
(100)
(100)
(100)
(100)
0
0
0
0
0
(100)
Sep. 29, 2000
(100)
50
(25)
May 1, 1981
Data processing service and e-trading
consulting
Management consulting and seminar
organizer
(100)
(100)
100
100
Apr. 1, 1996
Help desk and system support
Mar. 11, 1999 Servicer
(50.21) 27.53 (5.00) Mar. 29, 1969 System engineering and data processing
(46.44) 45.10 (1.33)
Sep. 6, 1949
Commercial banking
(60.24) 49.43 (0.35)
Jul. 1, 1922
Commercial banking
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
100
100
100
100
100
100
100
100
Jul. 15, 1982 Temporary manpower service
May 27, 1998 Seminar organizer
Apr. 15, 2002 Banking clerical work
Oct. 16, 1995 Banking clerical work
Jan. 31, 1996 Banking clerical work
Mar. 15, 1990 Banking clerical work
Sep. 28, 1983 Banking clerical work
Dec. 21, 1994 Banking clerical work
Sep. 24, 1976 Banking clerical work
Mar. 8, 2010
Investments for corporate revitalization and
other related investments
Feb. 3, 2003
Banking clerical work
Feb. 3, 2003
Banking clerical work
Feb. 1, 1984
Banking clerical work
(69.71)
69.71
Sep. 21, 2000 Defined contribution plan administrator
(100)
(100)
100
100
Apr. 16, 2009
Electronic monetary claims recording
Mar. 1, 2010
Provision and translation of business tools and
research information
Note: Figures in parentheses ( ) in the voting rights columns indicate voting rights held indirectly via subsidiaries and affiliates.
*1 SMFG and SMBC’s voting rights in SMBC Barclays Wealth Service Co., Ltd. has been at 50.1% since July 1, 2010.
210
SMFG 2010
■ Principal Overseas Subsidiaries
Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
Sumitomo Mitsui Banking
Corporation Europe Limited
Sumitomo Mitsui Banking
Corporation (China) Limited
Manufacturers Bank
Sumitomo Mitsui Banking
Corporation of Canada
Banco Sumitomo Mitsui
Brasileiro S.A.
U.K.
China
U.S.A.
Canada
Brazil
US$1,600 million
CNY7.0 billion
US$80.786 million
C$169 million
R$409.357 million
ZAO Sumitomo Mitsui Rus Bank
Russia
RUB1.6 billion
PT Bank Sumitomo Mitsui
Indonesia
SMBC Leasing and Finance, Inc.
SMBC Capital Markets, Inc.
SMBC Securities, Inc.
SMBC Financial Services, Inc.
Indonesia
Rp1,502.4 billion
U.S.A.
U.S.A.
U.S.A.
U.S.A.
US$1,620
US$100
US$100
US$3 million
SMBC Cayman LC Limited*2
Cayman Islands
US$500
Sumitomo Finance (Asia) Limited
Cayman Islands
SBTC, Inc.
SB Treasury Company L.L.C.
SB Equity Securities (Cayman),
Limited
U.S.A.
U.S.A.
US$35 million
US$50 million
US$470 million
Cayman Islands
¥25,000 million
SFVI Limited
British Virgin Islands
US$300
Sakura Finance (Cayman) Limited
Cayman Islands
US$100,000
Sakura Preferred Capital (Cayman)
Limited
Cayman Islands
¥10 million
SMBC International Finance N.V.
Netherlands Antilles
US$200,000
SMBC Leasing Investment LLC
SMBC Capital Partners LLC
U.S.A.
U.S.A.
US$236.494 million
US$10,000
SMBC MVI SPC
Cayman Islands
US$195 million
SMBC DIP Limited
Cayman Islands
US$8 million
SMBC Capital Markets Limited
SMBC Derivative Products Limited
U.K.
U.K.
SMBC Capital India Private Limited India
Sumitomo Mitsui Finance Dublin
Limited
Ireland
US$797 million
US$300 million
Rs400 million
US$18 million
Sakura Finance Asia Limited
Hong Kong
US$65.5 million
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(100)
(100)
(100)
(100)
(100)
(100)
(99)
100
100
100
100
100
99
99
Mar. 5, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
Jun. 26, 1962
Commercial banking
Apr. 1, 2001
Commercial banking
Oct. 6, 1958
Commercial banking
May. 8, 2009
Commercial banking
Aug. 22, 1989 Commercial banking
(100)
89.69 (7.69)
Nov. 9, 1990
Leasing, investments
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
90
90
(10)
(10)
Dec. 4, 1986
Derivatives and investments
Aug. 8, 1990
Securities, investments
100
100
100
100
Aug. 8, 1990
Feb. 7, 2003
Investments,
investment advisor
Credit guarantee,
bond investment
Sep. 26, 1973
Investments
Jan. 26, 1998
Investments
0
(100)
Jan. 26, 1998
Loans
100
100
100
100
100
Dec. 15, 1998
Finance
Jul. 30, 1997
Investments
Feb. 11, 1991
Finance
Nov. 12, 1998
Finance
Jun. 25, 1990
Finance
0
(100)
Apr. 7, 2003
Investments in leasing
100
100
100
100
Dec. 18, 2003 Holding and trading securities
Sep. 9, 2004
Loans, buying/
selling of monetary claims
Mar. 16, 2005
Loans, buying/
selling of monetary claims
Mar. 13, 1990
Derivatives and investments
0
(100)
Apr. 18, 1995 Derivatives and investments
(100)
99.99 (0.00)
Apr. 3, 2008
Advisory services
(100)
(100)
(100)
100
100
100
—
Sep. 19, 1989
Finance
Oct. 17, 1977
Investments
Jun. 29, 1984
Investments
Nov. 28, 2006
Finance
Sumitomo Mitsui Finance Australia
Limited
SMFG Preferred Capital USD 1
Limited
Australia
A$156.5 million
Cayman Islands
US$649.491 million
100
*2 SMBC Cayman LC Limited, like other subsidiaries of SMBC, is a separate corporate entity with its own separate creditors and the claims of such creditors are
prior to the claims of SMBC, as the direct or indirect holder of the equity in such subsidiary.
SMFG 2010 211
Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
SMFG Preferred Capital GBP 1
Limited
SMFG Preferred Capital USD 2
Limited
SMFG Preferred Capital GBP 2
Limited
SMFG Preferred Capital JPY 1
Limited
SMFG Preferred Capital USD 3
Limited
SMFG Preferred Capital JPY 2
Limited
SMFG Preferred Capital JPY 3
Limited
SMBC Preferred Capital USD 1
Limited
SMBC Preferred Capital GBP 1
Limited
SMBC Preferred Capital USD 2
Limited
SMBC Preferred Capital GBP 2
Limited
SMBC Preferred Capital JPY 1
Limited
SMBC Preferred Capital USD 3
Limited
SMBC Preferred Capital JPY 2
Limited
Cayman Islands
£73.676 million
Cayman Islands
US$1,800 million
Cayman Islands
£250 million
Cayman Islands
¥135,000 million
Cayman Islands
US$1,350 million
Cayman Islands
¥698,900 million
Cayman Islands
¥392,900 million
Cayman Islands
US$663.141 million
Cayman Islands
£78.576 million
Cayman Islands
US$1,811 million
Cayman Islands
£251.5 million
Cayman Islands
¥137,000 million
Cayman Islands
US$1,358 million
Cayman Islands
¥706,500 million
100
100
100
100
100
100
100
0
0
0
0
0
0
0
(100)
(100)
(100)
(100)
(100)
(100)
(100)
—
—
—
—
—
—
—
100
100
100
100
100
100
100
Nov. 28, 2006
Finance
Oct. 25, 2007
Finance
Oct. 25, 2007
Finance
Jan. 11, 2008
Finance
Jul. 8, 2008
Finance
Nov. 3, 2008
Finance
Aug. 12, 2009
Finance
Nov. 28, 2006
Finance
Nov. 28, 2006
Finance
Oct. 25, 2007
Finance
Oct. 25, 2007
Finance
Jan. 11, 2008
Finance
Jul. 8, 2008
Finance
Nov. 19, 2008
Finance
■ Principal Affiliates
Company Name
Daiwa SMBC Capital Co., Ltd.*1
Daiwa Securities SMBC Principal
Investments Co., Ltd.
Daiwa SB Investments Ltd.
Sumitomo Mitsui Asset Management
Company, Limited
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
18,767
500
2,000
2,000
5,000
600
0
0
0
0
0
0
0
0
0
0
0
(40)
(40)
43.96
40
40
—
Oct. 20, 1983 Venture capital
Feb. 1, 2010
Investments, fund management
Apr. 1, 1999
Investment advisory and investment trust
management
(27.5)
27.5
Dec. 1, 2002
Investment advisory and investment trust
management
(50)
(49)
—
49
Jul. 3, 2006
System engineering and data processing
Nov. 29, 1972 System engineering and data processing
(15.06)
15.06
May 24, 1989 Commercial banking
(22.02)
22.02
Mar. 20, 1962 Consumer loans
(100)
49.99 (50.00)
Jun. 8, 2000
Consumer loans
(100)
0
(100)
Nov. 22, 1946 Consumer loans
(47.01)
4.99 (42.01) May 25, 1982 Credit card services
(48.58)
—
—
Sep. 11, 1950 Credit card and installment services
Feb. 21, 1981
Leasing
Vietnam Export Import Commercial Joint Stock
Bank
VND12,526.947
billion
Promise Co., Ltd.
At-Loan Co., Ltd.
SANYO SHINPAN FINANCE CO., LTD.
POCKET CARD CO., LTD.
Cedyna Financial Corporation*2
80,737
10,912
16,268
11,268
57,843
Sumitomo Mitsui Auto Service Company, Limited
6,950
39.99
*1 Daiwa SMBC Capital Co., Ltd. is no longer an affiliate of Sumitomo Mitsui Financial Group or Sumitomo Mitsui Banking Corporation as of July 1, 2010, due to
dissolution of the venture capital joint venture with Daiwa Securities Group Inc.
*2 Cedyna Financial Corporation became a consolidated subsidiary, on May 31, 2010.
212
SMFG 2010
International Directory (as of June 30, 2010)
Asia and Oceania
SMBC Branches and
Representative Offices
Hong Kong Branch
7th & 8th Floor, One International
Finance Centre, 1 Harbour View
Street, Central, Hong Kong
Special Administrative Region,
The People’s Republic of China
Tel: 852 (2206) 2000
Fax: 852 (2206) 2888
Shanghai Branch
11F, Shanghai World Financial
Center, 100 Century Avenue,
Pudong New Area, Shanghai
200120, The People’s Republic of
China
Tel: 86 (21) 3860-9000
Fax: 86 (21) 3860-9999
Dalian Representative Office
Senmao Building 9F, 147
Zhongshan Lu, Dalian 116011,
The People’s Republic of China
Tel: 86 (411) 8370-7873
Fax: 86 (411) 8370-7761
Chongqing Representative Office
27F, Metropolitan Tower, 68
Zourong Road, Yuzhong District,
Chongqing 400010, The People’s
Republic of China
Tel: 86 (23) 6280-3394
Fax: 86 (23) 6280-3748
Shenyang Representative Office
Room No. 606, Gloria Plaza Hotel
Shenyang, No. 32 Yingbin Street,
Shenhe District, Shenyang
110013, The People’s Republic of
China
Tel: 86 (24) 2252-8310
Fax: 86 (24) 2252-8769
(*) Shenyang Representative Office is closed
on August 13, 2010.
Taipei Branch
3F, Walsin Lihwa Xinyi Building,
No. 1 Songzhi Road, Xinyi District,
Taipei 110, Taiwan
Tel: 886-2-2720-8100
Fax: 886-2-2720-8287
Seoul Branch
Young Poong Bldg. 7F, 33,
Seorin-dong, Jongno-gu,
Seoul, 110-752, Korea
Tel: 82-2-732-1801
Fax: 82-2-399-6330
Singapore Branch
3 Temasek Avenue #06-01,
Centennial Tower, Singapore
039190, The Republic of
Singapore
Tel: 65-6882-0001
Fax: 65-6887-0330
Labuan Branch
Level 12 (B&C), Main Office
Tower, Financial Park Labuan,
Jalan Merdeka, 87000 Labuan,
Federal Territory, Malaysia
Tel: 60 (87) 410955
Fax: 60 (87) 410959
Labuan Branch Kuala Lumpur
Marketing Office
Letter Box No. 25, 29th Floor,
UBN Tower, 10, Jalan P. Ramlee,
50250 Kuala Lumpur, Malaysia
Tel: 60 (3) 2026-8392
Fax: 60 (3) 2026-8395
Kuala Lumpur Representative
Office
Letter Box No. 25, 29th Floor,
UBN Tower, 10, Jalan P. Ramlee,
50250 Kuala Lumpur, Malaysia
Tel: 60 (3) 2026-8392
Fax: 60 (3) 2026-8395
Ho Chi Minh City Branch
9th Floor, The Landmark,
5B Ton Duc Thang Street,
District 1, Ho Chi Minh City,
Vietnam
Tel: 84 (8) 3520-2525
Fax: 84 (8) 3822-7762
Hanoi Branch
1105, 11th Floor, Pacific Place
Building, 83B Ly Thuong Kiet
Street, Hanoi, Vietnam
Tel: 84 (4) 3946-1100
Fax: 84 (4) 3946-1133
Yangon Representative Office
Room Number 717/718, 7th Floor,
Traders Hotel, 223 Sule Pagoda
Road, Pabedan Township,
Yangon, Myanmar
Tel: 95 (1) 242828 ext.7717
Fax: 95 (1) 381227
Bangkok Branch
8th-10th Floor, Q.House Lumpini
Building, 1 South Sathorn Road,
Tungmahamek, Sathorn, Bangkok
10120, Thailand
Tel: 66 (2) 353-8000
Fax: 66 (2) 353-8282
Manila Representative Office
20th Floor, Rufino Pacific Tower,
6784 Ayala Avenue, Makati City,
Metro Manila, The Philippines
Tel: 63 (2) 841-0098/9
Fax: 63 (2) 811-0877
Sydney Branch
Level 35, The Chifley Tower,
2 Chifley Square, Sydney, NSW
2000, Australia
Tel: 61 (2) 9376-1800
Fax: 61 (2) 9376-1863
SMFG 2010 213
Sumitomo Mitsui Banking
Corporation (China) Limited
Guangzhou Branch
12F, International Finance Place,
No.8 Huaxia Road, Tianhe District,
Guangzhou 510623, The People’s
Republic of China
Tel: 86 (20) 3819-1888
Fax: 86 (20) 3810-2028
Sumitomo Mitsui Banking
Corporation (China) Limited
Suzhou Branch
23F, Metropolitan Towers, No. 199
Shi Shan Road, Suzhou New
District, Suzhou, Jiangsu 215011,
The People’s Republic of China
Tel: 86 (512) 6825-8205
Fax: 86 (512) 6825-6121
Sumitomo Mitsui Banking
Corporation (China) Limited
Suzhou Industrial Park
Sub-Branch
16F, International Building, No. 2,
Suhua Road, Suzhou Industrial
Park, Jiangsu Province 215021,
The People’s Republic of China
Tel: 86 (512) 6288-5018
Fax: 86 (512) 6288-5028
Sumitomo Mitsui Banking
Corporation (China) Limited
Hangzhou Branch
23F, Golden Plaza, No.118, Qing
Chun Road, Xia Cheng District,
Hangzhou, Zhejiang 310003,
The People’s Republic of China
Tel: 86 (571) 2889-1111
Fax: 86 (571) 2889-6699
Sumitomo Mitsui Banking
Corporation (China) Limited
Shenyang Branch
1501, E Building, Shenyang Fortune
Plaza, 59 Beizhan Road, Shenhe
District, Shenyang, 110013
The People’s Republic of China
Tel: 86 (24) 3128-7000
Fax: 86 (24) 3128-7005
PT Bank Sumitomo Mitsui
Indonesia
Summitmas II, 10th Floor, JI.
Jendral Sudirman Kav. 61-62,
Jakarta 12190, Indonesia
Tel: 62 (21) 522-7011
Fax: 62 (21) 522-7022
Sumitomo Mitsui Finance Australia
Limited
Level 35, The Chifley Tower,
2 Chifley Square, Sydney, NSW
2000, Australia
Tel: 61 (2) 9376-1800
Fax: 61 (2) 9376-1863
SMBC Capital Markets Limited
Hong Kong Branch
7th Floor, One International
Finance Centre, 1 Harbour View
Street, Central, Hong Kong
Special Administrative Region,
The People’s Republic of China
Tel: 852-2532-8500
Fax: 852-2532-8505
SMBC Metro Investment
Corporation
20th Floor, Rufino Pacific Tower,
6784 Ayala Avenue, Makati City,
Metro Manila, The Philippines
Tel: 63-2-8110845
Fax: 63-2-8110876
Vietnam Export Import
Commercial Joint Stock Bank
7 Le Thi Hong Gam Street,
Nguyen Thai Binh Ward, District
1, Ho Chi Minh City, Vietnam
Tel: 84 (8) 3821-0055
Fax: 84 (8) 3829-6063
SBCS Co., Ltd.
10th Floor, Q. House Lumpini
Building, No.1 South Sathorn Road,
Tungmahamek, Sathorn,
Bangkok 10120 Thailand
Tel: 66 (2) 677-7270~5
Fax: 66 (2) 677-7279
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Sumitomo Mitsui Banking
Corporation (China) Limited
Head Office (Shanghai)
11F, Shanghai World Financial
Center, 100 Century Avenue,
Pudong New Area, Shanghai
200120, The People’s Republic of
China
Tel: 86 (21) 3860-9000
Fax: 86 (21) 3860-9999
Sumitomo Mitsui Banking
Corporation (China) Limited
Shanghai Puxi Sub-Branch
1, 12, 13,12F, Maxdo Center,
8 Xingyi Road, Changning District,
Shanghai, The People’s Republic of
China
Tel: 86 (21) 2219-8000
Fax: 86 (21) 2219-8199
(*) opened on July 5, 2010
Sumitomo Mitsui Banking
Corporation (China) Limited
Beijing Branch
Unit1601,16F, North Tower,
Beijing Kerry Centre, No.1, Guang
Hua Road, Chao Yang District,
Beijing 100020, The People’s
Republic of China
Tel: 86 (10) 5920-4500
Fax: 86 (10) 5915-1080
Sumitomo Mitsui Banking
Corporation (China) Limited
Tianjin Branch
12F, The Exchange Tower 2, 189
Nanjing Road, Heping District,
Tianjin 300051, The People’s
Republic of China
Tel: 86 (22) 2330-6677
Fax: 86 (22) 2319-2111
Sumitomo Mitsui Banking
Corporation (China) Limited
Tianjin Binhai Sub-Branch
8F, E2B, Binhai Financial Street,
No. 20, Guangchang East Road,
TEDA, Tianjin 300457, The
People’s Republic of China
Tel: 86 (22) 6622-6677
Fax: 86 (22) 6628-1333
214
SMFG 2010
BSL Leasing Co., Ltd.
19th Floor, Sathorn City Tower,
175 South Sathorn Road,
Thungmahamek, Sathorn,
Bangkok, 10120 Thailand
Tel: 66 (2) 670-4700
Fax: 66 (2) 679-6160
SMBC Capital India Private Limited
B-14/A, Qutab Institutional Area,
Katwaria Sarai, New Delhi-
1100016, India
Tel: 91 (11) 4607-8366
Fax: 91 (11) 4607-8355
The Japan Research Institute
(Shanghai) Solution Co., Ltd.
Unit 141, 18F, HSBC Tower,
1000 Lujiazui Ring Road,
Pudong New Area,
Shanghai, 200120 The People’s
Republic of China
Tel: 86 (21) 6841-2788
Fax: 86 (21) 6841-1287
(*) relocated on July 19, 2010
The Japan Research Institute
(Shanghai) Consulting Co., Ltd.
Unit 41, 18F, HSBC Tower,
1000 Lujiazui Ring Road,
Pudong New Area,
Shanghai, 200120 The People’s
Republic of China
Tel: 86 (21) 6841-1288
Fax: 86 (21) 6841-1287
(*) relocated on July 19, 2010
The Japan Research Institute
(Shanghai) Consulting Co., Ltd.
Beijing Branch
Unit 906, 9F, North Tower, Beijing
Kerry Centre, No.1, Guanghua
Road, Chaoyang District, Beijing
100020, The People’s Republic of
China
Tel: 86 (10) 8529-8141
Fax: 86 (10) 8529-7343
Sumitomo Mitsui Finance and
Leasing (Singapore) Pte. Ltd.
152 Beach Road,
Gateway East #21-5,
Singapore 189721
Tel: 65-6224-2955
Fax: 65-6225-3570
Sumitomo Mitsui Finance and
Leasing (Hong Kong) Ltd.
Room 2703, Tower I,
Admiralty Centre, 18 Harcourt
Road, Hong Kong Special
Administrative Region,
The People’s Republic of China
Tel: 852-2523-4155
Fax: 852-2845-9246
SMFL Leasing (Thailand) Co., Ltd.
30th Floor, Q. House
Lumpini Building,
1 South Sathorn Road,
Tungmahamek, Sathorn,
Bangkok 10120 Thailand
Tel: 66 (2) 677-7400
Fax: 66 (2) 677-7413
Sumitomo Mitsui Finance and
Leasing (China) Co., Ltd.
Room 2502-2503, Goldlion Tower,
138 Ti Yu Dong Road,
Guangzhou, 510620
The People’s Republic of China
Tel: 86 (20) 8755-0021
Fax: 86 (20) 8755-0422
Sumitomo Mitsui Finance and
Leasing (China) Co., Ltd.
Shanghai Branch
Unit 2301-2303,Lippo Plaza,
222 Middle Huaihai Road,
Luwan District, Shanghai, 200021
The People’s Republic of China
Tel: 86(21)5396-5522
Fax: 86(21)5396-5552
SMFL Leasing (Malaysia) Sdn. Bhd.
Letter Box No. 58, 11th Floor,
UBN Tower, 10 Jalan P. Ramlee,
50250 Kuala Lumpur, Malaysia
Tel: 60 (3) 2026-2619
Fax: 60 (3) 2026-2627
PT. SMFL Leasing Indonesia
Summitmas II, 12th Floor, Jl.Jend.
Sudirman Kav. 61-62 Jakarta
Selatan 12190, Indonesia
Tel: 62 (21) 520-2083
Fax: 62 (21) 520-2088
Sumitomo Mitsui Auto Leasing &
Service (Thailand) Co., Ltd.
161, Nuntawan Building, 10th Floor,
Rajdamri Road,
Khwaeng Lumpinee,
Khet Pathumwan,
Bangkok Metropolis, Thailand
Tel: 66-2252-9511
Fax: 66-2255-3130
PROMISE (HONG KONG) CO., LTD.
14th Floor, Luk Kwok Centre,72
Gloucester Road,Wanchai, Hong
Kong Special Administrative Region,
The People’s Republic of China
Tel: 852 (3199) 1000
Fax: 852 (2528) 5472
PROMISE (THAILAND) CO., LTD.
15th Floor, Capital Tower, All
Seasons Place, 87/1 Wireless Road,
Lumpini, Phatumwan, Bangkok
10330 Thailand
Tel: 66 (2) 655-8574
Fax: 66 (2) 655-8170
PROMISE (SHENZHEN) CO., LTD.
Room 911-912, Ying Long
Development Center, Shennan
Road 6025, Fu Tian District,
Shenzhen 518040, The People’s
Republic of China
Tel: 86 (755) 2396-6200
Fax: 86 (755) 2396-6379
SMFG 2010 215
The Americas
SMBC Branches and
Representative Offices
New York Branch
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-4000
Fax: 1 (212) 593-9522
Cayman Branch
P.O. Box 694, Edward Street,
George Town, Grand Cayman,
Cayman Islands
Los Angeles Branch
601 South Figueroa Street,
Suite 1800, Los Angeles,
CA 90017, U.S.A.
Tel: 1 (213) 452-7800
Fax: 1 (213) 623-6832
San Francisco Branch
555 California Street, Suite 3350,
San Francisco, CA 94104, U.S.A.
Tel: 1 (415) 616-3000
Fax: 1 (415) 397-1475
Houston Representative Office
Two Allen Center, 1200 Smith
Street, Suite 1140 Houston, Texas
77002, U.S.A.
Tel: 1 (713) 277-3500
Fax: 1 (713) 277-3555
Mexico City Representative Office
Torre Altiva Boulevard Manuel
Avila Camacho 138 Piso 2, Loc. B
Lomas de Chapultepec, 11000
Mexico, D.F.
Tel: 52 (55) 2623-0200
Fax: 52 (55) 2623-1375
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Manufacturers Bank
515 South Figueroa Street,
Los Angeles, CA 90071, U.S.A.
Tel: 1 (213) 489-6200
Fax: 1 (213) 489-6254
Sumitomo Mitsui Banking
Corporation of Canada
Ernst & Young Tower, Suite 1400,
P.O. Box 172, Toronto Dominion
Centre, Toronto, Ontario M5K
1H6, Canada
Tel: 1 (416) 368-4766
Fax: 1 (416) 367-3565
Banco Sumitomo Mitsui Brasileiro
S.A.
Avenida Paulista, 37-11 e 12
andar, Sao Paulo-SP-CEP 01311-
902, Brazil
Tel: 55 (11) 3178-8000
Fax: 55 (11) 3289-1668
SMBC Capital Markets, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5100
Fax: 1 (212) 224-5181
SMBC Leasing and Finance, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5200
Fax: 1 (212) 224-5222
SMBC Securities, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5300
Fax: 1 (212) 224-5333
JRI America, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-4200
Fax: 1 (212) 224-4611
Europe, Middle-East and Africa
SMBC Branches and
Representative Offices
Düsseldorf Branch
Prinzenallee 7,40549 Düsseldorf,
Federal Republic of Germany
Tel: 49 (211) 36190
Fax: 49 (211) 3619236
Brussels Branch
Avenue des Arts, 58, Bte. 18,
1000 Brussels, Belgium
Tel: 32 (2) 551-5000
Fax: 32 (2) 513-4100
Dubai Branch
Building One, 5th Floor, Gate
Precinct, Dubai International
Financial Centre, PO Box 506559
Dubai, United Arab Emirates
Tel: 971 (4) 428-8000
Fax: 971 (4) 428-8001
Madrid Representative Office
Villanueva, 12-1. B, 28001 Madrid,
Spain
Tel: 34 (91) 576-6196
Fax: 34 (91) 577-7525
SMBC Amsterdam Representative
Office
Strawinskylaan 1733 Toren D-12,
1077XX Amsterdam, The
Netherlands
Tel: 31 (20) 718-3888
Fax: 31 (20) 718-3889
Prague Representative Office
International Business Centre,
Pobrezni 3,186 00 Prague 8,
Czech Republic
Tel: 420-224-832-911
Fax: 420-224-832-933
216
SMFG 2010
ZAO Sumitomo Mitsui Rus Bank
Presnenskaya naberezhnaya,
house 10, block C, Moscow 123317,
Russian Federation
Tel: 7 (495) 287-8200
Fax: 7 (495) 287-8201
Sumitomo Mitsui Finance Dublin
Limited
La Touche House, I.F.S.C.,
Custom House Docks, Dublin 1,
Ireland
Tel: 353 (1) 670-0066
Fax: 353 (1) 670-0353
JRI Europe, Limited
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7406-2700
Fax: 44 (20) 7406-2799
SMFL Aircraft Capital Corporation
B.V.
World Trade Center Amsterdam,
Strawinskylaan 907,
1077 XX Amsterdam,
The Netherlands
Tel: 31-20-575-2570
Fax: 31-20-575-2571
Bahrain Representative Office
No. 406 & 407 (Entrance 3, 4th
Floor) Manama Centre,
Government Road, Manama,
State of Bahrain
Tel: 973-17223211
Fax: 973-17224424
Tehran Representative Office
4th Floor, 80 Nezami Gangavi
Street, Vali-e-Asr Avenue, Tehran
14348, Islamic Republic of Iran
Tel: 98 (21) 8879-4586/4569
Fax: 98 (21) 8820-6523
Doha QFC Office
Office 1901, 19th Floor, Qatar
Financial Centre Tower,
Diplomatic Area-West bay, Doha,
Qatar, P.O. Box 23769
Tel: 974-4496-7572
Fax: 974-4496-7576
Cairo Representative Office
Flat No. 6 of the 14th Fl., 3 Ibn
Kasir Street, Cornish El Nile, Giza,
Arab Republic of Egypt
Tel: 20 (2) 3761-7657
Fax: 20 (2) 3761-7658
Johannesburg Representative
Office
Building Four, First Floor,
Commerce Square,
39 Rivonia Road, Sandhurst,
Sandton 2196, South Africa
Tel: 27 (11) 502-1780
Fax: 27 (11) 502-1790
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Sumitomo Mitsui Banking
Corporation Europe Limited
Head Office
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7786-1000
Fax: 44 (20) 7236-0049
Sumitomo Mitsui Banking
Corporation Europe Limited
Paris Branch
20, Rue de la Ville l’Evêque,
75008 Paris, France
Tel: 33 (1) 44 (71) 40-00
Fax: 33 (1) 44 (71) 40-50
Sumitomo Mitsui Banking
Corporation Europe Limited
Milan Branch
Via della Spiga 30/ Via Senato 25,
20121 Milan, Italy
Tel: 39 (02) 7636-1700
Fax: 39 (02) 7636-1701
Sumitomo Mitsui Banking
Corporation Europe Limited
Moscow Representative Office
Presnenskaya naberezhnaya,
house 10, block C, Moscow, 123317
Russian Federation
Tel: 7 (495) 287-8265
Fax: 7 (495) 287-8266
SMBC Capital Markets Limited
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7786-1400
Fax: 44 (20) 7786-1490
SMBC Derivative Products Limited
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7786-1400
Fax: 44 (20) 7786-1490
SMFG 2010 217
**SMBCE:Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Finance Dublin Limited
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Capital
Markets Limited
SMBCE** Paris Branch
Madrid Representative Office
SMBC Amsterdam
Representative Office
Brussels Branch
SMBCE**
Moscow Representative Office
ZAO Sumitomo Mitsui Rus Bank
Prague Representative Office
Düsseldorf Branch
SMBCE** Milan Branch
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
Dubai Branch
Doha QFC Office
SMBC Capital India
Private Limited
Dubai Branch
Johannesburg Representative Office
GLOBAL NETWORK
Sumitomo Mitsui Finance Australia Limited
Sydney Branch
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Head Office (Shanghai)
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Guangzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Suzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Hangzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Beijing Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenyang Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Binhai Sub-Branch
Suzhou Industrial Park Sub-Branch
■ Shanghai Branch
■ Dalian Representative Office
■ Chongqing Representative Office
■ Shenyang Representative Office
■ Hong Kong Branch
SMBC Capital Markets Limited Hong Kong Branch
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Labuan Branch
■ Labuan Branch Kuala Lumpur Marketing Office
Kuala Lumpur Representative Office
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Vietnam Export Import Commercial Joint Stock Bank
■ Yangon Representative Office
■ Bangkok Branch
SBCS Co., Limited
■ Manila Representative Office
SMBC Metro Investment Corporation
■ Sydney Branch
Sumitomo Mitsui Finance Australia Limited
■ PT Bank Sumitomo Mitsui Indonesia
■ SMBC Capital India Private Limited
218
SMFG 2010
Overseas service network (as of June 30, 2010)
Branches*: 15 Sub-Branches*: 6
Representative Offices: 13 Total: 34
Also showing principal overseas subsidiaries
* Number of each status is based on the definition in Japan.
Los Angeles Branch
San Francisco Branch
Shenyang Branch
Shenyang Representative Office*1
Beijing Branch
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Representative
Office
Seoul
Branch
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Head Office (Shanghai)*2
Shanghai Branch
Chongqing
Representative Office
Hanoi Branch
Hangzhou
Branch
Guangzhou
Branch
Taipei Branch
Yangon Representative Office
Hong Kong Branch
SMBC Capital Markets Limited
Hong Kong Branch
Bangkok Branch
SBCS Co., Limited
Manila Representative Office
SMBC Metro Investment Corp.
Labuan Branch
Kuala Lumpur Marketing Office
Kuala Lumpur Representative Office
Ho Chi Minh City Branch
Vietnam Export Import
Commercial Joint Stock Bank
Labuan Branch
Singapore Branch
PT Bank Sumitomo Mitsui Indonesia
Sumitomo Mitsui Banking Corporation of Canada
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Securities, Inc.
Manufacturers Bank
Houston Representative Office
Mexico City
Representative Office
Cayman Branch
Banco Sumitomo Mitsui Brasileiro S.A.
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
*1 Shenyang Representative Office is closed on August 13, 2010.
*2 Shanghai Puxi Sub-Branch opened on July 5, 2010.
The Americas
■ New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Securities, Inc.
■ Los Angeles Branch*
■ San Francisco Branch*
■ Houston Representative Office*
■ Mexico City Representative Office*
■ Cayman Branch
■ Manufacturers Bank
■ Sumitomo Mitsui Banking Corporation of
Canada
■ Banco Sumitomo Mitsui Brasileiro S.A.
Europe, Middle East and Africa
■ Sumitomo Mitsui Banking Corporation
Europe Limited
SMBC Capital Markets Limited
■ Sumitomo Mitsui Banking Corporation
Europe Limited Paris Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Milan Branch
■ Düsseldorf Branch
■ Brussels Branch
■ SMBC Amsterdam Representative Office
■ Madrid Representative Office
■ Prague Representative Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited
Moscow Representative Office
■ ZAO Sumitomo Mitsui Rus Bank
■ Sumitomo Mitsui Finance Dublin Limited
■ Dubai Branch
■ Doha QFC Office
■ Bahrain Representative Office
■ Tehran Representative Office
■ Cairo Representative Office
■ Dubai Branch Johannesburg Representative
Office*
SMFG 2010 219
www.smfg.co.jp/english
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
0
Printed in Japan
Continue reading text version or see original annual report in PDF
format above