ANNUAL REPOR T
YEAR ENDED MARCH 31, 2011
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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.
CONTENTS
•Message from Top Management ............................... 2
•Business Overview.................................................... 8
Consumer Banking ..................................................................
8
Corporate Banking ................................................................... 10
Services for High Networth Individuals,
Business Owners and Employees ......................................... 12
Investment Banking ................................................................. 13
International Banking ............................................................... 14
Treasury Markets...................................................................... 15
and Quality ............................................................ 49
•Group Companies .................................................... 16
•Financial Highlights ................................................... 19
•Financial Review ....................................................... 23
•Risk Management ..................................................... 32
•Corporate Social Responsibility (CSR) ....................... 48
•Initiatives for Enhancing Customer Satisfaction (CS)
•Corporate Governance ............................................. 50
•Internal Audit System ................................................ 51
•Compliance .............................................................. 52
•Environmental Preservation Initiatives ........................ 54
•Social Contribution Activities ..................................... 58
•Human Resources .................................................... 62
•Financial Section and Corporate Data ....................... 69
Financial Section ...................................................................... 70
Corporate Data ........................................................................ 211
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This material contains “forward-looking statements” (as defined in
the U.S. Private Securities Litigation Reform Act of 1995), regarding
the intent, belief or current expectations of us and our managements
with respect to our future financial condition and results of operations.
In many cases but not all, these statements contain words such as
“anticipate,” “estimate,” “expect,” “intend,” “may,” “plan,” “probability,”
“risk,” “project,” “should,” “seek,” “target” and similar expressions.
Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and actual results
may differ from those expressed in or implied by such forward-looking
statements contained or deemed to be contained herein. The risks
and uncertainties which may affect future performance include the
fragility of any economic recovery, both globally and in Japan; our
ability to successfully implement its business and capital strategy; the
success of our business alliances including those in the consumer
finance industry; exposure to new risks as we expand the scope of
our business; significant credit-related costs; declines in the value of
our securities portfolio. Given these and other risks and uncertainties,
you should not place undue reliance on forward-looking statements,
which speak only as of the date of this material. We undertake no
obligation to update or revise any forward-looking statements.
Please refer to our most recent disclosure documents such as
our annual report or the registration statement on Form 20-F filed
with the U.S. Securities and Exchange Commission, as well as our
earnings press release for a more detailed description of the risks and
uncertainties that may affect our financial conditions, our operating
results, and investors’ decisions.
September 2011
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 2011 1
Message from Top Management
We extend our deepest sympathies and heartfelt condolences to all those who have suffered and the families and
friends of those who tragically lost their lives in the Great East Japan Earthquake which struck Northeastern Japan
in March 2011. We pray for the earliest recovery for the affected people and areas.
We would like to thank all of our stakeholders for your continued support and patronage.
We, Koichi Miyata and Takeshi Kunibe, succeeded the management in April 2011, and assumed the positions
of President of Sumitomo Mitsui Financial Group and President and CEO of Sumitomo Mitsui Banking Corporation,
respectively. In this annual report, we would like to present our initiatives implemented in fiscal 2010 and our
management policies going forward.
Principal Initiatives in Fiscal 2010
earnings of consolidated subsidiaries such as Kansai Urban
Banking Corporation and Cedyna.
In fiscal 2010, we implemented our initiatives to secure a resilient
Also, in order to achieve medium- to long-term growth, we
capital base and enhance our business portfolio in order to achieve
made steady progress in strengthening our focused business areas
sustainable growth in accordance with the following two manage-
by enhancing collaboration between SMBC’s domestic and overseas
ment policies: 1) “forward looking” — transforming our business
branches, expanding our overseas channel network especially in
model to grow steadily under a new regulatory and competitive
Asia, strengthening alliances with major local banks, and improving
environment, and 2) emphasizing return on risks and costs in order
capabilities of SMBC Nikko Securities. To accelerate our business
to improve our asset quality and thoroughly control expenses and
development as a global player, we listed on the New York Stock
credit costs.
Exchange in November 2010.
SMFG’s consolidated ordinary profit increased by ¥266.7 billion
to ¥825.4 billion and net income increased by ¥204.3 billion to
¥475.9 billion. This significant increase was due mainly to:
- an increase in SMBC’s banking profit due to an increase in gains
on sale of bonds by successfully managing interest-rate fluctuation,
Management Policies Going Forward
—Overview of the Medium-term Management Plan—
- a decrease in total credit cost as a result of tailored efforts to assist
In May 2011, we launched our medium-term management plan
clients to improve their businesses and financial condition, and,
starting from fiscal 2011 and ending in 2013, for the first three years
- an earnings contribution of SMBC Nikko Securities (for-
of the second decade of our business operations; our group was
merly Nikko Cordial Securities), in addition to the improved
originally formed at the establishment of SMBC in 2001.
I sincerely believe that my mission as President of SMFG is to orchestrate the
group in its next stage of development by further strengthening cooperation
among our group companies and improving our ability to act with speed, leverag-
ing our existing business platform and corporate infrastructure we have created as
a leading financial services group.
We, the SMFG group, strive to enhance our capabilities to comprehensively
provide our clients with diverse and sophisticated financial products and services,
including broker/dealer services in addition to our core commercial banking
services.
Koichi Miyata
President
Sumitomo Mitsui Financial Group, Inc.
2
SMFG 2011
Enhance risk-return profile
by improving asset quality
Aim for top-level cost efficiency
among global players
SMFG’s consolidated
net income RORA (SMFG):
approx. 0.8%
SMFG’s consolidated overhead ratio:
50-55%
SMBC’s non-consolidated overhead ratio: 45-50%
Profitability
Steady
improvement
Financial soundness
Growth
Achieve sufficient Core Tier I ratio
as required for a global player
Expand overseas business by capturing growing
business opportunities especially in Asia
Core Tier I ratio:
approx. 8%
Overseas banking profit ratio:
approx. 30%
* The figures in the chart are targeted goals for fiscal 2013.
Core Tier I ratio: Calculated based on the definition under Basel III in 2019; all regulatory adjustments are deducted, excluding net unrealized
gains (losses) on other securities (SMFG consolidated).
Overseas banking profit ratio: Managerial accounting basis.
In order to implement our new medium-term management plan,
Having that in mind, we will strive to further accommodate our
first of all, we will proactively strive to facilitate our financial intermedi-
clients’ financial needs in a timely and effective manner in Japan,
ary services to fulfill our corporate social responsibility as a leading
our geographic original domain, and establish a globally competitive
financial services group in Japan, which is faced with unprecedented
business platform, financial base and corporate infrastructure by
difficult challenges resulting from the Great East Japan Earthquake
focusing on our five strategic business areas, while addressing new
last March. We firmly support Japan’s reconstruction financially, and
financial regulations and other issues.
are making every effort as a financial institution to put our economy
back on track for sustainable growth of the global economy.
My mission as President and CEO of SMBC is to move the company
forward quickly and steadily for the next level of growth, building on our
business franchise, capital foundation and sense of unity, which we have
created and strengthened in the first decade of our operations.
“Provide the most sophisticated products and services to our clients,”
“Act with global perspective” and “Constantly innovate, proactively
respond to the changes in business environment and stay ahead of the
times” — these are my principles for SMBC.
Takeshi Kunibe
President and CEO
Sumitomo Mitsui Banking Corporation
SMFG 2011 3
◎ Management Targets
For the first three years of the second decade of the SMBC and
◎ Strategic Initiatives
In order to achieve the aforementioned management and financial
SMFG group, we set two management targets in order to accom-
targets, we have designated the following five business areas as
plish our basic policy of becoming a globally competitive financial
critical strategic businesses for management:
services group with the highest trust of our clients and stakeholders
by maximizing our strengths of “Spirit of Innovation,” “Speed” and
“Solution & Execution.” The first target is to achieve top quality in
strategic business areas, and the second target is to establish a solid
financial base and corporate infrastructure to be able to address the
new financial regulations and competitive business environment.
◎ Financial Targets
In order to appropriately address the strengthening of financial regu-
lations globally, we are required to focus further on enhancement of
risk-return and cost-return profiles and steadily expand bottom-line
profit. Therefore, we need to capture overseas business oppor-
tunities especially in rapidly growing Asian markets in addition to
sustaining and further strengthening our solid business operations
in Japan.
Having this in mind, we strive to achieve well-balanced and
steady improvement of “financial soundness,” “profitability” and
“growth,” and we have set the following four objectives for the next
three fiscal years:
• Financial consulting for individuals
• Solution providing for corporations
• Commercial banking in emerging markets, especially in Asia
• Broker-dealer/Investment banking
• Non-asset business such as payment & settlement services and
asset management
The growth of these business areas will be driven under two main
initiatives of pursuing “synergies between SMBC and SMBC Nikko
Securities” and “global expansion.” We will execute these initiatives
on a group-wide basis, and also establish a solid financial base and
corporate infrastructure that support these initiatives.
An “unpredictable,” “uncertain,” and “unstable” business environ-
ment still remains, due mainly to the diverse implications of the
Great East Japan Earthquake to the Japanese economy, as well
as fiscal deficits in the developed countries and soaring commodity
prices. Furthermore, the global strengthening of financial regula-
tions requires banks, in the private sector, to achieve more efficient
asset allocation, higher capital efficiency and more stringent liquidity
• Achieve sufficient Core Tier I ratio as required for a global player
management.
• Enhance risk-return profile by improving asset quality
On the other hand, business opportunities are expanding rapidly
• Aim for top-level cost efficiency among global players
in emerging countries especially in Asia, where financial needs are
• Expand overseas business by capturing growing business oppor-
increasing as their economies substantially grow and Japanese
tunities especially in Asia
companies are developing their businesses.
Against this backdrop, we will move forward responding
proactively and flexibly to the continuously evolving environment,
making every effort to increase our shareholders’ value and striving
to become a top-tier global financial services group.
4
SMFG 2011
Become a globally competitive financial services group with the highest trust
Basic policies
of our stakeholders by maximizing our strengths of
“Spirit of Innovation,” “Speed” and “Solution & Execution.”
Corporate slogan:
LEAD THE VALUE
Management plan for coming three years
Strongly support Japan’s reconstruction on the financial front
Medium-term management plan (fiscal 2011 - 2013)
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● Aim for top quality in strategic business areas
● Establish a financial base and corporate infrastructure strong enough to address
the new financial regulations and competitive environment
Fiscal
2013
targets
Core Tier I ratio:
approx. 8%
Consolidated net income RORA
approx. 0.8%
Consolidated overhead ratio
Overhead ratio
50-55%
45-50%
Overseas banking profit ratio
approx. 30%
Well-balanced and steady improvement of “financial soundness,” “profitability” and “growth”
● Achieve sufficient Core Tier I ratio as required for a global player
● Enhance risk-return profile by improving asset quality
● Aim for top-level cost efficiency among global players
● Expand overseas business by capturing growing business opportunities especially in Asia
Profitability
Steady
improvement
Key initiatives to achieve management and financial targets
Financial
soundness
Growth
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● Financial consulting for individuals
● Solution providing for corporations
● Commercial banking in emerging markets, especially in Asia
● Broker-dealer/Investment banking
● Non-asset business such as payment & settlement services and
asset management
C
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p
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● Strengthen group-wide management capabilities
● Strengthen corporate infrastructure to support
our global expansion
● Pursue efficient operation
Macroeconomic trends
Market trends
Global regulatory trends
Business environment
●
●
●
Continuing low growth rate in domes-
tic market and yen appreciation
Continuing high growth rates in emerg-
ing markets including Asia
Risks associated with fiscal deficits in
developed countries and inflation in
emerging countries
●
●
●
Decreasing financing needs in domes-
tic market and accelerating global
expansion by Japanese corporations
Increasing financial needs in over-
seas markets, especially in emerging
countries
Changing investment and borrow-
ing practices of individuals as a result
of an aging population in domestic
market
●
●
Implementation of new capital regula-
tions (Basel III)
Proposals for additional capital require-
ments for “Systematically Important
Financial Institutions”
SMFG 2011 5
◎ Two main initiatives for strategic business areas
• Initiatives to pursue synergies between SMBC and SMBC Nikko Securities
SMBC Nikko Securities, which is the principal business operation
Specifically in the wholesale business, we are enhancing the
of our securities business, has been consistently earning profits
capabilities of SMBC Nikko Securities to accommodate the needs
from its established retail business and increasing its market share
of Japanese corporate clients for tapping into global capital markets
in the wholesale business. While strengthening its cross-sell with
and cross-boarder M&As by increasing its overseas staff, while
SMBC, SMBC Nikko Securities has fortified its wholesale business
improving its sales and trading capabilities for institutional investors
by installing a market transaction system, enhancing its equity sales
in Japan, other Asian countries, the U.S. and Europe.
capabilities targeting institutional investors by establishing the Equity
Concurrently, we are accelerating the alignment of SMBC
Research Division and developing its overseas operations by com-
and SMBC Nikko Securities through the redeployment of human
mencing business operations in London, New York, Hong Kong and
resources and greater collaboration, in order to respond to the grow-
Shanghai.
ing and diversifying need for wealth management of Japanese indi-
We will continue to strengthen the wholesale capabilities of
vidual clients and provide advanced financial solutions for Japanese
SMBC Nikko Securities and promote its cooperation with other
corporate clients. We strive to further strengthen our solid business
group companies including SMBC.
operations in Japan by implementing these initiatives.
Strengthen wholesale securities business of SMBC Nikko Securities
● Increase overseas personnel and business operations
✔ Global offerings
✔ Cross-border M&As, etc.
● Strengthen sales and trading capabilities for institutional investors in Japan,
other Asia countries, the U.S. and Europe
Strengthen cross-sell among SMBC Nikko Securities, SMBC and other group companies
Meeting clients’
diversifying needs
• Initiatives for global expansion
Our competitors of top-tier financial institutions develop their
Through such initiatives, we strive to increase our overseas
business operations globally, while sustaining their solid business
banking profit ratio to 30% in fiscal 2013 from 23% in fiscal
operations in their home countries. We similarly strive to develop a
2010 and grow our banking profits in Asia by 50% in fiscal 2013
platform for achieving top quality in commercial banking operations
compared with fiscal 2010.
in emerging markets mainly in Asia where higher growth is expected
to capture expanding business opportunities, while sustaining and
further strengthening our solid business operations in Japan.
Specifically, we are strengthening our business operations by
enhancing our channel network and allocating human resources
focusing on Asia. We will also proactively respond to the needs for
(JPY bn)
150.0
■ Banking profit at the International Banking Unit* (left)
■ Overseas banking profit ratio (right)
30%
23%
deposits, foreign exchange and other services related to payment
100.0
and settlement which are expected to grow in emerging countries
experiencing high economic growth and to the increasing demand
for infrastructure financing in emerging countries. We are also
expanding the collaboration of business operations and redeploy-
ment of human resources between SMBC’s domestic and overseas
offices in order to effectively and quickly accommodate the needs of
our corporate clients in Japan for their global business expansion.
50.0
0
7%
Fiscal
2004
2005
2006
2007
2008
2009
2010
2013
*Managerial accounting basis.
Sum of SMBC and its overseas subsidiaries.
6
SMFG 2011
30%
20%
10%
0%
◎ Establish a solid financial base and corporate
infrastructure
Meanwhile, our basic policy on returns to shareholders is to
increase returns consistently and continuously through the sustain-
Our group has been rapidly expanding our business operations as
able growth of enterprise value, by sustaining a consolidated payout
each group company has been growing to become a major player in
ratio of over 20%, while prudently managing the level of retained
its business area and we have increased the number of group com-
earnings to maintain our financial soundness in view of the public
panies through acquisitions, including SMBC Nikko Securities. Also,
nature of banking business operations.
in order to meet the global strengthening of financial regulations, we
In order to achieve these two goals, we will proactively allocate
are required to focus further on the enhancement of our risk-return
risk-adjusted assets into strategic business areas while controlling
and cost-return profiles and steadily expand our bottom-line profit.
aggregate volume of risk-adjusted assets by reducing low-yielding
Therefore, we will strengthen our group management capabilities
assets, and strengthen our capital base by consistently accumulat-
including risk management, control consolidated overhead ratio at
ing retained earnings. We will consider any increases of shareholders
50-55% and develop human resources required for global business
returns, by taking into account the level of our regulatory capital,
expansions.
payout ratio and dividends.
◎ Capital Policy and Returns for Shareholders
In the medium-term management plan, we have set a management
goal to achieve Core Tier I ratio* of approximately 8% on March
We shall sincerely and faithfully pursue these initiatives to meet
the expectations of our stakeholders.
31, 2014. This means that we will strive to achieve a capital ratio
September 2011
of approximately 1% higher than the Basel III required level of 7%
by five years earlier than the Basel III full implementation deadline of
March 2019.
* Calculated based on the definition under Basel III in 2019; all regulatory
adjustments are deducted from Common Equity Tier I, excluding net unreal-
ized gains (losses) on other securities (SMFG consolidated).
◎ Group Structure*
Sumitomo Mitsui Financial Group
Consolidated total assets
¥138 trillion
Consolidated Tier I ratio
12.47%
100%
SUMITOMO MITSUI Banking Corporation
Sumitomo Mitsui Banking Corporation
Total assets
Deposits
Loans
¥115 trillion
¥74 trillion
¥55 trillion
Number of retail accounts
approx. 26 million
Number of corporate loan clients
approx. 119,000
* As of Jun. 30, 2011 for shareholding ratio and as of Mar. 31, 2011 for other figures.
60%
100%
100%
100%
100%
22%
51%
Koichi Miyata
President
Sumitomo Mitsui
Financial Group, Inc.
Takeshi Kunibe
President and CEO
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Finance and Leasing
Japan Research Institute
Became a wholly-owned subsidiary (Oct. 2009)
SMBC Nikko Securities
40%
(Leasing)
Sumitomo
Corporation
(System engineering and
management consulting, etc.)
(Securities)
(Credit card)
34%
Sumitomo Mitsui Card
NTT DOCOMO
Became a wholly-owned subsidiary (May 2011)
Cedyna
SMBC Friend Securities
SMFG Card & Credit
66%
100%
Promise
Became a consolidated subsidiary (Jul. 2009)
(Consumer finance)
ORIX Credit Corporation
SMFG 2011 7
Business Overview
■ Consumer Banking
SMFG Group companies are enhancing their financial services
for clients. Some of SMBC’s noteworthy achievements in
this area for fiscal 2010 are investment trusts outstanding of
¥2.725 trillion (as of March 31, 2011); foreign bonds and yen-
denominated bond sales of ¥198 billion; pension-type insurance
sales of ¥192.1 billion; single premium whole life insurance sales
of ¥200.5 billion; and housing loans outstanding of ¥14.4908
trillion (as of March 31, 2011).
Financial Consulting Business
In fiscal 2010, SMBC continued to
enhance its product line up of invest-
ment trusts, pension-type insurance,
life insurance and other financial
products.
For investment trusts, the bank
has expanded its product range to
include funds which invest in emerg-
ing market sovereign bonds and
corporate bonds, funds which invest
mainly in bonds issued by worldwide
public utilities companies, and
Australian dollar-denominated foreign investment trusts which
invest in international high-yield bonds.
SMBC increased its number of
funds to a total of 33 (as of March
31, 2011) for transactions avail-
able exclusively on the Internet and
mobile phones; this particular service
was launched in October 2009. The
bank also conducted its time-limited
campaign of charging no load and
discounts on sales commissions, and
cash back campaigns to clients.
As for insurance products, we
respond to our clients’ needs by selling
level-premium life insurance products at all branches in Japan
and enabling those clients having difficulties coming down to
our branch during regular banking hours to request information
materials and application forms through ATMs (started from
August 2010) and the Internet (started from February 2011).
In addition, the bank began offering four new types of over-
the-counter products:
1) pension-type insur-
ance which switches
to a stable investment
strategy after securing
the targeted profit;
2) a whole-life policy,
of which the insured
increases
amount
ATM screen
8
SMFG 2011
proportionally to fund performance while guaranteeing a
minimum death coverage; 3) whole-life insurance with an option
enabling conversion to medical or nursing-care insurance; and
4) whole-life insurance with added-coverage for cancer surger-
ies and hospitalization.
As for Japanese government
bonds for individuals, SMBC started
offering three-year maturity products
in June 2010 in addition to our existing
five- and ten-year maturity products.
We continue to offer a wide
range of foreign-currency and yen-
denominated bonds appropriate
for our clients’ needs. In April 2010,
SMBC began financial instruments
intermediary services for individuals as
an agent of SMBC Nikko Securities, in addition to SMBC Friend
Securities. In January 2011, the operations of SMBC Friend
Securities related to SMBC’s financial instruments intermediary
and other services were integrated into those of SMBC Nikko
Securities.
We believe that it is important to support and follow up our
clients even after they have purchased our products. As part of
our fulfilling this commitment, we take numerous measures to
keep clients up-to-date with new developments — by having
seminars regarding funds performances, monthly issuances
of special market reports, and mailing of financial statements
detailing assets performance.
Loan Business
We develop new products and services to enable us to respond to
the diversified needs of our clients. For instance, our housing loan
with insurance for major serious illnesses had an outstanding loan
balance of ¥1,750 billion, as of March 31, 2011.
In September 2010, SMBC began accepting accelerated
full-sum repayments of housing loans through the SMBC Direct
online banking service. With this service, over-the-counter
procedures can now be completed at home or other remote
locations. This service significantly contributed to maximizing
convenience for our clients.
Consequently, we are accommodating the diverse needs
of our housing loan clients via the Internet along with existing
services for partial early repayment and the option to change the
interest rate to either floating or fixed rates.
Following the enactment of the “Act Concerning Temporary
Measures to Facilitate Financing for Small and Medium-Sized
Enterprises, etc.,” we appointed specialists to provide consulta-
tions and assistance with clients having difficulties in repaying
their mortgage at all bank branches as well as at the nine special
Loan Support Offices located nationwide.
We will continue to provide more personalized and expe-
dited support and services for such clients.
Settlement and Consumer
Finance Business
In March 2011, we began offering a
new service “SMBC First Pack Debut,”
which was especially designed for stu-
dents between the ages of 18 and 23,
under our settlement service platform
of “SMBC First Pack.” When students
make automatic bill payments for their
mobile phones using the account reg-
istered with the service, they are not
charged in the month following the next month, for after busi-
ness hours service fees for ATMs located at domestic branches
and @BΛNK ATMs installed at convenience stores and other
locations. Such services are designed specifically for the needs
and lifestyle of students.
The iD* credit service, which was created as a result of the
strategic alliance of SMFG and NTT DoCoMo, Inc., continues to
further evolve. As of March 31, 2011, there were approximately
15.84 million subscribers for this service and approximately
510,000 terminals for such credit services installed on the prem-
ises of affiliated merchants.
* “iD” is a trademark of NTT DoCoMo, Inc.
As of the end of March 2011, there were 719 automatic
contract machines for our consumer finance business with
Promise Co., Ltd., and the outstanding balance of card loans
made by the bank and guaranteed by Promise was approxi-
mately ¥340 billion. At-Loan Co., Ltd., the former business part-
ner for this affiliation was absorbed and merged into Promise in
April 2011, as part of a reorganization plan.
Transaction Channels
For SMBC Direct online banking services, we are constantly
adding highly advanced services to meet our clients’ needs to
improve convenience and reinforce security. In November 2010,
we launched an online overseas remittance service for individual
clients through SMBC Direct, improving the service previously
offered only at our branches. This is another way for us to better
accommodate our clients by simplifying the procedures, increas-
ing their choices and maximizing convenience. As of March 31,
2011, there were approximately 10.86 million registered clients.
Our call centers located in Tokyo, Kobe and Fukuoka for
our retail clients also take calls from our retail online clients who
prefer to speak with our staff on important issues. The operation
of these three call centers enhances our services by offering
telephone consultations for inquiries on asset management or
loans, as well as any information related to our financial services
to provide the type of services best accommodated to the life-
style and needs of our clients.
Topics
◆ Joint Business Operations of SMBC and SMBC
Nikko Securities
SMBC Nikko Securities became a wholly-owned subsidiary
of SMBC on October 1, 2009, the milestone event which has
further enhanced our Group to be able to offer our clients
more competitive products and services.
Since October 2009, SMBC has been working with
SMBC Nikko Securities to offer investment trust products,
organize seminars, and provide financial instruments interme-
diary services for our individual clients.
In April 2010, SMBC began financial instruments inter-
mediary services for individuals as an agent of SMBC Nikko
Securities, in addition to SMBC Friend Securities. In June
2010, SMBC expanded the services’ portfolio to include
structured bonds, and started to offer a single premium whole
life insurance with variable benefit, jointly developed for the
first time with SMBC Nikko Securities for over-the-counter
sales. In October 2010, SMBC Nikko Securities also became
SMBC’s banking agent. Further, in January 2011, the opera-
tions of SMBC Friend Securities related to the financial instru-
ments intermediary and other services were integrated into
those of SMBC Nikko Securities. We continue to proactively
develop both our banking and securities businesses.
A seminar jointly held with SMBC Nikko Securities
An SMBC ATM installed at SMBC Nikko Securities’
Sendai Branch
SMFG 2011 9
■ Corporate Banking
Improving Products and Services for
Mid-sized Companies and SMEs
•Initiatives to facilitate financing
SMBC believes that facilitating the efficient supply of funds to
its clients is one of its main social responsibilities as a financial
institution. We are making our best efforts, under increasingly
difficult global financial conditions, to proactively facilitate financ-
ing appropriate to the needs of our mid-sized and SME cor-
porate clients. SMBC established its Middle Market Facilitating
Financing Department in December 2009 under the Planning
Department of the Corporate Banking Unit.
We will continue to implement initiatives to identify the con-
stantly changing needs and issues of our corporate clients, and
offer customized products and services in order to support their
business development.
•Environmentally friendly products and services
In order to respond to society’s greater demand for the envi-
ronmental commitments of our clients including not only major
companies but also mid-sized companies and SMEs, SMBC
has been augmenting its loan products with environmental
incentives, creating an environmental business information sec-
tion under the bank’s homepage, and offering seminars. The
cumulative total of such loans provided was approximately ¥350
billion as of March 31, 2011.
Furthermore, our environmental initiatives have been publicly
recognized. We received the “2009 Nikkei Superior Products
and Services Award” in January 2010, and the “Grand Prize by
the Ministry of Environment” at “the 7th Eco-Products Awards”
in November 2010, for our “SMBC Environmental Assessment
Loan/Private Placement Bonds.”
•Information services
SMBC has been strengthening its internal systems for business-
matching, resulting in a dramatic increase in the number of busi-
ness meetings we have arranged between possible partners. In
particular, in our “all-in-one matching” program, which simulta-
neously matches a substantial number of our corporate clients
with the purchasing departments of major corporations, we
have enhanced our corporate client information database. This
enables us to supply our corporate clients with more information
on the purchasing needs of major corporations.
We also held the SMFG Environmental Business Forum in
December 2010 which formed a part of “Eco-Products 2010” in
Tokyo Big Sight, for the promotion of environmental businesses.
At this annual event, we arranged approximately 670 business
meetings to match the increasing environmental procurement
needs of major corporations with
the growing needs of SMEs for new
distribution channels.
At this event, our Group compa-
nies exhibited diverse environmental
solutions, and also held panel dis-
cussions and provided environmental
information.
Furthermore,
the bank and
SMBC Nikko Securities installed the
“IPO Navigator” in July 2010, an
online information service offered for
free of charge to registered clients
considering an IPO. Information nec-
essary for an IPO is provided by the
platform, of which the contents are
supplied by nine advisory companies
and two sponsor companies. During
its six months of operation, more
than 260 companies have registered
with this program. SMBC and SMBC
Nikko Securities continue to support
our clients planning for an IPO.
Enhancing Services for Globalizing
Corporations
An increasing number of our corporate clients are expanding
their businesses overseas, and are faced with the growing need
to address such issues as differences in business practices;
cultures; legal, accounting, and taxation systems, the interpreta-
tion of these systems; as well as funding.
SMBC established its Global Advisory Department (GAD)
to specifically assist the development of solutions for the cross-
border issues of globally expanding clients. GAD works to
further strengthen our domestic and overseas support for the
overseas business operations of such companies.
We provide overseas business-related seminars on Brazil
and global issues, not limited to China or other Asian markets,
and also provide the latest overseas economic or market infor-
mation, including local conditions, details of regulations, industry
trends, and other relevant issues, for our clients considering to
newly develop their businesses overseas; and we also provide
high quality support and solutions for the needs of our clients
who have already established their business operations over-
seas, including business development and reorganization. We
are constantly enhancing our system to support the globalization
of our clients’ businesses.
Strengthening Measures for Greater China
As the economic integration continues in Greater China (PRC,
Hong Kong and Taiwan), inter-company trading and funding
have been actively increasing. A substantial number of Japanese
companies have expanded business into China, and it is antici-
pated that this entry and expansion by such companies into the
10
SMFG 2011
growing Chinese market will further accelerate in the foreseeable
future.
In order to more effectively meet the needs of such clients
whose business straddles the Japanese and Chinese markets,
in fiscal 2010, SMBC transferred its business responsibilities
for the planning, promotion, and management of transactions
between its Chinese subsidiary of Sumitomo Mitsui Banking
Corporations (China) Limited and Japanese corporate clients
from the International Banking Unit to the Corporate Banking
Unit. The same was done for the Hong Kong and Taipei
branches in fiscal 2011.
The Shenzhen Branch of Sumitomo Mitsui Banking
Corporation (China) Limited began its business operations on
May 20, 2011. Under the Group network, including branches in
Hong Kong and Guangzhou, we are strengthening our support
for our clients’ businesses in southern China.
In banking operations, we established a “Fund for
Supporting Companies Expanding their Business Operations in
China” in cooperation with Chinese companies in fiscal 2010.
The fund provides for equity and other types of investments for
Japanese companies expanding their businesses into China.
We also support such Japanese companies in Japan and China
by providing them with necessary assistance and support for
the globalization of their businesses. We continue to compre-
hensively provide our customized services to our clients by
supporting their head offices in Japan and business operations
in China.
Enhanced Initiatives for the Public and
Financial Sectors
As our Japanese economy continuously evolves, the responsibil-
ities of local government and financial institutions are becoming
more sophisticated and diversified. We believe that an exten-
sive international network, and accurate and timely collection
of information are necessary for supporting regional industrial
promotion, attracting companies, building social infrastructure,
creating environmental measures, and supporting local compa-
nies expanding their businesses into overseas markets.
In order to respond to the needs of our clients, the Group
provides diverse services by using its networks in Japan and
overseas, while pursuing alliances with local government agen-
cies and financial institutions. We executed an alliance agree-
ment with the city of Kita-Kyushu in June 2011 for the industrial
promotion of Kita-Kyushu, which strategically plans to further
develop its growing industries. Since fiscal 2010, we have also
established operational alliances with the Kansai Urban Banking
Corporation, Mie Bank, Ltd. and four other banks to better
support companies expanding their businesses into overseas
markets.
Our bank Group also offers diverse services for public ben-
efit corporations which are faced with the need to modify their
business or financial strategies due to the recent amendments
to regulations governing such corporations.
Our initiatives for the current fiscal year are focused on
supporting local public corporations that have incurred sub-
stantial damage due to the Great East Japan Earthquake for
their recovery, in accordance with the recovery plan submitted
by each prefecture, including Miyagi Prefecture, with which
we executed a Cooperative Agreement for the Promotion of
Industry in fiscal 2008.
Topics
◆ IPO Seminars
SMBC and SMBC Nikko Securities jointly held their first
“IPO Seminar” in February 2011. The seminar was held for
IPO Navigator members with speakers from SMBC Nikko
Securities and the Japan Research Institute. It was extremely
successful and attended by approximately 120 members
mostly from eastern Japan. We also held our second seminar
in Osaka in July 2011 especially
for our clients in western Japan,
in order to continue supporting
our clients who are planning for
IPO by providing them with high-
quality information and content.
IPO seminar
◆ Launching of the “SMBC Food and Agricultural
Assessment Loan”
SMBC has launched its “SMBC Food and Agricultural
Assessment Loan,” a type of loan which offers favorable
terms and conditions based on the assessment results of
surveys and interviews on the level of contributions made
by the borrower in the areas of food or agricultural improve-
ments, in accordance with the assessment standards set
forth by the Japan Research Institute. We approved our first
such loan to Asahi Breweries, Ltd., who contributed to the
designing of the loan by giving us their opinions.
SMBC will continue to support initiatives for “improve-
ments of eating habits” and the “development of the agricul-
tural, forestry and fisheries industries” in Japan by providing
the “SMBC Food and Agricultural Assessment Loan.”
Assessment explanation and
discussion
Loan Certificate awarded to Asahi Breweries, Ltd.
SMFG 2011 11
■ Services for High Networth Individuals,
Business Owners and Employees
allocation and management. It strives to provide diverse asset
management services and, established a joint-venture business
in June 2010.
Topics
◆ Joint-venture businesses within our asset man-
agement services
SMBC, SMBC Nikko Securities and Barclays PLC estab-
lished “SMBC Barclays Wealth Division” within SMBC Nikko
Securities to provide new asset management services
leveraging the knowledge of Barclays Wealth, known for its
leading global private banking services.
The purposes of this joint-venture business are for
expanding our product portfolio, improving research skills,
and meeting the need for high
quality asset management pro-
posals for business owners and
high networth individuals. We
experimentally began offering the
services in some of our branches
in June 2010, and will roll out
these services at all branches
in Japan during the fiscal year
ending March 31, 2012, in order
to assist as many clients as
possible.
Life Planning Support for Employees
The management environment for SMBC’s corporate clients is
undergoing dramatic changes, as the life planning needs of their
employees are becoming diversified.
In responding to the challenges presented by such changes
for our corporate clients’ personnel matters and financial strate-
gies, PAD utilizes the diverse financial products and services
offered by SMBC to support our corporate clients by creating
employee financial benefit programs and defined-contribution
pension plans.
Furthermore, the SMBC products and services are offered
to employees, through their employers, in an effort to achieve
their financial or other life planning goals.
Private Advisory Department
The Private Advisory Department (PAD) of SMBC specializes
in products and services which meet the diverse requirements
of business owners and high networth individuals. Activities of
this department cover three types of business operations as
follows. One such business operation is the business and asset
transfer for which we offer our services based on our extensive
knowledge and experience accumulated over the years, and the
additional expertise provided by alliance partners such as major
tax accounting firms. The second business is the private bank-
ing services which provide comprehensive financial services for
managing our clients’ financial assets. The third business is the
workplace banking services that support the HR strategies of
our corporate clients. This particular business provides assis-
tance for designing the employee savings and other employee
financial benefit programs, and defined-contribution pension
plans.
PAD consistently provides diverse products and services
for both individuals and corporate clients by working with other
SMBC Group companies and alliance partners.
High-net-worth individuals
Customers
Business owners
Heads of wealthy families
Sumitomo Mitsui Financial Group
Sumitomo Mitsui Banking Corporation
Corporate Business Office
Branches
Private Advisory Department
Business
growth
needs
Business
succession
needs
Asset
succession
needs
Financial benefit
program needs
Revised
defined-contribution
pension plan needs
Support from specialized
units of SMBC
SMBC Nikko Securities
SMBC Barclays Wealth Division
SMFG companies
Outside specialists (major tax accounting firms and other professionals)
Barclays PLC
Support for Business and Asset Transfers
PAD specialists prepare customized proposals for business
owners concerned about their business and asset transfers.
Our customized and diverse consulting services cover various
matters for both individuals and companies. We offer a variety of
seminars to provide our clients with up-to-date information and
advice.
Private Banking
PAD offers comprehensive financial advisory services for our cli-
ents’ financial assets by truly understanding their financial goals
and providing appropriate advice for their risk profiles. Based on
discussions on their goals, it prepares proposals for their asset
12
SMFG 2011
■ Investment Banking
Topics
◆ Expansion of Securities Businesses in Overseas
Markets
The SMBC’s subsidiaries, SMBC Nikko Capital Markets
Limited (UK) and SMBC Nikko Securities America, Inc. (US),
have begun and are expanding their securities business
operations in London and New York, respectively. SMBC
Nikko Securities’ wholly owned subsidiaries in Hong Kong
and Shanghai also commenced securities business and M&A
advisory service operations in January 2011.
June 30, 2011
◆Environmental Business
SMBC established its Environmental Products Department
in October 2007 to promote its environmental businesses.
It also developed a cross-organizational “Growing Industrial
Cluster*1 Project Team” in July 2010 to promote businesses
associated with four growing industrial sectors. It cross-
organizationally promotes efforts aimed at expanding, identi-
fying and creating mid- to long-term business opportunities
for our clients by cooperating with industries, government
and universities, and collecting information from the domestic
and international networks.
As a result of these measures, a CDM*2 project, which
we supported in Singapore for the trading of emission credits,
became the country’s first such large project to be registered
by the United Nations, and we provided financing by utiliz-
ing the Nippon Export and Investment Insurance (“NEXI”) for
Vietnam’s first hydroelectric power generation business by the
private sector. These initiatives contributed to our nomination
for the award of “Sustainable Bank of the Year 2011 (Cross-
Regional category),” organized by the Financial Times and the
International Finance Corporation.
*1 The four growing industrial sectors are: the “Environment,” “New
Energy,” “Water” and “Natural Resources.”
*2 “Clean Development Mechanism”
SMFG consolidates the resources from the Investment Banking
Unit of SMBC and SMBC Nikko Securities and other Group
companies to assist its clients with their business develop-
ment and enhancement of their corporate value by providing
optimized solutions for the needs of its clients in areas such as
fund-raising and asset management, M&A, risk-hedging, and
payment and settlement.
As the businesses of our corporate clients become further
globalized and the number of investors increases, SMBC Nikko
Securities has began its operations of M&A advisory services,
underwriting bonds and brokerage services (for Japanese
stocks) at its overseas offices. We plan to further globalize our
operations, and respond appropriately and timely to the sophis-
ticated financial needs of our clients.
Collaboration with SMBC Nikko Securities
As of April 1, 2011, Nikko Cordial Securities, which became
a wholly owned subsidiary of SMBC on October 1, 2009,
changed its corporate name to SMBC Nikko Securities Inc. As
the core securities firm for the Group, it has expanded its retail
and wholesale businesses by closely working with SMBC.
In the league tables published by Thomson Reuters for fiscal
2010, SMFG was ranked fourth in the M&A advisory services
category for publicly announced mergers involving Japanese
companies with a market share of 19.2%. We placed fifth for
underwriting amount for the “Japanese Corporate Bonds”
category (market share of 16.6%). We continue to strengthen
the cooperation between SMBC Nikko Securities and SMBC
and to respond to the diverse needs of our clients for raising
capital from the market, cross-border M&A transactions and
securitization.
Number of referrals by SMBC to SMBC Nikko
Securities
1,000
■ Investment Management ■ Investment banking businesses
800
600
400
200
0
2009
Oct.-Dec.
2010
Jan.-Mar.
2010
Apr.-Jun.
2010
Jul.-Sept.
2010
Oct.-Dec.
2011
Jan.-Mar.
Underwriting amount for
“Japanese Corporate Bonds” Market share*
SMBC Nikko Securities
SMBC Nikko Securities
16.6%
6.2%
1st
FY2009
FY2010
Fiscal 2013 (Target)
*Source: Thomson Reuters
Underwriting amount for “Japanese Corporate Bonds”
Information contained in this document for the period prior to September 2009 is
based on the information provided by the former Nikko Cordial Securities Inc.
SMFG 2011 13
■ International Banking
SMFG offers value-added services to its clients (corporations,
financial institutions, governmental organizations and public enti-
ties) operating globally by creating tailor-made solutions which
meet diverse local needs, mainly through SMBC’s International
Banking Unit.
SMBC has three regional headquarters: in Europe, the
United States and the Asia-Pacific region; and subsidiaries in
such emerging markets as China, Russia, Brazil and Malaysia.
Through this network, it has established a system which quickly
and flexibly responds to the diverse needs of each region. It
strives to become a global commercial bank which can exten-
sively demonstrate its strengths for the diverse business oppor-
tunities in the international market.
Expansion of Overseas Network
SMBC is working to expand its overseas network of branches
to improve their services for the Japanese companies and to
enhance their presence in emerging markets.
SMBC (China) opened two new branches and two new
sub-branches in the fiscal year 2010: Shenyang branch and
Shanghai (Pixi) Sub-branch in June and July 2010, respectively,
and Changshu Sub-branch and Shenzhen branch in January
and May 2011, respectively. The SMBC Group will use its net-
work in China, which consists of branches and offices in 15
locations, to enhance the quality of its financial services.
management subsidiary of Kotak Mahindra Bank* in India, for
the establishment of infrastructure funds in India.
SMBC continues to develop its banking networks and expand
Asian businesses in diversified ways by establishing alliances with
major local financial institutions in Asia.
* Kotak Mahindra Bank, with which we have established a capital and
operating alliance, is the core bank of the Kotak Mahindra Group.
Core IT System Upgrades
SMBC is pursuing its overseas business development and the
advancement of information processing and management sys-
tems in order to further support the global development of our
clients’ businesses. SMBC has upgraded the Asian accounting
system as part of its plan to promote the strengthening of its
overseas administrative system. Furthermore, it also works to
further advance client information and business management
systems.
Strengthening of Risk Management
SMBC is continuously enhancing its credit monitoring system
as part of its plan to reinforce its credit cost control system,
and it has also established specialized credit management
departments in Europe and the United States, in addition
to the International Credit Management and regional Credit
Departments.
Having established the Risk Management Department
Groups in Europe and the United States, it is building a com-
prehensive risk management system especially made for the
local markets.
Strengthening of Compliance System
As the global trend towards strengthening financial regulations
continue, and based on the understanding that it is essential
to further strengthen the compliance system as our business
grows, we are further focusing on enhancing the management
system by improving the collection and analysis of information
related to regulatory changes, and providing such management
resources as human resources.
Capital Strategies and Business Alliances with
Major Asian Financial Institutions
The alliance strategies in Asian countries are specifically planned
In responding to the strengthening of regulations related
to economic sanctions in each country, we continue to pursue
more sophisticated and efficient means to prevent money-
to take the advantage of the special attributes of each country
laundering and financing for terrorist activities.
and region. We plan to enhance our solutions such as expand-
ing our Asian currencies services for each region.
In December 2010, the bank executed a Memorandum of
Understanding on Mutual Business Cooperation with RHB Bank
Development of Professional Human Resources
Required for Overseas Business Growth
We are further improving our training and educational programs
Berhad, Malaysia’s fourth-largest bank by market capitalization
in order to respond appropriately and promptly to the increas-
(as of the end of March 2011), a strategic partner for around the
ingly diverse and highly sophisticated needs of our clients. To
last 30 years. The bank aims to further strengthen this alliance
gain international financial experience, we place our promising
relationship.
employees in our overseas offices or at the overseas special-
Additionally, in March 2011, the bank executed the
ized financial institutions outside of the Group. As SMBC’s first
Cooperative Agreement with Kotak Mahindra (UK) Ltd., an asset
attempt, it invited employees, including overseas national staff,
14
SMFG 2011
to attend intensive educational training in Tokyo. Furthermore,
We continue to improve the functions of i-Deal, a system
we continue to focus on the development of human resources in
which allows our clients to execute their foreign exchange
Asia, where our business continues to develop tremendously, by
transactions on the Internet. The Treasury Unit continues to fully
providing our national staff with seminars and e-learning programs
support our clients by meeting their market transactional needs
developed by the Asia Pacific Training Department, in order for
and offering the highest level of services in the industry.
them to be able to offer the best solutions for our clients.
Topics
◆Overseas Environmental Business Opportunities
SMBC is enhancing its initiatives for global environmental
businesses.
It has provided co-financing as the lead bank for the
commercial solar power generation business project which is
scheduled to start in the fiscal year 2014 in Spain. This financing
utilized the insurance system of Nippon Export and Investment
Insurance (“NEXI”), and was its first project to support Japanese
companies going overseas for the purpose of engaging in power
generation businesses utilizing renewable energies.
SMBC continues to strengthen its initiatives for renew-
able energy businesses, and to proactively promote the
development of overseas environmental businesses.
■ Treasury Markets
SMFG strives to offer increasingly high valued services to meet
more sophisticated and diverse needs of its clients for trans-
actions in the money, foreign exchange, bond and derivatives
markets through the Treasury Unit of SMBC. In order to maintain
and further enhance profitability while managing risks appro-
priately, the Treasury Unit focuses on the following three goals
of: (a) increasing volumes generated from clients’ transactions;
(b) strengthening its Asset-Liability Management (ALM) system
and trading skills; and (c) ensuring portfolio management of its
assets and liabilities.
More Solutions and Services for Clients’
Market Transactions
SMBC offers solutions appropriate for the market transactional
needs of its clients by working with branches to present to its
corporate clients with the proposals for such as hedging trans-
actions, reflecting the shifting trends in the financial markets.
ALM and Trading Operations
The Treasury Unit pursues to maximize its earnings through the
ALM and trading operations, while controlling the market and
liquidity risks, by searching for trends in the various financial
markets.
We strive to perform appropriate ALM and trading opera-
tions by responding to the changes in the financial market to
generate consistent earnings.
Customers
Corporate Business Offices, Branches
Treasury Unit
Planning Dept.
Treasury Marketing Dept.
Enhance customer convenience by improving our services
Planning and research
Transactions with customers
Customer order flow
Trading Dept.
Efficient operations
based on
order-initiated trades
and ALM hedging
Foreign exchange
transactions
Derivative
transactions
Bond
transactions
CD, CP
transactions
ALM
operations
Deposits
Loans
Bonds
Alternative
investments
Treasury Dept.
International
Treasury Dept.
Precise ALM
operations and
liquidity
management
Trading
ALM (Asset Liability Management)
Fund and bond transactions
Interbank Market
Topics
◆ Issuance of U.S. Dollar-denominated Straight
Bonds in the Global Markets
For the environmental changes in the foreseeable future, we
are taking measures to diversify the medium- to long-term
fund procurement channels. In January 2011, we again
issued the U.S. Dollar-denominated straight bonds in the
United States and other global markets, following the issu-
ance in 2010.
◆ Expanded Offerings of Currencies of Asia and
Other Emerging Markets
In order to meet our clients’ market transaction needs, we are
increasing our line-up of foreign currencies, mainly Asian and
also other emerging-market currencies. We are also com-
mitted to updating our clients with the information related to
the foreign exchange transactions by offering seminars con-
ducted by economists specialized in Asian financial markets.
SMFG 2011 15
Group Companies (as of March 31, 2011)
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
• To provide optimum added value to our customers
and together with them achieve growth
• To create sustainable shareholder value through
business growth
• 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
Act) and of non-bank subsidiaries, as well as the performance of ancillary functions
Establishment: December 2, 2002
Head Office: 1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
Chairman of the Board: Masayuki Oku
President: Koichi Miyata
(Concurrent Director at Sumitomo Mitsui Banking Corporation)
(Appointed on April 1, 2011)
Capital: ¥2,337.8 billion (as of March 31, 2011)
Stock Exchange Listings:
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Nagoya Stock Exchange (First Section)
Note: American Depositary Receipts (ADRs) are listed on the New York Stock
Exchange.
SUMITOMO MITSUI Banking Corporation
SUMITOMO MITSUI Banking Corporation
www.smbc.co.jp/global/index.html
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 exper-
tise of strategic Group companies 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, Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan
President and CEO: Takeshi Kunibe (Concurrent
Director at Sumitomo Mitsui
Financial Group)
Number of Employees: 22,524
Number of branches and other business locations:
Credit Ratings (as of June 30, 2011)
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–
In Japan:
1,547*
Branches:
493
(Including 38 specialized deposit account branches)
164
Sub-branches:
Banking agencies:
2
Offices handling non-banking business: 23
865
Automated service centers:
33
Overseas:
15
Branches:
7
Sub-branches:
11
Representative offices:
Financial Information (Consolidated basis, years ended March 31)
2011
Billions of yen
2009
2010
2008
For the Year:
Ordinary income .....
Ordinary profit .......
Net income (loss) ....
At Year-End:
Net assets...............
¥6,983.1
Total assets ............ 132,715.6
¥2,711.3
751.2
450.8
¥2,579.9
557.7
332.4
¥2,989.6
59.2
(317.3)
¥3,411.0
734.9
351.8
¥6,894.5
120,041.3
¥4,518.6
115,849.3
¥5,080.7
108,637.7
* The number of domestic branches excludes ATMs located at
the business sites of companies and at retail convenience stores.
SMFG CARD & CREDIT, INC.
SMFG Card & Credit, Inc. (“FGCC”) was estab-
lished in October 2008 as an intermediate holding
company of SMFG to hold shares of Sumitomo
Mitsui Card Co., Ltd., and Cedyna Financial
Corporation. FGCC is the core company respon-
sible for implementing SMFG’s credit card strat-
egy and establishing uniform business policies.
FGCC also creates a framework for promoting a
solid partnership between Sumitomo Mitsui Card
and Cedyna Financial Corporation, seeks to real-
ize economies of scale for the Group as a whole,
and maximizes top-line synergy by leveraging each
party’s strengths.
16
SMFG 2011
Company Name: SMFG Card & Credit, Inc.
Business Profile: Management of subsidiaries and affiliates
Establishment: October 1, 2008
Head Office: 1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
President & CEO: Ikuhiko Morikawa (Appointed on April 1, 2011)
Number of Employees: 32
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
excellent 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
affluent consumer lifestyles and make further
dramatic advances as a leading brand in its
industry sector.
www.smbc-card.com
(Japanese only)
Company Name: Sumitomo Mitsui Card
Credit Ratings (as of June 30, 2011)
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: Hideo Shimada
Number of Employees: 2,300
(Appointed on June 29, 2011)
JCR
Long-term Short-term
J–1+
A+
Financial Information (Years ended March 31)
2011
Billions of yen
2009
2010
2008
For the Year:
Revenue from credit
card operations ........ ¥6,896.3
185.2
Operating revenue ......
Operating profit ..........
32.6
At Year-End:
Number of cardholders
(in thousands) ...........
20,770
¥6,209.0
183.5
24.3
¥5,858.6
180.1
22.2
¥5,375.2
168.3
16.8
20,504
18,655
16,406
www.cedyna.co.jp/english/
Cedyna Financial Corporation was formed in
April 2009 as a result of the merger of OMC
Card, Inc., Central Finance Co., Ltd. and
QUOQ Inc., consolidating their client bases,
marketing capabilities and expert knowledge.
As a member of the SMFG Group, it strives
to become “the number one credit card busi-
ness entity in Japan” by closely working with
Sumitomo Mitsui Card.
Concurrently, as a leading consumer
finance company, it also provides the highest
level of service for diverse consumer finan-
cial needs including credit cards, consumer
credit, and solution marketing.
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: 3,096
Credit Ratings (as of June 30, 2011)
JCR
Long-term Short-term
J–1
A
Financial Information (Years ended March 31)
2011
2010
Billions of yen
2009
OMC* CF*
QQ*
For the Year:
Operating revenue ......
Operating profit ..........
At Year-End:
Number of cardholders
(in thousands) ...........
¥203.2
0.8
¥223.9 ¥137.7 ¥80.6 ¥44.8
(5.2)
(40.8)
(1.4)
6.9
22,513
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 formed in October 2007
as a result of the merger of SMBC Leasing
Company, Limited and Sumisho Lease Co.,
Ltd. SMFL strives to become one of the top
leasing companies in Japan in terms of both
quantity and quality by consolidating and
leveraging the client portfolios and expert
knowledge of SMBC Leasing Company
based on the financial solution formulation
capabilities of the SMFG Group, and those
of Sumisho Lease Company based on its
industrial association with the Sumitomo
Corporation Group.
SMFL meets the diversifying needs of our
clients by providing high value-added ser-
vices that go beyond the conventional level
of leasing services, based on its decades of
combined experiences of the different back-
grounds and characteristics of the two com-
panies. SMFL strives to contribute to society
as a leading leasing company through quality
leasing operations.
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: Yoshinori Kawamura
(Appointed on June 29, 2011)
Number of Employees: 1,485
Credit Ratings (as of June 30, 2011)
R&I
JCR
Long-term Short-term
a–1
J–1+
A+
AA–
Financial Information (Years ended March 31)
2011
Billions of yen
2009
2010
2008
For the Year:
Leasing transaction
volume ....................
Operating revenue ....
Operating profit ........
¥800.8
¥733.6
¥895.8
¥1,054.1
812.8
50.2
894.7
43.8
947.6
36.4
708.4
36.2
SMFG 2011 17
The Japan Research Institute, Limited (JRI),
an intelligence engineering company, provides
high value-added information system, con-
sultation and think-tank services. In addition
to providing financial consultation services
on management reform, IT, the planning and
development of strategic information systems
and outsourcing, it also conducts diverse
activities including domestic and international
economic research and analysis, policy rec-
ommendations and business incubation.
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: 2,101
www.jri.co.jp/english/
Financial Information (Years ended March 31)
For the Year:
Operating revenue ....
Operating profit ........
2011
¥84.8
1.5
Billions of yen
2009
2010
¥81.7
0.9
¥88.0
1.0
2008
¥88.1
3.8
www.smbc-friend.co.jp
(Japanese only)
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: 2,034
Financial Information (Years ended March 31)
For the Year:
Operating revenue ...
Operating profit ......
2011
¥53.2
10.2
Billions of yen
2009
2010
¥67.4
22.7
¥43.2
2.3
2008
¥60.5
19.0
www.smbcnikko.co.jp/en
SMBC Nikko Securities strives to become
the leading securities and investment banking
company in Japan.
Company Name: SMBC Nikko Securities Inc.
(name changed on April 1, 2011)
Business Profile: Securities services
Establishment: June 15, 2009
Head Office: 3-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
President & CEO: Eiji Watanabe
Number of Employees: 6,975
Credit Ratings (as of June 30, 2011)
Moody’s
Standard & Poor’s
R&I
JCR
Long-term Short-term
P–1
A–1
a–1
—
Aa3
A+
A+
AA–
Financial Information (Years ended March 31)
2011
For the Year:
Operating
revenue ......... ¥218.6
Operating
income ..........
38.5
Billions of yen
2010
*1
*2
2009
*3
¥85.6
¥104.9
¥164.1
20.9
23.5
19.6
*1 Formerly Nikko Cordial Securities (1H)
*2 Nikko Cordial Securities, June 2009 (expenses related
to preparatory costs prior to the start of operations were
posted during the period from June to September)
*3 Formerly Nikko Cordial Securities
SMBC Friend Securities Co., Ltd. is a secu-
rities company with one of the best financial
foundations and efficient operations in the
industry, and provides a full range of securi-
ties services focusing mainly on retail clients.
SMBC Friend Securities provides highly effi-
cient nationwide network operations offering
services closely tailored to the needs of its
clients and the communities while operating
a new business model of online financial con-
sulting services.
SMBC Friend Securities will continue to
develop consistently toward its goal of becom-
ing “one of the leading Japanese securities
companies in the retail securities market,”
offering high-quality products and services
accommodating the needs of its clients and
building trust for its clients.
SMBC Nikko Securities Inc. (formerly Nikko
Cordial Securities Inc.), which was established
in July 1918, has developed solid relation-
ships of trust with its corporate clients over
the last nine decades. It became a member
of the SMFG Group in October 2009, bring-
ing its accumulated knowledge and sub-
stantial client base to closely work with and
leverage the extensive service network and
business relations of SMBC. In April 2011,
its corporate name was changed to SMBC
Nikko Securities from Nikko Cordial Securities
in order to define its status as the principal
securities company of the Group. As such,
SMBC Nikko Securities provides comprehen-
sive and highly sophisticated financial services
by consistently working closely with SMBC in
order to pursue comprehensive securities and
investment banking businesses.
18
SMFG 2011
Financial Highlights
Sumitomo Mitsui Financial Group
◆ Consolidated
Year ended March 31
For the Year:
2011
2010
Total income ................................................................
Total expenses .............................................................
Net income (loss) .........................................................
Comprehensive income ...............................................
¥ 3,862,660
3,035,346
475,895
413,375
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 ..................................................
¥ 7,132,073
137,803,098
1,646,369
1,058,945
370,899
61,555
Selected Ratios:
Capital ratio ..................................................................
Return on Equity ..........................................................
Price Earnings Ratio .....................................................
16.63%
9.76%
7.68x
Per Share (Yen):
Net assets ....................................................................
Net income (loss) .........................................................
Net income — diluted .................................................
¥3,533.47
336.85
336.78
¥ 3,184,688
2,626,590
271,559
—
¥ 7,000,805
123,159,513
1,529,484
1,068,329
586,414
57,888
15.02%
7.63%
12.44x
¥3,391.75
248.40
244.18
Millions of yen
2009
¥ 3,556,536
3,527,040
(373,456)
—
¥ 4,611,764
119,637,224
1,586,317
1,077,852
(33,176)
48,079
11.47%
—%
—x
¥2,790.27
(497.39)
—
2008
2007
¥ 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
¥ 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
¥424,546.01
59,298.24
56,657.41
¥469,228.59
57,085.83
51,494.17
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 24.
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. The consolidated capital ratio is 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.
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 ..............................................................................................................................................................
Net income .............................................................................................................................................................
Net income — diluted .............................................................................................................................................
2008
¥4,245.46
592.98
566.57
2007
¥4,692.29
570.86
514.94
Yen
SMFG 2011 19
◆ Nonconsolidated
Year ended March 31
For the Year:
2011
2010
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
¥ 222,217
206,865
24,467
191,539
¥4,842,914
6,237,655
77.64%
2,337,895
¥ 133,379
118,818
16,641
66,176
¥4,805,574
6,152,774
78.10%
2,337,895
Millions of yen
2009
¥ 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
192
Number of employees ..................................................
70,001
1,414,055,625
183
103,401
789,080,477
167
Selected Ratios:
Return on Equity ..........................................................
Price Earnings Ratio .....................................................
Dividend payout ratio ...................................................
4.02%
19.68x
76.09%
1.59%
57.41x
213.41%
3.52%
28.79x
75.96%
2008
2007
¥ 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%
Per Share (Yen):
Net assets ....................................................................
Dividends:
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) ..........................
Net income ..................................................................
Net income — diluted .................................................
¥3,282.75
¥3,256.32
¥3,389.38
¥339,454.71
¥342,382.75
100
/
/
/
/
/
/
/
/
/
/
/
/
88,500
131.42
131.41
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
Notes: 1. All SMFG employees are on secondment assignment from SMBC, etc.
2. 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:
Yen
2008
¥3,394.55
2007
¥3,423.83
Common stock ..................................................................................................................................................
Net income .............................................................................................................................................................
Net income — diluted .............................................................................................................................................
120
91.34
91.34
70
463.26
419.73
20
SMFG 2011
Sumitomo Mitsui Banking Corporation
◆ Consolidated
Year ended March 31
For the Year:
2011
2010
Total income ................................................................
Total expenses .............................................................
Net income (loss) .........................................................
Comprehensive income ...............................................
¥ 2,714,944
1,972,065
450,832
363,689
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 ..................................................
¥ 6,983,132
132,715,674
1,529,587
943,077
305,968
48,219
Selected Ratios:
Capital ratio ..................................................................
Return on Equity ..........................................................
19.16%
8.42%
Per Share (Yen):
Net assets ....................................................................
Net income (loss) .........................................................
Net income — diluted .................................................
¥50,344.52
4,184.89
4,184.07
¥ 2,597,675
2,039,296
332,497
—
¥ 6,894,564
120,041,369
1,498,271
1,007,160
523,444
47,837
16.68%
8.64%
¥49,036.12
4,240.20
4,236.01
Millions of yen
2009
¥ 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)
—
2008
2007
¥ 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
¥ 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
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. The consolidated capital ratio is 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.
SMFG 2011 21
◆ 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 (1st series Type 6) ..........................
Net income (loss) .........................................................
Net income — diluted .................................................
2011
2010
Millions of yen
2009
2008
2007
¥ 2,110,588
1,521,748
421,180
¥ 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
1,531,759
844,897
832,562
699,197
¥ 5,559,293
115,484,907
82,443,286
55,237,613
39,853,432
1,090,605
1,126,269
711,522
305,621
1,576,094
237,383
444,664
1,770,996
70
106,248
22,524
21.45%
7.87%
35.53%
45.6%
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%
¥50,317.86
¥48,799.31
¥41,404.62
¥58,204.22
¥67,124.90
1,388
88,500
3,905.80
—
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
Notes: 1. Please refer to page 169 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 29.
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. The nonconsolidated capital ratio is 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.
5. “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.
22
SMFG 2011
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, 2011.
1. Operating Results
Operating results for fiscal 2010 include the results of 327
consolidated subsidiaries and 47 subsidiaries and affiliates
accounted for by the equity method.
In fiscal 2010, net interest income decreased due mainly
to deterioration in interest margins on deposits and loans
resulting from lower interest rates in Japan. However, SMBC
increased gains on bonds by quickly responding to fluctua-
tions in market interest rates, and SMFG’s net fees and
commissions increased mainly because of an increase in
the number of consolidated subsidiaries. As a result, gross
profit increased by ¥268.0 billion year on year to ¥2,504.7
billion. After adjusting for general and administrative
expenses, credit cost, net losses on stocks, equity in losses
of affiliates and other items, ordinary profit increased by
¥266.6 billion year on year to ¥825.4 billion, due mainly to
a decrease in SMBC’s credit cost as a result of the tailored
efforts to assist certain debtors to improve their businesses
and financial conditions.
After adjusting ordinary profit for extraordinary gains
and losses, income taxes, and other items, net income
increased by ¥204.3 billion year on year to ¥475.8 billion.
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 ...................................
2011 (A)
2010 (B)
327
47
307
58
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 losses on stocks .....................................................................................................
Equity in 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 .....................................................................................................................
Income before minority interests ...................................................................................
Minority interests in net income ...................................................................................
Net income ....................................................................................................................
Net total credit cost (A) + (B) .........................................................................................
[Reference]
Consolidated net business profit (Billions of yen) .........................................................
2011 (A)
¥2,504,730
1,317,651
2,335
766,230
237,093
181,419
(1,355,322)
(220,162)
(156,571)
(63,574)
14,919
(14,935)
(91,949)
(13,319)
1,452
825,428
1,884
(5,411)
2,813
827,313
(97,446)
(143,325)
586,542
(110,646)
¥ 475,895
¥ (217,348)
Millions of yen
2010 (B)
¥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)
379,227
(107,668)
¥ 271,559
¥ (472,968)
Increase (decrease)
(A) – (B)
20
(11)
Increase (decrease)
(A) – (B)
¥268,096
(63,261)
557
157,614
43,006
130,181
(194,020)
253,775
20,101
120,683
32,863
80,128
(81,871)
8,223
12,455
266,659
2,555
7,445
1,845
269,216
6,664
(68,566)
207,315
(2,978)
¥204,336
¥255,620
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 net business 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 2011 23
¥ 1,002.0
¥ 832.3
¥ 169.7
Deposits (excluding negotiable certificates of deposit) at
the end of the fiscal year under review rose by ¥3,350.3 bil-
lion in comparison with March 31, 2010 to ¥81,998.9 billion,
and negotiable certificates of deposit increased by ¥1,370.7
billion to ¥8,366.3 billion.
Meanwhile, loans and bills discounted decreased by
¥1,352.6 billion year on year to ¥61,348.3 billion, and the
balance of securities increased by ¥11,328.1 billion to
¥39,952.1 billion.
Net assets amounted to ¥7,132.0 billion, and, of this total,
stockholders’ equity was ¥4,921.4 billion, due mainly to
recording of net income.
Assets, Liabilities and Net Assets
March 31
Assets ............................................................................................................................ ¥137,803,098
39,952,123
61,348,355
130,671,024
81,998,940
8,366,323
7,132,073
Securities ...................................................................................................................
Loans and bills discounted ........................................................................................
Liabilities ........................................................................................................................
Deposits.....................................................................................................................
Negotiable certificates of deposit ..............................................................................
Net assets .....................................................................................................................
2011 (A)
Millions of yen
2010 (B)
¥123,159,513
28,623,968
62,701,033
116,158,708
78,648,595
6,995,619
7,000,805
Increase (decrease)
(A) – (B)
¥14,643,585
11,328,155
(1,352,678)
14,512,316
3,350,345
1,370,704
131,268
2. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2011
amounted to ¥430.7 billion, a decrease of ¥214.2 billion
from the previous fiscal year-end, reflecting a decrease 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,
amounted to ¥370.9 billion, a decrease of ¥215.5 billion
from the previous fiscal year-end.
Unrealized Gains (Losses) on Securities
2011
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)
¥ 59,857
370,899
311,956
76,770
(17,827)
42
430,799
311,956
136,639
(17,796)
(A) – (B)
¥ 1,247
(215,515)
(99,028)
(46,888)
(69,598)
(20)
(214,288)
(99,028)
(45,730)
(69,529)
Unrealized
gains
¥ 61,389
720,864
487,773
108,640
124,449
42
782,295
487,773
170,021
124,500
Unrealized
losses
¥ 1,531
349,965
175,817
31,870
142,277
—
351,496
175,817
33,382
142,297
Net unrealized
gains (losses) (B)
¥ 58,610
586,414
410,984
123,658
51,771
62
645,087
410,984
182,369
51,733
2010
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
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.
Net unrealized gains (losses) on other securities, as of March 31, 2011 and 2010, included gains of ¥1,153 million and ¥105 million, respectively, which
were recognized in the statements of income by applying fair value hedge accounting. As a result, the amounts recorded in net assets, as of March 31,
2011 and 2010, were reduced by ¥1,153 million and ¥105 million, respectively.
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” (Accounting Standards Board of Japan
(“ASBJ”) Practical Issues Task Force No. 25).
24
SMFG 2011
3. Consolidated Capital Ratio
SMFG’s consolidated capital ratio as of March 31, 2011
was 16.63%, 1.61 percentage points higher than at March
31, 2010.
Total capital, which is the numerator in the capital ratio
calculation equation, rose by ¥304.6 billion year on year
to ¥8,432.8 billion. This was due mainly to recording of
net income. Risk-adjusted assets, the denominator in the
equation, decreased by ¥3,390.7 billion year on year to
¥50,693.6 billion due in part to a reduction in corporate
exposures.
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 ...........................................................................................................
2011 (A)
¥ 6,323,995
2,536,958
(428,082)
8,432,871
50,693,696
Millions of yen
2010 (B)
¥ 6,032,280
2,563,853
(467,906)
8,128,228
54,084,471
Increase (decrease)
(A) – (B)
¥ 291,715
(26,895)
39,824
304,643
(3,390,775)
16.63%
12.47%
15.02%
11.15%
1.61%
1.32%
4. Dividend Policy
In view of the public nature of its business, SMFG has set a
fundamental policy of increasing profit distribution stably and
continuously 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 funda-
mental 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 2010 business perfor-
mance, SMFG has decided to pay a term-end dividend of
¥100 per share of common stock for the fiscal year.
SMFG will employ its retained earnings to increase its
enterprise value by aiming for top quality in strategic busi-
ness areas, and establishing a solid financial base and cor-
porate infrastructure enough to address the new financial
regulations and competitive environment.
5. Deferred Tax Assets
Net deferred tax assets decreased by ¥77.8 billion from the
end of the previous fiscal year to ¥624.2 billion.
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
2011 (A)
¥624,219
2010 (B)
¥702,065
Increase (decrease)
(A) – (B)
¥(77,846)
9.9%
11.6%
(1.7)%
SMFG 2011 25
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, 2011.
1. Operating Results
Gross banking profit in fiscal 2010 increased by ¥76.4 billion
from the previous fiscal year to ¥1,531.7 billion, and
expenses (excluding nonrecurring losses) rose by ¥13.4 bil-
lion to ¥699.1 billion. As a result, banking profit (before pro-
vision for general reserve for possible loan losses) increased
by ¥63.0 billion to ¥832.5 billion.
Ordinary profit — banking profit (before provision for
general reserve for possible loan losses) adjusted for nonre-
curring items such as credit cost and net losses on stocks —
increased by ¥132.9 billion to ¥595.7 billion.
After adjustment of ordinary profit for extraordinary gains
and losses and income taxes, SMBC posted net income of
¥421.1 billion, a year-on-year increase of ¥103.1 billion.
2. Income Analysis
Gross Banking Profit
Gross banking profit increased by ¥76.4 billion year on year
to ¥1,531.7 billion. This was mainly due to increased gains
on bonds by quickly responding to fluctuations in market
interest rates, and higher total fees for loan-related services
at the International Banking Unit.
Expenses
Expenses (excluding nonrecurring losses) increased by
¥13.4 billion to ¥699.1 billion. This increase was due mainly
to costs associated with a bolstering of personnel in stra-
tegic business domains and investments made in previous
fiscal years in branches and computer systems, which out-
weighed the benefits of ongoing cost-cutting measures in
publicity and advertising expenses and building and mainte-
nance expenses.
Banking Profit
Banking profit (before provision for general reserve for pos-
sible loan losses) increased by ¥63.0 billion from the previ-
ous fiscal year to ¥832.5 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 ................................................................................................................
2011 (A)
¥1,531,759
[1,114,329]
[417,429]
967,825
2,299
302,667
151,070
107,897
[1,384,638]
(699,197)
(249,842)
(411,471)
(37,883)
832,562
[685,441]
12,335
844,897
Banking Profit by Business Unit
Millions of yen
2010 (B)
¥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
Increase (decrease)
(A) – (B)
¥ 76,484
[(2,895)]
[79,379]
(78,557)
563
15,953
35,714
102,812
[(33,367)]
(13,445)
(4,114)
(8,206)
(1,124)
63,040
[(46,811)]
3,268
66,308
Year ended March 31, 2011
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
Head Office
Account
Total
¥97.5
3.6
¥222.2
(24.1)
¥165.3
(3.0)
¥128.6
25.1
¥312.8
56.1
¥(93.8)
5.4
¥832.6
63.1
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. “Head Office Account” consists 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.
26
SMFG 2011
Nonrecurring Losses (Credit Cost, etc.)
Nonrecurring losses amounted to ¥249.1 billion, an improve-
ment of ¥66.6 billion from the previous fiscal year. This was
due mainly to a ¥156.1 billion drop in credit cost to ¥107.6 bil-
lion, as a result of the tailored efforts to assist certain debtors to
improve their businesses and financial conditions, which out-
weighed the impact of a ¥91.1 billion worsening in net losses
on stocks to ¥87.2 billion, due to increased write-offs.
Net total credit cost — the sum of credit cost of ¥107.6 bil-
lion recorded under “Nonrecurring losses,” provision for gen-
eral reserve for possible loan losses, and gains on recoveries of
written-off claims — amounted to ¥94.2 billion, a year-on-year
decrease of ¥160.3 billion.
Ordinary Profit
As a result of the foregoing, ordinary profit totaled ¥595.7 bil-
lion, ¥132.9 billion higher than in the previous fiscal year.
Extraordinary Gains (Losses)
Extraordinary losses amounted to ¥6.8 billion, a decrease of
¥1.1 billion from the previous year.
Net Income
Current income taxes amounted to ¥42.3 billion, and deferred
income taxes were ¥125.2 billion. As a result, net income
increased by ¥103.1 billion year on year to ¥421.1 billion.
Ordinary Profit and Net Income
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).............................................................
Income taxes:
Current .......................................................................................................................
Deferred .....................................................................................................................
Net income ....................................................................................................................
Net 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 ..................................................................
2011 (A)
¥832,562
12,335
844,897
(249,193)
(107,660)
(87,285)
21,671
(1,604)
(107,353)
(54,247)
595,704
(6,864)
(2,336)
(4,288)
1,055
(42,386)
(125,273)
¥421,180
¥ (94,269)
12,335
(70,775)
(27,104)
(9,693)
(87)
1,055
Millions of yen
2010 (B)
¥ 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
(44,997)
(91,757)
¥ 317,995
¥(254,660)
9,067
(102,663)
(92,114)
(69,259)
232
77
Increase (decrease)
(A) – (B)
¥ 63,040
3,268
66,308
66,646
156,145
(91,142)
(35,048)
(718)
(55,378)
1,645
132,955
1,135
(4,784)
6,237
978
2,611
(33,516)
¥103,185
¥160,391
3,268
31,888
65,010
59,566
(319)
978
SMFG 2011 27
Net Assets
Net assets at fiscal year-end amounted to ¥5,559.2 billion.
Of this total, stockholders’ equity amounted to ¥5,188.2 bil-
lion, consisting of ¥1,770.9 billion in capital stock, ¥2,481.2
billion in capital surplus (including ¥710.2 billion in other
capital surplus), and ¥935.9 billion in retained earnings.
Valuation and translation adjustments were ¥371.0 billion,
comprising ¥229.8 billion in net unrealized gains on other
securities, ¥121.1 billion in net deferred gains on hedges,
and ¥20.0 billion in land revaluation excess.
3. Assets, Liabilities and Net Assets
Assets
SMBC’s assets as of March 31, 2011 increased by
¥11,948.5 billion from the previous fiscal year-end to a total
of ¥115,484.9 billion. This increase was due chiefly to a
¥11,317.2 billion increase in securities due to an increase in
the balance of Japanese government bonds held.
Liabilities
Liabilities as of March 31, 2011 amounted to ¥109,925.6
billion, an increase of ¥11,787.1 billion from the previous
fiscal year-end. The main reason for the increase in liabilities
was a ¥3,579.2 billion increase in deposits due to the rising
total value of deposits held by individuals and of corporate
deposits in Japan, and increases in fund procurement in the
borrowed money and other markets.
Assets, Liabilities and Net Assets
March 31
Assets ............................................................................................................................ ¥115,484,907
39,853,432
55,237,613
109,925,614
74,036,469
8,406,816
5,559,293
Securities ...................................................................................................................
Loans and bills discounted ........................................................................................
Liabilities ........................................................................................................................
Deposits.....................................................................................................................
Negotiable certificates of deposit ..............................................................................
Net assets .....................................................................................................................
2011 (A)
Millions of yen
2010 (B)
¥103,536,394
28,536,200
56,619,058
98,138,445
70,457,266
7,173,373
5,397,949
Increase (decrease)
(A) – (B)
¥11,948,513
11,317,232
(1,381,445)
11,787,169
3,579,203
1,233,443
161,344
28
SMFG 2011
4. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2011
amounted to ¥336.6 billion, a decrease of ¥229.2 billion
from the previous fiscal year-end, reflecting a decrease 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,
amounted to ¥305.6 billion, a decrease of ¥215.7 billion
from the previous fiscal year-end.
Unrealized Gains (Losses) on Securities
2011
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)
¥ 58,930
(27,948)
305,621
275,468
71,931
(41,778)
42
336,646
261,289
130,861
(55,505)
(A) – (B)
¥ 1,027
(14,477)
(215,756)
(95,991)
(44,214)
(75,550)
(20)
(229,226)
(104,690)
(43,188)
(81,348)
Unrealized
gains
¥ 60,394
521
662,003
468,639
99,888
93,476
42
722,962
469,161
160,282
93,518
Unrealized
losses
¥ 1,463
28,470
356,382
193,170
27,956
135,254
—
386,315
207,871
29,420
149,023
Net unrealized
gains (losses) (B)
¥ 57,903
(13,471)
521,377
371,459
116,145
33,772
62
565,872
365,979
174,049
25,843
2010
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
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.
Net unrealized gains (losses) on other securities, as of March 31, 2011 and 2010, included gains of ¥1,153 million and ¥105 million, respectively, which
were recognized in the statements of income by applying fair value hedge accounting. As a result, the amounts recorded in net assets, as of March 31,
2011 and 2010, were reduced by ¥1,153 million and ¥105 million, respectively.
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 for Financial Assets” (ASBJ Practical Issues Task Force No. 25).
SMFG 2011 29
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
Cards
CLO
CMBS
RMBS, etc.
Balances
(after provisions
and write-offs)
¥ 2.6
1.5
12.7
1.3
¥18.1
Change from
Mar. 31, 2010
¥2.6
(1.4)
(0.9)
1.2
¥1.5
March 31, 2011
Overseas
¥2.6
1.5
—
0.1
¥4.2
Change from
Mar. 31, 2010
¥2.6
(1.4)
—
(0.0)
¥1.2
Net unrealized
gains/losses
(after write-offs)
¥(0.1)
1.2
0.1
0.3
¥ 1.5
Change from
Mar. 31, 2010
¥(0.1)
0.7
0.1
0.3
¥ 1.0
(Billions of yen)
March 31, 2010
Balances
(after provisions
and write-offs)
Overseas
Net unrealized
gains/losses
(after write-offs)
¥ — ¥— ¥—
0.5
0.0
0.0
¥0.5
2.9
13.6
0.1
¥16.6
2.9
—
0.1
¥3.0
Total
Notes: 1. RMBS, etc. include approximately ¥0.1 billion of sub-prime related products.
2. There is no amount of ABCP.
3. Excludes GSE and SMBC's exposure to subordinated beneficiaries owned through the securitization of SMBC's loan receivables.
4. No loss was recorded on securitized products in the fiscal year ended March 31, 2011.
2. Transactions with Monoline Insurance Companies
Credit Derivatives (Credit Default Swap [“CDS”]) Transactions with Monoline Insurance Companies
March 31, 2011
March 31, 2010
March 31, 2011
Net
exposure
Change from
Mar. 31, 2010
Reserve for
possible loan
losses
Net
exposure
Reserve for
possible loan
losses
Amount of
reference
assets
Change from
Mar. 31, 2010
March 31, 2010
Amount of
reference
assets
(Billions of yen)
Exposure to CDS transactions with
monoline insurance companies
Notes: 1. Reference assets are rated investment grade or equivalent, and do not include sub-prime related assets.
¥(45.6)
¥48.5
¥0.8
¥2.9
¥13.6
2. SMFG recorded loss on such transactions of approximately ¥3.7 billion in the fiscal year ended March 31, 2011.
Loans and Investments Guaranteed by Monoline Insurance Companies, etc.
(Billions of yen)
March 31, 2011
March 31, 2010
Exposure
Change from
Mar. 31, 2010
Reserve for
possible loan
losses
Exposure
Reserve for
possible loan
losses
¥321.3
¥(181.8)
¥503.1
Loans and investments guaranteed or
insured by monoline insurance companies
Note: Underlying assets are those of project finance, etc., which are rated investment grade or equivalent, and include no sub-prime related assets.
¥(0.1)
¥0.0
¥9.4
¥9.5
¥0.0
3. Leveraged Loans
Europe
Japan
United States
Asia (excluding Japan)
March 31, 2011
March 31, 2010
(Billions of yen)
Loans
Change from
Mar. 31, 2010
Undrawn
commitments
Change from
Mar. 31, 2010
¥196.9
183.5
77.2
65.4
¥523.0
¥(64.2)
7.3
(36.0)
5.8
¥(87.1)
¥ 23.4
15.5
66.1
7.7
¥112.7
¥ (5.4)
3.7
(7.4)
(1.7)
¥(10.8)
Reserve for
possible loan
losses
¥ 7.5
12.7
11.0
1.0
¥32.2
Loans
Undrawn
commitments
¥261.1
176.2
113.2
59.6
¥610.1
¥ 28.8
11.8
73.5
9.4
¥123.5
Reserve for
possible loan
losses
¥ 6.2
12.7
12.2
2.3
¥33.4
Total
Notes: 1. Above figures include the amount to be sold of approximately ¥3 billion.
In the fiscal year ended March 31, 2011, we sold leveraged loans of approximately ¥24 billion, and loss on the sale amounted to approximately ¥3 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.
30
SMFG 2011
4. Asset Backed Commercial Paper (ABCP) Programs as Sponsor
We sponsor issuance of ABCP, whose reference assets are
such as clients’ receivables, in order to fulfill clients’ financ-
ing needs. Most of the reference assets are high-grade
claims of corporate clients and do not include sub-prime
related assets.
Reference assets related to ABCP programs as sponsor
Reference: In addition, we provide liquidity supports for ABCP programs which are sponsored by other banks.
Total notional amount of reference assets of such programs is approximately ¥47 billion.
¥473.2
¥(28.1) ¥194.7
Notional
amount
Change from
Mar. 31, 2010
Overseas
Change from
Mar. 31, 2010
¥56.1
Notional
amount
Overseas
¥501.3
¥138.6
March 31, 2011
March 31, 2010
(Billions of yen)
5. Others
We have no securities issued by structured investment vehicles.
SMFG 2011 31
Risk Management
Basic Approach
As risks in the financial services increase in diversity and complexity,
(2) Fundamental Principles and Basic Policies for Risk
Management
risk management—identifying, measuring, and controlling risk—has
SMFG’s Groupwide basic policies for risk management stipulate the
never been more important in the management of a financial holding
fundamental principles for risk management that must be followed,
company.
and spell out risk management procedures from various perspec-
SMFG has encapsulated the basic principles to be employed
tives. These include managing risk on a consolidated accounting
in risk management in the manual entitled Regulations on Risk
basis, managing risk using quantification methods, ensuring con-
Management. In the manual, we have specified the basic policies
sistency with business strategies, setting up a system of checks
for risk management: 1) Set forth SMFG’s Groupwide basic policies
and balances, contingency planning for emergencies and serious
for risk management after specifying the categories of risk to which
situations, and verifying preparedness to handle all conceivable
these policies apply; 2) Provide all necessary guidance to Group
risk situations. In addition, there are specific operational policies
companies to enable them to follow the basic risk management
for implementing appropriate management of risk by all Group
policies set forth by SMFG and set up their own appropriate risk
companies.
management systems; and 3) Monitor the implementation of risk
Under SMFG’s Groupwide basic policies for risk management,
management by all Group companies to ensure that their practices
all Group companies periodically carry out reviews of the basic
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 catego-
ries 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 systematically manage all
these categories of risk across the entire Group.
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 authorized by the
Board. The Management Committee, the designated board mem-
bers, 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
32
SMFG 2011
Guidance for
drafting of basic
policies
Monitoring
Report
SMBC
SMBC Nikko
Securities
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
Integrated Risk 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 associ-
ated 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 operational—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 plan-
ning 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 man-
agement 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) Risk Capital-Based Management
In order to maintain a balance between risk and return as well as
ensure the soundness of the Group from an overall perspective, 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 appro-
priately and effectively to each unit to keep total exposure to various
risks within the scope of our resources, i.e., capital.
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
business 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. Risk capital limits are subdivided
into guidelines or ceilings for each business including VaR and loss
limits. Therefore, by strictly observing the VaR and loss limits, and
other factors, SMFG maintains the soundness of the Group as a
whole.
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.
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 2011 33
Liquidity risk is managed within the context of cash-flow plans
Credit risk is the most significant risk to which SMFG is
and funding gap. Other risk categories are managed with proce-
exposed. Without effective credit risk management, the impact of
dures closely attuned to the nature of the risk, as described in the
the corresponding losses on operations can be overwhelming.
following paragraphs.
(2) Stress Testing
In the current volatile business environment, stress testing to analyze
and estimate the adverse effects of events such as an economic
recession and market volatility on the business and financial condi-
tions of financial institutions is increasingly essential. When estab-
lishing a management plan, SMFG also conducts stress tests using
The purpose of credit risk management is to keep credit risk
exposure to a permissible level relative to capital, to maintain the
soundness of Groupwide assets, and to ensure returns commen-
surate 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
a number of stress events to analyze and estimate their impact on
operating concepts, policies, and standards for credit operations, in
its financial condition.
accordance with the business mission and rules of conduct.
SMBC is promoting the understanding of and strict adherence
Implementation of Basel II
Basel II is an international agreement on the minimum capital
to its credit policy among all its managers and employees. By con-
ducting risk-sensitive credit management, SMBC aims to enhance
requirements for internationally active banks, and it has been applied
shareholder value and play a key part in society by providing high-
since March 31, 2007, to the internationally active banks in Japan.
value-added financial services.
Under the Basel II framework, there are multiple approaches
to calculating the capital requirements. We have adopted the
advanced internal ratings-based (IRB) approach for credit risk and
2. Credit Risk Management System
At SMBC, the Credit & Investment Planning Department within
the Advanced Measurement Approach (AMA) for operational risk
the Risk Management Unit is responsible for the comprehensive
since March 31, 2009 and March 31, 2008 respectively.
management of credit risk. This department drafts and adminis-
Details of our initiatives are provided below, and detailed infor-
ters credit policies, the internal rating system, credit authority
mation on the capital ratio is provided in the discussion on Capital
guidelines, and credit application guidelines, and manages non-
Ratio Information appearing in the Financial Section and Corporate
performing loans (NPLs) and other aspects of credit portfolio
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.
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 investi-
gates 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 classi-
fied 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.
34
SMFG 2011
The Internal Audit Unit, operating independently of the business
SMBC has established the Credit Risk Committee, as a con-
units, audits asset quality, accuracy of gradings and self-assessment,
sultative body, to round out its oversight system for undertaking
and state of credit risk management, and reports the results directly
flexible and efficient control of credit risk, and ensuring the overall
to the Board of Directors and the Management Committee.
soundness of the bank’s loan operations.
■ SMBC’s Credit Risk Management System
Risk Management Unit
Corporate Risk Management Dept.
•Aggregates risk for comprehensive management
•Plans and proposes risk quantification methods
Credit & Investment Planning Dept.
•Aggregates credit risk for unified management
•Plans and proposes basic credit policies
•Drafts, administers, and examines internal rating system
Credit Portfolio Management Dept.
•Undertakes active portfolio management
Board of Directors
Corporate Auditors
Management Committee
External Audit (Auditing Firm)
Internal Audit Unit
Internal Audit Dept.
•Audits credit risk management
Credit Review Dept.
•Audits self-assessments, grading (obligors and facilities), and
effectiveness of write-offs and reserves
Corporate Services Unit
Corporate Research Dept.
•Industry trend research
•Credit assessment of major industry players
Credit Administration Dept.
•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 acknowledge 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 cat-
egory 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 obligor
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 quality 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.
SMFG 2011 35
Obligor grades and facility grades are reviewed once a year,
the Monte Carlo method to calculate our maximum loss exposure to
and, whenever necessary, such as when there are changes in the
the estimated amount of the maximum losses that may be incurred.
credit situation.
Based on these quantitative results, we allocate risk capital.
There are also grading systems for small and medium-sized
Risk quantification is also executed for purposes such as to
enterprises (SME) loans, loans to individuals, and project finance
determine the portfolio’s risk concentration, or to simulate economic
and other structured finance tailored according to the risk charac-
movements (stress tests), and the results are used for making
teristics of these types of assets.
optimal decisions across the whole range of business operations,
The Credit & Investment Planning Department centrally man-
including formulating business plans and providing a standard
ages the internal rating systems, and properly designs, operates,
against which individual credit applications are assessed.
supervises, and validates the grading models. It validates the grad-
ing models (including statistical validation) of main assets following
the procedures manual once a year, to ensure their effectiveness
and suitability.
(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 facilities
stored in a database to calculate the credit risk. Then, based on
these parameters, we run a simulation of simultaneous default using
■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
(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 enterprise’s
capability of loan repayment and its growth prospects. These quan-
titative measures, when combined with qualitative analyses of indus-
trial trends, the enterprise’s R&D capabilities, the competitiveness of
its products or services, and its management 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 objective examination of all relevant factors.
Increasing the understandability to customers of loan conditions
and approval standards for specific borrowing purposes and loan
categories is a part of SMBC’s ongoing review of lending 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
Borrower
Category
Financial Reconstruction
Law Based Disclosure
Category
(Domestic)
Normal
Borrowers
Normal Assets
assessment process. To respond proactively and
promptly to customers’ funding needs—particu-
larly 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 custom-
ers without delay. It also facilitates the effective
management of credit risk, as well as the flexible
setting of interest rates.
We also provide loans to individuals who
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
rent out properties such as apartments. The
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
loan applications are subjected to a precise
Bankrupt and
Quasi-Bankrupt
Assets
credit risk assessment process utilizing a risk
assessment model that factors in the projected
revenue from the rental business. The process is
also used to provide advice to such customers
on how to revise their business plans.
36
SMFG 2011
(b) Credit Monitoring System
corporate groups by setting guidelines for maximum loan amounts.
At SMBC, in addition to analyzing loans at the application stage,
To manage country risk, SMBC also has credit limit guidelines
the Credit Monitoring System is utilized to reassess obligor grades
based on each country’s creditworthiness.
and review self-assessment and credit policies so that problems
can be detected at an early stage, and quick and effective action
(c) Researching Borrowers More Rigorously and Balancing Risk
can be taken. The system includes periodic monitoring carried out
and Returns
each time an obligor enterprise discloses financial results, as well
Against a backdrop of drastic change in the business environ-
as continuous monitoring performed each time credit conditions
ment, SMBC rigorously researches borrower companies’ actual
change, as indicated in the diagram below.
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 borrowers’ busi-
ness 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 portfolio to
stabilize credit risk.
(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 invest-
ment, and investment in securitization products. Regular monitoring
is conducted to make sure that these guidelines are being followed,
thus ensuring appropriate overall management of credit risk.
(b) Controlling Concentration Risk
Because the concentration of credit risk in an industry or corporate
group has the potential to substantially impair capital, SMBC imple-
ments measures to prevent the excessive concentration of loans in
an industry and to control large exposure to individual companies or
■SMBC’s Credit Monitoring System
Obligor Information
Processing
Registration
of Financial
Statements/
Creation and
Revision of
Corporate
Card
Flow of Obligor Grading/Grading Outlook/Credit Policies/Action Plans/Facility Grading Assignment
Nonconsoli-
dated
Financial
Grade
Consolidated
Financial
Grade
Effective
Financial
Grade
Not Flagged
Flagging
According to
Self-
Assessment
Criteria
Flagged
Self-Assessment
Logic
Quantitative
Assessment
Financial
Assessment
Credit Status
Qualitative
Assessment
Normal
Borrowers
Borrowers
Requiring
Caution
Potentially
Bankrupt
Borrowers
Effectively
Bankrupt
Borrowers
Bankrupt
Borrowers
Grading Outlook Assessment
Performance
Trends
+
Qualitative
Risk
Factors
Final
Obligor
Grade
•Positive
•Flat
•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 2011 37
(4) Self-Assessment, Asset Write-Offs and Provisions,
write-offs is generally known as provision for the reserve for possible
and Disclosure of Problem Assets
loan losses.
(a) Self-Assessment
SMBC’s write-off and provision criteria for each self-
SMBC conducts rigorous self-assessment of asset quality using
assessment borrower category are shown in the table below.
criteria based on the Financial Inspection Manual of the Financial
As part of our overall measures to strengthen risk management
Services Agency and the Practical Guideline published by the
throughout the Group, all consolidated subsidiaries use substantially
Japanese Institute of Certified Public Accountants. Self-assessment
the same standards as SMBC for write-offs and provisions.
is the latter stage of the obligor grading process for 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 appropriate level
of write-offs and provisions. Each asset is assessed individually
for its security and collectibility. Depending on the borrower’s cur-
rent 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 bor-
rower are classified into Classification I, II, III, and IV assets accord-
ing to their default and impairment risk levels, taking into account
such factors as collateral and guarantees. As part of our efforts to
bolster risk management throughout the Group, our consolidated
Potentially Bankrupt Borrowers
subsidiaries carry out self-assessment in substantially the same
manner.
Borrower Categories, Defined
Normal Borrowers
Borrowers with good earnings performances and no
significant financial problems
Borrowers Requiring Caution
Borrowers identified for close monitoring
Potentially Bankrupt Borrowers
Effectively Bankrupt Borrowers
Borrowers perceived to have a high risk of falling into
bankruptcy
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
Effectively Bankrupt/ Bankrupt
Borrowers
General reserve
Notes
Specific reserve
Self-Assessment
Borrower Categories
Standards for Write-Offs and
Provisions
Normal Borrowers
Borrowers Requiring Caution
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 “provi-
sion 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 uncollect-
ible in part or in total (individually evaluated claims)
Asset Classifications, Defined
Discounted Cash Flow Method
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 doubt-
ful 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 recognition of a loan loss
provision on a contra-asset account in the amount deemed uncol-
lectible, referred to as an indirect write-off. Recognition of indirect
38
SMFG 2011
SMBC uses the discounted cash flow (DCF) method to calculate
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 evalua-
tion 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 uti-
lize up-to-date and correct data to realize the most accurate esti-
mates 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 Act (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, 2011, please refer to page 170.
4. Risk Management of Marketable Credit Transactions
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 consid-
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 market 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 dis-
ered to be exposed to both credit risk from the underlying assets as
cuss the SMBC’s ALM operation.
well as “market risk” and “liquidity risk” that arise from their trading
as financial products. This is referred to as marketable 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 management,
we also apply the methods for management of market and liquidity
risks.
In addition, we have established guidelines based on the char-
acteristics 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 highly
efficient system of mutual checks and balances.
To prevent unforeseen processing errors as well as fraudu-
lent 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 2011 39
departments (back office) and the administrative departments
historical simulation method). This internal SMBC model is evaluated
(middle office) conduct the checks. In addition, the Internal Audit
periodically by an independent auditing firm to assess its
Unit of SMBC periodically performs comprehensive internal audits to
appropriateness and accuracy.
verify that the risk management framework is functioning properly.
(b) Back-Testing Results
3. Market and Liquidity Risk Management Methods
The relationship between the VaR calculated with the model and
(1) Market Risk Management
SMBC manages market risk by setting maximum limits for VaR and
maximum loss. These limits are set within the “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 managing 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 depos-
its (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 2010 are shown in
the table below. SMBC’s internal VaR model makes use of
historical data to prepare scenarios for market fluctuations and,
by conducting simulations of gains and losses, the model esti-
mates the maximum losses that may occur (this is known as the
the actual profit and loss data is back-tested daily. The back-
testing results for SMBC’s trading accounts for fiscal 2010 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 2009, there were no such excess losses during
fiscal 2010. This demonstrates that the SMBC VaR model, with a
one-sided confidence interval of 99.0%, is sufficiently reliable.
Glossary
1. VaR (Value at risk)
The largest predicted loss that is possible given a fixed con-
fidence interval. For example, VaR indicates, for a holding
period of one day and a confidence interval of 99.0%, the
maximum loss that may occur as a result of market fluctua-
tions 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 advantage
of short-term fluctuations in market values and differences in
value among markets.
4. Banking
A market operation for generating profit through management
of interest rates, terms, and other aspects of assets (loans,
bonds, etc.) and liabilities (deposits, etc.).
■VaR Results
June 2010
Sept. 2010
Dec. 2010
Mar. 2011
Maximum
Minimum
Average
SMFG (consolidated)
SMBC (consolidated)
SMBC (nonconsolidated)
Trading Book
Banking Book
Trading Book
Banking Book
Trading Book
Banking Book
(Billions of yen)
8.1
7.5
7.1
6.8
9.3
5.8
7.9
38.2
39.8
45.5
48.6
50.9
29.7
40.5
6.9
7.0
6.8
6.5
8.7
5.4
7.2
37.1
39.0
44.4
47.4
49.6
28.8
39.4
1.9
2.3
2.0
1.3
3.6
1.3
2.2
33.7
36.0
40.4
43.1
45.4
25.2
35.7
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)].
40
SMFG 2011
■Back-Testing Results (Trading Book)
SMFG (consolidated)
SMBC (consolidated)
SMBC (nonconsolidated)
4.0
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
-4.0
Actual Profit or Loss (¥ billion)
0
1.0
2.0
3.0
4.0
VaR (¥ billion)
4.0
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
-4.0
Actual Profit or Loss (¥ billion)
0
1.0
2.0
4.0
3.0
VaR (¥ billion)
4.0
3.0
2.0
1.0
0
-1.0
-2.0
-3.0
-4.0
Actual Profit or Loss (¥ billion)
0
1.0
2.0
3.0
4.0
VaR (¥ billion)
(c) Stress Testing
To minimize the impact of crises on the SMBC’s funding, SMBC
The market occasionally undergoes extreme fluctuations that
manages highly liquid supplementary funding sources, whereby
exceed projections. To manage market risk, therefore, it is impor-
SMBC maintains high quality liquid assets, such as U.S. treasuries
tant to run simulations of unforeseen situations that may occur in
and has emergency borrowing facilities.
financial markets (stress testing). The bank conducts stress tests
In addition, for emergency situations, there are contingency
on a monthly basis assuming various scenarios, and has measures
plans in place for addressing funding liquidity risk that include an
in place for irregular events.
action plan with measures for reducing funding gap limits and
(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, 2011, the outlier ratio was around 8%, 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 cur-
rency and other factors. Additionally, a risk limit is set by currency as
needed to achieve more rigorous management.
guidelines.
■ Decline in Economic Value Based on Outlier Framework
SMBC (consolidated)
SMBC (nonconsolidated)
March 31, 2010 March 31, 2011 March 31, 2010 March 31, 2011
(Billions of yen)
Total
Impact of Yen
interest rates
Impact of U.S. dollar
interest rates
Impact of Euro
interest rates
532.7
396.7
90.3
33.2
696.4
530.5
141.9
16.0
490.8
357.9
88.6
32.8
660.3
497.4
139.6
15.6
Percentage of Tier I + Tier II
6.1%
7.8%
5.8%
7.7%
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, 2011)
SMBC Portfolio
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SMFG 2011 41
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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 sys-
tem 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 create a more sophisticated
quantification model and to enhance operational risk management
throughout the Group.
■SMBC’s Operational Risk Management System
2. Operational Risk Management System
SMFG has designed and implemented an operational risk manage-
ment 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 man-
agement, 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 depart-
ment. 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 Operational
Risk Management Department. In addition, there is the Operational
Risk Committee, comprising all relevant units of the bank, where
operational risk information is reported and risk mitigation plans
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
42
SMFG 2011
are discussed. In this way, we realize a highly effective operational
The basic framework of the AMA quantification model of
risk management framework. The operational risk situation is also
SMFG and SMBC is outlined in the diagram below. Among
reported to the Management Committee and the Board of Directors
the four elements, collected internal loss data and the results of
on a regular basis, for review of the basic policies on operational
scenarios analysis through risk control assessment are input
risk management. Moreover, the bank’s independent Internal Audit
directly into the quantification model described later in this sec-
Department conducts periodic audits to ensure that the operational
tion to calculate required capital and risk-weighted assets
risk management system is functioning properly.
(= required capital divided by 8%). In addition, external loss data
3. Operational Risk Management Methodology
As previously defined, operational risk covers a wide range of
and BEICFs are used in verifying the assessment of scenarios,
along with internal loss data, to increase objectivity, accuracy, and
completeness.
events, including the risk of losses due to errors in operation, sys-
The specific content, method of collection and use of the four
tem failures, and natural disasters. Also, operational risk events
elements are described below. In each group company the same
can occur virtually anywhere and everywhere. Thus, it is essential
four elements are collected and utilized.
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 measure-
■ Basic Framework of Operational Risk Measurement
ment methodology that can be applied to all types of operational
of SMFG and SMBC
risk, and to comprehensively and comparatively capture the status
of and changes in potential operational risks of business processes.
(1) Internal Loss Data
(4)
Scenario
Analysis through
Risk Control
Assessments
Data
input
(5)
Measurement
Using the
Quantification
Model
(2) External Loss Data
Verifi-
cation
(3) BEICFs
(6) Risk Mitigation Initiatives
Also, from the viewpoint of internal control, the measurement meth-
odology used to create 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 calculat-
ing 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 scenarios 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.
SMFG 2011 43
(1) Internal Loss Data
Internal loss data are defined as “the information on events in which
of controls, and (c) estimate the frequency and severity of risk sce-
narios.” SMFG and SMBC apply this methodology to their principal
SMFG and SMBC incur losses resulting from the realization of oper-
business activities.
ational risk.” At SMFG and SMBC, internal loss data are collected
The purpose of risk control assessment is to identify material
for all cases where the gross loss amount is at least one yen (the
and potential operational risks pertinent to business processes, to
threshold amount), and seven years of internal loss data are directly
measure them, and to develop and carry out a risk mitigation plan
used in the quantification of required capital for operational risk.
to manage the risks. Another purpose of risk control assessment is
(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.
(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.
(4) Scenario Analysis through Risk Control Assessments
Risk control assessment is defined as “risk management methodol-
ogy to (a) identify material operational risks, and describe them in
terms of risk scenarios, (b) assess the risks and the effectiveness
■Flowchart for Risk Control Assessment (Example)
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, opera-
tional risks inherent in various business processes are recognized as
“scenarios.” The risk and control conditions for each scenario are
assessed, and the frequency of occurrence and amount of losses
are estimated based on them. The assessment process comprises
three steps: (i) initial assessment, (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).
As an effective mechanism for mitigating operational risks, the
maximum loss occurring once in 100 years (hereinafter, “scenario
exposure”) is calculated for each scenario derived through the risk
control assessment, and then a magnitude rating is provided by
classifying them into five categories according to the severity of
loss. Risk mitigation plans are developed by the relevant business
units for those scenarios with high-severity risk identified through
magnitude rating.
(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
44
SMFG 2011
The principal features of this risk control assessment method
(amount of loss per loss incident) based on internal losses and
are (1) “objectivity,” which is realized by estimating the frequency of
frequency of “low-frequency and high-severity” events obtained
losses based on historical internal loss experience and by estimating
through the risk control assessment.
the severity of losses based on the transaction amounts pertinent to
By using the loss frequency and loss severity distribu-
the scenarios, and (2) an appropriate level of “sensitivity,” because
tions, the aggregated loss severity distribution is generated by
changes in the business environment and the implementation of risk
conducting Monte Carlo simulations and by generating various
mitigation measures can be reflected in the frequency and severity
combinations of loss occurrence and loss amount which are simu-
of losses by changing the assessment of risk and control as well as
lated by changing these two factors. 99.0% VaR is calculated from
transactions amounts.
(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 Group companies
other than those applying the AMA. Then, the required capital and
risk-weighted assets for SMFG and SMBC Group are measured by
aggregating these figures.
The outline of the quantification model for SMBC is as follows.
First, we generate a loss frequency distribution (number of loss
incidents over a one-year period) based on the number of his-
torical internal losses. Then, we generate a loss severity distribution
■Measurement Using the Quantification Model
Distribution of Loss Frequency
(
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
0.20
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
(
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
0.30
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)
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 com-
pute 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 introducing 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.
Please note that the accuracy of quantification model outputs
described above is secured through the regular ex ante and ex post
facto verification processes.
The breakdown of risk-weighted assets by event type for the
Group on a consolidated basis, computed with the previously
described quantification method, is as follows.
Repeat (e.g., 1 million times)
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 2011 45
■ 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, 2011)
Percentage
9%
7%
1%
19%
19%
5%
40%
(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 sce-
narios identified in the previously mentioned magnitude rating.
In addition to the above, the operational risk-weighted assets
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 opera-
tional risk-weighted assets calculated using the internal loss data
and the scenario exposure determined from the risk control assess-
ment 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 operational risk and improve sce-
nario 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 business 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 aware-
ness 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
46
SMFG 2011
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 investigations
of processing risk; minimizing losses in the event of processing
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
Computer-related trouble at financial institutions now has great
potential to impact society, with system risk diversifying owing to
advances in IT and expansion of business fields. To prevent any
computer system breakdowns, we have taken numerous 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, sensitive information is encrypted,
unauthorized external access is blocked, and all known counter-
measures to secure data are implemented. There are also contin-
gency 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 pat-
administration to deliver high-quality service to customers.” Adding
terns emerge.
new policies or making major revisions to existing ones for process-
ing risk management requires the approval of both the Management
Committee and the Board of Directors.
Settlement Risk
In the administrative regulations, SMBC has also defined specific
Settlement risk is the possibility of a loss arising from a transaction
rules for processing risk management. The rules allocate processing
that cannot be settled as planned. Because this risk comprises ele-
risk management tasks among six types of departments: operations
ments of several types of risk, including credit, liquidity, processing,
planning departments, compliance departments, operations depart-
and system risk, it requires interdisciplinary management.
ments, transaction execution departments (primarily front-office
At SMBC, the Operations Planning Department is responsible
departments, branches, and branch service offices), internal audit
for coordinating the management of settlement risk with the Credit &
departments, and the customer support departments. In addi-
Investment Planning Department, which oversees credit risk, and the
tion, there is a specialized group within the Operations Planning
Corporate Risk Management Department, which oversees liquidity
Department to strengthen administrative procedures throughout the
risk.
Group.
5. System Risk
System risk is the possibility of a loss arising from the failure, mal-
function, or unauthorized use of computer systems.
SMFG recognizes that reliable computer systems are essential
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 2011 47
Corporate Social Responsibility (CSR)
Key Points of CSR Activities
The following are the key points of our CSR activities. First, we
have created a solid management framework, including corporate
governance, internal auditing, compliance, and risk management
systems. Secondly, we offer the most value for our four major
stakeholder groups as follows.
• We shall endeavor to develop and prosper with our customers
by offering top-quality, highly-valued products and services.
• We shall maintain the solid management by disclosing appro-
priate information, developing our internal control system and
operate solid management to maximize our shareholders’
value.
• We shall contribute to society and preserve the natural
environment by continuously and proactively implementing
initiatives including social and environmental activities.
• We shall foster a free and active business environment which
respects individuals and allows each employee to realize his
or her full potential.
Lastly, we shall strive to ultimately contribute to the sustainable
development of society through such activities.
■ SMFG CSR Values
Contributing to the Sustainable Development of Society
Customers
Shareholders and
the Market
The Environment
and Society
Employees
CSR Group Initiatives
Highly-valued
products and
services
Sound
Management
Social and
community
activities and
environmental
activities
Corporate
culture respecting
the individual
Solid Management Structure
(corporate governance, internal controls, compliance, risk
management, information disclosure, etc.)
Integrally Implementing CSR Activities and
Business Strategies
CSR activities are considered the foundation of the business
strategies of SMFG and Group companies as well as the fulfillment
of management policies and business goals.
Completely and fully performing CSR activities is undoubtedly
the essence of “management itself,” and sincerely committing to the
implementation of CSR initiatives is considered the shortest path for
achieving management policies and business goals.
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 us to equally provide the most
value to our customers, our shareholders and the market, the
environment and society, and our employees. Through this process,
we strongly believe that contributing to the sustainable development
of society as a whole is vital for us to fulfill our corporate social
responsibilities.
Basic CSR Policies
In implementing CSR activities, SMFG has defined CSR and put in
place a set of common principles regarding business ethics 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.
48
SMFG 2011
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 the Group’s services and
products. SMFG regularly holds its Group Customer Satisfaction Committee meetings to review reports on the analyses of the Voice of the
Customers (VOC), and discuss measures to increase customer satisfaction.
SMBC has created the Quality Management Department to
establish the structure to proactively utilize the VOC in order to
improve the bank’s businesses and management. The Quality
Management Department is primarily responsible for analyzing the
VOC data. Reports prepared by this department are discussed
by the CS and Quality Improvement Committee, consisting of
the president and directors who are also members of the bank’s
Management Committee, and such reports are to be proactively
applied to enhance the satisfaction of our clients and the quality of
our services offered.
Concurrently with these activities, we have been undertaking a
wide range of initiatives for improving the customer satisfaction and
quality. Such initiatives include offering a toll-free telephone service
and conducting surveys to obtain the opinions of our diverse clients
visiting our branches and offices, or mailing them such surveys. We
also provide training and educational programs to our employees in
order to offer the kind of services to further satisfy our clients.
VOC Database
We record in the VOC database the opinions of our clients collected
mainly at our branches, and we share such database within the
bank. Furthermore, such data collected is analyzed and utilized by
the Quality Management Department to provide guidance for our
branches and propose any improvements to Head Office depart-
ments for the overall CS measures for the bank.
Head Office departments also analyze such VOC data and
apply the results to make appropriate improvements in our products
and services.
CS and Quality Improvement Committee
The CS and Quality Improvement Committee, which is chaired by
the president of SMBC, meets regularly to review reports on the
specific opinions expressed by our clients, and discuss and analyze
any monthly changes to the number of opinions collected. The
committee also reviews reports on the results of the analyses of the
VOC, and considers appropriate improvement measures.
Furthermore, the reports on the regularly held educational
programs or initiatives are submitted to the CS and Quality
Improvement Committee to further enhance and establish our
awareness of “Our Clients Always Come First.”
■ 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 2011 49
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
implement the ideas contained in our Group philosophy, we
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
the directors. At SMFG, we have six corporate auditors, three of
whom are outside auditors. The auditors monitor the execution
of business operations of SMFG and its subsidiaries by attend-
ing meetings of the Board of Directors and listen to reports on
operations from the directors and others. They also examine
documents relating to important decisions and receive reports
from the internal audit departments, representatives of subsid-
iaries 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
activities of SMFG and other Group companies, from the role of
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 cor-
porate 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
serve as the chairmen of these committees. To ensure that the
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 supervi-
sion 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
SMFG directors (including three outside directors) of the total of
12 SMFG directors (including three outside directors) also serve
as directors of SMBC. To monitor the conduct of operations at
50
SMFG 2011
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 outside director) of these companies.
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
internal control systems.
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 operational 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 func-
tions are performed principally by the Board.
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 primarily
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,
which has a total membership of sixteen.
Executive officers are appointed by the Board to manage
the operation of SMBC’s businesses. As of June 30, 2011,
SMBC has 73 executive officers, including the president, and 11
serve concurrently as directors. The Management Committee
of SMBC is the highest decision-making body at the opera-
tional 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 important 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
within the businesses they oversee.
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 internal audits. The Internal Auditing Committee meets every
quarter, and its members discuss important matters related
to internal auditing based on reports prepared by the depart-
ments responsible for internal audits. There is also the Audit
Department, which is an internal auditing unit that is indepen-
dent 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 man-
agement, are operating appropriately and effectively. The Audit
Department is also responsible for the overall supervision of
the internal audit systems 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 guid-
ance 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
business 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 compli-
ance and risk management at SMBC — its head office depart-
ments, 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 departments focus on material issues that arise in
the management of specific operations and categories of risk.
These auditing activities emphasize the verification of “Targeted
Audit Items” across the whole of the bank’s organization.
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 information
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 2011 51
Compliance
Compliance Systems at SMFG
Basic Compliance Policies
SMFG strives to further strengthen its compliance systems so
that it may fulfill its public mission and corporate social responsi-
bilities as a financial services group offering diversified products
and services, and thereby become a truly outstanding global
corporate group.
For compliance policies, SMFG sets forth its “Business
Ethics” (on page 48) as the common CSR principles for the
Group, and considers the strengthening of such Business Ethics
as one of the critical issues for the management.
Group Management from a Compliance
Perspective
As a financial holding company, SMFG strives to maintain a
compliance system which provides the appropriate directions,
guidance and monitoring related to compliance for its Group
companies.
Specifically, SMFG manages and monitors the self-sustaining
compliance functions of individual Group companies through
regular meetings attended by all Group companies and meetings
with individual companies. The following compliance issues will
be strengthened for the fiscal year 2011: (a) Responding appro-
priately to the regulatory environment, and strengthening the
compliance structure of overseas offices; and (b) Strengthening
the compliance structure of the Group.
Reporting System for Inappropriate Accounting
and Auditing Activities
SMFG has implemented the “SMFG Accounting and Auditing
Hotline” to provide the means for individuals in and out of the
Group to report inappropriate accounting and auditing activi-
ties. This hotline quickly identifies and takes appropriate actions
against any fraudulent activity or any misconduct associated
with accounting and auditing at SMFG and its consolidated
subsidiaries.
Reports may be submitted by regular mail or e-mail to the following
respective addresses.
Mailing address:
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 address:
smfghotline@iwatagodo.com
* The hotline accepts any alerts of inappropriate activities concerning
accounting and auditing at SMFG and its consolidated subsidiaries.
* Anonymous reports are also accepted; however, if possible, providing
personal information such as your name and contact information would
be appreciated and helpful.
* Please provide as much detail as possible for such inappropriate activi-
ties. An investigation may not be feasible if information is not adequate.
* Personal information will not be disclosed to any third parties without
your consent, unless such disclosure is 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.
52
SMFG 2011
Compliance at SMBC
Strengthening the Compliance System
To be in compliance with laws, regulations, and other social
standards is basically and generally required for all corporations.
Especially for banks, compliance-related issues are particularly
important as their public missions and corporate social respon-
sibilities are considered critical in the financial markets.
In accordance with the basic policies of SMFG, SMBC
requires its management and staff to have the highest values to
gain public trust, abide by relevant laws and regulations, uphold
high ethical standards, and act fairly and sincerely. Therefore,
SMBC considers that being fully in compliance is one of the
most critical issues for management to appropriately deal with
the issues related to the Banking Law, the Financial Instruments
and Exchange Act, compliance with other related ordinances,
and elimination of anti-social organizations.
Management of the Compliance System
SMBC adopts a two-tiered structure as its basic compliance
system as follows. At the first level, each department and office
is individually responsible for making preliminary decisions to
ensure that its conduct is in compliance with laws and regula-
tions. At the next level, the independent Internal Audit Unit con-
ducts strict audits of such departments or offices.
In order to maintain this two-tiered structure and ensure
its effective operation, the Compliance Unit, made up of the
General Affairs Department and the Legal Department, plans
and implements the kind of systems and improvements to be
in compliance, under the directions of the management. The
Compliance Unit also provides guidance for and monitors the
activities of all departments and branches, and assists such
departments and branches to make appropriate compliance-
related decisions.
SMBC commits to the following activities to ensure that
such compliance structure functions effectively.
Preparation of a Compliance Manual
SMBC has prepared its Compliance Manual by stating the
objectives, guidance and 60 compliance principles in order to
assist the management and staff to be fully in compliance. This
manual has been approved by the Board of Directors.
Development of Compliance Programs
The Board of Directors develops a specific annual plan for
compliance-related activities for each fiscal year, including
amendments to the rules and regulations and training, for the
objectives of the compliance system for SMBC and its con-
solidated subsidiaries to function effectively. During the fiscal
year 2011, SMBC will continue to strengthen its compliance
measures in order to quickly adapt to any changes in the social
environment. Such measures include strengthening the moni-
toring of marketing and sales of risk products, appropriately
managing conflicts of interest as the cooperation among Group
companies intensify further, responding to amendments to the
Act on Prevention of Transfer of Criminal Proceeds, further
strengthening measures to eliminate transactions associated
with anti-social organizations, and strengthening the overseas
compliance measures appropriate for the growing overseas
operation and further strengthened regulations of each country.
Appointment of Compliance Officers
In addition to appointing compliance officers to each branch
and department of the bank, the “Area Compliance Officers,”
who independently function from frontline departments, are
appointed for the Middle Market Banking Unit and Consumer
Banking Unit to direct and oversee compliance activities at the
branches and offices.
Creation of the Compliance Committee
The Compliance Committee, which consists of cross-
departmental compliance members, chaired by the director
in charge of compliance, has been created in order to com-
prehensively review and discuss compliance related issues.
To enhance fair and objective deliberations by the Compliance
Committee, outside members are also invited to participate in
such Compliance Committee meetings.
For the handling of any complaints from and conflicts with our
clients, SMBC has executed agreements, respectively, with the
Japanese Bankers Association, a designated dispute resolution
agency under the Banking Act, and the Trust Companies
Association of Japan, a Designated Dispute Resolution
Organization under the Trust Business Act and Act on Provision,
etc. of Trust Business by Financial Institutions.
Japanese Bankers Association:
Contact information: Consultation office,
Japanese Bankers Association
Telephone numbers: (Japan) 0570-017109 or 03-5252-3772
Business hours:
Monday through Friday
(except public and bank holidays)
9:00 am to 5:00 pm
Trust Companies Association of Japan:
Contact information: Consultation office, Trust Companies
Association of Japan
Telephone numbers: (Japan) 0120-817335 or 03-3241-7335
Business hours:
Monday through Friday
(except public and bank holidays)
9:00 am to 5:15 pm
SMFG 2011 53
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 our initiatives to preserve and achieve harmony
with the natural environment in our corporate activities. SMFG officially signed the “Statement by Financial
Institutions on the Environment and Sustainable Development” of the United Nations Environment Programme
(“UNEP”) in July 2002.
The Group Environmental Policy
Basic concepts
Recognizing the importance of realizing a sustainable society, SMFG is continuously making efforts to preserve and achieve harmony
with the natural environment in its corporate activities in order to support the economy and contribute to the betterment of society as a
whole.
Specific environmental policies
• We provide environment friendly financial products, information and solutions which support our clients in their efforts to preserve the
eco-system.
• We devise means to reduce environmental risks posed by our own activities and the society.
• We are determined to fulfill our social responsibilities through the conservation of resources and energy and the reduction of waste.
• We strictly comply with the environment-related laws and regulations.
• We practice the highest level of information disclosure related to the Group’s environmental activities and consistently improve our
efforts to contribute to environmental preservation by communicating with our staff as well as the third parties.
• We place high priority on thoroughly educating our staff about our environmental principles to ensure that they conform to these prin-
ciples in the performance of their work.
• We actively and effectively implement “environmental management,” and make continuous efforts to improve our system to deal with
environmental issues by setting goals and targets for every fiscal year and reviewing them as deemed necessary.
• These policies are disclosed on the Group’s website, and the printed version is available upon request.
Three pillars of the Group’s activities
The three pillars of our environmental action plan are to
“reduce environmental implications,” “manage environ-
mental risks,” and “promote environmental businesses.”
We set forth environmental objectives for various activities
and follow PDCA (plan, do, check, and act) procedures in
such environmental activities.
SMFG and principal Group companies have obtained
ISO14001 certification, the international standard for
Environmental Management Systems (EMS).
EMS Enhancement System
Environmental Action Plan and PDCA Procedures
The Group Environmental
Policy
Implementation of
environmental initiatives
Reduce environmental
implications
Manage environmental risks
Promote environmental
businesses
PLAN
DO
CHECK
ACT
SMFG
Officer in charge of environmental issues:
Officer responsible for environment management: GM of Group CSR Dept., Corporate Planning Dept.
ISO14001 Secretariat:
Officer in charge of Corporate Planning Dept.
Group CSR Dept., Corporate Planning Dept.
SMFG Card & Credit
SMBC
Sumitomo Mitsui Card
Sumitomo Mitsui
Finance and Leasing
SMBC Friend Securities
Japan Research Institute
Corporate Planning Dept.
Corporate Planning Dept.
Corporate Planning Dept.
General Affairs Dept.
Operational Section
SMBC Nikko Securities
Communications Dept.
54
SMFG 2011
Reducing Environmental Impact
• Initiatives for Carbon Neutrality
SMFG sets forth objectives each fiscal year for reducing its use
of electric power and other energy resources, and it is actively
engaged in achieving these energy conservation goals.
SMBC ensures that its head offices are carbon neutral by
using Green Energy and trading carbon credits*. Sumitomo
Mitsui Finance and Leasing’s Tokyo Head Office is also carbon
neutral.
In addition, SMBC Friend Securities and Sumitomo Mitsui
Auto Service Company, Limited are converting their automobiles
to more environment-friendly ones for their transport needs and
making their transportation carbon neutral by offsetting emission
volumes.
* “Carbon credits” are also referred to as “emission allowances.” In this annual
report, we use “carbon credits.”
• Responding to the Amendments to the Rational Use of
Energy Act
Under the Amendments to the Rational Use of Energy Act of
April 2010, companies using 1,500kl or more energy (crude oil
equivalent) per annum are now required to establish an energy
consumption management system and develop a medium-
to long-term energy efficiency improvement plan for reducing
energy consumption by at least 1% per year.
The Group is taking measures to reduce its energy usage in
its business operations at all locations, in accordance with this
law, and developing consultation business to meet the needs
of our clients for energy conservation and the reduction of CO2
emissions.
• Greening IT Operations
SMBC has been promoting greening IT operations at its branch
terminals and ATMs. The new CUTE* terminals for over-the-
counter transactions, which are jointly developed with NEC
Corporation and Oki Electric Industry Co., Ltd., have made it
possible to convert paper-based documents, such as images
of driver’s license and other forms of IDs into electronic images
and to store them quickly. The CUTE terminals have reduced
approximately 3 million A4-size sheets of paper annually. SMBC
donated part of the cost saved from paper reduction by the
CUTE to the Tokyo Metropolitan Government’s Green Tokyo
Fund, specifically for the “Creating Umi-no-Mori (Sea Forest)”
project, one of the four projects’ funds. We also donated to the
University of Tokyo’s “Life in Green Project” for the construction
of research facilities for botanical studies.
We are further promoting efforts to make our offices more
paperless and efficient through various measures, such as
converting the records of ATM’s transactional data (called “ATM
Journal”) and reports submitted to the Head Office in electronic
format. These efforts will make a great contribution in the saving
of the equivalent of 28 million A4-size sheets of paper annually.
* CUTE: Common User Terminal Engine
• Environmental measures taken in the Head Office building
SMFG and SMBC moved to a new Head Office building in
October 2010. The new building is designed to achieve a 30%
reduction in annual CO2 emissions, compared with the aver-
age office building in Tokyo, by implementing environmental
measures, such as rainwater storage facilities, photovoltaic
power-generation, rooftop-greening, motion sensors and
recycled material usage. We have taken various other measures
to achieve efficient administrative operations by co-sharing
office spaces and promoting
paperless meetings.
• Eco-Friendly Branches
In order to generate new and
creative ideas on energy-
saving at branches, the bank
publicly began soliciting ideas
by newly creating the “SMBC
eco-banking office prize” for
the “eco japan cup 2010,” a competition open to the public for
new environmental businesses held annually for which SMBC
is one of the sponsors. Prize-winning ideas will be incorporated
into the planning and designing of environment-friendly model
branches of the bank.
Environment-friendly model branch
SMBC Friend Securities is converting its branches to more
environment-friendly ones at the time of branch relocation
or renovation by installing carpet tiles made of materials with
carbon-offset initiatives.
Managing Environmental Risks
• Dealing with Soil Contamination and Asbestos Risks
In order to deal with the risk of contamination of the borrower’s
collateral land, SMBC requires contamination risk assessment
to be conducted for the land to meet certain criteria. When it
is considered that the contamination risk is high, the assessed
value of such potential risks is deducted from the assessment
value of the collateral.
Similarly with the risk of asbestos exposure, the assessed
value of this risk is deducted from the assessment value of the
collateral. SMBC also recommends to its clients that they con-
duct such contamination assessments. SMBC conducts such
contamination assessments and properly removes asbestos
from its buildings.
• Adoption of the “Equator Principles”
SMBC has adopted the Equator Principles, a set of principles
for determining, assessing and managing the social and envi-
ronmental risk of project financing. Its Environment Analysis
Department assesses the social and environmental risk of large
projects in accordance with such Principles.
■ Flow chart of the Social and Environmental Risk Assessment
of SMBC
Project Information
Screening
t
n
e
m
s
t
n
e
i
l
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
i
l
t
n
e
m
n
o
r
i
v
n
E
SMFG 2011 55
Environmental businesses
The Group considers that environmental businesses are part of its core business operations, through which it contributes to the con-
tinued well-being and improvement of the global environment. In fiscal 2005, SMBC started its cross-organizational Eco-Biz Promotion
Council, for periodical discussion of the development of sophisticated and efficient products and services for environmental maintenance
and improvement. Other SMFG Group companies have become members of this Council, meeting on a regular basis.
Environmental Initiatives by Group Companies
Company
Clients
Program/Product
SMFG
Corporate
SAFE environmental magazine
SMBC*1/
JRI*2
SMBC
SMFG Environmental Business Forum
SMBC Environmental Assessment Loan/
Private Placement Bond
SMBC-ECO Loan
Ministry of Environment’s interest-
subsidized financing program
Carbon-credit related business
activities (matching, advisory, trust and
consultation activities)
Carbon credit trading
Strengthening alliances with interna-
tional and financial institutions
“Climate & Children Supporters”
Individuals
Environmental campaign using JGBs
for individuals
Nikko*3
SMBC/
Nikko
Nikko World Trust – Nikko Green New
Deal Fund (JPY Non-hedged Class)/
(JPY Hedged Class)
Green Bonds
SMBC Nikko World Bank Bond Fund
SMBC /
SMFL*4
Individuals
Corporate
eco japan cup
SMFL
Corporate
Carbon-neutral leases
Trading of used machinery and
equipment
Description
Started in 1996, this bimonthly magazine contains interviews with top management of environmentally advanced companies,
analyses of business and the latest regulatory trends, and other useful information for corporate environmental activities. It can be
viewed online at SMFG’s website (in Japanese). http://www.smfg.co.jp/responsibility/csrinfo/safe.html
SMBC holds multifunctional programs, including environmental seminars and business matching opportunities at the Eco-Products
event, one of Japan’s largest environmental exhibitions.
Terms and conditions of this loan/bond depend on the results of an assessment of a company’s environmental friendliness using
standards established by SMBC and JRI. Clients can choose the fund procurement method — loans or private placement bonds.
This loan offers reductions on interest rates of up to 0.25% for SMEs with environmental management systems certified by any of
more than 20 organizations, including NPOs and local governments.
Under this program, companies may receive loans from financial institutions, with interest subsidized by the government to finance
global warming-related capital investment, provided that they set and achieve CO2 emission reduction targets during a specified
period. As one of the financial institutions authorized to provide loans under this program, the bank supports companies taking
environmental initiatives.
SMBC serves clients with needs associated with carbon credits by using overseas offices for their trust operations and other
resources to offer products and services such as introducing sellers in developing countries, providing advisory services to support
transactions, offering trust products and financing. SMBC established a consultation company in Brazil to assist in development of
Clean Development Mechanism (CDM) projects.
In June 2009, SMBC became a carbon credit trader, the first Japanese bank to trade carbon credits directly with clients.
In April 2010, the bank executed a Memorandum of Understanding with the Federation of Malaysian Manufacturers and Green
Purchasing Network Association Malaysia for the promotion of environmental businesses in Malaysia. In efforts to further establish
a more solid global network, SMBC has formed business alliances with local financial institutions and economic organizations in
the Philippines, Brazil and other countries for the promotion of financing for renewable energy projects and carbon-credit trading.
An original program of SMBC which supports measures to prevent global warming through the trading of carbon credits while
helping children affected by drastic climate changes through UNICEF. When participating companies trade carbon credits to
prevent global warming, they automatically support elementary schools in Mozambique which is known for its frequent droughts
and natural disasters, having built 17 wells and 44 toilets under the UNICEF water management and public hygiene project. (as of
June 30, 2010)
We have been contributing to global environmental protection by 1) trading the equivalent of 100kg of carbon credits and
2) planting trees equivalent to the number of trees planted in 1m2 for the number of individuals who purchased JGBs. Concurrently,
we have been supporting the recovery and reconstruction of areas struck by the Great East Japan Earthquake by trading carbon
credits generated in northeastern Japan.
The Green New Deal is an economic recovery policy based on global environmental initiatives. This fund invests by purchasing
stocks of companies in countries where high growth in green businesses is anticipated.
“Green Bonds”, the purpose of which is to promote environmental preservation, is the generic name given to the various bonds
offered by SMBC Nikko Securities starting in 2010. Funds raised from these bonds must be used for environmental protection
measures.
This is the first fund in the world to invest in the green bonds issued by the World Bank (data provided by Nikko Asset Management
Co., Ltd.)
The funds raised by the issuances of these bonds should essentially be used only for loans for projects to prevent global warming
in emerging countries.
Furthermore, a portion of earnings from the fund will be donated to the Japan Committee for UNICEF and the Japanese Red Cross
Society for the resolution of social conflicts around the world.
This is a contest for selecting companies which have practical environmental technologies and ideas. SMBC also arranges for
venture companies to conduct R&D jointly with Japanese universities and the funding of their R&D activities.
http://www.eco-japan-cup.com/ (in Japanese only)
The first new service in the leasing industry started in August 2007, which renders the greenhouse gases released by leased
assets neutral through the allocation of carbon credits to these assets. The goal is to provide further support to companies that
protect the environment through their own activities.
Machinery and facilities with expired leases or bought back from the client are sold by SMFL to clients needing such items.
Through the purchase and sale of used machinery, SMFL aims to become an environment-friendly leaser committed to the
recycling and reuse of products.
*1 Sumitomo Mitsui Banking Corporation *2 The Japan Research Institute Limited *3 SMBC Nikko Securities Inc. *4 Sumitomo Mitsui Finance and Leasing Co., Ltd.
*5 Sumitomo Mitsui Banking Corporation (China) Limited *6 The Japan Research Institute (Shanghai) Consulting Co., Ltd. *7 Sumitomo Mitsui Card Company, Limited
*8 SMBC Friend Securities Co., Ltd. *9 THE MINATO BANK, LTD. *10 Kansai Urban Banking Corporation
56
SMFG 2011
Company
Clients
Program/Product
JRI
Corporate,
other
Environmental advisory business
Energy-saving industrial initiative with
Guangdong Province
JRI /
SMBC /
SMBCCN*5 /
JRIS *6
SMCC*7
SMCC /
Cedyna
Cedyna
Friend *8
Friend /
Nikko
Minato*9
Consulting for construction of Tianjin
Eco-City, and attracting Japanese
companies
Individuals
Chip recycling
Web Registration Campaign
Socially contributing environmental
cards
Global environmental sustainability
bonds
Electronic statement service
Corporate Minato ECO Loan/Private Placement
Bond
Individuals Minato ECO product purchasing loan
Minato ECO housing loan
KUBC*10
Individuals Mother Lake eco-time deposits
Housing loan for solar power
generation
Donation to environmental fund by
housing loans
Description
This business is involved in many projects mainly for waste treatment and energy. Its objective is to prevent global warming and
support the growth of environmental companies by creating new businesses.
In November 2010, we executed a memorandum with the Department of Science and Technology of Guangdong Province on a
joint promotion of industries which conserve energy and reduce carbon emissions. We plan to promote low-carbon and energy-
saving industries and Energy Service Companies, including measures such as policy research for energy-saving and the promotion
of technological transfers through collaborative model projects by Japanese and Chinese companies.
Leveraging its environmental business expertise, JRI is creating a plan for the use of renewable energy at the Tianjin Eco-City,
China’s 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 project.
Rare metal extracted from IC chips installed in expired credit cards, are recycled.
SMCC is vigorously promoting the use of online account statements (credit/debit sums are e-mailed and the details posted on its
website) as a means of conserving paper and helping cut CO2 emissions.
We issue socially contributing environmental credit cards such as “Chikyuni Yasashii Card” and “Cedyna Card AXU” which donate
part of the payments made by such cards to environment preservation organizations.
SMBC Friend Securities marketed global environmental sustainability bonds issued by the European Reconstruction and
Development Bank (ERDB) during the period from November 30 to December 21, 2010. The funds raised by such bonds are used
to support natural energy development, forestry regeneration and other environmental projects selected by the ERDB based on its
evaluation standards.
Promoting the usage of online account statements
Minato Bank offers preferential interest rates on loans and preferential fees on underwriting of private placement bonds for
corporations which have acquired an environmental management system certification.
Minato Bank offers environment-friendly loans to clients purchasing and installing new-energy or energy-saving equipment. It
additionally offers housing loans with discounted interest rates to clients (a) purchasing homes installed with such equipment,
(b) renovating their homes to be energy efficient, (c) refinancing housing loans of energy efficient homes or (d) constructing or
purchasing new homes which meet the residential environmental efficiency standards set forth by the city of Kobe (Comprehensive
Assessment System for Environmentally Efficient Construction).
KUBC offers time deposits, through which clients may contribute the amount equivalent to 0.01% of their deposit balance to the
“The Mother Lake-Shiga Support Fund,” which preserves the natural environment of Lake Biwa. In April 2011, KUBC donated
¥5.25 million to this Fund, which is equivalent to 0.01% of ¥52.5 billion, the outstanding balance as of February 28, 2011.
The bank has launched a campaign in which applicable interest rate cuts of up to 1.0% a year are offered to clients who take out
housing loans for residences in which solar power generation facilities are installed.
When clients purchase homes which are installed with designated solar power generation systems and located in the subdivisions
in the Katata district of Otsu-city, Shiga Prefecture, a certain percentage of the housing loan amount is donated to the Ohmi
Environment Conservation Foundation, the activities of which are dedicated to the preservation of Lake Biwa.
Environmental Business Forum at Eco-Products
2010
Issuance of “Cedyna Card AXU” to preserve
bio-diversity
In order to preserve bio-diversity, we issued the Cedyna Card
AXU in May 2010, through which environmental contributions
may be made. In addition to the basic functions of regular
credit cards, this Card offers ecological options including
participation in ecological nature tours under the “Green
Selection” program; shop LOHAS products and services with
the concept of preserving the environment and bio-diversity,
under the “Green Shopping” program; and donates 0.1% of
the payments made by the Card to environment preserva-
tion organizations under the “Green Contribution” program; to
make the usage of this Card more interesting and enjoyable.
The Eco-Products exhibition, held each December, is one of
Japan’s largest environmental exhibitions. Following last year’s
event, SMFG again held the SMFG Environmental Business
Forum, comprising various environmental business events.
SMFG conducted business matching, set up booths
having catalogs available, and offered lectures, seminars, and
other programs, targeting different types of stakeholders, such
as those who are planning to newly enter the environmental
business field, considering expanding their marketing chan-
nels, and reviewing the information collected. By offering such
opportunities, SMFG provided forums for the representatives of
companies in the environmental field to expand their network
business contacts and exchange information.
During the three-day exhibition, we held 17 seminars on
various topics, as well as two panel discussions. 659 busi-
ness matchings were arranged, and 28 companies had booths
marketing their products and services.
Consequently, the SMFG
Environmental Business Forum
hosted a substantial number of
business negotiations for new
environmental technologies,
products, and services.
SMFG 2011 57
Social Contribution Activities
Fundamental approach on 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 by 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
• Collection and Donation of Mistakenly-Written Postage-
Prepaid Postcards and Recycling of Other Used Items
SMFG collects mistakenly-written postage-prepaid postcards
from Group employees, exchanges them for new postage
stamps, and donates the stamps to volunteer organizations to
help them cover their postage costs. In addition, SMBC col-
lects unused prepaid telephone cards, Sumitomo Mitsui Card,
Sumitomo Mitsui Finance and Leasing (SMFL) and Cedyna
collect PET bottle caps, and Sumitomo Mitsui Card and SMBC
Friend Securities collect used postage stamps from employees,
donating them to volunteer organizations. SMBC and SMBC
Friend Securities also donate products given by the companies
to their shareholders.
• Sign-Language Courses
In order to enhance the capabilities of our employees allowing
them to better communicate and offer personalized services
to assist the hearing-challenged, sign-language workshops are
held annually by SMBC. In fiscal 2010, the bank also organized
seminars explaining the daily problems faced by the hearing-
challenged, interpreted by a sign-language interpreter.
• Volunteer Activities, and Blood Donation Campaigns
SMBC offers educational workshops for volunteer activities in
to encourage
order
its
to
employees
participate in voluntary
activities. In fiscal 2010,
workshops were orga-
nized in Tokyo, Nagoya
and Osaka, simulating
experiences of global
58
SMFG 2011
poverty, diversity, environment and other related issues.
SMBC Friend Securities organizes personal awareness
sessions during which our employees can actually experience
some of the difficulties encountered and experienced by our
senior citizens by using wheelchairs. At the same time, “Senior
Citizen Simulation” sessions are also organized.
Blood donation campaigns at the workplace are organized
by SMBC, Sumitomo Mitsui Card and SMBC Nikko Securities.
• Sale of Products Made by Social Welfare
Organizations
In the SMBC Head Office building, employees can buy products
made by NPOs employing the physically challenged.
Volunteer Activities for Local and Overseas
Communities
• Volunteer Fund
SMBC has a system in which volunteering employees may have
¥100 deducted monthly from their salaries to donate to volunteer
organizations. As of June 2011, more than 11,000 employees par-
ticipated in this program. The following are some of the 23 activities
funded by the SMBC Volunteer Fund in fiscal 2010.
Overseas
• School meals program for elementary schools in Burkina
Faso
• School library opened in Laos
• Support for elementary education in Afghanistan by perform-
ing the kamishibai (storytelling using pictures)
• In Indonesia, scholarships for intermediate and high school
students, and a health program for infants
• Clean water project for elementary schools in Sudan
• Improvement and expansion of elementary school facilities
in deprived areas in China
• Support mothers with children through health and literacy
programs organized by agricultural organizations in the
Philippines
• Project for helping women become self-supporting in
Myanmar
• Support for the improvement of living standards of deprived
women and elderly people in rural Bangladesh
Japan
• For terminally ill young children, SMBC provides funds for
family trips
• Sponsorship for workshops held at primary schools for pup-
pet plays performed by speech- and hearing-challenged
persons
• Support for the training of guide dogs (Wakaba program)
At Group member SAKURA KCS Corp., as of February
2011, 891 employees (approximately 80% of the company’s
total employees) have participated as volunteers by engaging in
welfare and environmental contribution activities.
• Supporting Education in Developing Countries by
Recycling Used Books
Sumitomo Mitsui Card collects old unwanted books from
employees to send to libraries in developing countries. It also
asks its cardholders to participate in this effort.
•Activities of YUI, SMBC’s Volunteer Organization
SMBC also provides support for YUI, an in-house volunteer
organization which provides opportunities for SMBC employees
to plan and perform volunteer activities. YUI volunteer activi-
ties performed regularly include social events at schools for the
hearing-challenged, beach-cleaning, and the organization of
singing performances by senior citizens. Other activities include
holding charitable bazaars for the sale of hand-crafted products.
• Contributing to Local Communities
SMBC has been promoting and performing volunteer activities
planned by its branches and other offices in Japan to contribute
to local communities. These activities include branch tours,
clean up of the local environment, 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 lobbies of SMBC branches. Similarly,
SMBC Nikko Securities is proactively involved in clean-ups and
volunteer activities at its branches, assisting in resolving issues
and problems faced by local communities and supporting the
development of local society.
• Local Community Contributions by Overseas Offices
Overseas offices conducted
the following activities in fiscal
2010.
• Sumitomo Mitsui Banking
Corporation (China) Limited
established a scholarship
program for students of
Zhejiang University, Shanghai International Studies University,
Sun Yat-sen University, and other universities.
• SMBC’s Hong Kong Branch gave donations in support of an
orchestra composed of young Asian musicians.
• SMBC’s Seoul Branch assisted South Korean students in
improving their Japanese language skills and in aquiring a
deeper understanding of Japanese culture through dona-
tions to a nationwide Japanese drama convention.
• SMBC’s Labuan Branch in Malaysia, following its relocation,
donated desks, chairs and cabinets to occupational training
centers for the disabled.
• SMBC’s Hanoi Branch provided international school stu-
dents with vocational experiences.
• SMBC’s Bangkok Branch assisted farmers in northeast
Thailand by donating underground water storage tanks and
assisting with vegetable planting and harvesting.
• Employees of Sumitomo Mitsui Banking Corporation Europe
(SMBCE) conducted volunteer activities in their time off.
SMBCE contributes to charitable organizations through an
in-house fund and also uses a matching gifts program under
which it donates a certain amount for every donation made
by its employees.
• The European office of the Japan Research Institute (JRI)
made a donation
in support of a
Japanese-language
speech contest.
•Donation Boxes for Foreign Currency Coins
SMBC cooperates in fundraising activities by UNICEF. As a
member of the UNICEF foreign currency coin donation com-
mittee, it places donation boxes for foreign currency coins at
the entrances of all manned branches and offices in Japan, and
sorts such collected coins by currency for delivery to UNICEF.
• Support through Products and Services
SMBC offers ordinary deposit accounts from which the accrued
interest (after tax) is donated to UNICEF, and SMBC also
makes donations matching the amount donated by its clients.
Sumitomo Mitsui Card collects donations from cardholders
through the World Gifts Point Service of VJA group companies,
SMFG 2011 59
and it also provides matching donations to UNICEF, UNESCO,
the World Wildlife Fund Japan and the World Food Program in
addition to donations given directly to UNICEF by the company.
It also offers the UNICEF VISA Card and other social contribu-
tion credit cards and donates a portion of credit card payments
to charitable organizations.
Cedyna contributes to the Japan National Council of
Protective Care Homes for Children and other organizations by
issuing social contribution credit cards such as the ATOM Card,
which supports “Realizing children’s dreams.” It also collects
donations from cardholders using “points” accumulated from
their purchases, and also accepts online donations.
• Participation in the “TABLE FOR TWO” Program
SMBC’s Head Office has a program that provides donations to
the nonprofit organization TABLE FOR TWO International to fund
school meals in developing countries, for every low-calorie meal
ordered for lunch. SMBC Friend Securities has also installed
vending machines selling healthy drinks, donating part of their
sales to TABLE FOR TWO International.
• Social Contribution
Activities of In-House
Foundations
Based in the United States,
SMBC Global Foundation
has provided scholarships to
more than 5,000 university
students in Asian countries
since its establishment in
1994. In the United States, it supports educational trips to
Japan organized by a high school located in Harlem, New York
City, and volunteer employees of SMBC and JRI to participate
in school beautification programs. The foundation also provides
matching gifts for SMBC employees.
Established in 1990, the SMBC Foundation for International
Cooperation strives to assist in developing human resources
necessary to achieve sustainable growth in developing econo-
mies as well as to promote international exchange activities.
Since its inception, the foundation has provided financial sup-
port for 7-8 students from Asian countries each year, enabling
them to attend universities in Japan. The foundation also offers
subsidies to research institutes and researchers undertaking
projects related to developing countries.
Environmental Activities
• Participation in Environmental Preservation Initiatives
SMFG organizes “SMFG Clean-up Day” on which Group
employees volunteer to clean up beaches. In fiscal 2010,
some 120 employees participated in this activity in Kanagawa
and Hyogo prefectures. SMBC Friend Securities organized its
own beach cleanup events in Chiba and Hyogo Prefectures.
Approximately 101 employees participated. In addition, employ-
ees of Cedyna, SMFL and JRI regularly participate in such
cleanup activities near their offices.
60
SMFG 2011
In autumn 2010, SMBC Nikko Securities established “Green
Week” for environmental protection and social contribution
activities. A total of 2,211 employees and their family members
participated in clean-ups and other group activities.
• SMBC Environmental Program NPO C.C.C Furano Field
SMBC also provides support to an environmental project in
Furano, Hokkaido implemented by screenwriter, Soh Kuramoto.
SMBC is providing support for forestation in a closed-down golf
course in Furano. It supports environmental education programs
under which children explore nature by using their five senses.
• Donations through Marketing of the World Bank
Green Fund
SMBC and SMBC Nikko Securities donate a portion of the
earnings from the “SMBC Nikko World Bank Bond Fund” (sim-
ply referred to as “World Bank Green Fund”) to the Japanese
Red Cross Society and the Japan Committee for UNICEF.
• Support for the EARTH PHOTO CONTEST
SMFL supports a photography contest for communicating the
importance of resolving environmental problems and encourag-
ing people to take action. The company presents the Sumitomo
Mitsui Finance and Leasing Prize for outstanding photographic
entries.
Contributing to Cultural, Artistic, and Educational
Activities
•Concerts Held in the Reception Lobbies of Branches
At the SMBC Head Office and Osaka Head Office, we hold lobby
concerts for the general public free of charge. The concerts held
last March and April were organized to raise donations for the
disaster recovery and reconstruction efforts after the Great East
Japan Earthquake.
•Support for Cultural and Artistic Ventures
For supporting kabuki and other traditional performing arts in
Japan, Sumitomo Mitsui Card donated stage curtains to the
National Theatre and the National Engei Hall. The company
also supports the development of talented performers by co-
sponsoring children kabuki performances. SMBC Friend Securities
supports cultural and artistic activities by specially sponsoring
art exhibitions such as those by Gyoshu Hayami (the traditional
Japanese painter) shown at the Yamatane Museum of Art.
SMBC and Cedyna support the promotion of music culture
by sponsoring classical music concerts.
•Financial and Economic Education
SMBC and SMBC Nikko Securities organize vocational work-
shops for elementary school students to experience working
in the financial industry. The bank supports diverse financial
and economic education activities, including publishing a book
called “What Does a Bank Do?,” providing financial educational
on-line games on the SMBC website, co-sponsoring Kidzania (a
vocational experience theme park for children), and supporting
Shinagawa Financial Park (economic training programs for junior
high school students).
Sumitomo Mitsui Card, SMFL, JRI and SMBC Nikko
Securities send instructors for classes at universities.
Additionally, in November 2010, SMBC Friend Securities began
its free online education program and practical experience
program, “You • You Toshi” (self-composed Investment) for inex-
perienced investors.
•Students Internship Program
SMBC, JRI and SMBC Friend Securities offer internship pro-
grams for students. In fiscal 2010, SMBC invited 16 students
allowing them to gain actual banking operational experience
at various departments of the Head Office. JRI invited five stu-
dents to help gain a thorough understanding of environmental
and energy businesses for the next generation. SMBC Friend
Securities invited 26 students to learn about financial instru-
ments and the securities business.
Emergency Reconstruction Assistance and
Support for the Regions Devastated by the Great
East Japan Earthquake
•Disaster-relief Donations
SMFG and its Group companies have donated an aggregate
of approximately ¥600 million for the reconstruction of regions
devastated by the Great East Japan Earthquake, out of which
SMBC and SMBC Nikko Securities donated ¥300 million and
¥100 million, respectively. The Group also took other initiatives
including collecting donations from employees and donating the
amount equivalent to the donations given by employees.
Furthermore, SMBC opened an account solely for donations
for disaster-relief efforts, and solicited donations from our clients
and also from our employees of all Group companies, including
the bank and SMBC Nikko Securities. Sumitomo Mitsui Card
and Cedyna also accept donations charged to credit cards.
•Charity Concerts
Since 2006, SMBC has held
charity concerts performed
by employees to support
unfortunate children world-
wide. The donations are col-
lected from the audiences
of concerts and also from
the sales of employees’ handcrafted products. In May 2011,
the bank delivered musical instruments, as part of its support
for disaster victims of the Great East Japan Earthquake, to the
elementary and intermediate schools which were substantially
damaged by the earthquake and tsunami. In addition, people
taking refuge in Tokyo were also invited to the concerts.
•Volunteer Activities
In April, SMBC implemented a special leave of absence for
disaster relief volunteer activities, and in June, it began allow-
ing employees to actually go to the disaster areas for regular
volunteering. By early July, 65 employees had participated in
such volunteer activities as the clean-up of homes and restor-
ing photographs by taking advantage of this volunteer leave
program.
In April, SMBC Nikko Securities also implemented the volun-
teer leave program, and in July, it sent approximately 360 newly
hired employees to the disaster areas for volunteer activities.
In order to assist our clients affected by the Great East
Japan Earthquake as much as possible, SMBC continued to
open its Sendai branch on non-business days, and provided the
over-the-counter payment services to our clients who had lost
their deposit books, certificates or registered seals (provided
that they had other types of identification). We also began offer-
ing housing loans with preferential interest rates for our clients
whose homes were lost or damaged by the earthquake, and
special funding facilities for our corporate clients.
SMFG 2011 61
Human Resources
SMFG and its Group companies strive to create the kind of
work environment which every employee feels proud of and is
able to develop his or her full potential and capabilities in. In
the following pages, we introduce some of the activities initi-
ated by the human resources department of SMBC and other
Group companies, including Sumitomo Mitsui Card, Cedyna,
Sumitomo Mitsui Finance and Leasing (SMFL), the Japan
Research Institute (JRI), SMBC Friend Securities, SMBC Nikko
Securities, The Minato Bank and Kansai Urban Banking.
Five Goals of SMBC’s Human Resources
Development
1. To develop professional and specialized employees who can
provide our clients with highly valued products and services.
2. To maintain and strengthen our sound business manage-
ment enabling SMBC to globally compete in the market.
3. To cultivate the kind of corporate culture which encour-
ages values of forward-looking, creative attitude and mutual
cooperation.
4. To be conscious of the social responsibilities of the Group,
and cultivate the kind of corporate culture that contributes to
the sound development of society.
5. To encourage employees to respect their individuality based
on an understanding of diversity and personal fulfillment.
Training Employees with Specialized
Professional Skills
In order to motivate and encourage younger employees and to
promote their personal development, the bank provides basic
practical training programs in three areas: the Retail Banking
College; the Corporate Banking College and the Banking
Operations College. Our employees are able to acquire the
required business knowledge and skills through on-the-job
training and seminars. The bank enhances its training programs
by assigning mentors to newly hired employees and the Training
Institute’s instructors to regional head office departments.
Following the amendments to the Money Lending Business
Law, Sumitomo Mitsui Card has increased its efforts toward
the development of professional expert employees in the credit
business. We have taken measures to proactively support our
employees to become licensed money lending officers by regu-
larly holding in-house seminars, educating them with knowledge
on products and other related subjects. Cedyna strives to
promote high professional standards and encourage the setting
of challenging goals. Younger employees are encouraged to
work in various departments to learn and gain business skills
and diverse work experience. They strengthen their professional
skills by taking programs at different levels for each type of busi-
ness and with specific objectives. SMFL has established “SMFL
Standards,” which annually sets forth the human resources
development plan for sogoshoku (management-track) employ-
ees of not more than five years with the company. SMFL has
62
SMFG 2011
created the “Young Employees’ Growth Plan & Guide,” based
on the SMFL Standards, and it has also established an in-house
business school which supplements on-the-job training. JRI
believes that its human resources provide added value, which
is translated into its solutions and proposals. With that in
mind, JRI has established the Staff Development Department
in the Computer System Division, and the Human Resources
Incubation Center in the Comprehensive Research Division
for the well-planned development of human resources. SMBC
Friend Securities has started to offer its accredited in-house
classes for our young employees to acquire business skills
to enhance their knowledge and improve their skills, in order
for the company to respond appropriately to the continuously
advancing sophistication and diversification of the securities
business. It has also introduced a tutoring program for effective
on-the-job training of new employees. SMBC Nikko Securities,
as a comprehensive securities and investment banking firm,
is further strengthening its educational programs to develop
employees with expert knowledge and improve their profes-
sional skills by providing its newly hired employees with OJT
personally assisted by instructors, follow-up seminars and other
programs such as the “new employee instructor program.” The
Minato Bank has consistently implemented the system of the
Minato Retail-business College (“MRC”) which improves the
quality of consultation services offered to its individual clients.
Kansai Urban Banking has a basic training program designed
for the first five years of employment with the bank in order to
develop an energetic group of employees. It has also created
a system to develop potential mid-management employees
and promote the careers of younger and female employees. As
described above, each Group company is further strengthening
its educational system.
Employees’ Training Seminar at SMBC Nikko
Securities
Training Seminar at Kansai Urban Banking
Creating a Corporate Culture which Derives
Strength from Diversity
•Human Resources Diversity
The Group is implementing its initiatives to create diversity (e.g.
gender, nationality) at work. In April 2008, the Diversity and
Inclusion Department was established in the Human Resources
Department, and other initiatives were implemented for creating
the kind of corporate culture which derives its strength from
diversity.
•Personnel System
In order to motivate employees to take on more challenges in
performing difficult tasks for promotion, SMBC has introduced a
new workplace hierarchy system in which job rankings are more
finely subdivided. This system will make it possible for talented
individuals to be quickly promoted to mid-management levels.
In order to enhance a sense of unity as “Team SMBC” and to
achieve a proactive and energetic bank, our employees’ per-
formances are evaluated not simply in terms of one fiscal year’s
achievements but also evaluated on their overall contributions to
the company.
•Developing Employees for Global Operations
In order to respond to the rapid globalization of society and busi-
nesses, SMBC is striving to develop global human resources
with practical language skills and an international business
sense. In fiscal 2010, in order to enhance the overseas market
presence and internal globalization of the company, the bank
substantially increased the number of employees taking lan-
guage classes or having overseas business experience, and
those employed locally by overseas offices and subsidiaries, and
promoted the exchange of
employees between offices
in Japan and overseas.
Discussion session
•Employing Persons with Disabilities
SMBC has established a special company called SMBC Green
Service Co., Ltd. which provides employment opportunities for
the physically-challenged. In December 2008, the company
opened its Kobe Branch, and the Unagidani Office in Osaka in
February 2009 for creating jobs not limited to the physically-
challenged but also including the mentally-challenged. As of
March 2011, physically-challenged employees accounted for
1.95% of our total number of employees, more than the legally
mandated level of 1.8%.
•Providing Support for Good Work-Life Balance
The Group has an employee support program which provides
assistance and support for maintaining a proper work-life bal-
ance. In fiscal 2008, Sumitomo Mitsui Card, SMFL, JRI, and
SMBC Friend Securities developed their “Work-Life Balance
Guidebook,” based on actual experiences at SMBC. All Group
companies have already implemented the programs for parental
leave, leave for taking care of ill children, and shorter working
hours. Such programs provide more employee benefits than
those mandated by law. In addition, SMBC, Sumitomo Mitsui
Card, and JRI provide child-care subsidies, while SMBC,
Sumitomo Mitsui Card, Cedyna, SMFL, and Kansai Urban
Banking have implemented a program for rehiring former
employees. These programs assist and support in realizing a
good work-life balance for the Group’s employees. There is
also an annual visitation day for the employee’s children and
other family members to give them an opportunity to see the
employee at work at SMBC, Sumitomo Mitsui Card, SMFL,
JRI, and SMBC Friend Securities. JRI also organizes “Mama &
Papa Lunches” for an opportunity for employees to exchange
information on raising children. SMBC has promoted a “Go
Home Early to the Family Day,” while SMFL has a campaign to
encourage employees to take their summer vacations and to
reduce overtime work. SMBC Nikko Securities has introduced
an online support program for employees returning to work after
parental leave. Cedyna was awarded the “Best Balance Award”
in 2010, under the “Promotion of Work Life Balance Certification
System” organized by Shinjuku Ward in Tokyo, recognized for
its diverse human resources programs and achievements. The
Minato Bank regularly provides training programs for employees
coming back to work after maternity leave. SMBC, Sumitomo
Mitsui Card, Cedyna, JRI and The Minato Bank have all obtained
“Kurumin certification” issued by the Japanese Ministry of
Health, Labour and Welfare, for programs in compliance with
the Law to Promote Measures to Support the Development of
the Next Generation.
Children’s Visitation Day
SMFG 2011 63
Enhancing Awareness of Individual Rights
SMBC has implemented in its corporate principles of action
concepts which state that “we will respect the individual human
dignity of our clients and employees” and “we will not allow
any discrimination.” Training seminars and study sessions
on human rights issues and discrimination are organized for
general managers of branches and departments, employees
newly-appointed to management positions, and newly hired
employees. Campaigns for creating slogans promoting individual
human rights are also organized to motivate our employees to
reflect and think about individual human rights and to come up
with a slogan for the campaign.
Kansai Urban Banking is implementing measures to further
enhance awareness of individual human rights by organizing
human rights awareness study sessions for each regional group
and inviting employees to think and come up with an individual
human rights slogan. SMFG and its Group companies partici-
pate in the “United Nations Global Compact,” and also endorse
and support its 10 principles in the areas of human rights, labor
standards, environment and anti-corruption measures.
◆ SMBC was Named as One of the Best 25 Companies to Work in
Japan in the “Great Place to Work” Ranking
In March 2011, SMBC was selected for the forth consecutive
year as one of the best companies in Japan to work in the survey
conducted by Great Place to Work® Institute Japan.
* Great Place to Work® Institute, Inc., incorporated in the U.S.,
is a survey organization which provides data for the annual list of
the “100 Best Places to Work” published by Fortune magazine.
The survey consists of two main sections: a survey on the internal
systems and corporate culture of
respondent companies, and a ques-
tionnaire survey by the employees
of these companies. The employee
survey carries a two-thirds weight in
determining final results.
Staff Profile
◆
SMBC
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
23,543
13,669
58.06%
9,874
41.94%
25,122
13,793
54.90%
11,329
45.10%
25,073
13,546
54.03%
11,527
45.97%
36 yrs 9 mos.
36 yrs 2 mos.
36 yrs 5 mos.
40 yrs 5 mos.
40 yrs 2 mos.
40 yrs 3 mos.
31 yrs 8 mos.
31 yrs 3 mos.
31 yrs 11 mos.
Average years of service
13 yrs 10 mos.
13 yrs 3 mos.
13 yrs 5 mos.
Male
Female
Number of women in
managerial positions**
Ratio of employees with
disabilities (% of total)***
16 yrs 11 mos.
16 yrs 8 mos.
16 yrs 9 mos.
9 yrs 6 mos.
9 yrs 0 mos.
9 yrs 7 mos.
456
584
766
1.95%
1.90%
1.95%
*
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment agencies,
and national staff at overseas branches.
** As of each March 31; job grades above assistant vice president
*** 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
2009
2010
2011
962
388
569
204
572
188
40.3%
35.9%
32.9%
**** Includes sogoshoku staff and consumer service staff. Business Career Path
employees are excluded.
Fiscal
Number of employees taking
parental leave
Men taking such leave
Number of career hires
2008
222
27
136
2009
331
29
11
2010
476
26
6
64
SMFG 2011
◆
Sumitomo Mitsui Card
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
2,156
1,112
51.58%
1,044
48.42%
2,247
1,133
50.42%
1,114
49.58%
2,300
1,146
49.83%
1,154
50.17%
36 yrs 2 mos.
36 yrs 4 mos.
36 yrs 8 mos.
39 yrs 8 mos.
39 yrs 10 mos.
40 yrs 0 mos.
32 yrs 6 mos.
32 yrs 10 mos.
33 yrs 5 mos.
◆
Sumitomo Mitsui Finance and Leasing
2010
2009
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
1,640
1,023
62.38%
617
37.62%
1,666
1,035
62.12%
631
37.88%
2011
1,648
1,025
62.20%
623
37.80%
37 yrs 1 mos.
37 yrs 3 mos.
37 yrs 8 mos.
40 yrs 2 mos.
40 yrs 3 mos.
40 yrs 6 mos.
32 yrs 0 mos.
32 yrs 4 mos.
33 yrs 0 mos.
Average years of service
10 yrs 3 mos.
10 yrs 7 mos.
11 yrs 0 mos.
Average years of service
12 yrs 1 mos.
12 yrs 5 mos.
12 yrs 10 mos.
*
9 yrs 4 mos.
11 yrs 2 mos.
11 yrs 6 mos.
Male
Female
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment agencies,
and national staff at overseas branches.
10 yrs 0 mos.
12 yrs 0 mos.
9 yrs 7 mos.
*
7 yrs 6 mos.
15 yrs 2 mos.
15 yrs 6 mos.
14 yrs 10 mos.
Male
Female
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: 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).
8 yrs 7 mos.
8 yrs 0 mos.
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
** Includes contract employees
2009
2010
2011
98
66
84
46
72
43
67.3%
54.8%
59.7%
April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
2009
2010
2011
40
2
28
1
22
3
5.0%
3.6%
13.6%
Fiscal
2008
2009
2010
Fiscal
2008
2009
2010
Number of employees taking paren-
tal leave
Men taking such leave
37
6
53
6
43
2
Number of employees taking paren-
tal leave
13
22
34
◆
Cedyna
March 31**
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
4,485
2,787
62.14%
1,698
37.86%
3,466
2,062
59.49%
1,404
40.51%
3,340
2,021
60.51%
1,319
39.49%
39 yrs 9 mos.
37 yrs 8 mos.
38 yrs 7mos.
43 yrs 2 mos.
40 yrs 8 mos.
41 yrs 5 mos.
34 yrs 1 mos.
33 yrs 2 mos.
34 yrs 4 mos.
Average years of service
14 yrs 11 mos.
13 yrs 4 mos.
14 yrs 2 mos.
17 yrs 7 mos.
Male
Female
Excluding employees seconded from other companies, employees on short-
term contracts and part-time employees.
9 yrs 11 mos.
15 yrs 7 mos.
10 yrs 6 mos.
11 yrs 0 mos.
16 yrs 4 mos.
*
** As of March 31, 2009, the total number of employees includes employees of
OMC Card, Inc., Central Finance Co., Ltd., and QUOQ Inc.
April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
2009
2010
2011
79
46
32
14
44
22
58.2%
43.8%
50.0%
Fiscal
2008
2009
2010
Number of employees taking paren-
tal leave***
Men taking such leave
*** For fiscal year 2008, the total number of employees includes employees of
45
55
0
3
62
0
OMC Card, Inc., Central Finance Co., Ltd., and QUOQ Inc.
◆
Japan Research Institute
2009
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2010
2011
2,215
1,732
78.19%
483
21.81%
2,322
1,792
77.17%
530
22.83%
2,323
1,782
76.71%
541
23.29%
38 yrs 11 mos.
39 yrs 0 mos.
39 yrs 1 mos.
39 yrs 8 mos.
39 yrs 11 mos.
39 yrs 9 mos.
35 yrs 11 mos.
35 yrs 9 mos.
36 yrs 4 mos.
Average years of service
9 yrs 7 mos.
9 yrs 11 mos.
9 yrs 9 mos.
*
8 yrs 7 mos.
10 yrs 3 mos.
9 yrs 11 mos.
Male
Female
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment agencies,
and national staff at overseas branches.
10 yrs 3 mos.
8 yrs 6 mos.
8 yrs 8 mos.
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
2009
2010
2011
147
46
50
14
53
20
31.3%
28.0%
37.7%
** Includes only sogoshoku staff. Ippanshoku staff are excluded.
Fiscal
2008
2009
2010
Number of employees taking paren-
tal leave
Men taking such leave
30
3
25
6
48
7
SMFG 2011 65
◆
SMBC Friend Securities
◆
THE MINATO BANK
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
2,011
1,434
71.31%
577
28.69%
2,072
1,462
70.56%
610
29.44%
1,897
1,359
71.64%
538
28.36%
36 yrs 9 mos.
36 yrs 11 mos.
37 yrs 7 mos.
39 yrs 1 mos.
39 yrs 4 mos.
39 yrs 8 mos.
31 yrs 1 mos.
31 yrs 4 mos.
32 yrs 5 mos.
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
2,121
1,348
63.55%
773
36.45%
2,152
1,320
61.34%
832
38.66%
2,166
1,337
61.73%
829
38.27%
40 yrs 10 mos.
40 yrs 3 mos.
40 yrs 4 mos.
44 yrs 2 mos.
43 yrs 9 mos.
43 yrs 8 mos.
35 yrs 2 mos.
34 yrs 11 mos.
35 yrs 0 mos.
Average years of service
13 yrs 2 mos.
13 yrs 3 mos.
14 yrs 0 mos.
Average years of service
15 yrs 2 mos.
14 yrs 10 mos.
15 yrs 3 mos.
*
8 yrs 3 mos.
15 yrs 4 mos.
15 yrs 1 mos.
Male
Female
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment agen-
cies, and national staff at overseas branches.
15 yrs 9 mos.
9 yrs 5 mos.
8 yrs 5 mos.
April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
2009
2010
2011
232
117
148
68
149
79
50.4%
45.9%
53.0%
** Both non-area specified and area specified staff
Fiscal
2008
2009
2010
Number of employees taking paren-
tal leave
20
22
25
◆
SMBC Nikko Securities
March*
Number of employees**
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009
2010
2011
6,004
3,578
59.59%
2,426
40.41%
6,584
4,057
61.62%
2,527
38.38%
7,094
4,449
62.71%
2,645
37.29%
37 yrs 2 mos.
38 yrs 1 mos.
38 yrs 11 mos.
38 yrs 11 mos.
39 yrs 6 mos.
40 yrs 3 mos.
34 yrs 7 mos.
35 yrs 9 mos.
36 yrs 8 mos.
Average years of service
12 yrs 0 mos.
12 yrs 1 mos.
11 yrs 11 mos.
12 yrs 9 mos.
12 yrs 4 mos.
11 yrs 1 mos.
11 yrs 2 mos.
*
Male
Female
As of March 1 of the respective years
13 yrs 0 mos.
10 yrs 7 mos.
*
** The number of full-time employees. The following list of employees is deducted
from the total number of employees: executive officers, employees seconded to
other companies and organizations 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
2009
2010
2011
182
53
159
54
493
190
29.1%
34.0%
38.5%
*** Professional staff (Classes I-II), FA, and specialists
Fiscal
2008
2009
2010
19 yrs 4 mos.
Male
Female
The number of full-time employees including executives and employees sec-
onded to other companies or organizations.
Excluded employees on short-term contracts, and part-time employees.
19 yrs 2 mos.
8 yrs 1 mos.
8 yrs 0 mos.
19 yrs 3 mos.
9 yrs 0 mos.
*
April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
2009
2010
2011
63
13
32
6
44
9
20.6%
18.8%
20.5%
Fiscal
2008
2009
2010
Number of employees taking paren-
tal leave
Men taking such leave
23
1
20
1
16
1
◆
Kansai Urban Banking
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
2009**
2010
2011
1,890
1,282
67.83%
608
32.17%
2,880
1,989
69.06%
891
30.94%
2,809
1,929
68.67%
880
31.33%
39 yrs 10 mos.
39 yrs 9 mos.
39 yrs 10 mos.
43 yrs 9 mos.
43 yrs 5 mos.
43 yrs 4 mos.
31 yrs 6 mos.
31 yrs 7 mos.
32 yrs 3 mos.
Average years of service
16 yrs 7 mos.
16 yrs 8 mos.
16 yrs 8 mos.
19 yrs 11 mos.
19 yrs 10 mos.
Male
Female
Total is for full-time non-executive employees of the bank, including employees
seconded to other companies and organizations. Excluded are executive offi-
cers, employees on short-term contracts, part-time employees, employees of
temporary employment agencies.
10 yrs 1 mos.
19 yrs 9 mos.
9 yrs 5 mos.
9 yrs 5 mos.
** Up to March 31, 2009, figures are those of prior to the merger with The
Biwako Bank, Ltd.
April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
2009
2010
2011
137
80
97
42
86
50
58.4%
43.3%
58.1%
Fiscal***
Number of employees taking paren-
tal leave
2008
2009
2010
19
12
25
*** Up to fiscal 2009, figures are those prior to the merger with The Biwako Bank,
Number of employees taking paren-
tal leave
66
SMFG 2011
177
207
229
Ltd.
• The combined employment ratio for persons with disabilities for the above nine companies was 1.87% as of March 2011.
Principal Work-Life Balance Systems (Employee Support Programs)
Leave for taking care of
sick children
Shorter working hours
Parental leave
Restrictions on overtime
Exemption from
late-night work
18 months or maximum of
2 years in case of inability to
place in daycare center
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)
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 elementary
school.
SMBC
Up to March 31 in the 6th
grade of elementary school
Up to March 31 in the 6th
grade of elementary school
18 months or maximum of
2 years in case of inability to
place in daycare center
Sumitomo Mitsui
Card
Up to 3 years old
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 3rd grade of elementary
school.
Up to March 31 in the 3rd
grade of elementary school (5
days per annum for one child;
no upper limit)
Up to March 31 in the 3rd
grade of elementary school
(Employees can choose to work
5, 6, or 7 hours a day).
Up to March 31 in the 3rd
grade of elementary school
Up to March 31 in the 3rd
grade of elementary school
Up to entry into elementary
school
Up to entry into elementary
school
Cedyna
Sumitomo Mitsui
Finance and
Leasing
Japan Research
Institute
1 year or maximum of 18
months in case of inability to
place in daycare center
No restrictions on children’s
age or number of days leave
18 months or maximum of
2 years in case of inability to
place in daycare center
Up to March 31 in the 6th
grade of elementary school (5
days per annum for one child;
no upper limit)
Employees can reduce daily
working hours to a minimum
of 5 hours 30 minutes up to
March 31 in the 6th grade of
elementary school.
Employees can choose to work
4, 5, 6 or 7 hours per day up
to March 31 in the 3rd grade
of elementary school (this
system can be combined with
flextime).
Up to entry into elementary
school
Up to entry into elementary
school
• Work relocations
• System for rehiring former
employees
Up to entry into elementary
school
For employees who are preg-
nant or have given birth within
previous 12 months
18 months or maximum of
2 years in case of inability to
place in daycare center
SMBC Friend
Securities
Up to 3 years old
SMBC Nikko
Securities
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)
Employees can reduce daily
working hours to between 6
hours and 6 hours 50 minutes
up to March 31 in the 3rd
grade of elementary school.
Up to entry into elementary
school (5 days per annum for
one child; 10 days for two or
more children)
Up to child’s entry into junior
high school, employees can
in
reduce working hours
increments of 30 minutes for a
maximum reduction of 2 hours
30 minutes per day.
Up to March 31 in the 3rd
grade of elementary school
Up to March 31 in the 3rd
grade of elementary school
Up to entry into junior high
school
Up to entry into junior high
school
Up to 3 years old
THE MINATO BANK
Up to entry into elementary
school (5 days per annum for
one child; 10 days for two or
more children)
Up to entry into elementary
school, employees can opt for
6-hour working day
Up to entry into elementary
school
Up to entry into elementary
school
• Maternity
spouse)
leave
(to help
Kansai Urban
Banking
1 year or maximum of 18
months in case of inability to
place in daycare center
Up to entry into elementary
school (5 days per annum for
one child; 10 days for two or
more children)
Up to 3 years old, employees
can opt for 6-hour working day
Up to entry into elementary
school
Up to entry into elementary
school
Other principal systems
• Work relocations
• Child-care subsidies
• Leave to care for sick family
members
• Shorter working hours to care
for sick family members
• System for rehiring former
employees
• Work relocations
• Child-care subsidies
• Leave to care for sick family
members
• System for rehiring former
employees
• Maternity leave and work
• Short-term childcare leave
• Leave to care for sick family
members
• System for rehiring former
employees on
• Maternity leave (for men)
• Child-care subsidies
• Leave to care for sick family
members
• Shorter working hours to care
for sick family members
• More time off and shorter
working hours to care for
sick family members
• Days off to care for sick
family members
• Leave to care for sick family
members
• Shorter working hours to care
for sick family members
• Use of designated day-care
center at discounted rates
• Leave to care for sick family
members
• Special days off to care for
sick family members
• Shorter working hours to care
for sick family members
• Staggered working hours
(shift system)
• Leave to care for sick family
members
• Shorter working hours to care
for sick family members
• System for rehiring former
employees
• Leave to care for sick family
members
• Home helpers provided
SMFG 2011 67
68
SMFG 2011
Financial Section and Corporate Data
Financial Data
SMFG
Consolidated Balance Sheets ..................................... 70
Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income ... 72
Consolidated Statements of
Changes in Net Assets .............................................. 73
Consolidated Statements of Cash Flows .................... 75
Notes to Consolidated Financial Statements .............. 77
Corporate Data
Sumitomo Mitsui Financial Group, Inc.
Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 211
SMFG Organization ................................................. 211
Sumitomo Mitsui Banking Corporation
Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 212
Independent Auditors’ Report ..................................... 139
SMBC Organization ................................................ 214
SMBC
Principal Subsidiaries and Affiliates
Supplemental Information ........................................... 140
Principal Domestic Subsidiaries ............................. 216
SMFG
Income Analysis (Consolidated) .................................. 146
Principal Overseas Subsidiaries ............................. 217
Principal Affiliates .................................................... 218
Assets and Liabilities (Consolidated)........................... 149
International Directory ................................................. 219
Capital (Nonconsolidated) ........................................... 152
SMBC
Income Analysis (Consolidated) .................................. 155
Assets and Liabilities (Consolidated)........................... 158
Income Analysis (Nonconsolidated) ............................ 160
Deposits (Nonconsolidated) ........................................ 164
Loans (Nonconsolidated)............................................. 166
Securities (Nonconsolidated) ...................................... 171
Ratios (Nonconsolidated) ............................................ 173
Capital (Nonconsolidated) ........................................... 175
Others (Nonconsolidated)............................................ 176
Trust Assets and Liabilities (Nonconsolidated) ............ 178
Capital Ratio Information
SMFG
Capital Ratio Information (Consolidated) .................... 179
SMBC
Capital Ratio Information ............................................. 209
SMFG 2011 69
SMFG
Consolidated Balance Sheets
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
March 31
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Assets
Cash and due from banks (Notes 9 and 30) .........................................................
Deposits with banks (Notes 9 and 30)..................................................................
Call loans and bills bought (Notes 9 and 30) ........................................................
Receivables under resale agreements (Note 30) ..................................................
Receivables under securities borrowing transactions (Note 30) ..........................
Monetary claims bought (Notes 9 and 30) ...........................................................
Trading assets (Notes 3, 9 and 30) .......................................................................
Money held in trust (Notes 30 and 31) .................................................................
Securities (Notes 4, 9, 30 and 31) ........................................................................
Loans and bills discounted (Notes 5, 9 and 30) ...................................................
Foreign exchanges (Note 30) ...............................................................................
Lease receivables and investment assets (Notes 9, 29 and 30) ..........................
Other assets (Notes 6, 9, 30 and 32) ....................................................................
Tangible fixed assets (Notes 7, 9 and 15) .............................................................
Intangible fixed assets (Note 8) ............................................................................
Deferred tax assets (Note 25) ...............................................................................
Customers’ liabilities for acceptances and guarantees .......................................
Reserve for possible loan losses (Note 30) ..........................................................
Total assets ..........................................................................................................
¥ 5,645,094
3,588,811
851,636
131,104
4,740,410
1,122,307
6,632,898
24,011
39,952,123
61,348,355
1,077,024
1,734,169
4,604,732
1,168,908
674,216
644,736
4,921,500
(1,058,945)
¥137,803,098
¥ 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
$ 67,890
43,161
10,242
1,577
57,010
13,497
79,770
289
480,483
737,803
12,953
20,856
55,379
14,058
8,108
7,754
59,188
(12,735)
$1,657,283
70
SMFG 2011
(Continued)
March 31
Consolidated Balance Sheets
SMFG
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Liabilities and net assets
Liabilities
Deposits (Notes 9, 10 and 30) ..............................................................................
Call money and bills sold (Notes 9 and 30) ..........................................................
Payables under repurchase agreements (Notes 9 and 30) ..................................
Payables under securities lending transactions (Notes 9 and 30) .......................
Commercial paper (Note 30) ................................................................................
Trading liabilities (Notes 9, 11 and 30)..................................................................
Borrowed money (Notes 9, 12 and 30).................................................................
Foreign exchanges (Note 30) ...............................................................................
Short-term bonds (Notes 13 and 30)....................................................................
Bonds (Notes 13 and 30) ......................................................................................
Due to trust account (Note 30) .............................................................................
Other liabilities (Notes 9, 14, 29, 30 and 32) ........................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for employee retirement benefits (Note 28) ............................................
Reserve for executive retirement benefits ............................................................
Reserve for point service program .......................................................................
Reserve for reimbursement of deposits ...............................................................
Reserve for loss on interest repayment ................................................................
Reserve under the special laws ...........................................................................
Deferred tax liabilities (Note 25) ...........................................................................
Deferred tax liabilities for land revaluation (Note 15) ............................................
Acceptances and guarantees (Note 9) .................................................................
Total liabilities ......................................................................................................
Net assets (Note 26)
Capital stock (Note 16) ........................................................................................
Capital surplus .....................................................................................................
Retained earnings ................................................................................................
Treasury stock .....................................................................................................
Total stockholders’ equity ...................................................................................
Net unrealized gains on other securities (Notes 23, 25 and 31) ...........................
Net deferred losses on hedges (Notes 23, 25 and 32) .........................................
Land revaluation excess (Note 15) .......................................................................
Foreign currency translation adjustments (Note 23) ............................................
Total accumulated other comprehensive income ..............................................
Stock acquisition rights (Note 33) ........................................................................
Minority interests .................................................................................................
Total net assets ....................................................................................................
Total liabilities and net assets .............................................................................
See accompanying notes to consolidated financial statements.
¥ 90,365,263
2,629,407
726,365
5,713,233
337,120
5,248,302
10,769,668
256,160
1,183,198
3,866,095
216,171
4,188,259
45,176
2,496
44,604
2,728
18,927
9,923
59,812
392
20,517
45,698
4,921,500
130,671,024
2,337,895
978,851
1,776,433
(171,760)
4,921,419
272,306
(9,701)
33,357
(122,889)
173,073
262
2,037,318
7,132,073
¥137,803,098
¥ 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
$1,086,774
31,622
8,736
68,710
4,054
63,119
129,521
3,081
14,230
46,495
2,600
50,370
543
30
536
33
228
119
719
5
247
550
59,188
1,571,510
28,117
11,772
21,364
(2,066)
59,187
3,275
(117)
401
(1,478)
2,081
3
24,502
85,773
$1,657,283
SMFG 2011 71
SMFG
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
(Consolidated Statements of Income)
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
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 25):
¥1,612,599
1,208,389
251,311
2,351
8,464
18,592
71,589
51,900
2,335
897,461
237,093
1,039,662
73,507
3,862,660
294,947
139,424
49,251
2,753
8,847
68,947
25,723
131,230
858,243
1,355,322
48,720
346,881
3,035,346
827,313
Current ..............................................................................................................
Deferred ............................................................................................................
Income before minority interests ........................................................................
Minority interests in net income ...........................................................................
Net income ...........................................................................................................
97,446
143,325
586,542
110,646
¥ 475,895
¥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
104,110
74,759
107,668
¥ 271,559
$19,394
14,533
3,022
28
102
224
861
624
28
10,793
2,851
12,504
884
46,454
3,547
1,677
592
33
107
829
309
1,578
10,321
16,300
586
4,172
36,504
9,950
1,172
1,724
7,054
1,331
$ 5,723
(Consolidated Statements of Comprehensive Income)
Millions of yen
Year ended March 31
Income before minority interests ........................................................................
Other comprehensive income (Note 23)
Net unrealized losses on other securities .........................................................
Net deferred gains on hedges ..........................................................................
Foreign currency translation adjustments ........................................................
Share of other comprehensive income of
associates accounted for by equity method ..................................................
Total other comprehensive income ..................................................................
Total comprehensive income (Note 24) ..............................................................
Comprehensive income attributable to shareholders of the parent company ....
Comprehensive income attributable to minority interests ...............................
See accompanying notes to consolidated financial statements.
2011
¥586,542
(150,002)
29,587
(60,928)
8,176
(173,166)
413,375
343,920
69,455
2010
¥—
—
—
—
—
—
—
—
—
Millions of
U.S. dollars (Note 1)
2011
$7,054
(1,804)
356
(733)
98
(2,083)
4,971
4,136
835
72
SMFG 2011
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
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
¥2,337,895
¥1,420,877
$28,117
Issuance of new shares ................................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
—
—
¥2,337,895
917,018
917,018
¥2,337,895
—
—
$28,117
Capital surplus
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
978,897
57,245
11,772
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 ................................................................
—
(46)
—
(46)
¥ 978,851
928,094
(108)
(6,333)
921,652
¥ 978,897
—
(0)
—
(0)
$11,772
Retained earnings
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
Cash dividends ............................................................................................
Net income ...................................................................................................
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 ................................................................
Treasury stock
1,451,945
1,245,085
17,462
(152,878)
475,895
13
3
(13)
(10)
—
(126)
1,604
324,488
¥1,776,433
(71,174)
271,559
8
3
(11)
(1)
6,333
—
141
206,859
¥1,451,945
(1,839)
5,723
0
0
(0)
(0)
—
(1)
19
3,902
$21,364
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(124,061)
(124,024)
(1,492)
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................
(47,759)
60
(47,699)
¥ (171,760)
(189)
152
(36)
¥ (124,061)
(574)
0
(574)
$ (2,066)
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 ............................................................................
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 ................................................................
4,644,677
2,599,183
55,859
—
(152,878)
475,895
(47,759)
13
13
3
(13)
(10)
—
(126)
1,604
276,742
¥4,921,419
1,845,113
(71,174)
271,559
(189)
43
8
3
(11)
(1)
6,333
(6,333)
141
2,045,493
¥4,644,677
—
(1,839)
5,723
(574)
0
0
0
(0)
(0)
—
(1)
19
3,328
$59,187
SMFG 2011 73
SMFG
Consolidated Statements of Changes in Net Assets
(Continued)
Year ended March 31
Accumulated other comprehensive income
Net unrealized gains (losses) on other securities
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
¥ 412,708
¥ (14,649)
$ 4,963
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 ................................................................
(140,402)
(140,402)
¥ 272,306
427,358
427,358
¥ 412,708
Net deferred losses on hedges
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(39,367)
(20,835)
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 ................................................................
29,666
29,666
¥ (9,701)
(18,531)
(18,531)
¥ (39,367)
Land revaluation excess
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
34,955
35,159
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 ................................................................
(1,597)
(1,597)
¥ 33,357
(204)
(204)
¥ 34,955
Foreign currency translation adjustments
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
(101,650)
(129,068)
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 ................................................................
(21,238)
(21,238)
¥ (122,889)
27,418
27,418
¥ (101,650)
Total accumulated other comprehensive income
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
306,646
(129,394)
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 ................................................................
(133,573)
(133,573)
¥ 173,073
436,040
436,040
¥ 306,646
Stock acquisition rights
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
81
66
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 ................................................................
180
180
¥ 262
15
15
¥ 81
Minority interests
Balance at the end of the previous fiscal year..................................................
Changes in the fiscal year:
2,049,400
2,141,908
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 ................................................................
(12,081)
(12,081)
¥2,037,318
(92,508)
(92,508)
¥2,049,400
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 ............................................................................
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 ................................................................
See accompanying notes to consolidated financial statements.
7,000,805
4,611,764
—
(152,878)
475,895
(47,759)
13
13
3
(13)
(10)
—
(126)
1,604
(145,474)
131,268
¥7,132,073
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
74
SMFG 2011
(1,688)
(1,688)
$ 3,275
(473)
356
356
$ (117)
420
(19)
(19)
$ 401
(1,222)
(256)
(256)
$ (1,478)
3,688
(1,607)
(1,607)
$ 2,081
1
2
2
$ 3
24,647
(145)
(145)
$24,502
84,195
—
(1,839)
5,723
(574)
0
0
0
(0)
(0)
—
(1)
19
(1,750)
1,578
$85,773
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 ...................................................................................
Gains on negative goodwill ..............................................................................
Gains on step acquisitions ...............................................................................
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 point service program .............................................
Net change in reserve for reimbursement of deposits .....................................
Net change in reserve for loss on interest repayment ......................................
Interest income .................................................................................................
Interest expenses .............................................................................................
Net gains 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
2011
2010
Millions of
U.S. dollars (Note 1)
2011
¥ 827,313
154,267
5,411
22,938
(409)
(12,655)
13,319
(13,433)
1,057
163
(2,987)
(5,642)
(1,420)
(1,810)
(17,566)
(1,612,599)
294,947
(61,648)
148
280,834
5,029
7,813
256,101
1,401,384
3,628,657
1,380,003
4,569,942
(1,196,723)
(18,924)
700,211
165,025
26,333
1,397,458
(7,663)
64,083
152,703
(101,780)
515,688
56,617
1,635,444
(309,401)
(279,956)
13,918,277
(124,540)
13,793,737
¥ 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)
$ 9,950
1,855
65
276
(5)
(152)
160
(162)
13
2
(36)
(68)
(17)
(22)
(211)
(19,394)
3,547
(741)
2
3,377
60
94
3,080
16,854
43,640
16,597
54,960
(14,392)
(228)
8,421
1,985
317
16,806
(92)
771
1,836
(1,224)
6,202
681
19,669
(3,721)
(3,367)
167,388
(1,498)
165,890
SMFG 2011 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 ..................................................
Proceeds from sale of 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 ..................................................................................................
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 ........................................................
Purchases of treasury stock of subsidiaries .....................................................
Proceeds from sale of treasury stock of subsidiaries .......................................
Net cash provided by (used in) 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 ...................................................................
Cash and due from banks at the end of the year ..............................................
See accompanying notes to consolidated financial statements.
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
¥(67,169,471)
36,624,700
19,626,268
(6,942)
5,236
(182,839)
6,966
(101,624)
528
314
¥(46,300,009)
32,626,376
14,263,916
(9,748)
27
(156,154)
37,114
(82,287)
111
—
$(807,811)
440,465
236,034
(83)
63
(2,199)
84
(1,222)
6
4
59,408
—
715
(10,756)
(11,148,211)
80,000
(87,500)
(537,007)
(157,661)
8,000
(78,000)
256,751
611,172
(314,900)
—
(152,612)
471
(309)
(97,609)
(47,759)
13
(1,001)
17
(364,438)
(7,185)
2,273,901
3,371,193
(639,981)
1,824,896
(71,063)
388,000
(492,987)
(98,791)
(189)
43
—
—
1,451,099
(302)
(587,786)
3,800,890
(129)
(134,073)
962
(1,052)
3,088
(3,787)
—
(1,836)
6
(4)
(1,174)
(574)
0
(12)
0
(4,383)
(87)
27,347
40,543
—
¥ 5,645,094
158,089
¥ 3,371,193
—
$ 67,890
76
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Years ended March 31, 2011 and 2010
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 Companies 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 are
in principle integrated with those of SMFG’s accounting policies for
purposes of consolidation unless they apply different accounting prin-
ciples 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.
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, 2011, which was ¥83.15 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 ..............
2011
327
2010
307
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
SMBC Friend Securities Co., Ltd.
Nikko Cordial Securities Inc.
Sumitomo Mitsui Finance and Leasing Company, Limited
Sumitomo Mitsui Card Company, Limited
Cedyna Financial Corporation
SMBC Finance Service Co., Ltd.
The Japan Research Institute, Limited
SMBC Capital Markets, Inc.
Changes in the consolidated subsidiaries in the fiscal
year ended March 31, 2011 are as follows:
9 companies including Cedyna Financial Corporation
were newly consolidated through a third-party allotment of
new shares issued by the company. 38 companies including
SMBC Venture Capital Co., Ltd. were newly consolidated
due mainly to acquisitions of stocks.
12 companies including SB Equity Securities (Cayman),
Limited were excluded from the scope of consolidation
because they were no longer subsidiaries due mainly to
liquidation.
15 companies including Soir Leasing 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.
206 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.
SMFG 2011 77
SMFG
Notes to Consolidated Financial Statements
(i) Unconsolidated subsidiaries accounted for by the equity
(c) The balance sheet dates of consolidated subsidiaries
method
(i) The balance sheet dates of the consolidated subsidiaries
The number of unconsolidated subsidiaries accounted for
by the equity method is as follows:
March 31
Unconsolidated subsidiaries ..........
2010
4
2011
4
Principal company:
SBCS Co., Ltd.
(ii) Equity method affiliates
The number of the equity method affiliates is as follows:
2010
March 31
54
Affiliates.......................................
2011
43
Principal companies:
Sumitomo Mitsui Auto Service Company, Limited
Promise Co., Ltd.
Daiwa SB Investments Ltd.
Changes in the equity method affiliates in the fiscal year
ended March 31, 2011 are as follows:
4 companies including Famima Credit Corporation
became equity method affiliates due mainly to acquisitions
of stocks.
6 companies including Cedyna Financial Corporation
were excluded from the scope of equity method affiliates
because they became consolidated subsidiaries through a
third-party allotment of new shares issued by the company.
9 companies including Daiwa SMBC Capital Co., Ltd.
were also excluded due mainly to sales of stocks.
(iii) Unconsolidated subsidiaries that are not accounted for
by the equity method
206 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.
are as follows:
March 31
June 30 ........................................
July 31 .........................................
September 30 ...............................
October 31 ...................................
November 30 ...............................
December 31 ................................
January 31 ....................................
February 28 ..................................
March 31 ......................................
2011
4
2
3
1
7
119
18
7
166
2010
4
2
5
2
5
120
18
8
143
(ii) The subsidiaries with balance sheets dated June 30,
July 31, September 30, November 30 and January 31 are
consolidated using the financial statements as of March
31 for the purpose of consolidation. The subsidiary with
balance sheets dated October 31 is consolidated using the
financial statements as of January 31. Certain subsidiaries
with balance sheets dated December 31 are consolidated
using the financial statements as of March 31. Other
subsidiaries are consolidated using the financial statements
on their respective balance sheet dates.
Appropriate adjustments are made for material
transactions during the periods between their respective
balance sheet dates and the consolidated closing date, if the
financial statements of the consolidated subsidiaries were
based on dates other than March 31.
(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 2011 were ¥2,274,626
million ($27,356 million) and ¥2,274,424 million
($27,353 million), respectively. The respective amounts of
2010 were ¥2,261,647 million and ¥2,261,476 million.
(ii) The amount of principal transactions with the SPEs as
of and for the fiscal years ended March 31, 2011 and 2010
were as follows:
Millions of yen
2011
March 31
Loans and bills
discounted .................. ¥1,592,714 ¥1,630,152
670,385
Credit lines ...................
279,947
Liquidity lines ..............
593,578
291,991
2010
Millions of
U.S. dollars
2011
$19,155
7,139
3,512
Millions of
U.S. dollars
2011
$192
20
78
SMFG 2011
Year ended March 31
Interest on loans and
discounts ....................
Fees and commissions ...
Millions of yen
2011
2010
¥15,978
1,665
¥17,520
2,288
Notes to Consolidated Financial Statements
SMFG
(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 related
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 with no available market
prices, 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. Others 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
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
SMFG 2011 79
SMFG
Notes to Consolidated Financial Statements
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
amount of the claims. The amount of write-off was ¥867,866
million ($10,437 million) and ¥843,781 million at March 31,
2011 and 2010, 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.
(9) Reserve for employee retirement benefits
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 (Part 3)” (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 point service program
The reserve for point service program is provided for the
potential future redemption of points awarded to customers
under the “SMBC Point Pack,” credit card points programs,
and other customer points award programs. The amount
is calculated by converting the outstanding points into a
monetary amount, and rationally estimating and recognizing
the amount that will be redeemed in the future.
(12) 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.
(13) Reserve for loss on interest repayment
The reserve for loss on interest repayment is provided for the
possible losses on future claims of repayment of interest based
on historical interest repayment experience.
(14) 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.
(15) 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.
(16) Lease transactions
(a) Recognition of income on finance leases
Interest income is allocated to each period, based on the
interest method.
(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.
(17) Hedge accounting
(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.
80
SMFG 2011
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, 2011 and 2010
were ¥999 million ($12 million) and ¥2,470 million,
respectively. Gross amounts of deferred hedge gains on
“macro hedge” (before deducting tax effect) at March
31, 2011 and 2010 were ¥960 million ($12 million) and
¥2,416 million, respectively.
(b) Hedging against currency fluctuations
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
Notes to Consolidated Financial Statements
SMFG
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, fair value hedge accounting 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).
(18) Amortization of goodwill
Goodwill on SMBC Friend Securities Co., Ltd., Sumitomo
Mitsui Finance and Leasing Company, Limited, Nikko Cordial
Securities Inc., Kansai Urban Banking Corporation and
Cedyna Financial Corporation is amortized using the straight-
line method over 20 years. Goodwill on other companies
is 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) Consumption taxes
National and local consumption taxes of SMFG and its
consolidated domestic subsidiaries are accounted for using the
tax-excluded method.
(21) 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.
(22) 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 had 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)
SMFG 2011 81
SMFG
Notes to Consolidated Financial Statements
As a result, income before income taxes and minority
interests increased by ¥19,251 million as compared with
the former method.
(b) Accounting standard for asset retirement obligations
“Accounting Standard for Asset Retirement Obligations”
(ASBJ Statement No. 18, issued on March 31, 2008) and
“Guidance on Accounting Standard for Asset Retirement
Obligations” (ASBJ Guidance No. 21, issued on March 31,
2008) became effective for fiscal years beginning on or after
April 1, 2010. Accordingly, income before income taxes
and minority interests decreased by ¥4,215 million ($51
million) compared with the previous accounting method.
(c) Accounting standard for business combinations
“Accounting Standard for Business Combinations”
(ASBJ Statement No. 21, revised on December 26,
2008), “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, issued on December
26, 2008), “Partial Amendment to Accounting Standard
for Research and Development Costs” (ASBJ Statement
No. 23, issued on December 26, 2008), “Accounting
Standard for Business Divestitures” (ASBJ Statement
No. 7, revised on December 26, 2008), “Accounting
Standard for Equity Method of Accounting for Investments”
(ASBJ Statement No. 16, announced on December
26, 2008) and “Guidance on Accounting Standard for
Business Combinations and Accounting Standard for
Business Divestitures” (ASBJ Guidance No. 10, revised on
December 26, 2008) became effective for fiscal years begin-
ning on or after April 1, 2010, and SMFG has applied
them from the fiscal year ended March 31, 2011.
(23) Changes in presentation
(a) Consolidated balance sheets
“Other liabilities” as of March 31, 2010, included “Reserve
for point service program” of ¥14,091 million and “Reserve
for loss on interest repayment” of ¥9,735 million. From
the fiscal year ended March 31, 2011, they are presented
individually because the amounts have become significant.
(b) Consolidated statements of income
SMFG presents “Income before minority interests” on
the consolidated statement of income from the fiscal year
ended March 31, 2011 because “Cabinet Office Ordinance
of Partial Amendment to Regulation for Terminology,
Forms and Preparation of Financial Statements” (Cabinet
Office Ordinance No. 5, March 24, 2009) became effective
for fiscal years beginning on or after April 1, 2010.
(c) Consolidated statements of cash flows
In the fiscal year ended March 31, 2010, “Other, net”
included “Net change in reserve for point service program”
and “Net change in reserve for loss on interest repayment,”
a decrease of ¥879 million and an increase of ¥1,040
million, respectively. From the fiscal year ended March 31,
2011, they are presented individually because the amounts
have become significant.
(24) Accounting standard for equity method of accounting for
investments
SMFG has applied “Accounting Standard for Equity Method
of Accounting for Investments” (ASBJ Statement No. 16,
issued on March 10, 2008) and “Practical Solution on
Unification of Accounting Policies Applied to Associates
Accounted for Using the Equity Method” (ASBJ Practical
Issues Task Force No. 24, issued on March 10, 2008) because
they became effective for the fiscal years beginning on or after
April l, 2010. This accounting change had no impact on the
consolidated financial statements.
(25) Accounting standard for presentation of comprehensive
income
“Accounting Standard for Presentation of Comprehensive
Income” (ASBJ Statement No. 25, issued June 30, 2010)
became effective for consolidated financial statements for the
fiscal years ending on or after March 31, 2011. Accordingly,
SMFG has applied this standard and presents “Valuation and
transaction adjustments” and “Total valuation and transaction
adjustments” as of and for the fiscal year ended March 31,
2010 as “Accumulated other comprehensive income” and
“Total accumulated other comprehensive income” as of and for
the fiscal year ended March 31, 2011, respectively.
(26) 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.”
82
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
3. Trading Assets
Trading assets at March 31, 2011 and 2010 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, 2011 and 2010 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
2011
¥2,817,536
3,857
5,338
3,514,859
291,305
¥6,632,898
2010
¥2,779,725
1,246
6,931
3,642,477
278,307
¥6,708,688
Millions of yen
2011
¥25,934,346
544,409
3,256,034
2,741,796
7,475,535
¥39,952,123
2010
¥16,738,321
422,648
3,548,359
2,967,641
4,946,997
¥28,623,968
Millions of
U.S. dollars
2011
$33,885
47
64
42,271
3,503
$79,770
Millions of
U.S. dollars
2011
$311,899
6,547
39,159
32,974
89,904
$480,483
*1 Unsecured loaned securities for which borrowers have the right to sell or pledge in the amount of ¥50,935 million ($613 million) and ¥41,826 million are included in Japanese
government bonds in Securities and in trading securities in Trading assets at March 31, 2011 and 2010, respectively.
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,
¥3,032,285 million ($36,468 million) are pledged, and ¥232,420 million ($2,795 million) are held in hand at March 31, 2011. The respective amounts at March 31, 2010 were
¥3,840,308 million and ¥133,566 million.
*2 Japanese corporate bonds include private placement bonds (stipulated by Article 2-3 of the Financial Instruments and Exchange Act) which are guaranteed by banking subsidiaries in
the amount of ¥1,969,902 million ($23,691 million) and ¥2,136,145 million at March 31, 2011 and 2010, respectively.
*3 Japanese stocks and other include investments in unconsolidated subsidiaries and affiliates of ¥279,829 million ($3,365 million) and ¥321,897 million at March 31, 2011 and 2010,
respectively.
*4 Japanese stocks and other include investments in jointly controlled entities of ¥97,868 million ($1,177 million) and ¥94,369 million at March 31, 2011 and 2010, respectively.
5. Loans and Bills Discounted
(1) Loans and bills discounted at March 31, 2011 and 2010 consisted of the following:
March 31
Bills discounted ...............................................................................................
Loans on notes .................................................................................................
Loans on deeds .................................................................................................
Overdrafts .......................................................................................................
Millions of yen
2011
¥ 184,822
2,176,918
51,925,319
7,061,295
¥61,348,355
2010
¥ 196,382
2,324,520
52,839,032
7,341,097
¥62,701,033
(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
2011
2010
¥ 90,777
1,031,828
25,438
498,323
¥1,646,369
¥ 165,131
1,075,782
38,315
250,256
¥1,529,484
Millions of
U.S. dollars
2011
$ 2,223
26,181
624,477
84,922
$737,803
Millions of
U.S. dollars
2011
$ 1,092
12,409
306
5,993
$19,800
*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).”
SMFG 2011 83
SMFG
Notes to Consolidated Financial Statements
(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, 2011 and 2010 was ¥667,310 million ($8,025 million) and
¥617,381 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, 2011 and 2010 were
¥45,842,366 million ($551,321 million) and ¥41,957,592 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, 2011 and 2010 were ¥39,563,617 million
($475,810 million) and ¥36,373,235 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, 2011 and 2010 consisted of the following:
March 31
Prepaid expenses ..................................................................................................
Accrued income ...................................................................................................
Deferred assets .....................................................................................................
Financial derivatives* ..........................................................................................
Other ..................................................................................................................
* Referred to in Note 32
7. Tangible Fixed Assets
Tangible fixed assets at March 31, 2011 and 2010 consisted of the following:
March 31
Buildings ............................................................................................................
Land* ..................................................................................................................
Lease assets ..........................................................................................................
Construction in progress ......................................................................................
Other tangible fixed assets ...................................................................................
Total ....................................................................................................................
Accumulated depreciation ...................................................................................
* Includes land revaluation excess referred to in Note 15.
Millions of yen
2011
¥ 34,563
236,357
821,139
1,294,264
2,218,407
¥4,604,732
2010
¥ 30,643
239,422
488,712
1,079,708
1,771,559
¥3,610,046
Millions of yen
2011
¥ 350,494
551,839
10,527
4,464
251,583
¥1,168,908
¥ 717,073
2010
¥ 314,461
544,075
8,159
8,206
206,222
¥1,081,125
¥ 671,298
Millions of
U.S. dollars
2011
$ 416
2,843
9,875
15,565
26,680
$55,379
Millions of
U.S. dollars
2011
$ 4,215
6,637
126
54
3,026
$14,058
$ 8,624
84
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
8. Intangible Fixed Assets
Intangible fixed assets at March 31, 2011 and 2010 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, 2011 and 2010 consisted of the following:
March 31
Assets pledged as collateral:
Millions of yen
2011
¥262,068
352,790
361
58,995
¥674,216
2010
¥215,563
363,507
367
46,809
¥626,248
Millions of yen
2011
2010
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 .............................................................................
¥ 2,859
327,259
1,926
2,565,106
8,586,487
2,149,928
10,436
15,019
5,102
26,053
955,000
726,365
5,078,535
356,577
5,119,245
11,140
110,568
¥ 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
Millions of
U.S. dollars
2011
$3,152
4,243
4
709
$8,108
Millions of
U.S. dollars
2011
$ 34
3,936
23
30,849
103,265
25,856
126
181
61
313
11,485
8,736
61,077
4,288
61,566
134
1,330
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, 2011 and 2010:
March 31
Cash and due from banks and Deposits with banks ..............................................
Trading assets ......................................................................................................
Securities .............................................................................................................
Loans and bills discounted ...................................................................................
Millions of yen
2011
¥ 32,987
177,403
20,790,338
—
2010
¥ 25,804
111,283
14,233,542
1,171,863
Millions of
U.S. dollars
2011
$ 397
2,134
250,034
—
At March 31, 2011, other assets included surety deposits of ¥119,299 million ($1,435 million), variation margins of futures market transac-
tions of ¥18,029 million ($217 million) and other variation margins of ¥84,382 million ($1,015 million). At March 31, 2010, other assets
included surety deposits of ¥102,085 million, variation margins of futures market transactions of ¥8,457 million and other variation margins of
¥83,768 million.
SMFG 2011 85
SMFG
Notes to Consolidated Financial Statements
10. Deposits
Deposits at March 31, 2011 and 2010 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, 2011 and 2010 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 ....................................................................
12. Borrowed Money
Borrowed money at March 31, 2011 and 2010 consisted of the following:
Millions of yen
March 31
Borrowed money*2 ...................................................... ¥10,769,668 ¥5,470,578
2010
2011
Millions of yen
2011
¥ 7,046,031
38,444,302
721,677
4,931,391
26,891,477
8,366,323
3,964,058
¥90,365,263
2010
¥ 6,871,401
35,153,531
750,961
5,363,534
26,888,129
6,995,619
3,621,037
¥85,644,215
Millions of yen
2011
¥1,623,046
1,803
5,639
3,617,812
¥5,248,302
2010
¥1,582,808
2,367
6,961
3,474,589
¥5,066,727
Millions of
U.S. dollars
2011
$ 84,739
462,349
8,679
59,307
323,409
100,617
47,674
$1,086,774
Millions of
U.S. dollars
2011
$19,520
22
68
43,509
$63,119
Millions of
U.S. dollars
2011
$129,521
Average
interest rate*1
2011
0.45%
Due
Jan. 2011–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 ¥371,232 million ($4,465 million) and ¥378,729 million at March 31, 2011 and 2010, respectively.
The repayment schedule over the next 5 years on borrowed money at March 31, 2011 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
2011
¥8,948,213
503,992
347,268
284,237
268,479
Millions of U.S. dollars
2011
$107,615
6,061
4,176
3,418
3,229
86
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
13. Bonds
Bonds at March 31, 2011 and 2010 consisted of the following:
March 31
Issuer
SMBC:
Description
Short-term bonds, payable in Yen ..........................
Straight bonds, payable in Yen ..............................
Straight bonds, payable in Euroyen ........................
Straight bonds, payable in U.S. dollars ..................
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 .....................
Other consolidated subsidiaries:
Straight bonds, payable in Yen ..............................
Subordinated bonds, payable in Yen ......................
Short-term bonds, payable in Yen ..........................
Millions of yen*1
2011
2010
Millions of
U.S. dollars
2011
Interest rate*2
(%)
2011
Due
¥ 40,999
{40,999}
1,233,898
{197,793}
20,900
{5,000}
290,823
($3,497,576 thousand)
46,444
(A$539,931 thousand)
1,373,255
{49,999}
447,494
88,182
($1,060,522 thousand)
{1,995}
125,885
(€1,071,181 thousand)
¥ 164,678
{164,678}
1,032,907
{149,198}
20,900
$ 493
0.10
Apr. 2011
14,839
0.12–1.813 Apr. 2011–May 2025
251
0.00–4.66895 Mar. 2012–Feb. 2037
—
3,498
1.95–3.15
Jul. 2013–Jan. 2016
46,031
(A$539,895 thousand)
1,383,521
{149,798}
593,800
102,371
($1,100,179 thousand)
41,162
(€329,591 thousand)
559
5.76
Mar. 2013
16,515
1.04625–2.80 Jun. 2011–Dec. 2020
5,382
1,060
0.44–2.97 May 2016–Perpetual
5.625–8.00 Nov. 2011–Perpetual
1,514
4.00–4.375 Nov. 2020–Perpetual
113,411
{26,010}
125,798
1,142,198
{1,142,198}
¥5,049,293
89,738
{62,842}
112,239
{140}
1,047,500
{1,047,500}
¥4,634,851
1,364
0.30417–4.95 Apr. 2011–Jan. 2041
1,513
1.80–4.50 Jun. 2016–Perpetual
13,737
0.121–0.45 Apr. 2011–Aug. 2011
$60,725
*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, 2011 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
2011
¥1,464,015
375,313
405,297
270,100
609,627
Millions of U.S. dollars
2011
$17,607
4,514
4,874
3,248
7,332
SMFG 2011 87
SMFG
Notes to Consolidated Financial Statements
14. Other Liabilities
Other liabilities at March 31, 2011 and 2010 consisted of the following:
March 31
Accrued expenses .................................................................................................
Unearned income .................................................................................................
Income taxes payable ...........................................................................................
Financial derivatives*1 .........................................................................................
Lease liabilities*2 .................................................................................................
Other ..................................................................................................................
Millions of yen
2011
¥ 132,089
167,880
47,431
818,962
64,436
2,957,458
¥4,188,259
2010
¥ 144,338
174,931
56,708
818,105
58,742
1,940,320
¥3,193,146
Millions of
U.S. dollars
2011
$ 1,589
2,019
570
9,849
775
35,568
$50,370
*1 Referred to in Note 32
*2 Average interest rate on lease liabilities for the year ended March 31, 2011 was 4.60%. 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, 2011 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
2011
¥21,680
15,680
10,496
6,712
4,288
Millions of U.S. dollars
2011
$261
189
126
81
52
15. Land Revaluation Excess
SMBC and certain consolidated subsidiary revaluated their own land
for business activities in accordance with the “Act on Revaluation of
Land” (the “Act”) (Act No. 34, effective March 31, 1998) and “Act
for Partial Revision of Act on Revaluation of Land” (Act No. 19,
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 Act. 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
A consolidated subsidiary and an affiliate:
March 31, 1999 and March 31, 2002
Method of revaluation (stipulated in Article 3-3 of the Act)
SMBC:
Fair values were determined by applying appropriate
adjustments for land shape and timing of appraisal to the
values stipulated in Article 2-3, 2-4 or 2-5 of “Order for
Enforcement of Act on Revaluation of Land” (Cabinet Order
No. 119 of March 31, 1998).
A consolidated subsidiary and an affiliate:
Fair values were determined based on the values stipulated
in Articles 2-3 and 2-5 of “Order for Enforcement of Act on
Revaluation of Land” (Cabinet Order No. 119 of March 31,
1998).
88
SMFG 2011
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, 2011 and 2010 were as follows:
Number of shares
2011
2010
Authorized
March 31
Common stock ........................................................................................ 3,000,000,000 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 ........................................................................................................ 3,000,634,001 1,414,125,626
—
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
1,414,055,625
—
—
70,001
—
—
—
1,414,125,626
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
Companies 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 Companies 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 2011 89
SMFG
Notes to Consolidated Financial Statements
17. Fees and Commissions
Fees and commissions for the fiscal years ended March 31, 2011 and 2010 consisted of the following:
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 ...............................................................................................................
Millions of yen
2011
¥ 82,604
127,856
71,277
18,054
6,507
62,762
185,970
163,706
178,720
¥897,461
¥ 33,958
97,272
¥131,230
2010
¥ 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
18. Trading Income
Trading income for the fiscal years ended March 31, 2011 and 2010 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
2011
¥ 94,234
1,538
140,157
1,162
¥237,093
2010
¥ 63,424
2,254
127,833
576
¥194,087
19. Other Operating Income
Other operating income for the fiscal years ended March 31, 2011 and 2010 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
2011
¥ 209,496
105
693,492
11,336
125,231
¥1,039,662
2010
¥ 90,942
10
243,237
—
118,823
¥453,012
20. Other Operating Expenses
Other operating expenses for the fiscal years ended March 31, 2011 and 2010 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
2011
¥ 47,874
7,194
984
2,701
627,378
44,556
—
127,554
¥858,243
2010
¥ 30,122
17,401
331
1,197
201,932
1,591
17,011
132,186
¥401,773
90
SMFG 2011
Millions of
U.S. dollars
2011
$ 993
1,538
857
217
78
755
2,237
1,969
2,149
$10,793
$ 408
1,170
$ 1,578
Millions of
U.S. dollars
2011
$1,133
18
1,686
14
$2,851
Millions of
U.S. dollars
2011
$ 2,520
1
8,340
136
1,506
$12,503
Millions of
U.S. dollars
2011
$ 576
87
12
32
7,545
536
—
1,534
$10,322
Notes to Consolidated Financial Statements
SMFG
21. Other Income
Other income for the fiscal years ended March 31, 2011 and 2010 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 ...........................................................................
Gains on step acquisitions ...................................................................................
Other ..................................................................................................................
Millions of yen
2011
¥27,523
203
884
2,813
12,655
29,427
¥73,507
2010
¥ 57,231
130
17,179
968
—
35,128
¥110,638
22. Other Expenses
Other expenses for the fiscal years ended March 31, 2011 and 2010 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* ..................................................................
Provision for reserve for loss on interest repayment ..............................................
Influence amount as a result of the application of Accounting Standard for
Asset Retirement Obligations ............................................................................
Other ..................................................................................................................
*Losses on impairment of fixed assets consisted of the following:
Millions of yen
2011
¥156,571
4,551
114,921
352
6,834
13,319
5,914
5,411
14,530
3,552
20,921
¥346,881
2010
¥176,672
34,814
32,495
375
76,439
21,542
6,003
12,856
—
—
65,052
¥426,252
Millions of
U.S. dollars
2011
$331
2
11
34
152
354
$884
Millions of
U.S. dollars
2011
$1,883
55
1,382
4
82
160
71
65
175
43
252
$4,172
Year ended
March 31
Tokyo metropolitan area ........................................ Branch (—)
Area
Purpose of use
2011
Corporate assets (5 items)
Idle assets (39 items)
Other (4 items)
Kinki area ............................................................. Branches (4 branches)
Corporate assets (—)
Idle assets (42 items)
Other (—)
Other .................................................................... Corporate assets (—)
Idle assets (5 items)
Other (—)
Type
Land and buildings, etc.
Land and buildings, etc.
Land and buildings, etc.
Millions of yen
2011
2010
¥ — ¥ 13
8,295
1,511
335
164
35
1,436
256
21
281
503
254
1,070
461
69
—
3,542
—
—
13
—
Millions of
U.S. dollars
2011
$ —
3
13
6
1
—
43
—
—
0
—
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 their
branches, corporate assets, idle assets and others. 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 2011 91
SMFG
Notes to Consolidated Financial Statements
23. Other Comprehensive Income
Other comprehensive income for the fiscal year ended March 31, 2010 consisted of the following:
Year ended March 31
Other comprehensive income .................................................................................................................................................
Net unrealized gains on other securities .............................................................................................................................
Net deferred losses on hedges .............................................................................................................................................
Foreign currency translation adjustments ...........................................................................................................................
Share of other comprehensive income of associates accounted for by equity method ............................................................
24. Comprehensive Income
Comprehensive income for the fiscal year ended March 31, 2010 consisted of the following:
Year ended March 31
Comprehensive income ..........................................................................................................................................................
Comprehensive income attributable to shareholders of the parent company ........................................................................
Comprehensive income attributable to minority interests ..................................................................................................
25. Deferred Tax Assets and Liabilities
(1) Significant components of deferred tax assets and liabilities at March 31, 2011 and 2010 were as follows:
March 31
Deferred tax assets:
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 ...............................................................................
Millions of yen
2011
2010
¥ 273,415
316,010
454,603
161,174
33,236
77,284
6,848
10,857
249,420
1,582,851
(739,055)
843,795
(101,791)
(23,459)
(44,015)
(12,967)
(4,502)
(32,840)
(219,576)
¥ 624,219
¥ 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
Millions of yen
2010
¥424,477
465,868
(19,065)
(4,399)
(17,926)
Millions of yen
2010
¥803,705
707,804
95,900
Millions of
U.S. dollars
2011
$ 3,288
3,801
5,467
1,938
400
929
82
131
3,000
19,036
(8,888)
10,148
(1,224)
(282)
(530)
(156)
(54)
(395)
(2,641)
$ 7,507
(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, 2011 and 2010. A reconciliation of the
effective income tax rate reflected in the accompanying consolidated statements of income to the statutory tax rate for the years ended
March 31, 2011 and 2010 was as follows:
Statutory tax rate ...............................................................................................................................
Valuation allowance .......................................................................................................................
Dividends exempted for income tax purposes .................................................................................
Gains on step acquisitions ..............................................................................................................
Equity in losses of affiliates ............................................................................................................
Other .............................................................................................................................................
Effective income tax rate ....................................................................................................................
92
SMFG 2011
2011
40.69%
(11.53)
(1.17)
(0.62)
0.66
1.07
29.10%
2010
40.69%
(10.81)
—
—
1.91
0.26
32.05%
Notes to Consolidated Financial Statements
SMFG
26. Changes in Net Assets
(1) Type and number of shares issued and treasury shares are as follows:
Year ended March 31, 2011
Shares issued
March 31,
2010
Number of shares
Increase
Decrease
Common stock ................................................... 1,414,055,625
70,001
Preferred stock (1st series Type 6) ......................
Total .............................................................. 1,414,125,626
Treasury shares
—
—
—
—
—
—
March 31,
2011
1,414,055,625
70,001
1,414,125,626
Common stock ...................................................
Total ..............................................................
17,070,100
17,070,100
15,516,991*
15,516,991
5,177*
5,177
32,581,914
32,581,914
* Increase in number of treasury common shares issued:
(cid:129) 37,591 shares due to purchase of fractional shares
(cid:129) 15,479,400 shares due to acquisition of SMFG shares by SMFG Card & Credit, Inc., a wholly-owned subsidiary of SMFG, in connection with making Cedyna Financial
Corporation a wholly-owned subsidiary of SMFG Card & Credit through the share exchange
Decrease in number of treasury common shares issued:
(cid:129) 5,177 shares due to sale of fractional shares
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 ..............................................................
*1 Increase in number of common shares issued:
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
(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 2011 93
SMFG
Notes to Consolidated Financial Statements
(2) Information on stock acquisition rights is as follows:
Year ended March 31, 2011
SMFG ..............................
Consolidated subsidiary ...
Total ................................
Year ended March 31, 2010
SMFG ..............................
Consolidated subsidiary ...
Total ................................
Detail of stock
acquisition rights
Stock options
—
Type of
shares
—
—
March 31,
2010
—
—
Number of shares
Increase
—
—
Decrease
—
—
March 31,
2011
—
—
Detail of stock
acquisition rights
Stock options
—
Type of
shares
—
—
March 31,
2009
—
—
Number of shares
Increase
—
—
Decrease
—
—
March 31,
2010
—
—
Millions of
U.S. dollars
March 31,
2011
$2
1
$3
Millions of yen
March 31,
2011
¥170
91
¥262
Millions of yen
March 31,
2010
¥—
81
¥81
(3) Information on dividends is as follows:
(a) 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
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
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
Effective date
Record 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
(b) Dividends paid in the fiscal year ended March 31, 2011
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥77,567
3,097
Millions of yen, except per share amount
Cash dividends
per share
¥ 55
44,250
Record date
March 31, 2010
March 31, 2010
Effective date
June 29, 2010
June 29, 2010
Date of resolution: Ordinary general meeting of shareholders held on June 29, 2010
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥70,515
3,097
Date of resolution: Meeting of the Board of Directors held on November 12, 2010
94
SMFG 2011
Millions of yen, except per share amount
Cash dividends
per share
¥ 50
44,250
Record date
Effective date
September 30, 2010 December 3, 2010
September 30, 2010 December 3, 2010
Notes to Consolidated Financial Statements
SMFG
(c) Dividends to be paid in the fiscal year ending March 31, 2012
Type of shares
Common stock ......................................................
Preferred stock (1st series Type 6) ..........................
Aggregate amount
of dividends
¥70,514
3,097
Date of resolution: Ordinary general meeting of shareholders held on June 29, 2011
27. Cash Flows
Fiscal year ended March 31, 2011
Millions of yen, except per share amount
Source
of dividends
Retained earnings
Retained earnings
Cash dividends
per share
¥ 50
44,250
Record date
Effective date
March 31, 2011 June 29, 2011
March 31, 2011 June 29, 2011
Significant non-money transactions
Cedyna Financial Corporation and 8 other companies were newly consolidated through a third-party allotment of new shares issued by the
company. Their major assets and liabilities are as follows:
Assets ...................................................................................................................................
Loans and bills discounted ................................................................................................
Other assets ......................................................................................................................
Customers’ liabilities for acceptances and guarantees .........................................................
Liabilities .............................................................................................................................
Borrowed money ...............................................................................................................
Acceptances and guarantees ..............................................................................................
Millions of yen
¥2,631,525
438,497
803,639
1,124,290
¥2,520,313
989,790
1,124,290
Millions of U.S. dollars
$31,648
5,274
9,665
13,521
$30,310
11,904
13,521
Fiscal year ended March 31, 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)
(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
Liabilities ..................................................................................................................................................................
Deposits ................................................................................................................................................................
¥1,078,769
1,033,256
(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
Liabilities ..................................................................................................................................................................
Borrowed money ....................................................................................................................................................
Acceptances and guarantees ...................................................................................................................................
¥714,850
343,002
258,620
SMFG 2011 95
SMFG
Notes to Consolidated Financial Statements
28. Employee Retirement Benefits
(1) Outline of employee retirement benefits
Consolidated subsidiaries in Japan have contributory and non-contributory funded or unfunded 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 pension 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) ...........................
2011
¥(976,271)
883,255
(93,016)
266,775
(10,365)
163,393
207,997
¥ (44,604)
Note: Some consolidated subsidiaries adopt the simple method in calculating the projected benefit obligation.
2010
¥(938,161)
891,366
(46,794)
226,268
(15,234)
164,240
205,931
¥ (41,691)
(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 ..........................................................................................................
2011
¥23,505
23,621
(27,624)
45,902
(6,229)
4,812
¥63,988
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.”
2010
¥21,052
22,459
(23,883)
60,456
(11,167)
4,229
¥73,146
(4) Assumptions
Millions of
U.S. dollars
2011
$(11,741)
10,622
(1,119)
3,208
(124)
1,965
2,501
$ (536)
Millions of
U.S. dollars
2011
$283
284
(332)
552
(75)
58
$770
The principal assumptions used in determining benefit obligation and pension expenses at or for the fiscal years ended March 31, 2011
and 2010 were as follows:
Year ended March 31
Discount rate .............................................................. Domestic consolidated subsidiaries
Overseas consolidated subsidiaries
Expected rate of return on plan assets ......................... Domestic consolidated subsidiaries
Overseas consolidated subsidiaries
1.4% to 2.5%
5.4% to 9.0%
0% to 4.0%
5.5% to 5.6%
2010
1.4% to 2.5%
0% to 4.0%
2011
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, 2011 and 2010.
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, 2011 and 2010.
29. 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.
96
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(b) Lessor side
(i) Breakdown of lease investment assets
March 31
Lease receivables ...................................................................................
Residual value ......................................................................................
Unearned interest income .....................................................................
Total .....................................................................................................
2011
¥1,241,757
95,359
(206,317)
¥1,130,799
2010
¥1,343,868
103,095
(233,640)
¥1,213,323
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 .....................................................................................................
2011
¥230,050
160,632
111,555
53,371
40,555
84,682
¥680,846
2010
¥242,087
173,269
109,219
75,511
32,981
73,660
¥706,728
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 .....................................................................................................
2011
¥ 389,029
288,064
210,604
129,630
77,517
146,911
¥1,241,757
2010
¥ 407,746
306,937
220,648
152,399
79,417
176,720
¥1,343,868
Millions of
U.S. dollars
2011
$14,934
1,147
(2,481)
$13,600
Millions of
U.S. dollars
2011
$2,767
1,932
1,341
642
488
1,018
$8,188
Millions of
U.S. dollars
2011
$ 4,679
3,464
2,533
1,559
932
1,767
$14,934
(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, 2011 was ¥10,115 million ($122 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, 2011 and 2010 were as follows:
March 31
Due within 1 year .................................................................................
Due after 1 year ....................................................................................
Total .....................................................................................................
2011
¥ 34,804
267,049
¥301,854
2010
¥17,153
69,742
¥86,895
Millions of yen
Millions of
U.S. dollars
2011
$ 418
3,212
$3,630
(b) Lessor side
Future minimum lease payments on operating leases which were not cancelable at March 31, 2011 and 2010 were as follows:
March 31
Due within 1 year .................................................................................
Due after 1 year ....................................................................................
Total .....................................................................................................
2011
¥ 36,995
156,549
¥193,545
2010
¥ 23,585
122,599
¥146,185
Millions of yen
Millions of
U.S. dollars
2011
$ 445
1,883
$2,328
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.
SMFG 2011 97
SMFG
Notes to Consolidated Financial Statements
30. Financial Instruments
(1) Status of financial instruments
(a) Policies on financial instruments
SMFG conducts banking and other financial services such
as securities, leasing, credit card, invest banking, consumer
finance, and venture capital. Its banking business includes
deposit taking, lending, securities trading, securities
investment, domestic and foreign exchange transactions,
brokerage, etc. of financial futures transactions, etc., cor-
porate bond trust services, trust business, sale of securities
investment trusts, sale of insurance products, and securities
intermediary services.
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.
98
SMFG 2011
(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 Note 2. (17) 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.
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 credit 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, operat-
ing independently from the business units, audits asset
quality, credit 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
Notes to Consolidated Financial Statements
SMFG
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 one 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
SMFG 2011 99
SMFG
Notes to Consolidated Financial Statements
Department, which is independent from the business
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 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 and, based on 4 years of historical
observation, calculates the maximum loss that may
occur as a result of market fluctuations in 1 day with a
probability of 1%.
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).
— Quantitative information on market risks
As of March 31, 2011, total VaR of SMBC and other
major consolidated subsidiaries was ¥48.6 billion in
the banking book (market operations for generating
profit through management of interest rates, terms,
and other aspects of assets (loans, bonds, etc.) and
liabilities (deposits, etc.)), ¥6.8 billion in the trading
book (market operations for generating profit by taking
advantage of short-term fluctuations in market values
and differences in value among markets) and ¥114.1
billion in the holding of shares (listed shares) for the
purpose of strategic investment.
However, it should be noted that these figures are
statistical figures that change according to changes in
the assumptions and the calculation methods, and may
not cover the risk of future market conditions fluctuat-
ing drastically compared to market fluctuations of the
past.
— 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.
100
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(2) Fair value of financial instruments
(a) Consolidated balance sheet amounts, fair values and net unrealized gains or losses of financial instruments as of March 31, 2011 and
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
Hedge accounting not applied .....................................................
Hedge accounting applied ...........................................................
Total ................................................................................................
Consolidated balance
sheet amount
¥ 9,227,272
850,997
131,104
4,740,410
1,110,692
3,108,841
24,011
4,182,273
34,871,036
61,348,355
(812,542)
60,535,813
1,072,850
1,719,905
¥121,575,209
¥ 81,998,940
8,366,323
2,629,407
726,365
5,713,233
337,120
1,623,046
10,769,668
256,160
1,183,198
3,866,095
216,171
¥117,685,729
Millions of yen
2011
Fair value
¥ 9,233,629
851,482
131,145
4,740,410
1,117,128
3,108,841
24,011
4,242,131
34,871,036
61,586,792
1,076,542
1,816,390
¥122,799,543
¥ 82,015,066
8,365,839
2,629,406
726,365
5,713,233
337,120
1,623,046
10,780,649
256,160
1,183,198
3,952,658
216,171
¥117,798,915
¥ 16,149
357,952
¥ 374,101
¥ 16,149
357,952
¥ 374,101
Net unrealized gains
(losses)
¥ 6,357
484
40
—
6,435
—
—
59,857
—
1,050,978
3,692
96,485
¥1,224,333
¥ 16,126
(484)
(0)
—
—
—
—
10,981
—
—
86,563
—
¥ 113,186
¥ —
—
¥ —
SMFG 2011 101
SMFG
Notes to Consolidated Financial Statements
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 2011
Notes to Consolidated Financial Statements
SMFG
Millions of U.S. dollars
2011
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
$ 110,971
10,235
1,577
57,010
13,358
37,388
289
50,298
419,375
737,803
(9,772)
728,031
12,903
20,684
$1,462,119
$ 986,157
100,617
31,622
8,736
68,710
4,054
19,520
129,521
3,081
14,230
46,495
2,600
$1,415,343
$ 194
4,305
$ 4,499
Fair value
$ 111,048
10,240
1,577
57,010
13,435
37,388
289
51,018
419,375
740,671
12,947
21,845
$1,476,843
$ 986,351
100,611
31,622
8,736
68,710
4,054
19,520
129,653
3,081
14,230
47,536
2,600
$1,416,704
$ 194
4,305
$ 4,499
Net unrealized gains
(losses)
$ 77
5
0
—
77
—
—
720
—
12,640
44
1,161
$14,724
$ 194
(6)
(0)
—
—
—
—
132
—
—
1,041
—
$ 1,361
$ —
—
$ —
*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 and Deposits with 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 and Deposits with 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 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 interest rate and a credit
risk premium.
Regarding claims on bankrupt borrowers, effectively
SMFG 2011 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 Issues
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 using the same method applied
to the estimation of a loan loss. 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.
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 fair 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.
104
SMFG 2011
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
2011
2010
Millions of U.S.
dollars
2011
Monetary claims bought without market prices*1 ........................................
¥ 7,606
¥ 7,889
$ 92
Securities:
Unlisted stocks, etc.*2, 4 ..............................................................................
Investments in partnership, etc.*3, 4 .............................................................
Total ................................................................................................................
*1 Beneficiary claims on loan trusts 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.
*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
291,922
354,422
¥654,234
278,869
340,113
¥626,589
3,354
4,090
$7,536
in their balance sheets and statements of income.
*4 Unlisted stocks and investments in partnership totaling ¥15,076 million ($181 million) and ¥26,770 million were written-down in the fiscal years ended March 31, 2011 and
2010, respectively.
(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, 2 .........................................
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
¥ 7,945,095
842,638
131,104
4,740,410
751,345
13,702,861
165,782
155,000
5,032
4,750
1,000
13,537,079
11,517,890
18,033
642,634
1,358,521
13,013,773
1,074,722
540,645
¥42,742,597
Millions of yen
2011
After 1 year
through 5 years
¥ 2,938
8,998
—
—
98,873
16,893,389
3,708,714
3,315,000
166,107
226,607
1,000
13,184,674
7,620,372
278,781
1,835,259
3,450,261
21,474,032
1,685
938,489
¥39,418,406
After 5 years
through 10 years
¥ —
—
—
—
58,080
5,309,448
304,400
290,000
100
8,800
5,500
5,005,048
2,944,300
69,793
405,417
1,585,536
7,911,639
—
106,288
¥13,385,457
After 10 years
¥ —
—
—
—
193,178
547,556
—
—
—
—
—
547,556
—
44
58,833
488,678
11,235,643
—
39,086
¥12,015,464
SMFG 2011 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 .............................................................................
March 31
Deposits with banks .....................................................
Call loans and bills bought ...........................................
Receivables under resale agreements .............................
Receivables under securities borrowing transactions .....
Monetary claims bought*1, 2 .........................................
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
Within 1 year
$ 95,551
10,134
1,577
57,010
9,036
164,797
1,994
1,864
61
57
12
162,803
138,519
217
7,729
16,338
156,510
12,925
6,502
$514,042
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
Millions of U.S. dollars
2011
After 1 year
through 5 years
$ 35
108
—
—
1,189
203,168
44,603
39,868
1,998
2,725
12
158,565
91,646
3,353
22,072
41,494
258,257
20
11,287
$474,064
After 5 years
through 10 years
$ —
—
—
—
699
63,854
3,661
3,488
1
106
66
60,193
35,410
839
4,876
19,068
95,149
—
1,278
$160,980
After 10 years
¥ —
—
—
—
189,786
717,074
—
—
—
—
—
717,074
364,500
46
60,592
291,934
10,884,978
—
40,375
¥11,832,214
After 10 years
$ —
—
—
—
2,323
6,585
—
—
—
—
—
6,585
—
0
708
5,877
135,125
—
470
$144,503
*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 ..........................................................................................
Millions of yen
2011
¥ 2,043
27,402
998,936
616
8,685
2010
¥ 3,196
16,989
1,213,627
3,286
10,048
Millions of
U.S. dollars
2011
$ 25
330
12,014
7
104
*2 Does not include “Monetary claims bought” and “Loans and bills discounted” without tenure totaling ¥4,047million ($49 million) and ¥6,717,074 million ($80,783 million) at
March 31, 2011, respectively. Does not include “Loans and bills discounted” without tenure totaling ¥6,829,836 million at March 31, 2010.
106
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
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
¥ 76,809,748
8,197,688
2,629,407
726,365
5,713,233
337,120
8,948,213
256,160
1,183,210
280,805
216,171
¥105,298,124
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
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
$ 923,749
98,589
31,622
8,736
68,710
4,054
107,615
3,081
14,230
3,377
2,600
$1,266,363
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
2011
After 1 year
through 5 years
¥4,611,848
168,634
—
—
—
—
1,403,977
—
—
1,660,338
—
¥7,844,799
After 5 years
through 10 years
¥ 348,749
—
—
—
—
—
259,433
—
—
1,633,465
—
¥2,241,648
Millions of yen
2010
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
Millions of U.S. dollars
2011
After 1 year
through 5 years
$55,464
2,028
—
—
—
—
16,885
—
—
19,968
—
$94,345
After 5 years
through 10 years
$ 4,194
—
—
—
—
—
3,120
—
—
19,645
—
$26,959
After 10 years
¥227,549
—
—
—
—
—
158,043
—
—
293,153
—
¥678,746
After 10 years
¥251,172
—
—
—
—
—
148,392
—
—
408,790
—
¥808,356
After 10 years
$2,737
—
—
—
—
—
1,901
—
—
3,525
—
$8,163
SMFG 2011 107
SMFG
Notes to Consolidated Financial Statements
31. 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.
(a) Securities classified as trading purposes
March 31
Valuation gains included in the earnings for the fiscal year ........................
(b) Bonds classified as held-to-maturity
Millions of yen
2011
¥(6,863)
2010
¥(2,583)
Millions of U.S.
dollars
2011
$(83)
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 ...................................................................................................
¥3,384,266
159,618
237,233
4,193
¥3,785,310
¥ 379,873
11,899
1,887
10,301
¥ 403,962
¥4,189,272
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
2011
Fair value
¥3,437,088
162,339
243,070
4,201
¥3,846,700
¥ 378,410
11,860
1,878
10,282
¥ 402,430
¥4,249,130
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)
¥52,821
2,721
5,837
8
¥61,389
¥ (1,463)
(39)
(9)
(19)
¥ (1,531)
¥59,857
Net unrealized
gains (losses)
¥49,221
3,079
7,039
4
¥59,344
¥ (626)
(2)
(1)
(104)
¥ (734)
¥58,610
108
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
March 31
Bonds with unrealized gains:
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 ...................................................................................................
(c) Other securities
Consolidated balance
sheet amount
$40,701
1,920
2,853
50
$45,524
$ 4,568
143
23
124
$ 4,858
$50,382
Millions of U.S. dollars
2011
Fair value
$41,336
1,952
2,923
51
$46,262
$ 4,550
143
23
124
$ 4,840
$51,102
Millions of yen
2011
Net unrealized
gains (losses)
$635
32
70
1
$738
$ (18)
(0)
(0)
(0)
$ (18)
$720
Consolidated balance
sheet amount
Acquisition cost
Net unrealized
gains (losses)
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 ...................................................................................................
¥ 1,341,992
12,365,024
9,468,315
199,005
2,697,703
3,125,508
¥16,832,525
¥ 869,937
13,194,988
12,701,891
173,886
319,210
4,448,401
¥18,513,327
¥35,345,852
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
¥ 854,218
12,256,383
9,423,084
197,609
2,635,688
3,001,059
¥16,111,661
¥ 1,045,754
13,226,858
12,729,163
175,423
322,272
4,590,679
¥18,863,292
¥34,974,953
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
¥ 487,773
108,640
45,230
1,395
62,014
124,449
¥ 720,864
¥(175,817)
(31,870)
(27,271)
(1,536)
(3,062)
(142,277)
¥(349,965)
¥ 370,899
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
SMFG 2011 109
SMFG
Notes to Consolidated Financial Statements
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
2011
Consolidated balance
sheet amount
Acquisition cost
Net unrealized
gains (losses)
$ 16,139
148,708
113,870
2,394
32,444
37,589
$202,436
$ 10,462
158,689
152,759
2,091
3,839
53,499
$222,650
$425,086
$ 10,273
147,401
113,326
2,377
31,698
36,092
$193,766
$ 12,577
159,072
153,087
2,109
3,876
55,210
$226,859
$420,625
$ 5,866
1,307
544
17
746
1,497
$ 8,670
$(2,115)
(383)
(328)
(18)
(37)
(1,711)
$(4,209)
$ 4,461
Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥1,153 million ($14 million) for the fiscal year ended March 31, 2011 and ¥105
million for the fiscal year ended March 31, 2010 that are recognized in the fiscal year’s earnings by applying fair value hedge accounting.
2. Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:
March 31
Stocks .........................................................................................................................
Other .........................................................................................................................
Total ...........................................................................................................................
2011
¥274,329
352,260
¥626,589
2010
¥285,123
369,111
¥654,234
Millions of yen
Millions of U.S. dollars
2011
$3,299
4,237
$7,536
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 years ended March 31, 2011 and 2010
There are no corresponding transactions.
(e) Other securities sold during the years ended March 31, 2011 and 2010
Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................
Sales amount
¥ 47,019
18,058,502
17,690,062
137,365
231,074
18,652,000
¥36,757,522
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
Millions of yen
2011
Gains on sales
¥ 11,371
71,653
69,180
907
1,566
152,588
¥235,613
Millions of yen
2010
Gains on sales
¥ 50,898
35,397
32,937
634
1,825
61,872
¥148,167
Losses on sales
¥ (3,203)
(32,572)
(31,297)
(633)
(641)
(16,204)
¥(51,980)
Losses on sales
¥ (3,556)
(6,154)
(5,915)
(103)
(136)
(24,367)
¥(34,079)
110
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
Millions of U.S. dollars
2011
Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................
Sales amount
$ 566
217,180
212,749
1,652
2,779
224,317
$442,063
Gains on sales
$ 137
862
832
11
19
1,835
$2,834
Losses on sales
$ (38)
(392)
(376)
(8)
(8)
(195)
$(625)
(f) Change of classification of securities
There are no corresponding transactions.
(g) Write-down of securities
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
balance sheet amount and the amount of write-down is accounted for as valuation loss for the fiscal year. Valuation losses for the
fiscal years ended March 31, 2011 and 2010 were ¥109,921 million ($1,322 million) and ¥19,519 million, respectively. 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.
(2) Money held in trust
(a) Money held in trust classified as trading purposes
March 31
Consolidated balance sheet amount ............................................................
Valuation gains included in the earnings for the fiscal year ........................
2011
¥1,441
1
2010
¥1,483
13
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
Consolidated balance sheet amount ............................................................
Acquisition cost .........................................................................................
Net unrealized gains (losses) ......................................................................
Unrealized gains ....................................................................................
Unrealized losses ....................................................................................
2011
¥22,569
22,527
42
42
—
2010
¥17,250
17,188
62
157
(95)
Millions of yen
Notes: 1. Consolidated balance sheet amount is calculated using market prices at the fiscal year-end.
2. “Unrealized gains” and “Unrealized losses” are breakdowns of “Net unrealized gains (losses)” respectively.
Millions of
U.S. dollars
2011
$17
0
Millions of
U.S. dollars
2011
$271
271
0
0
—
SMFG 2011 111
SMFG
Notes to Consolidated Financial Statements
(3) Net unrealized gains on other securities and other money held in trust
Millions of yen
March 31
Net unrealized gains ..................................................................................
Other securities .....................................................................................
Other money held in trust .....................................................................
(–) Deferred tax liabilities ..........................................................................
Net unrealized gains on other securities (before adjustment) ......................
(–) Minority interests .................................................................................
(+) SMFG’s interest in net unrealized gains on valuation of other
securities held by the equity method affiliates ....................................
Net unrealized gains on other securities .....................................................
2011
¥369,852
369,810
42
102,593
267,259
7,125
12,172
¥272,306
2010
¥586,154
586,091
62
168,758
417,396
7,991
3,304
¥412,708
Millions of
U.S. dollars
2011
$4,448
4,448
0
1,234
3,214
85
146
$3,275
Notes: 1. Net unrealized gains on other securities included gains of ¥1,153 million ($14 million) for the fiscal year ended March 31, 2011 and ¥105 million for the fiscal year
ended March 31, 2010 that are recognized in the fiscal year’s earnings by applying fair value hedge accounting.
2. Net unrealized gains included foreign currency translation adjustments on non-marketable securities denominated in foreign currencies.
32. Derivative Transactions
(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.
(a) Interest rate derivatives
March 31
Listed
Interest rate futures:
Sold ....................................................................................................
Bought ...............................................................................................
Interest rate options:
Sold ....................................................................................................
Bought ...............................................................................................
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 ......................................
Interest rate swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Caps:
Sold ....................................................................................................
Bought ...............................................................................................
Floors:
Sold ...................................................................................................
Bought ...............................................................................................
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥ 36,061,333
33,791,946
¥ 2,080,554
2,088,859
¥ (13,057)
12,150
¥ (13,057)
12,150
16,628
420,747
—
—
(1)
(12)
(1)
(12)
—
19,504,719
356,885,048
158,333,988
170,756,972
27,653,869
3,391,868
2,924,852
20,895,278
9,178,858
882,481
8,551,945
578,528
1,678,256
/
—
314,376
267,296,032
120,027,611
129,214,787
17,913,499
2,347,307
2,076,786
5,852,048
2,985,925
278,959
8,419,741
333,204
937,592
/
—
(704)
95,050
3,822,736
(3,725,094)
(1,507)
(75,573)
72,362
(10,084)
7,603
(10,006)
7,460
—
(704)
95,050
3,822,736
(3,725,094)
(1,507)
(75,573)
72,362
(10,084)
7,603
(10,006)
7,460
(14,089)
42,041
¥ 113,136
(14,089)
42,041
¥ 113,136
112
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
Millions of yen
2010
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
March 31
Listed
Interest rate futures:
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:
Sold ....................................................................................................
Bought ...............................................................................................
Interest rate options:
Sold ....................................................................................................
Bought ...............................................................................................
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 ......................................
Interest rate swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Caps:
Sold ....................................................................................................
Bought ...............................................................................................
Floors:
Sold ...................................................................................................
Bought ...............................................................................................
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$ 433,690
406,397
$ 25,022
25,122
$ (157)
146
$ (157)
146
200
5,060
—
—
(0)
(0)
(0)
(0)
—
234,573
4,292,063
1,904,197
2,053,602
332,578
40,792
35,176
251,296
110,389
10,613
102,850
6,958
20,183
/
—
3,781
3,214,625
1,443,507
1,553,996
215,436
28,230
24,976
70,379
35,910
3,355
101,260
4,007
11,276
/
—
(9)
1,143
45,974
(44,800)
(18)
(909)
870
(121)
91
(120)
90
—
(9)
1,143
45,974
(44,800)
(18)
(909)
870
(121)
91
(120)
90
(169)
506
$ 1,361
(169)
506
$ 1,361
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
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.
SMFG 2011 113
SMFG
Notes to Consolidated Financial Statements
(b) Currency derivatives
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥20,597,671
¥12,937,360
¥(392,609)
¥ (28,299)
711,681
948,904
50,708,557
3,054,155
2,935,419
/
672,001
695,468
19,400,525
1,996,329
1,894,947
/
(23,439)
38,789
114,272
(300,544)
420,803
¥(142,728)
(23,439)
38,789
114,272
(300,544)
420,803
¥221,581
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)
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
Sold ....................................................................................................
Bought ...............................................................................................
3,855,995
3,850,518
Other:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
51
42
/
—
—
/
1
0
¥ 8,620
March 31
Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:
Sold ....................................................................................................
Bought ...............................................................................................
Forward foreign exchange .......................................................................
Currency options:
Sold ....................................................................................................
Bought ...............................................................................................
Total ......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$247,717
$155,591
$(4,722)
$ (340)
8,559
11,412
609,844
36,731
35,303
/
8,082
8,364
233,320
24,009
22,790
/
(282)
466
1,374
(3,614)
5,061
$(1,717)
(282)
466
1,374
(3,614)
5,061
$2,665
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
2. Fair value is calculated using discounted present value and option pricing models.
114
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(c) Equity derivatives
March 31
Listed
Equity price index futures:
Sold ....................................................................................................
Bought ...............................................................................................
Equity price index options:
Sold ....................................................................................................
Bought ...............................................................................................
Over-the-counter
Equity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
March 31
Listed
Equity price index futures:
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥129,122
46,212
¥ —
—
6,200
4,456
201,781
203,957
/
—
—
200,642
200,642
/
¥ 1,689
283
(203)
116
(41,359)
41,430
¥ 1,956
¥ 1,689
283
(203)
116
(41,359)
41,430
¥ 1,956
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)
March 31
Listed
Equity price index futures:
Sold ....................................................................................................
Bought ...............................................................................................
Equity price index options:
Sold ....................................................................................................
Bought ...............................................................................................
Over-the-counter
Equity options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$1,553
556
75
54
2,427
2,453
/
$ —
—
—
—
2,413
2,413
/
$ 20
3
(2)
1
(497)
498
$ 23
$ 20
3
(2)
1
(497)
498
$ 23
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
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.
SMFG 2011 115
SMFG
Notes to Consolidated Financial Statements
(d) Bond derivatives
March 31
Listed
Bond futures:
Sold ....................................................................................................
Bought ...............................................................................................
Bond futures options:
Sold ....................................................................................................
Bought ...............................................................................................
Over-the-counter
Forward bond agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Bond options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
March 31
Listed
Bond futures:
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥1,227,129
1,141,914
¥ —
—
¥(1,601)
388
¥(1,601)
388
29,100
58,800
2,994
33,313
24,843
24,843
/
—
—
—
32,096
—
—
/
27
(31)
48
739
27
(31)
48
739
(162)
129
¥ (461)
(162)
129
¥ (461)
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:
Sold ....................................................................................................
Bought ...............................................................................................
Bond futures options:
Sold ....................................................................................................
Bought ...............................................................................................
Over-the-counter
Forward bond agreements:
Sold ....................................................................................................
Bought ...............................................................................................
Bond options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$14,758
13,733
350
707
36
401
299
299
/
$ —
—
—
—
—
386
—
—
/
$(19)
5
0
(0)
0
9
(2)
1
$ (6)
$(19)
5
0
(0)
0
9
(2)
1
$ (6)
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
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.
116
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(e) Commodity derivatives
March 31
Listed
Commodity futures:
Sold ....................................................................................................
Bought ...............................................................................................
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 .......................................................................................................
March 31
Listed
Commodity futures:
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥ 4,566
5,573
¥ —
—
¥ 19
(24)
¥ 19
(24)
197,189
143,052
25
18,952
7,742
/
167,741
115,341
—
14,871
6,067
/
(52,883)
94,816
0
(43)
308
¥42,194
(52,883)
94,816
0
(43)
308
¥42,194
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:
Sold ....................................................................................................
Bought ...............................................................................................
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 .......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$ 55
67
$ —
—
$ 0
(0)
$ 0
(0)
2,371
1,720
0
228
93
/
2,017
1,387
—
179
73
/
(636)
1,140
0
(1)
4
$ 507
(636)
1,140
0
(1)
4
$ 507
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
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.
SMFG 2011 117
SMFG
Notes to Consolidated Financial Statements
(f) Credit derivative transactions
March 31
Over-the-counter
Credit default options:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
March 31
Over-the-counter
Credit default options:
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
¥1,004,667
1,107,470
/
¥695,622
602,404
/
¥(12,098)
14,148
¥ 2,049
¥(12,098)
14,148
¥ 2,049
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:
Sold ....................................................................................................
Bought ...............................................................................................
Total .......................................................................................................
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
$12,083
13,319
/
$8,366
7,245
/
$(145)
170
$ 25
$(145)
170
$ 25
Notes: 1. The above transactions are valued at fair value and the valuation gains (losses) are accounted for in the consolidated statements of income.
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.
(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
deposit
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 .......
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
118
SMFG 2011
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
¥ 1,080,929
9,861,263
36,637,577
24,170,619
12,437,041
29,916
¥ 1,080,929
—
30,969,355
19,172,729
11,767,209
29,416
¥ (421)
(223)
20,313
314,269
(294,567)
611
460,983
—
460,899
—
1,085
—
2,562
2,562
—
7,850
3,832
3,832
190,477
13,500
152,777
24,200
/
2,562
2,562
—
7,850
2,354
2,354
162,237
4,000
136,237
22,000
/
410
(410)
—
0
(108)
(108)
(Note 3)
¥ 20,644
Notes to Consolidated Financial Statements
SMFG
Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposit
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
Interest rate swaps: .............................................. Loans and bills discounted;
Receivable floating rate/payable fixed rate .......
other securities (bonds)
Special treatment for
interest rate swaps
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
deposit
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 .......
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
2011
Contract amount
Total
Over 1 year
Fair value
$ 13,000
118,596
440,620
290,687
149,573
360
$ 13,000
—
372,452
230,580
141,518
354
$ (5)
(3)
244
3,780
(3,543)
7
5,544
—
31
31
—
94
46
46
2,291
162
1,838
291
/
5,543
—
31
31
—
94
28
28
1,951
48
1,638
265
/
13
—
5
(5)
—
0
(1)
(1)
(Note 3)
$ 248
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).
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 “30. Financial Instruments.”
SMFG 2011 119
SMFG
Notes to Consolidated Financial Statements
(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
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
2011
Contract amount
Total
¥2,776,330
9,615
Over 1 year
¥1,882,407
—
Fair value
¥338,351
(172)
Currency swaps. ................................................... Deposits
12,038
11,139
(248)
Currency swaps. ................................................... Deposits; borrowed money
Forward foreign exchange ....................................
Total ....................................................................
11,739
103,553
/
11,405
3,179
/
(Note 3)
¥337,930
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
2011
Contract amount
Total
$33,389
116
Over 1 year
$22,639
—
Fair value
$4,069
(2)
145
141
1,245
/
134
137
38
/
(3)
(Note 3)
$4,064
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. Forward foreign 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 “30. Financial Instruments.”
120
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(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
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 ....................................................................
Millions of yen
2011
Contract amount
Total
Over 1 year
Fair value
¥ —
21,521
/
¥ —
11,078
/
¥ —
(623)
¥(623)
Millions of yen
2010
Contract amount
Type of derivative
Equity price index swaps:
Principal items hedged
Other securities (equity)
Total
Over 1 year
Fair value
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 ....................................................................
¥ —
9,534
/
¥ —
9,534
/
¥ —
(276)
¥(276)
Millions of U.S. dollars
2011
Contract amount
Total
Over 1 year
Fair value
$ —
259
/
$ —
133
/
$—
(7)
$ (7)
Note: Fair value is calculated using discounted present value.
SMFG 2011 121
SMFG
Notes to Consolidated Financial Statements
33. Stock Options
1. Share-based compensation expenses which were accounted for as general and administrative expenses in the fiscal years ended March 31,
2011 and 2010 are as follows:
Year ended March 31
Share-based compensation expenses .................................................................
2. Outline of stock options and changes is as follows:
(1) SMFG
Millions of yen
2011
¥180
2010
¥15
Millions of
U.S. dollars
2011
$2
(a) Outline of stock options
Date of resolution
Title and number of grantees ...... Directors and employees of SMFG and SMBC: 677
June 27, 2002
Number of stock options* ..........
Grant date ..................................
Condition for vesting ..................
Common shares: 162,000
August 30, 2002
N.A.
Requisite service period ..............
N.A.
Exercise period ...........................
* “Number of stock options” is reported in consideration of the 100-for-1 stock split implemented on January 4, 2009.
June 28, 2004 to June 27, 2012
July 28, 2010
Directors of SMFG: 8
Corporate auditors of SMFG: 3
Executive officers of SMFG: 2
Directors, corporate auditors, executive officers of SMBC: 69
Common shares: 102,600
August 13, 2010
A stock acquisition right holder may exercise
stock acquisition rights from the day when
they are relieved of their positions either as a
director, corporate auditor or executive officer
of SMFG and SMBC.
June 29, 2010 to the closing of the ordinary
general meeting of shareholders of SMFG for the
fiscal year ended March 31, 2011.
August 13, 2010 to August 12, 2040
(b) Stock options granted and changes
Number of stock options
Date of resolution
Before vested
June 27, 2002
July 28, 2010
Previous fiscal year-end ..............................................................................................
Granted .....................................................................................................................
Forfeited ....................................................................................................................
Vested........................................................................................................................
Outstanding ..............................................................................................................
After vested
Previous fiscal year-end* ............................................................................................
Vested........................................................................................................................
Exercised ...................................................................................................................
Forfeited ....................................................................................................................
Exercisable .................................................................................................................
—
—
—
—
—
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.
—
102,600
—
—
102,600
—
—
—
—
—
Price information (Yen)
Date of resolution
Exercise price .................................................................................................................
Average exercise price ....................................................................................................
Fair value at the grant date ............................................................................................
June 27, 2002
July 28, 2010
¥6,649
—
—
¥ 1
—
2,215
122
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(c) Valuation technique used for valuating fair value of stock options
Stock options granted in the fiscal year ended March 31, 2011 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 Expected volatility is calculated based on the closing price of common shares of SMFG on each trading day in the 4 years between August 14, 2006 and August 13, 2010.
*2 The average expected life could not be estimated rationally due to insufficient amount of data.
July 28, 2010
51.44%
4 years
¥100 per share
0.23%
Therefore, it was estimated based on average assumption periods of directors of SMFG and SMBC.
*3 Expected dividends are based on the actual dividends on common stock for the fiscal year ended March 31, 2011.
*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.
(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 2011 123
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 ................................................ 104,000
—
Vested..........................................................................
—
Exercised .....................................................................
10,000
Forfeited ......................................................................
94,000
Exercisable ...................................................................
138,000
—
12,000
—
126,000
222,000
—
—
12,000
210,000
325,000
—
—
23,000
302,000
451,000
—
—
20,000
431,000
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 ................................................................
—
—
—
—
—
—
—
—
—
—
— 289,000
—
—
—
—
— 289,000
—
350,000
—
—
—
— 350,000
After vested
Previous fiscal year-end ................................................ 115,000
—
Vested..........................................................................
Exercised .....................................................................
—
—
Forfeited ......................................................................
Exercisable ................................................................... 115,000
174,000
—
—
—
174,000
112,000
—
— 289,000
—
—
—
—
289,000
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
—
—
¥131
144
—
¥179
—
—
¥202
—
—
¥313
—
—
¥490
—
138
June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
¥461
—
96
¥193
—
51
¥302
—
37
¥461
—
96
¥490
—
138
(c) 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.
124
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
34. Segment Information
Fiscal years ended March 31, 2011 and 2010
1. Outline of reportable segments
SMFG Group’s reportable segment is defined as an operating segment for which discrete financial information is available and reviewed by
the Board of Directors regularly in order to make decisions about resources to be allocated to the segment and assess its performance.
Besides banking business, SMFG Group companies conduct businesses such as securities, leasing, credit card, invest banking, consumer
finance, and venture capital. The primary businesses, “Banking business,” “Securities services,” “Leasing,” and “Credit card services,” are
separate, reportable segments, and other businesses are aggregated as “Other business.”
“Banking business” includes deposit taking, lending, securities trading, securities investment, domestic and foreign exchange transactions,
brokerage, etc. of financial futures transactions, etc., corporate bond trust services, trust business, sale of securities investment trusts, sale of
insurance products, and securities intermediary services. SMBC assesses business performance by classifying businesses into 5 business units
based on client segment: Consumer banking unit, Middle market banking unit, Corporate banking unit, International banking unit and
Treasury unit.
2. Method of calculating profit and loss amount by reportable segment
Accounting method applied to the reported business segment is the same as described in “Significant Accounting Policies.” However, profit or
loss of the equity method affiliates is recorded in “Other profit or loss” in the amount of ordinary profit multiplied by the ownership ratio.
SMFG does not assess assets by business segment.
3. Information on profit and loss amount by reportable segment
Millions of yen
Banking business
Consumer
Year ended March 31, 2011
banking unit
Gross profit ........................... ¥387,790
337,529
50,261
(290,292)
(26,343)
—
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit ..................... ¥ 97,498
Middle market
banking unit
¥443,862
272,866
170,996
(221,725)
(22,209)
—
Corporate
banking unit
¥201,244
131,355
69,889
(35,986)
(5,252)
—
SMBC
International
banking unit
¥186,503
107,708
78,795
(57,935)
(6,148)
—
Treasury
unit
¥330,720
136,318
194,402
(17,897)
(3,220)
—
Subtotal
Head office
account
¥(18,359) ¥1,531,759
967,825
(17,950)
(408)
563,934
(699,197)
(75,362)
(71,030)
(7,858)
—
Others
Total
¥241,752 ¥1,773,512
149,761 1,117,586
655,925
(834,227)
(81,279)
(34,428)
91,990
(135,030)
(10,249)
— (34,428)
¥222,137
¥165,258
¥128,568
¥312,823
¥(93,721) ¥ 832,562
¥ 72,294 ¥ 904,856
Securities services
Leasing
Millions of yen
SMBC
Friend
Securities
Co., Ltd.
¥52,989
626
52,362
(42,728)
(2,089)
—
Nikko
Cordial
Securities
Inc.
¥205,188
(2,722)
207,911
(166,645)
(2,439)
—
Sumitomo Mitsui
Finance and
Leasing Company,
Limited
¥95,260
60,059
35,201
(28,125)
(3,098)
(16,911)
Others
¥ 3,423
778
2,644
(3,029)
(1,202)
(5,596)
Total
¥261,600
(1,317)
262,918
(212,404)
(5,732)
(5,596)
Others
¥4,130
(3,407)
7,538
(9,851)
(567)
13,082
Total
¥99,390
56,651
42,739
(37,976)
(3,665)
(3,828)
¥10,260
¥ 38,542
¥(5,203) ¥ 43,599
¥50,224
¥7,361
¥57,585
Year ended March 31, 2011
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
Millions of yen
Credit card services
Sumitomo
Mitsui Card
Company,
Limited
¥182,307
22,941
159,366
(129,823)
(8,078)
(19,880)
Cedyna
Financial
Corporation
¥134,402
36,802
97,600
(97,517)
(7,547)
(37,514)
Others
¥5,795
2,550
3,245
(2,086)
(2,767)
4
Total
¥322,506
62,293
260,213
(229,426)
(18,393)
(57,389)
Other
business
Grand total
¥ 75,611 ¥2,532,622
100,369 1,335,583
(24,757) 1,197,039
12,952 (1,301,083)
(121,710)
(12,639)
(229,544)
(128,301)
¥ 32,604 ¥ (628)
¥3,714
¥ 35,690 ¥ (39,737) ¥1,001,994
Year ended March 31, 2011
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
SMFG 2011 125
SMFG
Notes to Consolidated Financial Statements
Millions of yen
Banking business
Consumer
Year ended March 31, 2010
banking unit
Gross profit ........................... ¥391,695
357,215
34,480
(288,724)
(27,044)
—
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit ..................... ¥102,971
Middle market
banking unit
¥472,866
298,183
174,683
(218,652)
(21,870)
—
Corporate
banking unit
¥197,224
125,853
71,371
(33,268)
(4,789)
—
SMBC
International
banking unit
¥169,135
110,135
59,000
(54,493)
(4,842)
—
Treasury
unit
Head office
account
Total
Others
Subtotal
¥272,848 ¥ (48,492) ¥1,455,275 ¥213,979 ¥1,669,255
135,460 1,181,843
187,552
487,411
85,296
(803,300)
(16,333)
(78,580)
(3,493)
(132,759)
—
(32,555) 1,046,382
408,892
(15,937)
(685,752)
(74,282)
(68,855)
(6,817)
—
78,519
(117,547)
(9,725)
— (132,759)
¥254,214
¥163,956
¥114,642
¥256,515 ¥(122,775) ¥ 769,522 ¥ (36,327) ¥ 733,194
Securities services
Leasing
Millions of yen
Year ended March 31, 2010
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
SMBC
Friend
Securities
Co., Ltd.
¥67,205
598
66,606
(44,413)
(2,495)
—
Nikko
Cordial
Securities
Inc.
¥100,511
(1,382)
101,893
(76,968)
(1,109)
—
Sumitomo Mitsui
Finance and
Leasing Company,
Limited
¥97,218
59,841
37,377
(28,508)
(3,064)
(24,814)
Others
¥12,313
4,711
7,602
(12,448)
(512)
(2,674)
Total
¥109,531
64,552
44,979
(40,956)
(3,577)
(27,488)
Total
Others
¥ (6,317) ¥161,398
(247)
161,646
(124,267)
(5,000)
13,702
536
(6,854)
(2,886)
(1,395)
13,702
¥22,792
¥ 23,542
¥ 4,499
¥ 50,834
¥43,896
¥ (2,809) ¥ 41,086
Millions of yen
Credit card services
Sumitomo
Mitsui Card
Company,
Limited
Year ended March 31, 2010
Gross profit ........................... ¥183,594
27,531
156,063
(135,739)
(7,795)
(23,539)
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit ..................... ¥ 24,316
Total
Others
¥ (210) ¥183,383
29,264
154,118
(137,909)
(11,559)
(40,417)
1,733
(1,944)
(2,170)
(3,763)
(16,878)
Other
business
Grand total
¥19,269 ¥2,142,838
9,982 1,285,395
857,443
9,287
(1,099,886)
6,547
(108,148)
(9,431)
(210,660)
(23,697)
¥(19,259) ¥ 5,056
¥ 2,119 ¥ 832,290
Millions of U.S. dollars
Banking business
Year ended March 31, 2011
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
Consumer
banking unit
$4,664
4,059
605
(3,491)
(317)
—
Middle market
banking unit
$5,338
3,282
2,056
(2,667)
(267)
—
Corporate
banking unit
$2,420
1,580
840
(433)
(63)
—
SMBC
International
banking unit
$2,243
1,295
948
(697)
(74)
—
Treasury
unit
$3,977
1,639
2,338
(215)
(39)
—
Head office
account
$ (220)
(215)
(5)
(906)
(94)
—
Subtotal
$18,422
11,640
6,782
(8,409)
(854)
—
Others
$2,907
1,801
1,106
(1,624)
(124)
(414)
Total
$21,329
13,441
7,888
(10,033)
(978)
(414)
$1,173
$2,671
$1,987
$1,546
$3,762
$(1,126)
$10,013
$ 869
$10,882
126
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
Millions of U.S. dollars
Securities services
SMBC
Friend
Securities
Co., Ltd.
$637
7
630
(514)
(25)
—
Nikko
Cordial
Securities
Inc.
$2,468
(32)
2,500
(2,004)
(29)
—
Others
$ 41
9
32
(37)
(15)
(67)
Total
$3,146
(16)
3,162
(2,555)
(69)
(67)
Sumitomo Mitsui
Finance and
Leasing Company,
Limited
$1,145
722
423
(338)
(37)
(203)
Leasing
Others
$ 50
(41)
91
(118)
(7)
157
Total
$1,195
681
514
(456)
(44)
(46)
$123
$ 464
$(63)
$ 524
$ 604
$ 89
$ 693
Year ended March 31, 2011
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
Millions of U.S. dollars
Credit card services
Sumitomo
Mitsui Card
Company,
Limited
$2,193
276
1,917
(1,561)
(97)
(240)
Cedyna
Financial
Corporation
$1,616
442
1,174
(1,173)
(91)
(451)
Others
$70
31
39
(25)
(33)
0
Total
$3,879
749
3,130
(2,759)
(221)
(691)
Other
business
$ 909
1,207
(298)
156
(152)
(1,543)
Grand total
$30,458
16,062
14,396
(15,647)
(1,464)
(2,761)
$ 392
$ (8)
$45
$ 429
$ (478)
$12,050
Year ended March 31, 2011
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................
Notes: 1. Consolidated net business profit = SMBC’s nonconsolidated banking profit + SMFG’s ordinary profit + Other subsidiaries’ ordinary profit (excluding nonrecurring factors)
+ Equity method affiliates’ ordinary profit ✕ Ownership ratio – Internal transactions (dividends, etc.)
2. Other profit or loss = Nonoperating profit or loss of consolidated subsidiaries except SMBC + Equity method affiliates’ ordinary profit ✕ Ownership ratio, etc.
3. Consolidated net business profit of SMBC Friend Securities Co., Ltd., Nikko Cordial Securities Inc., Sumitomo Mitsui Finance and Leasing Company, Limited, Sumitomo
Mitsui Card Company, Limited, and Cedyna Financial Corporation is operating profit of each company, and nonoperating profits or losses of the companies are classified
into “Others” in each segment. For the figures on Cedyna Financial Corporation which became a consolidated subsidiary in the 1st quarter of the fiscal year ended March
31, 2011, consolidated net business profit amount is sum of Operating profit in the 1st quarter ✕ Ownership ratio + Operating profit from the 2nd quarter through the
4th quarter of the fiscal year ended March 31, 2011. For the figures on Nikko Cordial Securities Inc. which became a consolidated subsidiary in the 3rd quarter of the fiscal
year ended March 31, 2010, consolidated net business profit amount is Operating profit for the 2nd half term of the fiscal year ended March 31, 2010.
4. “Other business” includes profit or loss to be offset as internal transactions between segments.
4. Difference between total amount of consolidated net business profit by reportable segment and ordinary profit on consolidated statements of
income (adjustment of difference)
Year ended March 31
Profit
Consolidated net business profit ......................................................................
Credit costs of SMBC .......................................................................................
Gains (losses) on stocks of SMBC .....................................................................
Amortization of unrecognized retirement benefit obligation of SMBC .............
Ordinary profit of consolidated subsidiaries other than reportable segment ......
Amortization of goodwill other than reportable segment .................................
Adjustment of profit or loss of equity method affiliates ....................................
Others .............................................................................................................
Ordinary profit on consolidated statements of income ......................................
Millions of yen
2011
2010
¥1,001,994
(95,324)
(87,285)
(38,019)
81,530
(16,268)
(11,841)
(9,355)
¥ 825,428
¥832,290
(254,737)
3,857
(47,107)
84,225
(13,108)
(29,193)
(17,456)
¥558,769
Millions of
U.S. dollars
2011
$12,050
(1,146)
(1,050)
(457)
981
(196)
(142)
(113)
$ 9,927
Notes: 1. Credit cost = Provision for reserve for possible loan losses (excluding translation adjustment of general reserve for possible loan losses) + Write-off of loans + Losses on sales
of delinquent loans
2. Gains (losses) on stocks = Gains on sale of stocks – Losses on sale of stocks – Losses on devaluation of stocks
3. Adjustment of profit or loss of equity method affiliates = Equity method affiliates’ net income ✕ Ownership ratio – Equity method affiliates’ ordinary profit ✕ Ownership
ratio
SMFG 2011 127
SMFG
Notes to Consolidated Financial Statements
5. Additional information
SMFG has applied “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement
No. 17, issued on March 27, 2009) and “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related
Information” (ASBJ Guidance No. 20, issued on March 21, 2008) from the fiscal year ended March 31, 2011.
6. Related information
(1) Business segment information
Year ended March 31, 2011
Ordinary income to external customers
Millions of yen
Millions of U.S. dollars
Banking Business .......................................................................................................
Securities Services ......................................................................................................
Leasing ......................................................................................................................
Credit Card Services ...................................................................................................
Other Business ...........................................................................................................
Total ..........................................................................................................................
¥2,329,933
270,861
305,165
755,444
184,455
¥3,845,861
$28,021
3,258
3,670
9,085
2,218
$46,252
Notes: 1. Ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income represents total income excluding gains on disposal of fixed assets, gains on recoveries of written-off claims and other extraordinary gains.
(2) Geographic segment information
(a) Ordinary income
Year ended March 31, 2011
Japan .......................................................................................................................
The Americas ..........................................................................................................
Europe and Middle East ...........................................................................................
Asia and Oceania .....................................................................................................
Total ........................................................................................................................
Millions of yen
¥3,433,235
158,377
88,061
166,186
¥3,845,861
Millions of U.S. dollars
$41,290
1,905
1,059
1,998
$46,252
Notes: 1. Ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income from transactions by SMFG and its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries is categorized as Japan. Ordinary income from transactions by overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries is categorized as The Americas, Europe and Middle East, or Asia and Oceania, based on their locations and in consideration of their
geographic proximity and other factors.
3. 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.
4. Ordinary income represents total income excluding gains on disposal of fixed assets, gains on recoveries of written-off claims and other extraordinary gains.
(b) Tangible fixed assets
Year ended March 31, 2011
Japan .......................................................................................................................
The Americas ..........................................................................................................
Europe and Middle East ...........................................................................................
Asia and Oceania .....................................................................................................
Total ........................................................................................................................
Millions of yen
¥1,093,077
12,639
59,557
3,634
¥1,168,908
Millions of U.S. dollars
$13,146
152
716
44
$14,058
(3) Information by major customer
There are no major customers individually accounting for 10% or more of ordinary income.
7. Information on losses on impairment of fixed assets by reportable segment
Year ended March 31, 2011
Banking Business .................................................................................................................
Securities Services .................................................................................................................
Leasing .................................................................................................................................
Credit Card Services .............................................................................................................
Other Business .....................................................................................................................
Total .....................................................................................................................................
Millions of yen
¥4,739
306
—
—
365
¥5,411
Millions of U.S. dollars
$57
4
—
—
4
$65
128
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
8. Information on amortization of goodwill and unamortized balance by reportable segment
Year ended March 31, 2011
Banking Business ............................................................
Securities Services ............................................................
Leasing ............................................................................
Credit Card Services ........................................................
Other Business ................................................................
Total ................................................................................
Millions of yen
Millions of U.S. dollars
Amortization
of goodwill
¥ 555
14,122
5,316
419
2,525
¥22,938
Unamortized
balance
¥ 10,457
244,455
88,481
9,396
—
¥352,790
Amortization
of goodwill
$ 7
170
64
5
30
$276
Unamortized
balance
$ 126
2,940
1,064
113
—
$4,243
9. Information on gains on negative goodwill by reportable segment
There is no material information to be reported for the fiscal year ended March 31, 2011.
0. Information on total credit cost by reportable segment
1
Year ended March 31, 2011
Banking Business .................................................................................................................
Securities Services .................................................................................................................
Leasing .................................................................................................................................
Credit Card Services .............................................................................................................
Other Business .....................................................................................................................
Total .....................................................................................................................................
Millions of yen
¥144,601
(21)
7,979
46,573
18,216
¥217,348
Millions of U.S. dollars
$1,739
(0)
96
560
219
$2,614
Notes: 1. Total credit cost = Provision for reserve for possible loan losses + Write-off of loans + Losses on sales of delinquent loans + Gains on recoveries of written-off claims
2. “Other business” includes profit or loss to be offset as internal transactions between segments.
Fiscal year ended March 31, 2010
(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
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 at March 31, 2010, 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. (22) (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 and Ordinary profit of “Banking business” increased by
¥19,251 million as compared with the former method. Assets of “Banking business” increased by ¥59,270 million and Assets of “Other business” decreased by ¥703
million.
SMFG 2011 129
SMFG
Notes to Consolidated Financial Statements
(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 ...................................
2,344,349
Ordinary expenses ...................
Ordinary profit ........................ ¥ 384,555
II. Assets ...................................... ¥107,412,125
¥ 205,016
106,215
311,232
171,438
¥ 139,794
¥8,255,658
Europe and
Middle East
¥ 126,121
2,641
128,763
115,093
¥ 13,669
¥4,931,900
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)
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 at March 31, 2010, 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. (22) (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 and Ordinary profit of “Japan” increased by ¥19,251 million as
compared with the former method. Assets of “Japan,” “Europe and Middle East” and “Asia and Oceania” increased by ¥58,612 million, ¥341 million and ¥181
million, respectively. Assets of “The Americas” decreased by ¥567 million.
(3) Ordinary income from overseas operations
Year ended March 31
Consolidated ordinary income from overseas operations (A) .................................................................................
Consolidated ordinary income (B) ........................................................................................................................
(A) / (B) ...............................................................................................................................................................
Notes: 1. Consolidated ordinary income from overseas operations is presented as a counterpart of overseas sales of companies in other industries.
Millions of yen
2010
¥ 459,354
3,166,465
14.5%
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.
35. Business Combinations
Fiscal year ended March 31, 2011
Cedyna Financial Corporation consolidated as a subsidiary through a
third-party allotment of new shares
SMFG Card & Credit, Inc. (“FGCC”), a wholly-owned subsidiary of
SMFG, subscribed all the new shares issued by way of a third-party
allotment by Cedyna Financial Corporation (“Cedyna”), an equity
method affiliate of SMFG, on May 31, 2010. Cedyna became a
consolidated subsidiary of SMFG. The outline of the business
combination is as follows:
1. Outline of the business combination
(1) Name of the acquired company and its business
Cedyna (Credit Card Services)
(2) Main reasons for the business combination
FGCC subscribed new shares issued by way of a third-party
allotment by Cedyna and made Cedyna a consolidated
subsidiary of SMFG in order to accelerate and ensure Cedyna’s
management restructuring including its investments in new
businesses and systems developments to increase the corporate
value as well as its cost restructuring, to further clarify the
positioning of Cedyna as one of the core business entities,
together with Sumitomo Mitsui Card Company, Limited of
SMFG Group’s credit card services and to enhance Cedyna’s
capital base.
(3) Date of business combination
May 31, 2010
(4) Legal form of the business combinations
Consolidated as a subsidiary through a third-party allotment
of new shares
(5) Name of the controlling entity after the business combination
Sumitomo Mitsui Financial Group, Inc.
(6) Percentage share of voting rights SMFG has acquired
Percentage share of voting rights owned before
business combination .............................................
Percentage share of voting rights additionally
acquired at the date of business combination .........
Percentage share of voting rights after acquisition ...
48%
21%
69%
(7) Main reason for deciding to acquire the company
It is because SMFG acquired a majority of voting rights of
Cedyna and consolidated it as a subsidiary.
2. Period of the acquired company’s financial results included in the
consolidated statements of income
From April 1, 2010 to March 31, 2011
Note that as the deemed acquisition date is June 30, 2010,
gain or loss related to the acquired company for the period from
April 1, 2010 to June 30, 2010 is presented as gain or loss from
130
SMFG 2011
investments by the equity method in the consolidated statements
of income.
3. Acquisition cost of the acquired company
Fair value of common stock
of Cedyna owned before
business combination ............
Fair value of common stock
of Cedyna additionally
acquired at the date of
business combination ............
Expenses directly required
for acquisition ......................
Acquisition cost of
the acquired company ...........
Millions of yen
Millions of
U.S. dollars
¥35,901
$ 432
49,999
203
601
3
¥86,104
$1,036
4. Difference between acquisition cost of the acquired company
and total acquisition cost of individual transactions leading to
acquisition
Acquisition cost of
the acquired company ...........
Total acquisition cost of
individual transactions
leading to acquisition ...........
Difference
(gains on step acquisitions) ...
Millions of yen
Millions of
U.S. dollars
¥86,104
$1,035
74,437
895
¥11,667
$ 140
5. Goodwill, reason for recognizing goodwill, amortization method
and amortization period
(1) Amount of goodwill
¥9,671 million ($116 million)
(2) Reason for recognizing goodwill
SMFG accounted for the difference between the acquisition
cost and the equivalent amount of SMFG’s interests in Cedyna
as goodwill.
(3) Method and term to amortize goodwill
Straight-line method over 20 years
6. Amounts of assets and liabilities acquired on the day of the busi-
ness combination
(1) Assets
Total assets .............................
Loans and bills discounted ......
Other assets ............................
Customer’s liabilities for
acceptances and guarantees ...
(2) Liabilities
Total liabilities .......................
Borrowed money ....................
Acceptances and guarantees ....
Millions of yen
¥2,631,525
438,497
803,639
Millions of
U.S. dollars
$31,648
5,274
9,665
Millions of yen
¥2,520,313
989,790
1,124,290
Millions of
U.S. dollars
$30,310
11,904
13,521
7. Approximate amounts of impact on the consolidated statements
of income for the fiscal year ended March 31, 2011, 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
Notes to Consolidated Financial Statements
SMFG
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 statements of income is as
follows:
Ordinary income ....................
Ordinary profit .......................
Net income ............................
Millions of yen
¥213,686
(5,584)
(2,257)
Millions of
U.S. dollars
$2,570
(67)
(27)
Note: Ordinary income is presented as a counterpart 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 Cedyna and its consolidated subsidiaries’ statements
of income for the period from April 1, 2010 to June 30, 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 LLC.
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)
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
SMFG’s interest in KUBC’s common stock ..........
SMFG’s interest in KUBC’s preferred stock .........
Acquisition cost ...................................................
Millions of yen
¥ 7,182
40,000
¥47,182
SMFG 2011 131
1,124,290
13,521
(5) Name of the controlling entity after the business combination
SMFG
Notes to Consolidated Financial Statements
4. Merger ratio, calculation method, number of shares delivered and
(2) Liabilities
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
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.
(3) Number of shares delivered and value
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 of KUBC (Type 1)
Preferred stock of KUBC (Type 2)
¥12,803 million
¥19,025 million
¥16,500 million
5. Goodwill, reason for recognizing goodwill, amortization method
and amortization period
(1) Amount of goodwill
¥11,056 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
6. Amounts of assets and liabilities acquired on the day of the busi-
ness combination
(1) Assets
Total assets ..........................................................
Loans and bills discounted ...................................
Securities .............................................................
Millions of yen
¥1,113,801
795,445
89,968
Total liabilities ....................................................
Deposits ..............................................................
Millions of yen
¥1,078,769
1,033,256
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
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
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
132
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
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.
36. Per Share Data
March 31
Net assets per share .............................................................................................
2011
¥3,533.47
Year ended March 31
Net income per share ...........................................................................................
Net income per share (diluted) ............................................................................
Notes: 1. Net income per share and Net income per share (diluted) are calculated based on the following.
2011
¥336.85
336.78
Yen
Yen
2010
¥3,391.75
2010
¥248.40
244.18
Millions of yen, except number of shares
Year ended March 31
Net income per share:
Net income ..........................................................................................................................
Amount not attributable to common stockholders ...............................................................
Dividends on preferred stock...........................................................................................
Net income 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...........................................................................................
Adjustment for dilutive shares issued by subsidiaries and affiliates ..................................
Increase in number of common stock (in thousands) ............................................................
Preferred stock ................................................................................................................
Stock acquisition rights ..................................................................................................
2011
¥475,895
6,195
6,195
¥469,700
1,394,390
¥ (73)
—
(73)
68
—
68
2010
¥271,559
8,449
8,449
¥263,109
1,059,227
¥ 1,931
2,254
(322)
26,191
26,191
—
U.S. dollars
2011
$42.50
U.S. dollars
2011
$4.05
4.05
Millions of U.S. dollars
2011
$5,723
74
74
$5,649
/
$ (1)
—
(1)
/
/
/
Outline of dilutive shares which were not included in the calculation of “Net income per share (diluted)” for the fiscal years ended March 31, 2011 and 2010 because they do
not have dilutive effect:
Stock acquisition rights: 1 type
(Number of stock acquisition rights issued by resolution at the general shareholders’ meeting on June 27, 2002: 1,081 units)
2. Net assets per share is calculated based on the following:
Millions of yen, except number of shares
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) ..........................................................................................
2011
¥7,132,073
2,250,681
210,003
3,097
262
2,037,318
¥4,881,392
1,381,473
2010
¥7,000,805
2,262,582
210,003
3,097
81
2,049,400
¥4,738,223
1,396,985
Millions of U.S. dollars
2011
$85,774
27,068
2,526
37
3
24,502
$58,706
/
SMFG 2011 133
(2) Share exchange ratio, its basis for determination, number of
shares delivered
(a) Type of shares and share exchange ratio
Common shares
SMFG 1 : Cedyna 0.06
Note: 0.06 shares of SMFG common stock was allotted and delivered per
share of Cedyna common stock.
(b) Basis for determination of share exchange ratio
Nikko Cordial Securities Inc. and Nomura Securities Co.,
Ltd. were appointed by FGCC and Cedyna, respectively,
as third party valuation institutions in order to ensure
the fairness and appropriateness in determining the share
exchange ratio for the Share Exchange. FGCC and Cedyna
engaged in negotiations and discussions with reference to
the share exchange ratio analysis provided by the above
third party valuation institutions and with consideration
for SMFG’s and Cedyna’s financial conditions, performance
trends and stock price movements. As a result, FGCC and
Cedyna each determined that the share exchange ratio set
forth in (a) above was beneficial to the shareholders of both
SMFG and Cedyna.
(c) Number of shares delivered
14,702 thousand common shares of SMFG
SMFG
Notes to Consolidated Financial Statements
37. Subsequent Events
1. Acquisition and cancellation of preferred stock
SMFG resolved, at a meeting of the Board of Directors held on
February 28, 2011, to acquire its preferred stock (1st series Type 6),
in accordance with the provisions of Article 18 of the Articles of
Incorporation of SMFG and to cancel its preferred stock (1st series
Type 6) in accordance with the provisions of Article 178 of the
Companies Act, as described below. According to the resolution,
SMFG acquired and cancelled its preferred stock (1st series Type 6)
on April 1, 2011. Capital surplus was reduced by the cancellation.
(1) Class of shares to be acquired and cancelled: Preferred stock
(1st series Type 6)
(2) Total number of shares to be acquired and cancelled: 70,001
shares
(3) Total amount of acquisition: ¥210,003,000,000
2. Transactions under common control
Making Cedyna Financial Corporation a wholly-owned subsidiary
SMFG Card & Credit, Inc. (“FGCC”) made Cedyna Financial
Corporation (“Cedyna”) a wholly-owned subsidiary by a share
exchange with an effective date of May 1, 2011 (the “Share
Exchange”). The outline of transactions under common control is
as follows:
(1) Outline of the transactions
(a) Name and business of combined entities
Acquisition company: FGCC (Management of subsidiaries
and affiliates)
Acquired company: Cedyna (Credit Card Services)
(b) Date of business combination
May 1, 2011
(c) Legal form of the business combination
Exchange of shares
(d) Name of the entity after the business combination
Sumitomo Mitsui Financial Group, Inc.
(e) Purpose of the transactions
SMFG and FGCC decided to organize a system which
allowed more timely and flexible decision making in order
to “establish the number one credit card business entity in
Japan.”
134
SMFG 2011
38. Parent Company
(1) Nonconsolidated Balance Sheets
Sumitomo Mitsui Financial Group, Inc.
March 31
Assets
Current assets ...........................................................................................
Cash and due from banks .....................................................................
Prepaid expenses ..................................................................................
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 ..........................................
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 ...........................................................................................
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 ........................................................................
Stock acquisition rights ...........................................................................
Total net assets .........................................................................................
Total liabilities and net assets ..................................................................
Notes to Consolidated Financial Statements
SMFG
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
¥ 96,397
54,154
29
32
41,382
798
6,141,258
0
0
0
8
8
6,141,248
6,141,248
¥6,237,655
¥1,001,841
997,030
940
3,054
25
5
107
91
586
392,900
392,900
—
1,394,741
2,337,895
1,833,027
1,559,374
273,652
715,303
30,420
684,883
(43,482)
4,842,743
170
4,842,914
¥6,237,655
¥ 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
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
$ 1,159
651
0
0
498
10
73,858
0
0
0
0
0
73,858
73,858
$75,017
$12,049
11,991
12
37
0
0
1
1
7
4,725
4,725
—
16,774
28,117
22,045
18,754
3,291
8,602
366
8,236
(523)
58,241
2
58,243
$75,017
SMFG 2011 135
SMFG
Notes to Consolidated Financial Statements
(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 .....................................................
2011
¥222,217
206,865
15,352
24,467
7,999
16,468
197,750
110
68
1
40
6,317
6,290
26
—
—
0
191,543
—
—
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
Income before income taxes ...................................................................
Income taxes:
191,543
71,846
Current ...................................................................................................
Deferred .................................................................................................
Net income ................................................................................................
3
—
¥191,539
154
5,514
¥ 66,176
Millions of
U.S. dollars (Note 1)
2011
$2,672
2,488
184
294
96
198
2,378
1
1
0
0
75
75
0
—
—
0
2,304
—
—
2,304
0
—
$2,304
Per share data:
Net income ............................................................................................
Net income — diluted ...........................................................................
¥131.42
131.41
¥53.82
—
$1.58
1.58
Yen
2011
2010
U.S. dollars (Note 1)
2011
136
SMFG 2011
Notes to Consolidated Financial Statements
SMFG
(3) Nonconsolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc.
Year ended March 31
Stockholders’ equity
Capital stock
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
¥2,337,895
¥1,420,877
$28,117
Issuance of new shares .....................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
—
—
¥2,337,895
917,018
917,018
¥2,337,895
—
—
$28,117
Capital surplus
Capital reserve
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
1,559,374
642,355
18,754
Issuance of new shares .................................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
—
—
¥1,559,374
917,018
917,018
¥1,559,374
—
—
$18,754
Other capital surplus
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
273,699
273,808
3,291
Disposal of treasury stock .............................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
(46)
(46)
¥ 273,652
(108)
(108)
¥ 273,699
(0)
(0)
$ 3,291
Total capital surplus
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
1,833,073
916,163
22,045
Issuance of new shares .................................................................
Disposal of treasury stock .............................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
—
(46)
(46)
¥1,833,027
917,018
(108)
916,909
¥1,833,073
—
(0)
(0)
$22,045
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
366
Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................
—
¥ 30,420
—
¥ 30,420
—
$ 366
Retained earnings brought forward
Balance at the end of the previous fiscal year ...............................
Changes in the fiscal year:
647,622
653,487
7,788
Cash dividends ..........................................................................
Net income .................................................................................
Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................
(154,278)
191,539
37,260
¥ 684,883
(72,041)
66,176
(5,865)
¥ 647,622
(1,856)
2,304
448
$ 8,236
Total retained earnings
Balance at the end of the previous fiscal year ...................................
Changes in the fiscal year:
678,042
683,907
8,154
Cash dividends ..............................................................................
Net income .....................................................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................
(154,278)
191,539
37,260
¥ 715,303
(72,041)
66,176
(5,865)
¥ 678,042
(1,856)
2,304
448
$ 8,602
SMFG 2011 137
SMFG
Notes to Consolidated Financial Statements
(Continued)
Year ended March 31
Stockholders’ equity
Treasury stock
Millions of yen
2011
2010
Millions of
U.S. dollars (Note 1)
2011
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
¥ (43,437)
¥ (43,400)
$ (522)
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
(105)
60
(45)
¥ (43,482)
(189)
152
(37)
¥ (43,437)
(1)
0
(1)
$ (523)
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 .....................................................
Stock acquisition rights
Balance at the end of the previous fiscal year.......................................
Changes in the fiscal year:
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 .....................................................
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 items other than stockholders’
equity in the fiscal year ....................................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................
4,805,574
2,977,547
57,794
—
(154,278)
191,539
(105)
13
37,169
¥4,842,743
1,834,037
(72,041)
66,176
(189)
43
1,828,026
¥4,805,574
—
(1,856)
2,304
(1)
0
447
$58,241
—
—
—
170
170
¥ 170
—
—
¥ —
2
2
$ 2
4,805,574
2,977,547
57,794
—
(154,278)
191,539
(105)
13
1,834,037
(72,041)
66,176
(189)
43
170
37,340
¥4,842,914
—
1,828,026
¥4,805,574
—
(1,856)
2,304
(1)
0
2
449
$58,243
138
SMFG 2011
SMFG
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, 2011 and 2010, and the related consolidated statements of income, changes in net
assets and cash flows for the years then ended, and the consolidated statement of comprehensive income for the year
ended March 31, 2011 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 state-
ments 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, 2011 and 2010, 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.
Additional Information:
As discussed in Note 37 to the consolidated financial statements, SMFG acquired and cancelled its 1st series Type 6
preferred stock on April 1, 2011, based on a resolution at the meeting of the Board of Directors held on February 28,
2011.
The consolidated financial statements as of and for the year ended March 31, 2011 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, 2011
SMFG 2011 139
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
2011
2010
¥ 5,539,966
3,537,476
851,636
131,104
4,699,667
1,076,044
6,590,920
19,326
39,748,394
61,959,049
1,077,024
114,560
2,643,552
828,698
409,917
568,966
3,862,442
(943,077)
¥132,715,674
¥ 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
Millions of
U.S. dollars
2011
$ 66,626
42,543
10,242
1,577
56,520
12,941
79,265
232
478,032
745,148
12,953
1,378
31,793
9,966
4,930
6,843
46,452
(11,342)
$1,596,099
140
SMFG 2011
(Continued)
Supplemental Information
SMBC
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 point service program .......................................................................
Reserve for reimbursement of deposits ...............................................................
Reserve for loss on interest repayment ................................................................
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 on other securities ..............................................................
Net deferred losses on hedges ............................................................................
Land revaluation excess .......................................................................................
Foreign currency translation adjustments ............................................................
Total accumulated other comprehensive income ..............................................
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
2011
2010
Millions of
U.S. dollars
2011
¥ 90,576,587
2,629,407
726,365
5,712,348
337,120
5,209,441
8,631,713
256,160
417,788
3,783,297
216,171
3,238,158
35,592
2,001
17,383
1,666
2,249
9,923
2,600
69
18,352
45,698
3,862,442
125,732,541
1,770,996
2,717,397
929,336
5,417,730
239,717
(8,921)
33,294
(119,696)
144,394
91
1,420,915
6,983,132
¥132,715,674
¥ 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
$1,089,315
31,622
8,736
68,699
4,054
62,651
103,809
3,081
5,024
45,500
2,600
38,944
428
24
209
20
27
119
31
1
221
550
46,452
1,512,117
21,299
32,681
11,176
65,156
2,883
(107)
400
(1,440)
1,736
1
17,089
83,982
$1,596,099
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 ¥83.15 to US$1, the exchange rate prevailing at March 31, 2011.
SMFG 2011 141
SMBC
Supplemental Information
Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
(Consolidated Statements of Income)
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:
¥1,485,778
1,153,471
248,988
2,351
8,429
18,439
4,369
49,729
2,299
665,109
212,920
297,766
51,070
2,714,944
268,627
139,543
28,434
2,751
8,743
66,922
22,231
137,944
143,012
1,094,576
42,427
285,477
1,972,065
742,878
Current ..............................................................................................................
Deferred ............................................................................................................
Income before minority interests ........................................................................
Minority interests in net income ...........................................................................
Net income ..........................................................................................................
59,719
150,503
532,656
81,823
¥ 450,832
142
SMFG 2011
Millions of yen
2011
2010
Millions of
U.S. dollars
2011
¥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
69,246
75,282
81,352
¥ 332,497
$17,868
13,872
2,994
28
101
222
53
598
28
7,999
2,561
3,581
614
32,651
3,231
1,678
342
33
105
805
268
1,659
1,720
13,164
510
3,433
23,717
8,934
718
1,810
6,406
984
$ 5,422
Supplemental Information
SMBC
(Continued)
(Consolidated Statements of Comprehensive Income)
Year ended March 31
Income before minority interests ........................................................................
Other comprehensive income
Net unrealized losses on other securities .........................................................
Net deferred gains on hedges ..........................................................................
Foreign currency translation adjustments ........................................................
Share of other comprehensive income of
associates accounted for by equity method ..................................................
Total other comprehensive income ..................................................................
Total comprehensive income ..............................................................................
Comprehensive income attributable to shareholders of the parent company ....
Comprehensive income attributable to minority interests ...............................
Millions of yen
2011
¥532,656
2010
¥—
(150,926)
29,408
(59,493)
12,044
(168,966)
363,689
322,474
41,215
—
—
—
—
—
—
—
—
Millions of
U.S. dollars
2011
$6,406
(1,815)
354
(716)
145
(2,032)
4,374
3,878
496
Per share data:
Net income .......................................................................................................
Net income — diluted ......................................................................................
¥4,184.89
4,184.07
¥4,240.20
4,236.01
$50.33
50.32
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 ¥83.15 to US$1, the exchange rate prevailing at March 31, 2011.
Yen
U.S. dollars
SMFG 2011 143
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 ...............................................................
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 on other securities ..............................................................
Net deferred gains 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
2011
2010
¥ 4,793,275
3,308,910
288,120
96,665
402,928
509,773
3,623,461
10,316
39,853,432
55,237,613
1,000,964
1,994,996
717,568
142,321
376,899
3,852,949
(711,522)
(13,769)
¥115,484,907
¥ 82,443,286
2,272,758
503,315
4,760,920
337,120
3,015,835
5,952,326
272,253
40,999
3,670,355
216,171
2,521,061
10,019
692
—
1,586
8,872
45,091
3,852,949
109,925,614
1,770,996
2,481,273
935,992
5,188,262
229,885
121,109
20,035
371,030
5,559,293
¥115,484,907
¥ 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
Millions of
U.S. dollars
2011
$ 57,646
39,794
3,465
1,162
4,846
6,131
43,577
124
479,296
664,313
12,038
23,993
8,630
1,712
4,533
46,337
(8,557)
(166)
$1,388,874
$ 991,501
27,333
6,053
57,257
4,054
36,270
71,586
3,274
493
44,141
2,600
30,320
121
8
—
19
107
542
46,337
1,322,016
21,299
29,841
11,256
62,396
2,765
1,456
241
4,462
66,858
$1,388,874
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 ¥83.15 to US$1, the exchange rate prevailing at March 31, 2011.
144
SMFG 2011
Supplemental Information
SMBC
Millions of yen
2011
2010
Millions of
U.S. dollars
2011
Nonconsolidated Statements of Income (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:
¥1,259,403
962,113
240,380
757
2,263
13,725
40,164
2,299
439,770
151,070
218,075
39,969
2,110,588
291,595
110,415
89,770
1,814
7,247
63,048
19,299
137,103
110,177
738,447
19,473
224,951
1,521,748
588,839
¥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
Current ..............................................................................................................
Deferred ............................................................................................................
Net income ..........................................................................................................
42,386
125,273
¥ 421,180
44,997
91,757
¥ 317,995
$15,146
11,571
2,891
9
27
165
483
27
5,289
1,817
2,623
481
25,383
3,507
1,328
1,080
22
87
758
232
1,649
1,325
8,881
234
2,705
18,301
7,082
510
1,507
$ 5,065
Per share data:
Net income .......................................................................................................
Net income — diluted ......................................................................................
¥3,905.80
—
¥4,051.75
—
$46.97
—
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 ¥83.15 to US$1, the exchange rate prevailing at March 31, 2011.
Yen
U.S. dollars
SMFG 2011 145
SMFG
Income Analysis (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Millions of yen
Year ended March 31
Domestic
operations
Interest income ..................................................... ¥1,345,979
281,315
Interest expenses ..................................................
Net interest income ................................................... 1,064,663
2,335
Trust fees ...................................................................
806,591
Fees and commissions .........................................
120,594
Fees and commissions payments ........................
685,997
Net fees and commissions ........................................
251,626
Trading income......................................................
6,732
Trading losses .......................................................
244,894
Net trading income ....................................................
961,912
Other operating income ........................................
821,014
Other operating expenses.....................................
140,898
Net other operating income (expenses) ....................
2011
Overseas
operations Elimination
Total
¥356,800
103,355
253,444
—
92,975
11,046
81,929
2,787
10,589
(7,801)
77,934
37,504
40,429
(89,739)
(439)
—
(2,105)
(410)
(1,695)
(17,321)
(17,321)
¥(90,179) ¥1,612,599
294,931
1,317,668
2,335
897,461
131,230
766,230
237,093
—
— 237,093
1,039,662
858,243
181,419
(183)
(274)
91
Domestic
operations
¥1,392,919
297,268
1,095,650
1,778
651,331
111,320
540,011
186,117
8,313
177,804
401,898
355,904
45,993
2010
Overseas
operations Elimination
¥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)
(101,319)
(1,352)
—
(2,622)
(1,495)
(1,126)
(20,932)
(20,932)
—
(210)
(98)
(112)
Total
¥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
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 (2011, ¥16 million; 2010, ¥20 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
¥93,247,748
54,156,879
31,216,834
355,148
26,178
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 ....................................................................
4,243,613
343,704
1,626,041
¥98,130,523
70,966,834
7,144,913
1,613,628
445,349
4,629,220
—
8,118,619
1,190,706
3,810,547
2011
Interest
¥1,345,979
1,006,690
228,045
2,250
32
8,464
1,566
62,998
¥ 281,315
71,673
12,396
2,166
573
8,847
—
106,979
2,006
76,662
Earnings yield
1.44%
1.86
0.73
0.63
0.12
0.20
0.46
3.87
0.29%
0.10
0.17
0.13
0.13
0.19
—
1.32
0.17
2.01
Average balance
¥86,229,707
55,382,826
24,828,351
343,760
13,958
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
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 consolidated subsidiaries use weekly, monthly or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,188,255 million; 2010, ¥965,438
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 (2011, ¥21,928 million; 2010, ¥12,392 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥21,928 million; 2010, ¥12,392 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
146
SMFG 2011
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
¥15,642,630
9,620,423
1,978,236
771,389
69,728
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 ....................................................................
—
2,285,316
184,752
¥10,510,807
6,702,036
2,013,996
326,104
597,909
—
328,969
421,821
—
105,117
2011
Interest
¥356,800
265,568
39,734
7,055
2,319
—
17,583
8,591
¥103,355
36,716
19,268
1,621
2,180
—
1,164
9,958
—
6,745
Millions of yen
Earnings yield
2.28%
2.76
2.01
0.91
3.33
Average balance
¥16,461,908
11,059,619
1,656,478
812,878
13,963
—
0.77
4.65
0.98%
0.55
0.96
0.50
0.36
—
0.35
2.36
—
6.42
—
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
Earnings yield
2.46%
2.84
1.88
0.63
6.36
—
0.65
4.13
1.01%
0.54
0.89
0.28
0.20
—
0.24
2.65
—
5.98
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 consolidated subsidiaries use weekly, monthly or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥103,935 million; 2010, ¥156,583
million).
Total of Domestic and Overseas Operations
Year ended March 31
Interest-earning assets .............................................. ¥107,061,829
62,448,896
32,845,940
1,126,538
95,907
Loans and bills discounted ...................................
Securities ..............................................................
Call loans and bills bought ....................................
Receivables under resale agreements ..................
Average balance
2011
Interest
¥1,612,599
1,199,083
251,311
9,305
2,351
Receivables under securities
borrowing transactions .......................................
Deposits with banks ..............................................
Lease receivables and investment assets ............
4,243,613
2,484,913
1,810,793
8,464
18,592
71,589
Interest-bearing liabilities .......................................... ¥106,745,754
77,485,196
9,158,909
1,939,732
1,043,259
4,629,220
328,969
7,228,342
1,190,706
3,522,765
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 ....................................................................
¥ 294,931
107,758
31,665
3,788
2,753
8,847
1,164
44,298
2,006
66,940
Millions of yen
Earnings yield
1.51%
1.92
0.77
0.83
2.45
0.20
0.75
3.95
0.28%
0.14
0.35
0.20
0.26
0.19
0.35
0.61
0.17
1.90
Average balance
¥100,773,612
64,723,468
26,505,349
1,156,638
27,922
2010
Interest
¥1,695,805
1,280,297
241,216
7,657
902
2,293,522
2,259,797
1,958,655
5,413
14,757
74,542
¥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
¥ 314,872
145,979
34,042
6,271
1,390
6,165
194
37,708
2,902
70,749
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
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 or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,288,655 million; 2010, ¥1,123,299
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 (2011, ¥21,928 million; 2010, ¥12,392 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥21,928 million; 2010, ¥12,392 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
SMFG 2011 147
SMFG
Income Analysis (Consolidated)
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥806,591
21,264
119,605
70,803
18,054
6,505
52,403
185,970
161,632
Deposits and loans ...............................................
Remittances and transfers ....................................
Securities-related business ...................................
Agency ..................................................................
Safe deposits ........................................................
Guarantees ............................................................
Credit card business .............................................
Investment trusts ..................................................
Millions of yen
2011
Overseas
operations Elimination
¥92,975
61,373
8,253
631
—
2
10,559
—
2,073
¥(2,105)
(33)
(2)
(156)
—
—
(200)
—
—
Total
¥897,461
82,604
127,856
71,277
18,054
6,507
62,762
185,970
163,706
Domestic
operations
¥651,331
20,660
118,012
54,380
14,763
6,681
40,468
143,770
—
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
—
Fees and commissions payments ............................. ¥120,594
27,927
Remittances and transfers ....................................
¥11,046
6,149
¥ (410)
(118)
¥131,230
33,958
¥111,320
26,285
¥10,923
4,920
¥(1,495)
(155)
¥120,748
31,050
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.
3. “Investment trusts” are reported as sub-account of “Fees and commissions” from the fiscal year ended March 31, 2011, because their significance
increased.
Trading Income
2011
2010
Millions of yen
Domestic
Year ended March 31
operations
Trading income .......................................................... ¥251,626
92,932
Gains on trading securities ...................................
Overseas
operations Elimination
¥ 2,787
1,301
¥(17,321)
—
Total
¥237,093
94,234
Domestic
operations
¥186,117
63,212
Overseas
operations Elimination
¥28,902
211
¥(20,932)
—
Total
¥194,087
63,424
Gains on securities related to
trading transactions ............................................
Gains on trading-related financial derivatives .......
Others ...................................................................
1,019
156,512
1,162
519
966
—
—
(17,321)
—
1,538
140,157
1,162
2,254
120,075
576
—
28,691
—
—
(20,932)
—
2,254
127,833
576
Trading losses............................................................ ¥ 6,732
—
Losses on trading securities .................................
¥10,589
—
¥(17,321)
—
¥ — ¥ 8,313
—
—
¥12,619
—
¥(20,932)
—
¥ —
—
Losses on securities related to
trading transactions ............................................
Losses on trading-related financial derivatives .....
Others ...................................................................
—
6,732
—
—
10,589
—
—
(17,321)
—
—
—
—
—
8,313
—
—
12,619
—
—
(20,932)
—
—
—
—
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.
148
SMFG 2011
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
2011
2010
¥46,333,358
25,357,704
3,855,153
75,546,217
5,997,958
¥81,544,175
¥ 4,810,044
1,533,773
108,904
6,452,722
2,368,364
¥ 8,821,087
¥90,365,263
¥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
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
2011
2010
Manufacturing..............................................................................................
Agriculture, forestry, fisheries and mining ...................................................
Construction ................................................................................................
Transportation, communications and public enterprises ............................
Wholesale and retail ....................................................................................
Finance and insurance ................................................................................
Real estate, goods rental and leasing .........................................................
Services .......................................................................................................
Municipalities ...............................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Overseas operations:
Public sector ................................................................................................
Financial institutions ....................................................................................
Commerce and industry ..............................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
¥ 6,001,645
148,994
962,259
3,829,628
4,238,042
3,991,865
7,761,065
3,847,475
1,230,912
20,393,976
¥52,405,866
¥ 35,733
608,810
7,475,110
822,834
¥ 8,942,489
¥61,348,355
11.45%
0.28
1.84
7.31
8.09
7.62
14.81
7.34
2.35
38.91
100.00%
0.40%
6.81
83.59
9.20
100.00%
—
¥ 6,694,906
153,473
1,095,482
3,271,221
4,497,698
4,299,050
8,210,117
4,077,881
1,117,092
20,606,900
¥54,023,825
¥ 43,100
543,997
7,223,161
866,948
¥ 8,677,208
¥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%
—
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.
SMFG 2011 149
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 ..............................................................................
2011
¥ 696,154
362,137
653
¥1,058,945
¥ 867,866
Risk-Monitored Loans
March 31
Bankrupt loans ................................................................................................
Non-accrual loans ...........................................................................................
Past due loans (3 months or more) .................................................................
Restructured loans ..........................................................................................
Total .................................................................................................................
Amount of direct reduction ..............................................................................
2011
¥ 90,777
1,031,828
25,438
498,323
¥1,646,369
¥ 735,638
Millions of yen
Millions of yen
2010
¥ 702,606
365,087
636
¥1,068,329
¥ 843,781
2010
¥ 165,131
1,075,782
38,315
250,256
¥1,529,484
¥ 727,633
Notes: Definition of risk-monitored loan categories
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 ..............................................................................
2011
¥ 281,611
875,837
532,873
1,690,321
67,868,754
¥69,559,075
¥ 867,866
Millions of yen
2010
¥ 392,424
881,239
298,179
1,571,842
68,431,335
¥70,003,177
¥ 843,781
Notes: Definition of problem asset categories
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
150
SMFG 2011
Assets and Liabilities (Consolidated)
SMFG
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2011
2010
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 .................................................................................................................
¥25,934,346
544,409
3,256,034
2,696,843
5,778,370
¥38,210,004
¥ —
—
—
—
1,697,165
¥ 1,697,165
¥ —
—
—
44,953
—
¥ 44,953
¥39,952,123
¥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
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 ........................................................... ¥6,149,138
Trading securities .................................................. 2,778,917
3,857
Derivatives of trading securities ............................
—
Securities related to trading transactions .............
Derivatives of securities related to
5,338
trading transactions ............................................
Trading-related financial derivatives ..................... 3,070,072
290,952
Other trading assets..............................................
2011
2010
Millions of yen
Overseas
operations Elimination
¥(34,836)
¥518,595
38,619
—
—
Total
¥6,632,898
— 2,817,536
3,857
—
—
—
Domestic
operations
¥6,156,853
2,747,496
1,246
—
¥587,881
32,229
—
—
Overseas
operations Elimination
¥(36,046)
Total
¥6,708,688
— 2,779,725
1,246
—
—
—
—
479,623
353
—
(34,836)
—
5,338
3,514,859
291,305
6,931
3,123,235
277,943
—
555,288
363
—
(36,046)
—
6,931
3,642,477
278,307
Trading liabilities ........................................................ ¥4,670,219
Trading securities sold for short sales .................. 1,622,216
1,803
Derivatives of trading securities ............................
¥612,920
830
—
¥(34,836)
¥5,248,302
— 1,623,046
1,803
—
¥4,470,010
1,582,808
2,367
¥632,763
—
—
¥(36,046)
¥5,066,727
— 1,582,808
2,367
—
Securities related to trading transactions
sold for short sales ..............................................
—
—
—
—
—
—
—
—
Derivatives of securities related to
5,638
trading transactions ............................................
Trading-related financial derivatives ..................... 3,040,560
—
Other trading liabilities ..........................................
1
612,088
—
—
(34,836)
—
5,639
3,617,812
—
6,961
2,877,873
—
—
632,763
—
—
(36,046)
—
6,961
3,474,589
—
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 2011 151
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
(68,000)
—
249,015
(67,000)
(439,534)
(195,000)
157,151
(16,700)
May 17, 2006*1 ........................................
August 11, 2006*2 ....................................
September 1, 2006*3 ...............................
September 6, 2006*4 ...............................
September 29, 2006*5 .............................
October 11, 2006*6 ..................................
April 30, 2008*7 ........................................
May 16, 2008*8 ........................................
January 4, 2009*9 .................................... 781,189,672.23
June 22, 2009*10 ...................................... 219,700,000
July 27, 2009*11 .......................................
8,931,300
January 27, 2010*12 ................................. 340,000,000
January 28, 2010*13 .................................
36,343,848
February 8, 2010*14 .................................
(33,400)
February 10, 2010*15 ...............................
20,000,000
Balances
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
¥ —
—
—
—
—
—
—
—
—
413,695
16,817
459,477
—
—
27,028
Balances
¥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
Changes
¥ —
(1,000,000)
221,365
—
—
—
—
—
—
413,695
16,817
459,477
—
—
27,028
Balances
¥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
Remarks:
*1 Repurchase and cancellation of 35,000 shares of preferred stock (Type 1) and 33,000 shares of preferred stock (Type 2)
*2 Capital reserve was transferred to other capital surplus pursuant to Article 448-1 of the Companies Act.
*3 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)
*4 Repurchase and cancellation of 67,000 shares of preferred stock (Type 2)
*5 Repurchase and cancellation of 500,000 shares of preferred stock (Type 3) and increase in shares of common stock of 60,466
*6 Repurchase and cancellation of 195,000 shares of preferred stock (Type 3)
*7 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)
*8 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)
*9 Increase in shares of common stock of 781,189,672.23 as a result of 100-for-1 stock split
*10 Public offering: Common stock: 219,700,000 shares
*11 Allotment to third parties: Common stock: 8,931,300 shares
Issue price: ¥3,766 Capitalization: ¥1,883
*12 Public offering: Common stock: 340,000,000 shares
Issue price: ¥2,702.81 Capitalization: ¥1,351.405
Issue price: ¥3,766 Capitalization: ¥1,883
*13 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)
*14 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)
*15 Allotment to third parties: Common stock: 20,000,000 shares
Issue price: ¥2,702.81 Capitalization: ¥1,351.405
Note: The number of shares of preferred stock (Type 6) decreased by 70,001 as a result of repurchase and cancellation of all the shares of preferred stock (1st series
Type 6) on April 1, 2011.
Number of Shares Issued
March 31, 2011
Common stock ...............................................................................................................................................................
Preferred stock (1st series Type 6) .................................................................................................................................
Total ................................................................................................................................................................................
Number of shares issued
1,414,055,625
70,001
1,414,125,626
152
SMFG 2011
Capital (Nonconsolidated)
SMFG
Stock Exchange Listings
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Nagoya Stock Exchange (First Section)
New York Stock Exchange*
* SMFG listed its ARDs on the New York Stock Exchange as of November 1, 2010.
Number of Common Shares, Classified by Type of Shareholders
March 31, 2011
Japanese government and local government ..................................................................
Financial institutions .........................................................................................................
Securities companies .......................................................................................................
Other institutions ..............................................................................................................
Foreign institutions ...........................................................................................................
Foreign individuals ...........................................................................................................
Individuals and others ......................................................................................................
Total ..................................................................................................................................
Fractional shares (shares) .................................................................................................
Number of
shareholders
7
394
105
9,032
938
141
342,025
352,642
—
Number of
units
4,774
4,144,500
717,865
1,664,643
5,538,375
714
2,049,686
14,120,557
1,999,925
Percentage of
total
0.03%
29.35
5.08
11.79
39.22
0.01
14.52
100.00%
—
Notes: 1. Of 3,762,514 shares in treasury stock, 37,625 units are included in “Individuals and others” and the remaining 14 shares are included in “Fractional shares.”
2. “Other institutions” include 28 units held by the Securities Custody Association.
3. The number of shares constituting 1 unit is 100.
Principal Shareholders
a. Common Stock
March 31, 2011
Japan Trustee Services Bank, Ltd. (Trust Account) ......................................................................................
The Master Trust Bank of Japan, Ltd. (Trust Account) .................................................................................
SSBT OD05 Omnibus Account — Treaty Clients*.......................................................................................
Japan Trustee Services Bank, Ltd. (Trust Account 9) ...................................................................................
Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension** ...................................................
State Street Bank and Trust Company 505225** .........................................................................................
SMFG Card & Credit, Inc. ............................................................................................................................
Nippon Life Insurance Company ..................................................................................................................
NATSCUMCO*** ...........................................................................................................................................
State Street Bank and Trust Company 505103** .........................................................................................
Total ..............................................................................................................................................................
Number of
shares
87,939,818
77,122,200
30,843,478
29,508,900
17,222,912
17,198,714
15,479,400
15,466,682
14,356,349
13,927,694
319,066,147
Percentage of
shares outstanding
6.21%
5.45
2.18
2.08
1.21
1.21
1.09
1.09
1.01
0.98
22.56%
* Standing agent: The HongKong and Shanghai Banking Corporation Limited’s Tokyo Branch
** Standing agent: Mizuho Corporate Bank, Ltd.
*** Standing agent: Sumitomo Mitsui Banking Corporation
Note: Pursuant to Article 67 of the Enforcement Ordinance of the Companies Act, the exercise of voting rights of common shares held by SMFG Card & Credit, Inc.
is restricted.
b. Preferred Stock (1st series Type 6)
March 31, 2011
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%
SMFG 2011 153
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 ..................................................................................................
2011
108,100 shares
Common stock
¥6,649 per share
¥3,325 per share
From June 28, 2004 to June 27, 2012
Date of resolution: Ordinary general meeting of shareholders held on June 27, 2002
March 31
Number of shares granted............................................................................................................
Type of stock ................................................................................................................................
Issue price ....................................................................................................................................
Amount capitalized when shares are issued ................................................................................
Exercise period of stock options ..................................................................................................
2011
102,600 shares
Common stock
¥2,216 per share
¥1,108 per share
From August 13, 2010 to August 12, 2040
Date of resolution: Meeting of the Board of Directors held on July 28, 2010
Note: Former SMBC issued and granted stock options to certain directors and employees pursuant to the resolution of the ordinary general meeting of shareholders
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 ........................................................................................
2011
¥3,355
2,235
2010
¥4,520
2,591
Notes: 1. Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
Yen
2009
¥9,640
2,585
2008
¥1,210,000
633,000
2007
¥1,390,000
1,010,000
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 2010
¥2,533
2,349
November 2010
¥2,685
2,325
December 2010
¥2,949
2,543
January 2011
¥3,090
2,791
February 2011
¥3,225
2,757
March 2011
¥3,190
2,235
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.
154
SMFG 2011
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 ..................................................... ¥1,227,312
241,960
Interest expenses ..................................................
985,352
Net interest income ...................................................
2,299
Trust fees ...................................................................
574,092
Fees and commissions .........................................
127,305
Fees and commissions payments ........................
446,786
Net fees and commissions ........................................
227,454
Trading income......................................................
6,732
Trading losses .......................................................
220,722
Net trading income ....................................................
249,252
Other operating income ........................................
135,821
Other operating expenses.....................................
113,430
Net other operating income (expenses) ....................
Millions of yen
2011
Overseas
operations Elimination
¥(73,281)
¥331,747
(73,372)
100,023
91
231,724
—
—
(1,961)
92,978
(407)
11,046
(1,553)
81,932
(17,321)
2,787
(17,321)
10,589
—
(7,801)
(53)
48,567
—
7,190
(53)
41,376
Total
¥1,485,778
268,610
1,217,168
2,299
665,109
137,944
527,165
212,920
—
212,920
297,766
143,012
154,753
Domestic
operations
¥1,302,315
272,565
1,029,750
1,736
502,032
118,326
383,705
148,600
8,313
140,287
140,284
103,485
36,799
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
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
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 (2011, ¥16 million; 2010, ¥20 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
Year ended March 31
Average balance
Interest-earning assets ................................... ¥91,909,190
54,710,171
31,053,391
352,721
26,178
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
2011
Interest
¥1,227,312
953,365
225,723
2,248
32
Earnings yield
1.34%
1.74
0.73
0.64
0.12
Average balance
¥85,101,802
56,291,108
24,649,455
337,927
13,958
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
4,202,003
292,234
8,429
1,419
0.20
0.49
2,277,769
268,117
5,394
1,704
0.24
0.64
Interest-bearing liabilities ............................... ¥95,026,491
71,099,847
7,197,270
1,613,567
443,352
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 .........................................................
4,545,844
—
6,205,133
359,916
3,347,596
¥ 241,960
71,691
12,453
2,166
571
8,743
—
89,516
564
59,612
0.25%
0.10
0.17
0.13
0.13
0.19
—
1.44
0.16
1.78
¥89,290,815
68,567,643
7,227,930
1,855,873
607,324
¥ 272,565
106,566
18,280
2,853
668
2,829,428
—
4,462,011
238,247
3,292,435
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
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 consolidated subsidiaries use weekly, monthly or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,143,287 million; 2010, ¥946,938
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 (2011, ¥18,676 million; 2010, ¥12,392 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥18,676 million; 2010, ¥12,392 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
SMFG 2011 155
SMBC
Income Analysis (Consolidated)
Overseas Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥15,061,087
9,530,458
1,585,317
771,389
69,728
Loans and bills discounted .........................
Securities ....................................................
Call loans and bills bought .........................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................
—
2,282,712
—
17,572
Millions of yen
2011
Interest
¥331,747
263,531
23,265
7,055
2,319
Earnings yield
2.20%
2.77
1.47
0.91
3.33
Average balance
¥16,085,915
10,971,078
1,459,443
812,878
13,963
2010
Interest
¥389,577
312,374
22,821
5,158
887
Earnings yield
2.42%
2.85
1.56
0.63
6.36
—
0.77
0.96%
0.55
0.96
0.50
0.36
—
2,152,553
—
14,066
¥11,763,523
7,472,669
1,811,253
1,205,537
364,451
¥116,457
40,606
16,102
3,416
713
¥100,023
36,716
19,268
1,621
2,180
Interest-bearing liabilities ............................... ¥10,438,017
6,702,044
2,013,996
326,104
597,909
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 .........................................................
—
328,969
349,022
—
105,117
Notes: 1. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
—
82,513
387,573
—
158,169
—
1,164
6,751
—
6,745
—
0.35
1.93
—
6.42
—
194
9,308
—
9,459
—
0.65
0.99%
0.54
0.89
0.28
0.20
—
0.24
2.40
—
5.98
2. In principle, average balances are calculated by using daily balances. However, some consolidated subsidiaries use weekly, monthly or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥103,430 million; 2010, ¥156,324
million).
Total of Domestic and Overseas Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥105,509,373
62,929,036
32,638,709
1,124,111
95,907
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
2011
Interest
¥1,485,778
1,144,168
248,988
9,303
2,351
Earnings yield
1.41%
1.82
0.76
0.83
2.45
Average balance
¥99,271,616
65,563,988
26,108,898
1,150,805
27,922
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
4,202,003
2,432,539
8,429
18,439
0.20
0.76
2,277,769
2,208,380
5,394
14,650
0.24
0.66
Interest-bearing liabilities ............................... ¥103,967,089
77,622,970
9,211,266
1,939,672
1,041,262
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 .........................................................
4,545,844
328,969
5,242,563
359,916
3,452,714
¥ 268,610
107,821
31,721
3,787
2,751
8,743
1,164
23,481
564
66,357
0.26%
0.14
0.34
0.20
0.26
0.19
0.35
0.45
0.16
1.92
¥99,138,171
75,827,957
9,039,183
3,061,410
971,775
¥ 295,615
146,051
34,382
6,270
1,381
2,829,428
82,513
3,151,386
238,247
3,450,605
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
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 or quarterly balances
instead.
3. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,239,571 million; 2010, ¥1,103,197
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 (2011, ¥18,676 million; 2010, ¥12,392 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥18,676 million; 2010, ¥12,392 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
156
SMFG 2011
Income Analysis (Consolidated)
SMBC
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥574,092
22,057
120,616
58,728
16,274
6,505
39,403
6,208
145,850
Deposits and loans ...............................................
Remittances and transfers ....................................
Securities-related business ...................................
Agency ..................................................................
Safe deposits ........................................................
Guarantees ............................................................
Credit card business .............................................
Investment trusts ..................................................
Millions of yen
2011
Overseas
operations Elimination
¥92,978
61,373
8,253
631
—
2
10,559
—
2,073
¥(1,961)
(11)
(1)
(156)
—
—
(184)
—
—
Total
¥665,109
83,419
128,869
59,203
16,274
6,507
49,778
6,208
147,923
Domestic
operations
¥502,032
21,425
119,075
48,897
14,782
6,681
39,475
6,179
—
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
—
Fees and commissions payments ............................. ¥127,305
27,927
Remittances and transfers ....................................
¥11,046
6,149
¥ (407)
(118)
¥137,944
33,958
¥118,326
26,285
¥10,923
4,920
¥(1,493)
(155)
¥127,756
31,050
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
3. “Investment trusts” are reported as sub-account of “Fees and commissions” from the fiscal year ended March 31, 2011, because their significance
increased.
Trading Income
2011
2010
Millions of yen
Domestic
Year ended March 31
operations
Trading income .......................................................... ¥227,454
68,760
Gains on trading securities ...................................
Overseas
operations Elimination
¥(17,321)
—
¥ 2,787
1,301
Total
¥212,920
70,062
Domestic
operations
¥148,600
25,694
Overseas
operations Elimination
¥(20,932)
—
¥28,902
211
Total
¥156,570
25,906
Gains on securities related to
trading transactions ............................................
Gains on trading-related financial derivatives .......
Others ...................................................................
1,019
156,512
1,162
519
966
—
—
(17,321)
—
1,538
140,157
1,162
2,254
120,075
576
—
28,691
—
—
(20,932)
—
2,254
127,833
576
Trading losses............................................................ ¥ 6,732
—
Losses on trading securities .................................
¥10,589
—
¥(17,321)
—
¥ — ¥ 8,313
—
—
¥12,619
—
¥(20,932)
—
¥ —
—
Losses on securities related to
trading transactions ............................................
Losses on trading-related financial derivatives .....
Others ...................................................................
—
6,732
—
—
10,589
—
—
(17,321)
—
—
—
—
—
8,313
—
—
12,619
—
—
(20,932)
—
—
—
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
SMFG 2011 157
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
2011
2010
¥46,475,850
25,358,154
3,858,755
75,692,760
6,054,758
¥81,747,518
¥ 4,818,026
1,533,773
108,904
6,460,703
2,368,364
¥ 8,829,068
¥90,576,587
¥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
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
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
2011
2010
Manufacturing..............................................................................................
Agriculture, forestry, fisheries and mining ...................................................
Construction ................................................................................................
Transportation, communications and public enterprises ............................
Wholesale and retail ....................................................................................
Finance and insurance ................................................................................
Real estate, goods rental and leasing .........................................................
Services .......................................................................................................
Municipalities ...............................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
¥ 5,997,719
148,770
961,596
3,816,458
4,216,614
5,241,692
7,729,135
3,954,440
1,230,912
19,796,115
¥53,093,455
11.30%
0.28
1.81
7.19
7.94
9.87
14.56
7.45
2.32
37.28
100.00%
¥ 6,689,718
153,199
1,094,835
3,261,007
4,475,464
5,271,565
8,179,721
4,192,580
1,117,092
20,374,612
¥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%
Overseas operations:
Public sector ................................................................................................
Financial institutions ....................................................................................
Commerce and industry ..............................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
¥ 43,100
543,997
7,142,983
866,945
¥ 8,597,027
¥63,406,825
¥ 35,733
621,657
7,385,370
822,832
¥ 8,865,594
¥61,959,049
0.40%
7.01
83.31
9.28
100.00%
—
0.50%
6.33
83.09
10.08
100.00%
—
comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
158
SMFG 2011
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
2011
¥ 90,171
958,729
14,226
466,459
¥1,529,587
¥ 716,192
Millions of yen
2010
¥ 162,969
1,047,913
38,249
249,139
¥1,498,271
¥ 710,815
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
2011
2010
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
¥25,934,346
544,409
3,237,321
2,621,131
5,713,956
¥38,051,166
Overseas operations:
¥16,738,321
422,648
3,531,793
2,843,148
3,431,856
¥26,967,768
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 operations
¥ —
—
—
—
1,454,593
¥ 1,454,593
¥28,422,362
¥ —
—
—
—
1,697,228
¥ 1,697,228
¥39,748,394
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 ........................................................... ¥6,107,160
Trading securities .................................................. 2,735,578
3,857
Derivatives of trading securities ............................
—
Securities related to trading transactions .............
Derivatives of securities related to
5,338
trading transactions ............................................
Trading-related financial derivatives ..................... 3,071,434
290,952
Other trading assets..............................................
2011
2010
Millions of yen
Overseas
operations Elimination
¥(34,836)
¥518,595
38,619
—
—
Total
¥6,590,920
— 2,774,197
3,857
—
—
—
Domestic
operations
¥6,067,423
2,656,782
1,244
—
Overseas
operations Elimination
¥(36,046)
¥587,881
32,229
—
—
Total
¥6,619,258
— 2,689,011
1,244
—
—
—
—
479,623
353
—
(34,836)
—
5,338
3,516,221
291,305
6,931
3,124,521
277,943
—
555,288
363
—
(36,046)
—
6,931
3,643,763
278,307
Trading liabilities ........................................................ ¥4,631,357
Trading securities sold for short sales .................. 1,582,282
1,514
Derivatives of trading securities ............................
¥612,920
830
—
¥(34,836)
¥5,209,441
— 1,583,112
1,514
—
¥4,446,003
1,557,587
2,296
¥632,763
—
—
¥(36,046)
¥5,042,720
— 1,557,587
2,296
—
Securities related to trading transactions
sold for short sales ..............................................
—
—
—
—
—
—
—
—
Derivatives of securities related to
5,638
trading transactions ............................................
Trading-related financial derivatives ..................... 3,041,922
—
Other trading liabilities ..........................................
1
612,088
—
—
(34,836)
—
5,639
3,619,174
—
6,961
2,879,158
—
—
632,763
—
—
(36,046)
—
6,961
3,475,875
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries. Overseas operations
comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. Intersegment transactions are reported in the “Elimination” column.
SMFG 2011 159
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
¥1,259,403
[2,267]
291,578
[2,267]
967,825
2,299
439,770
137,103
302,667
151,070
—
151,070
218,075
110,177
107,897
¥1,531,759
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 ........................................... ¥ 985,974
2011
International
operations
¥275,696
Interest expenses .......................................
118,390
175,456
Domestic
operations
¥1,063,182
2010
International
operations
¥323,681
153,247
187,233
867,584
Net interest income ........................................
2,299
Trust fees ........................................................
327,776
Fees and commissions ...............................
118,967
Fees and commissions payments ..............
208,808
Net fees and commissions .............................
940
Trading income ...........................................
—
Trading losses .............................................
940
Net trading income .........................................
75,579
Other operating income ..............................
40,882
Other operating expenses ..........................
34,696
Net other operating income (expenses) .........
Gross banking profit ....................................... ¥1,114,329
Gross banking profit rate (%) .........................
Notes: 1. Domestic operations include yen-denominated transactions by domestic branches, while international operations include foreign-currency-denominated
909,934
1,736
321,837
108,603
213,233
2,424
—
2,424
30,585
40,690
(10,104)
¥1,117,224
100,240
—
111,993
18,135
93,858
150,129
—
150,129
142,495
69,294
73,200
¥417,429
136,448
—
91,123
17,643
73,480
112,932
—
112,932
55,202
40,012
15,190
¥338,050
1.44%
1.63%
1.98%
1.50%
2.34%
1.60%
transactions by domestic branches and operations by overseas branches. Yen-denominated nonresident transactions and Japan offshore banking
accounts are included in international operations.
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 (2011, ¥16 million; 2010, ¥20 million) related to the management of money held in trust.
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 ................................... ¥77,087,991
[1,239,310]
47,537,001
27,380,279
62,671
—
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
474,990
26,437
92,728
Interest-bearing liabilities ............................... ¥76,271,874
61,678,813
7,425,533
1,176,587
79,200
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
1,161,916
1,937,454
59,861
2,524,056
2011
Interest
¥985,974
[2,267]
784,020
182,526
322
—
2,218
1,223
477
¥118,390
50,558
13,143
970
88
1,000
9,650
66
39,470
Earnings yield
1.27%
1.64
0.66
0.51
—
0.46
4.62
0.51
0.15%
0.08
0.17
0.08
0.11
0.08
0.49
0.11
1.56
Average balance
¥74,033,481
[563,457]
49,843,442
21,750,902
59,440
95
2010
Interest
¥1,063,182
[6,583]
866,832
174,752
382
0
1,397,584
36,110
105,873
4,059
1,266
929
¥74,843,531
59,829,387
7,376,192
1,533,682
390,348
¥ 153,247
77,419
18,792
1,662
465
1,039,464
2,095,517
165,447
2,265,856
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
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,008,208 million; 2010, ¥875,040
million).
2. 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 (2011, ¥10,640 million; 2010, ¥10,191 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥10,640 million; 2010, ¥10,191 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
3. 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.
160
SMFG 2011
Income Analysis (Nonconsolidated)
SMBC
2011
Interest
¥275,696
173,161
57,854
3,385
757
44
—
13,247
¥175,456
[2,267]
27,958
18,754
1,529
1,725
Millions of yen
Earnings yield
1.54%
1.99
1.06
1.03
1.60
Average balance
¥17,035,222
9,241,539
4,330,491
300,991
45,582
0.71
—
0.60
1.01%
0.35
0.97
0.55
0.31
257
—
2,220,451
¥16,725,582
[563,457]
8,610,028
1,746,135
610,090
346,279
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
Earnings yield
1.90%
2.12
1.26
0.94
0.42
0.85
—
0.58
1.11%
0.39
0.89
0.36
0.14
International Operations
Year ended March 31
Average balance
Interest-earning assets ................................... ¥17,816,289
8,698,046
5,456,150
328,099
47,258
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
6,253
—
2,189,841
Interest-bearing liabilities ............................... ¥17,214,422
[1,239,310]
7,784,154
1,932,985
276,613
549,435
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Bonds .........................................................
2,344,391
1,702,887
857,741
0.29
4.72
2.72
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥61,902 million; 2010, ¥138,379
1,579,701
1,954,454
1,046,437
4,631
92,296
28,527
6,247
76,455
23,510
0.26
4.48
2.74
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
Year ended March 31
Average balance
Interest-earning assets ................................... ¥93,664,970
56,235,047
32,836,430
390,771
47,258
Loans and bills discounted .........................
Securities ....................................................
Call loans ....................................................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Bills bought .................................................
Deposits with banks ...................................
481,243
26,437
2,282,569
2,263
1,223
13,725
Interest-bearing liabilities ............................... ¥92,246,987
69,462,967
9,358,519
1,453,201
628,636
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Short-term bonds .......................................
Bonds .........................................................
3,506,308
3,640,341
59,861
3,381,798
7,247
86,105
66
62,981
¥ 291,578
78,517
31,897
2,499
1,814
Millions of yen
2011
Interest
¥1,259,403
957,181
240,380
3,708
757
Earnings yield
1.34%
1.70
0.73
0.94
1.60
Average balance
¥90,505,247
59,084,981
26,081,394
360,432
45,678
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
0.47
4.62
0.60
0.31%
0.11
0.34
0.17
0.28
0.20
2.36
0.11
1.86
1,397,842
36,110
2,326,324
4,061
1,266
13,863
¥91,005,657
68,439,416
9,122,327
2,143,773
736,627
¥ 333,898
111,844
34,354
3,903
982
2,619,166
4,049,972
165,447
3,312,293
6,103
103,829
303
64,294
0.29
3.50
0.59
0.36%
0.16
0.37
0.18
0.13
0.23
2.56
0.18
1.94
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2011, ¥1,070,110 million; 2010, ¥1,013,420
million).
2. 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 (2011, ¥10,640 million; 2010, ¥10,191 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2011, ¥10,640 million; 2010, ¥10,191 million) and corresponding
interest (2011, ¥16 million; 2010, ¥20 million).
3. 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 2011 161
SMBC
Income Analysis (Nonconsolidated)
Breakdown of Interest Income and Interest Expenses
Domestic 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 .........................................................
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 ...................................
Interest expenses ...........................................
Deposits......................................................
Negotiable certificates of deposit ...............
Call money ..................................................
Payables under repurchase agreements ....
Payables under securities
lending transactions .................................
Borrowed money ........................................
Bonds .........................................................
Volume-related
increase
(decrease)
¥39,068
(39,132)
37,527
16
(0)
(2,679)
(339)
(104)
¥ 2,216
1,516
87
(341)
(350)
105
(833)
(146)
4,037
Volume-related
increase
(decrease)
¥12,086
(11,183)
11,936
268
7
42
(178)
¥ 4,982
(3,139)
1,746
(1,225)
419
2,037
(11,456)
(5,144)
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)
¥42,484
(49,964)
49,450
281
6
(2,663)
(339)
(260)
¥ 3,923
1,157
805
(1,198)
(144)
1,833
(10,041)
(146)
1,294
2011
Rate-related
increase
(decrease)
¥(116,275)
(43,680)
(29,754)
(76)
(0)
838
296
(348)
¥ (37,073)
(28,377)
(5,736)
(350)
(25)
(577)
(1,049)
(90)
(333)
2011
Rate-related
increase
(decrease)
¥(60,071)
(11,715)
(8,739)
268
556
Millions of yen
Net
increase
(decrease)
¥(77,207)
(82,812)
7,773
(59)
(0)
(1,840)
(42)
(452)
¥(34,857)
(26,861)
(5,649)
(692)
(376)
(471)
(1,882)
(237)
3,703
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
Millions of yen
Net
increase
(decrease)
¥(47,985)
(22,899)
3,196
536
564
Volume-related
increase
(decrease)
¥(61,205)
(32,439)
(13,658)
206
(560)
2010
Rate-related
increase
(decrease)
¥(190,653)
(118,112)
(50,678)
(166)
(3)
(2,506)
560
(20)
¥(109,038)
(49,086)
(13,713)
(5,687)
(1,390)
(4,205)
(7,739)
(355)
4,399
2010
Rate-related
increase
(decrease)
¥(198,767)
(146,629)
(35,355)
(4,310)
(578)
Net
increase
(decrease)
¥(120,871)
(95,344)
(15,567)
(469)
(8)
(429)
191
507
¥(100,526)
(46,392)
(5,271)
(8,991)
(1,578)
(6,949)
(5,652)
(175)
7,995
Net
increase
(decrease)
¥(259,972)
(179,068)
(49,013)
(4,104)
(1,139)
(0)
492
42
314
2
(2,246)
—
(22,437)
2
(24,683)
¥(16,760)
(3,326)
1,446
513
787
(421)
(4,384)
127
2011
Rate-related
increase
(decrease)
¥(163,361)
(55,747)
(38,481)
195
557
864
296
122
¥ (46,242)
(34,484)
(3,261)
(206)
975
(689)
(7,682)
(90)
(2,607)
¥(11,777)
(6,465)
3,192
(712)
1,207
1,615
(15,841)
(5,017)
¥(57,830)
(4,613)
9,379
(764)
(1,368)
(12,231)
(25,958)
(7,658)
Millions of yen
Net
increase
(decrease)
¥(120,877)
(105,711)
10,969
476
563
(1,798)
(42)
(138)
¥ (42,319)
(33,327)
(2,456)
(1,404)
831
1,144
(17,723)
(237)
(1,313)
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)
¥(308,311)
(115,258)
(7,122)
(9,678)
(4,504)
(46,831)
(20,849)
(11,641)
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)
Note: Volume/rate variance is prorated according to changes in volume and rate.
162
SMFG 2011
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
¥327,776
11,271
92,675
11,920
12,089
6,045
20,374
2011
International
operations
¥111,993
49,608
25,946
734
—
—
14,376
Fees and commissions payments ..................
Remittances and transfers .........................
¥118,967
21,368
¥ 18,135
9,631
Trading Income
Millions of yen
Total
¥439,770
60,879
118,621
12,655
12,089
6,045
34,750
¥137,103
31,000
Domestic
operations
¥321,837
11,114
92,857
13,280
11,611
6,249
20,934
¥108,603
20,479
Millions of yen
Domestic
operations
¥940
257
2011
International
operations
¥150,129
—
Total
¥151,070
257
1,538
1,538
148,111
479
148,111
1,162
Domestic
operations
¥2,424
1,309
—
—
1,114
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 .........................................................
—
—
683
¥ —
—
—
—
—
2010
International
operations
¥91,123
36,137
24,162
1,125
—
—
14,434
¥17,643
8,000
2010
International
operations
¥112,932
—
Total
¥412,960
47,252
117,019
14,405
11,611
6,249
35,368
¥126,246
28,479
Total
¥115,356
1,309
2,254
2,254
110,677
0
110,677
1,115
¥ —
—
¥ —
—
¥ —
—
¥ —
—
¥ —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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 on bonds ..........................................
Gains (losses) on derivatives ......................
Losses on foreign exchange transactions ...
General and Administrative Expenses
Millions of yen
Domestic
operations
¥34,696
28,388
874
—
2011
International
operations
¥ 73,200
118,732
8,454
(53,976)
Total
¥107,897
147,120
9,328
(53,976)
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)
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 .................................................................................................................
2011
¥210,947
12,612
32,364
71,030
56,459
6,795
5,382
5,190
3,285
7,390
7,814
37,883
51,220
190,821
¥699,197
Millions of yen
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
SMFG 2011 163
SMBC
Deposits (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Millions of yen
2011
2010
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
¥43,898,428
21,339,847
1,020,166
66,258,442
6,163,280
¥72,421,723
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
¥ 3,846,223
1,110,176
2,821,627
7,778,027
2,243,535
¥10,021,562
¥82,443,286
2. Fixed-term deposits = Time deposits + Installment savings
60.6%
29.5
1.4
91.5
8.5
100.0%
38.4%
11.1
28.1
77.6
22.4
100.0%
—
¥40,457,064
20,973,648
1,119,778
62,550,491
5,431,866
¥67,982,357
¥ 4,171,693
1,355,428
2,379,653
7,906,775
1,741,507
¥ 9,648,282
¥77,630,639
59.5%
30.9
1.6
92.0
8.0
100.0%
43.3%
14.0
24.7
82.0
18.0
100.0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2011
2010
Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................
¥39,935,948
21,296,124
446,739
61,678,813
7,425,533
¥69,104,346
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
¥ 3,883,930
1,217,809
2,682,413
7,784,154
1,932,985
¥ 9,717,140
¥78,821,486
¥38,899,878
20,484,955
444,553
59,829,387
7,376,192
¥67,205,580
¥ 4,417,417
1,366,600
2,826,011
8,610,028
1,746,135
¥10,356,164
¥77,561,744
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.
2. Negotiable certificates of deposit are excluded.
3. Accounts at overseas branches and Japan offshore banking accounts are excluded.
Millions of yen
2011
¥36,653,677
36,395,320
¥73,048,997
50.2%
49.8
100.0%
2010
¥35,637,984
31,921,076
¥67,559,060
52.8%
47.2
100.0%
164
SMFG 2011
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.
2011
¥2,724,955
314,448
¥3,039,403
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.
2011
¥ 8,166,662
7,110,695
20,201
1,035,765
4,317,906
4,255,106
25,538
37,261
6,078,181
5,996,091
56,543
25,546
1,628,322
1,562,223
59,947
6,150
1,071,485
1,012,125
55,318
4,041
1,187,423
513,895
671,352
2,175
¥22,449,980
20,450,137
888,901
1,110,941
Millions of yen
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
SMFG 2011 165
SMBC
Loans (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Balance of Loans and Bills Discounted
Year-End Balance
March 31
Domestic operations:
Millions of yen
2011
2010
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
International operations:
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
¥ 1,321,221
36,510,374
8,122,475
139,034
¥46,093,104
¥ 482,697
8,558,792
103,019
—
¥ 9,144,508
¥55,237,613
¥ 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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2011
2010
Loans on notes ............................................................................................
Loans on deeds ...........................................................................................
Overdrafts ....................................................................................................
Bills discounted ...........................................................................................
Subtotal .......................................................................................................
¥ 1,428,036
37,892,485
8,083,617
132,861
¥47,537,001
International operations:
¥ 1,720,223
38,993,305
8,969,237
160,676
¥49,843,442
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
¥ 431,246
8,166,756
100,044
—
¥ 8,698,046
¥56,235,047
¥ 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 .................................................................................................................
2011
¥21,095,931
34,141,682
¥55,237,613
38.2%
61.8
100.0%
2010
¥21,487,115
35,131,942
¥56,619,058
38.0%
62.0
100.0%
Millions of yen
Balance of Loans and Bills Discounted, Classified by Collateral
March 31
Securities .........................................................................................................
Commercial claims ..........................................................................................
Commercial goods ..........................................................................................
Real estate .......................................................................................................
Others ..............................................................................................................
Subtotal ...........................................................................................................
Guaranteed ......................................................................................................
Unsecured .......................................................................................................
Total .................................................................................................................
2011
¥ 492,005
966,036
123
6,747,774
689,604
8,895,545
18,505,823
27,836,245
¥55,237,613
Millions of yen
2010
¥ 562,243
996,719
—
6,895,988
603,538
9,058,490
21,075,681
26,484,887
¥56,619,058
166
SMFG 2011
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.
2011
¥ 8,716,300
9,279,086
7,330,056
1,949,030
7,084,266
5,502,456
1,581,809
2,451,364
2,060,192
391,171
19,481,101
18,486,100
995,001
8,225,494
8,225,494
—
¥55,237,613
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
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2011
2010
Manufacturing..............................................................................................
Agriculture, forestry, fisheries and mining ...................................................
Construction ................................................................................................
Transportation, communications and public enterprises ............................
Wholesale and retail ....................................................................................
Finance and insurance ................................................................................
Real estate, goods rental and leasing .........................................................
Services .......................................................................................................
Municipalities ...............................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
¥ 5,632,691
145,177
770,985
3,612,396
3,814,280
5,934,719
6,383,363
3,436,439
1,105,751
17,015,261
¥47,851,066
11.8%
0.3
1.6
7.5
8.0
12.4
13.3
7.2
2.3
35.6
100.0%
¥ 6,308,200
146,765
897,987
3,067,711
4,061,267
5,907,426
6,809,580
3,769,330
984,186
17,573,287
¥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%
Overseas operations:
Public sector ................................................................................................
Financial institutions ....................................................................................
Commerce and industry ..............................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Total .................................................................................................................
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches). Overseas operations comprise the operations of SMBC’s overseas
¥ 21,320
484,892
6,026,280
560,823
¥ 7,093,316
¥56,619,058
¥ 19,487
555,762
6,246,696
564,599
¥ 7,386,547
¥55,237,613
0.3%
7.5
84.6
7.6
100.0%
—
0.3%
6.8
85.0
7.9
100.0%
—
branches.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
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.
2011
¥47,851,066
33,813,418
70.7%
2010
¥49,525,741
34,457,098
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 employ-
ees. (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 2011 167
SMBC
Loans (Nonconsolidated)
Consumer Loans Outstanding
March 31
Consumer loans ..............................................................................................
Housing loans ..............................................................................................
Residential purpose .................................................................................
Others ..........................................................................................................
2011
¥15,369,284
14,490,768
11,141,658
878,516
2010
¥15,400,531
14,497,508
11,010,697
903,023
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, 2011
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
¥491,033
[4,617]
260,622
[1,720]
28,665
[1,720]
184
¥751,840
[6,338]
¥475,487
[2,554]
* Transfer from reserves by reversal or origination method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
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
¥483,315
Decrease during the fiscal year
Others
Objectives
¥491,033*
¥ —
Balance at end
of the fiscal year
¥483,315
227,935
59,791
200,831*
227,935
44,601
5,719
22,945*
44,601
272
¥711,522
—
¥59,791
184*
¥692,049
272
¥711,522
¥496,205
Millions of yen
Increase during
the fiscal year
¥497,582
Decrease during the fiscal year
Others
Objectives
¥ —
¥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 busi-
ness 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 pos-
sible loan losses for nonresident loans.
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
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
2011
¥70,775
2010
¥102,663
Specific Overseas Loans
March 31
Iceland .............................................................................................................
Ukraine ............................................................................................................
Pakistan ...........................................................................................................
Argentina .........................................................................................................
Total .................................................................................................................
Ratio of the total amounts to total assets .......................................................
Number of countries ........................................................................................
2011
¥1,233
1,010
68
6
¥2,318
0.00%
4
Millions of yen
2010
¥1,112
160
61
4
¥1,339
0.00%
4
168
SMFG 2011
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
2011
¥ 65,802
721,792
12,327
290,682
¥1,090,605
¥ 426,203
Millions of yen
2010
¥ 112,973
776,364
22,889
155,790
¥1,068,017
¥ 411,715
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
2011
¥ 138,433
684,826
303,010
1,126,269
61,025,837
¥62,152,106
¥ 496,205
Millions of yen
2010
¥ 224,335
697,670
178,679
1,100,685
62,116,059
¥63,216,745
¥ 478,042
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 place-
ment bonds, loans and bills discounted, foreign exchanges, accrued interest, and suspense payment in “other assets,” customers’ liabilities for acceptances
and guarantees, and securities lent under the loan for consumption or leasing agreements.
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)
Bankrupt loans
Non-accrual loans
Past due loans (3 months or more)
Restructured loans
A
B
C
C
SMFG 2011 169
SMBC
Loans (Nonconsolidated)
Classification under Self-Assessment, Disclosure of Problem Assets, and Write-Offs/Reserves
March 31, 2011
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
¥138.5
¥124.0
¥14.5
Direct
write-offs
(Note 1)
¥18.6
(Note 2)
100%
(Note 3)
Doubtful assets (2)
Portion of claims secured by
collateral or guarantees, etc. (6)
¥684.8
¥413.7
Necessary
amount
reserved
¥271.1
Substandard loans (3)
¥303.0
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥61,025.8
Portion of substandard loans
secured by collateral or
guarantees, etc. (7)
¥118.3
Claims to borrowers requiring
caution, excluding claims to
substandard borrowers
Claims to normal
borrowers
Total
(4)
¥62,152.1
(A) = (1) + (2) + (3)
¥1,126.3
Loan loss reserve for specific overseas countries
NPL ratio (A) / (4)
1.81%
(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) ¥656.0
Unsecured portion
(D) = ( A ) – (C)
Specific
reserve
General
reserve
¥209.1
(Note 2)
77.14%
(Note 3)
General reserve
for substandard
loans ¥102.8
¥483.5
(Note 5)
¥0.3
¥711.5
¥330.5
¥470.3
19.57%
(Note 3)
56.75%
(Note 3)
6.53%
[14.14%]
(Note 4)
0.23%
(Note 4)
Reserve ratio
(B) / (D)
70.28%
(Note 7)
Coverage ratio { ( B) + (C) } / (A)
87.59%
Notes: 1. Includes amount of direct reduction totaling ¥496.2 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Law. (Bankrupt/Effectively Bankrupt Borrowers: ¥4.1
billion; Potentially Bankrupt Borrowers: ¥18.3 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 ¥0.2 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, 2009
➀
¥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
➁
¥224.3
697.7
¥922.0
Fiscal 2010
New occurrences Off-balanced
¥(129.3)
(389.8)
¥(519.1)
¥ 43.5
376.9
¥420.4
March 31, 2011
➂
¥138.5
684.8
¥823.3
Billions of yen
Increase/
Decrease
➂ – ➁
¥(85.8)
Bankrupt and quasi-bankrupt assets ...
(12.9)
Doubtful assets ....................................
¥(98.7)
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 sale,
Increase/
Decrease
➁ – ➀
¥(95.3)
19.4
¥(75.9)
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 ¥179.6 billion for fiscal 2009 and ¥74.3 billion in fiscal 2010, recognized as “new occurrences” in the first halves of the
terms, were included in the amounts off-balanced in the respective second halves.
170
SMFG 2011
Securities (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
SMBC
Millions of yen
2011
2010
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 .................................................................................................................
¥25,220,129
307,731
2,847,093
3,494,297
292,520
/
/
¥32,161,772
¥ —
—
—
—
7,691,659
6,115,038
1,576,620
¥ 7,691,659
¥39,853,432
¥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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2011
2010
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
Subtotal .......................................................................................................
International operations:
¥20,450,913
298,131
2,998,815
3,311,944
320,475
/
/
¥27,380,279
¥14,930,938
189,976
3,282,013
2,995,811
352,162
/
/
¥21,750,902
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
¥ —
—
—
—
5,456,150
4,004,455
1,451,694
5,456,150
¥32,836,430
¥ —
—
—
—
4,330,491
2,952,764
1,377,727
¥ 4,330,491
¥26,081,394
current method.
SMFG 2011 171
SMBC
Securities (Nonconsolidated)
Balance of Securities Held, Classified by Maturity
March 31
One year or less
Millions of yen
2011
2010
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
¥11,623,061
816
223,139
1,191,516
1,180,724
—
¥ 8,305,240
5,051
244,651
487,627
461,065
—
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
6,146,846
59,197
1,035,346
2,155,970
2,107,922
—
4,400,297
191,427
885,721
1,144,449
1,114,468
—
394,063
14,670
398,420
1,018,939
985,785
—
2,655,860
41,572
232,956
568,872
551,714
—
—
47
71,509
372,957
174,422
179,337
—
—
—
3,494,297
1,531,474
—
1,397,283
Japanese government bonds ......................................................................
Japanese local government bonds .............................................................
Japanese corporate bonds .........................................................................
Japanese stocks ..........................................................................................
Others ..........................................................................................................
Foreign bonds ..........................................................................................
Foreign stocks .........................................................................................
¥25,220,129
307,731
2,847,093
3,494,297
7,984,180
6,115,038
1,576,620
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
¥16,085,664
221,206
3,102,608
3,661,722
5,464,999
3,680,136
1,468,576
172
SMFG 2011
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 acceptances
12.13
0.30
8.28
11.18
0.38
7.87
2010
0.44%
2011
0.54%
and guarantees ✕ 100
2. Ordinary profit (net income) to stockholders’ equity = (Ordinary profit (net income) – Preferred dividends) / {(Net assets 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
Yield/Interest Rate
Year ended March 31
Domestic operations:
Percentage
2011
2010
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) ........................................................................................................
1.27%
0.97
0.30
1.54%
1.43
0.11
1.34%
1.07
0.27
1.43%
1.02
0.41
1.90%
1.54
0.36
1.52%
1.11
0.41
Loan-Deposit Ratio
March 31
Domestic operations:
Millions of yen
2011
2010
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.
¥46,093,104
72,421,723
63.64%
68.79
¥ 9,144,508
10,021,562
91.24%
89.51
¥55,237,613
82,443,286
67.00%
71.34
¥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
SMFG 2011 173
SMBC
Ratios (Nonconsolidated)
Securities-Deposit Ratio
March 31
Domestic operations:
Millions of yen
2011
2010
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.
¥32,161,772
72,421,723
44.40%
39.62
¥ 7,691,659
10,021,562
76.75%
56.14
¥39,853,432
82,443,286
48.34%
41.65
¥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
174
SMFG 2011
Capital (Nonconsolidated)
Sumitomo Mitsui Banking Corporation
Changes in Number of Shares Issued and Capital Stock
Number of shares issued
Changes
May 17, 2006*1 .........................................
September 6, 2006*2 ................................
September 29, 2006*3 ..............................
October 11, 2006*4 ...................................
October 31, 2006*5 ...................................
September 10, 2009*6 ..............................
September 29, 2009*7 ..............................
November 26, 2009*8 ...............................
February 16, 2010*9 ..................................
214,194
173,770
601,757
153,181
(830,000)
20,672,514
8,211,569
992,453
20,016,015
Balances
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
SMBC
Millions of yen
Capital stock
Capital reserve
Balances
Changes
¥ — ¥ 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
Balances
Changes
¥ — ¥ 665,033
665,033
665,033
665,033
665,033
1,093,006
1,263,006
1,287,006
1,771,043
—
—
—
—
427,972
170,000
23,999
484,037
Remarks:
*1 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
*2 Conversion of 67,000 shares of preferred stock (Type 2) to 173,770 shares of common stock
*3 Conversion of 500,000 shares of preferred stock (Type 3) to 601,757 shares of common stock
*4 Conversion of 195,000 shares of preferred stock (Type 3) to 153,181 shares of common stock
*5 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)
*6 Allotment to third parties: Common stock: 20,672,514 shares
Issue price: ¥41,405 Capitalization: ¥20,702.5
*7 Allotment to third parties: Common stock: 8,211,569 shares
Issue price: ¥41,405 Capitalization: ¥20,702.5
*8 Allotment to third parties: Common stock: 992,453 shares
*9 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, 2011
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, 2011
Sumitomo Mitsui Financial Group, Inc. ..........................................................
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2011
Sumitomo Mitsui Financial Group, Inc. ..........................................................
Number of shares
70,001
Percentage of
shares outstanding
100.00%
Percentage of
shares outstanding
100.00%
SMFG 2011 175
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 serve
2010
22,460
33–10
10–6
¥7,336
2011
22,524
34–4
11–0
¥7,487
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:
2011
493
164
2
2010
494
164
1
Branches .....................................................................................................
Subbranches ...............................................................................................
Representative offices .................................................................................
Total .................................................................................................................
Note: “Main offices and branches” includes the International Business Operations Dept. (2011, 2 branches; 2010, 2 branches), specialized deposit account branches
15
6
13
693
15
7
11
692
(2011, 38 branches; 2010, 38 branches) and ATM administration branches (2011, 17 branches; 2010, 17 branches).
Number of Automated Service Centers
March 31
Automated service centers..............................................................................
2011
35,175
2010
32,391
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2011
2010
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
334,977
¥ 595,566,367
Received from various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
298,595
¥ 952,980,527
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
2,614
¥ 6,378,902
Received from various parts of the country:
Number of accounts (thousands) ............................................................
Amount ....................................................................................................
Total .................................................................................................................
988
¥ 2,284,019
¥1,557,209,816
407,093
¥ 653,586,914
300,189
¥ 804,727,712
2,679
¥ 6,396,030
1,006
¥ 2,722,318
¥1,467,432,974
176
SMFG 2011
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
2011
$2,129,774
1,388,730
$ 940,080
31,761
$4,490,346
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 .................................................................................................................
2011
¥ 19,398
25,605
—
51,381
13,102
¥ 109,488
419,252
3,324,207
¥3,852,949
2010
$1,463,062
992,185
$ 699,127
21,821
$3,176,196
2010
¥ 19,578
22,672
—
52,716
5,857
¥ 100,824
459,711
3,065,332
¥3,625,868
SMFG 2011 177
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 .........................................................................................
Total liabilities ..............................................................................................
2011
¥ 237,383
237,383
444,664
320,540
9,107
6,066
108,700
250
3,046
548,973
18,295
530,677
22
22
7
7
2,474
79,427
216,171
43,638
43,638
284
284
¥1,576,094
¥ 615,685
176,511
220,007
3,221
554,703
45
5,919
¥1,576,094
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
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
178
SMFG 2011
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 Act” (Notification No. 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: 327
Please refer to “Principal Subsidiaries and Affiliates” on page 216 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 Act.
2. Deduction from Capital
(cid:129) Number of nonconsolidated subsidiaries subject to deduction from capital: 210
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: 59
Please refer to “Principal Subsidiaries and Affiliates” on page 216 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 2011 179
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 LLC 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 ...............................................................................
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 reserve ..............
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..........................................................
Excess of eligible reserves relative to expected 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
2011
¥ 2,337,895
978,851
1,776,433
(171,760)
(73,612)
(122,889)
262
2,029,481
(394,342)
(36,324)
—
6,323,995
169,267
35,739
100,023
21,742
2,210,184
2,536,958
2,536,958
428,082
¥ 8,432,871
¥38,985,243
7,433,319
584,020
3,691,113
¥50,693,696
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
(A) / (E) ✕ 100 ....................................................................................................
12.47%
11.15%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
16.63%
¥ 4,055,495
15.02%
¥ 4,326,757
* “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.
180
SMFG 2011
■ Capital Requirements
March 31
Capital requirements for credit risk:
Capital Ratio Information
SMFG
Billions of yen
2011
2010
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:
¥4,605.9
2,790.4
2,393.4
39.5
124.9
232.6
904.0
438.3
152.3
313.4
335.3
175.4
84.9
75.1
47.8
27.3
160.4
150.7
265.1
699.7
5,305.6
29.1
21.9
3.2
2.3
1.6
0.1
17.6
46.7
¥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
Advanced measurement approach ........................................................................................................
Basic indicator approach ........................................................................................................................
Total capital requirements for operational risk........................................................................................
Total amount of capital requirements .......................................................................................................
235.1
60.2
295.3
¥5,647.6
232.2
17.2
249.4
¥6,049.5
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, Sumitomo Mitsui Banking Corporation Malaysia Berhad, SMBC Leasing and Finance, Inc., SMBC Capital Markets, Inc.,
SMBC Nikko 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, 2011, 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.
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 2011 181
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 35). 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
182
SMFG 2011
Capital Ratio Information
SMFG
(B) Portfolio
a. Domestic Corporate, Sovereign and Bank Exposures
Billions of yen
Exposure amount
On-balance
sheet assets
Off-balance
sheet assets
Undrawn
amount
Total
March 31, 2011
J1-J3 ................................... ¥18,775.3 ¥13,538.6 ¥5,236.6 ¥3,677.9
920.3
J4-J6 ................................... 14,013.7 10,817.1
20.5
1,541.3
J7 (excluding J7R) ...............
Japanese government and
local municipal corporations .... 32,765.0 32,641.9
5,071.1
5,529.7
Others ..................................
1,334.5
1,401.0
Default (J7R, J8-J10) ...........
Total ..................................... ¥74,263.3 ¥64,944.6 ¥9,318.7 ¥4,735.1
123.0
458.5
66.6
3,196.6
237.4
30.7
85.4
1,778.7
Weighted
average
CCF
75.00%
75.00
75.00
Weighted
average
LGD
Weighted
average
PD
0.06% 34.50%
0.85
12.54
29.25
27.70
Weighted
average
ELdefault
Weighted
average
risk weight
—% 15.62%
—
42.24
— 112.16
75.00
75.00
0.3 100.00
—
0.00
1.00
100.00
—
35.25
37.06
53.22
—
—
—
51.84
—
0.06
49.16
17.19
—
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
J7 (excluding J7R) ...............
16.4
2,146.4
Japanese government and
0.8
local municipal corporations .... 22,671.2 22,406.6
133.0
5,547.9
5,030.6
Others ..................................
Default (J7R, J8-J10) ...........
1.7
1,379.2
1,429.6
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
—
Note: “Others” includes exposures guaranteed by credit guarantee corporations, exposures to public sector entities and voluntary organizations, and exposures to obligors
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, 2011
G1-G3 .................................. ¥23,232.7 ¥15,404.6 ¥7,828.1 ¥3,515.5
158.5
779.8
G4-G6 ..................................
99.5
288.7
G7 (excluding G7R) .............
16.9
118.1
Others ..................................
6.7
170.1
Default (G7R, G8-G10) ........
Total ..................................... ¥24,589.4 ¥16,458.2 ¥8,131.3 ¥3,797.2
610.7
190.1
98.6
154.1
169.1
98.6
19.5
15.9
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 ..................................
Default (G7R, G8-G10) ........
7.2
212.0
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
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
0.15% 29.36%
2.34
23.26
2.21
100.00
—
28.31
27.49
38.20
63.54
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 16.66%
—
72.23
— 146.10
— 111.24
82.12
—
56.97
—
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
—
—
SMFG 2011 183
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, 2011.
(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
2011
2010
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%
—
Note: A portion of “Object finance” is calculated using the PD/LGD approach.
¥ 120.1
746.2
28.9
224.9
13.7
43.8
29.2
¥1,206.8
(b) High-Volatility Commercial Real Estate (HVCRE)
¥ 2.1
7.9
1.7
3.1
—
—
—
¥14.9
¥ 125.6
746.9
23.3
169.9
42.1
61.5
18.0
¥1,187.0
¥ 0.6
41.0
—
4.1
—
—
—
¥45.7
March 31
Strong:
Risk
weight
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%
—
Billions of yen
2011
¥ —
—
31.0
74.3
96.1
20.0
2.1
¥223.5
2010
¥ —
—
32.5
10.8
152.9
11.1
6.5
¥213.6
b. PD/LGD Approach Applicable Portion, Other Than Slotting Criteria Applicable Portion
(a) Object Finance
Billions of yen
Exposure amount
On-balance
sheet assets
¥ 91.7
21.0
10.9
—
9.6
¥133.3
Off-balance
sheet assets
¥24.3
6.6
0.0
—
0.3
¥31.2
Total
¥116.0
27.6
10.9
—
9.9
¥164.5
Undrawn
amount
¥1.2
7.3
0.1
—
—
¥8.5
Weighted
average
LGD
Weighted
Weighted
average
average
CCF
PD
0.39% 22.67%
75.00%
3.06
75.00
18.75
75.00
—
—
— 100.00
—
—
9.21
27.05
—
58.20
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 37.81%
—
29.41
— 155.72
—
—
82.12
51.63
—
—
March 31, 2011
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
184
SMFG 2011
Capital Ratio Information
SMFG
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
(b) Income-Producing Real Estate (IPRE)
Billions of yen
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
0.51% 20.86%
75.00%
2.43
75.00
19.75
75.00
—
—
— 100.00
—
—
12.95
29.84
—
65.16
—
Total
Exposure amount
On-balance
March 31, 2011
sheet assets
J1-J3 ................................... ¥ 546.9 ¥ 487.0
832.1
J4-J6 ...................................
65.9
J7 (excluding J7R) ...............
72.2
Others ..................................
22.7
Default (J7R, J8-J10) ...........
Total ..................................... ¥1,642.0 ¥1,479.8
920.1
78.0
74.2
22.8
Off-balance
sheet assets
¥ 59.9
88.0
12.2
2.1
0.1
¥162.2
Billions of yen
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 ..................................
Default (J7R, J8-J10) ...........
9.6
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
Undrawn
amount
¥0.6
3.6
—
2.6
—
¥6.8
Undrawn
amount
¥ —
4.2
—
2.5
—
¥6.7
Weighted
average
LGD
Weighted
average
CCF
75.00%
75.00
—
75.00
Weighted
average
PD
0.06% 26.77%
0.87
14.08
9.77
— 100.00
—
—
34.73
27.09
36.14
49.85
—
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
ELdefault
Weighted
average
risk weight
—% 41.74%
—
36.56
— 170.29
—
—
89.94
57.96
—
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 11.71%
—
60.42
— 125.31
62.17
—
18.53
48.37
—
—
Weighted
average
ELdefault
Weighted
average
risk weight
—% 12.15%
—
83.85
— 167.65
72.00
—
10.92
49.60
—
—
(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, 2011
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 ......................... ¥10,773.9
703.4
Others ...............................
105.3
Delinquent .............................
216.8
Default ..........................................
Total .............................................. ¥11,799.4
¥10,716.0
703.4
98.2
216.4
¥11,734.0
¥57.9
—
7.1
0.4
¥65.4
0.40%
0.92
29.44
100.00
—
42.14%
58.92
47.09
38.36
—
—%
—
—
36.34
—
27.25%
75.66
267.96
25.24
—
SMFG 2011 185
SMFG
Capital Ratio Information
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 .............................
Default ..........................................
163.2
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
—
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, 2011
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 ........ ¥ 576.4 ¥ 520.0 ¥ 54.2 ¥ 2.3
—
Delinquent ...............
18.5
17.9
0.6
Credit card balances
PD segment:
163.5
Not delinquent ........ 1,116.4
—
12.7
Delinquent ...............
—
45.4
Default ............................
Total ................................ ¥1,769.5 ¥1,214.7 ¥389.0 ¥165.8
327.1
2.5
4.6
625.8
10.2
40.9
¥ 183.9 29.47% 3.08% 85.42%
4.7 12.44
28.53
79.34
—% 71.88%
— 220.77
3,925.5
—
—
¥4,114.0
8.33
1.60
—
92.99
— 100.00
—
—
77.60
78.55
85.33
—
—
—
79.29
—
32.54
38.45
75.50
—
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, 2010
Card loans
PD segment:
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
76.31
22.22
—% 54.67%
— 206.05
669.3
Not delinquent ........ 1,010.7
6.6
7.8
Delinquent ...............
Default ............................
26.9
30.6
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
—
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 “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.”
186
SMFG 2011
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, 2011
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 .............................
¥ 917.8
356.9
361.8
¥ 907.7
355.6
358.5
¥10.1
1.3
3.4
0.80%
0.70
28.72
49.93%
55.59
60.16
—%
—
—
44.07%
27.79
95.33
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
211.2
171.8
56.8
188.1
¥2,264.5
209.6
170.1
56.6
187.6
¥2,245.8
1.6
1.7
0.2
0.5
¥18.7
1.42
2.14
20.06
100.00
—
47.80
60.44
50.96
66.98
—
—
—
—
62.31
—
52.62
78.96
112.17
58.41
—
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, 2010
Business loans
PD segment:
Not delinquent
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
—
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 2011 187
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
37) 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 ...........................................................................................................................................
2011
¥ 251.6
158.2
69.5
88.7
93.4
774.0
2,068.1
¥3,093.7
2010
¥ 234.2
149.5
48.0
101.5
84.7
724.6
2,259.6
¥3,218.4
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 is 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
¥536.5
79.5
2.1
155.4
0.5
¥774.0
Billions of yen
2011
Weighted
average
PD
0.05%
0.86
9.02
0.35
100.00
—
Weighted
average
risk weight
108.50%
213.83
402.32
139.50
—
—
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
—
—
Exposure
amount
¥514.7
79.1
1.6
128.7
0.5
¥724.6
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 ........................................................................
2011
¥697.3
2010
¥667.8
Billions of yen
188
SMFG 2011
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 reserve, non-performing loan write-offs, and gains on collection of written-off
claims) of ¥217.3 billion on a consolidated basis for fiscal year 2010, a decrease of ¥255.7 billion compared to the previous fiscal year.
SMBC recorded ¥94.3 billion in total credit costs on a non-consolidated basis in fiscal year 2010, a decrease of ¥160.4 billion com-
pared to the previous fiscal year. By exposure category, the credit cost for “corporate exposures” decreased by ¥144.7 billion compared
to the previous year, to ¥71.9 billion. The credit cost for “bank exposures” decreased by ¥17.5 billion compared to the previous year,
to ¥(14.0) billion. These results are primarily due to the measures taken by SMBC to improve the business and financial conditions of
borrowers according to the circumstances of each borrower, and a partial reversal of the loan-loss reserve.
Total Credit Costs
Billions of yen
Fiscal 2010 (A)
Fiscal 2009 (B)
Fiscal 2008
SMFG (consolidated) total .....................................................
SMBC (consolidated) total ....................................................
SMBC (nonconsolidated) total ..............................................
Corporate exposures .........................................................
Sovereign exposures .........................................................
Bank exposures .................................................................
Residential mortgage exposures .......................................
QRRE .................................................................................
Other retail exposures .......................................................
¥217.3
159.8
94.3
71.9
5.4
(14.0)
0.3
(0.1)
34.0
¥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
Increase
(decrease)
(A) – (B)
¥(255.7)
(259.6)
(160.4)
(144.7)
1.5
(17.5)
(0.4)
(0.2)
(27.6)
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 income.
2. Exposure category amounts do not include general reserve for Normal Borrowers.
3. Bracketed fiscal year amounts indicate gains generated by the reversal of reserve, 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 2010
Fiscal 2009
Estimated loss amounts
Estimated loss amounts
Billions of yen
SMFG (consolidated) total ................................
SMBC (consolidated) total ...............................
SMBC (nonconsolidated) total .........................
Corporate exposures ....................................
Sovereign exposures ....................................
Bank exposures ............................................
Residential mortgage exposures ..................
QRRE ............................................................
Other retail exposures ..................................
¥ —
—
1,204.3
1,021.1
7.8
30.5
4.1
0.1
140.8
After deduction
of reserves
¥ —
—
417.2
277.4
6.3
19.2
3.2
(0.0)
111.2
Actual loss
amounts
¥217.3
159.8
94.3
71.9
5.4
(14.0)
0.3
(0.1)
34.0
After deduction
of reserves
¥ —
—
354.0
210.0
4.3
34.4
3.4
0.1
107.5
Actual loss
amounts
¥473.0
419.4
254.7
216.6
3.9
3.5
0.7
0.1
61.6
¥ —
—
1,197.2
984.0
5.8
52.1
4.0
0.1
151.2
Fiscal 2008
Fiscal 2007
Estimated loss amounts
Estimated loss amounts
Billions of yen
SMFG (consolidated) total ................................
SMBC (consolidated) total ...............................
SMBC (nonconsolidated) total .........................
Corporate exposures ....................................
Sovereign exposures ....................................
Bank exposures ............................................
Residential mortgage exposures ..................
QRRE ............................................................
Other retail exposures ..................................
¥ —
—
954.2
806.7
9.0
6.1
4.0
0.1
128.3
After deduction
of reserves
¥ —
—
323.9
278.6
7.5
5.9
3.6
0.1
65.9
Actual loss
amounts
¥767.8
724.4
550.1
411.4
(0.4)
22.7
0.5
0.0
68.1
After deduction
of reserves
¥ —
—
311.4
252.6
9.6
4.9
4.1
0.1
53.1
Actual loss
amounts
¥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
Notes: 1. Amounts on consumer loans guaranteed by consolidated subsidiaries or affiliates as well as on “equity exposures” and “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 borrowers or below.
SMFG 2011 189
SMFG
Capital Ratio Information
■ Standardized Approach
1. Scope
The following consolidated subsidiaries have adopted the standardized approach for exposures as of March 31, 2011 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 181).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the IRB Approach
Sumitomo Mitsui Finance and Leasing Co., Ltd., Kansai Urban Banking Corporation and Cedyna Financial 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.
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 ..........................................................................................
¥ 8,773.2
243.3
814.8
1,061.6
377.7
3,242.1
5,645.9
78.4
0.0
0.0
¥20,237.0
Billions of yen
2011
2010
Of which assigned
country risk score
¥ 81.6
—
298.2
—
2.8
—
0.1
—
—
—
¥382.8
¥ 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
Of which assigned
country risk score
¥ 89.9
—
343.4
—
1.2
—
0.1
—
—
—
¥434.5
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 credit equivalent amount has been
included.
2. “Securitization exposures” have not been included.
■ Credit Risk Mitigation (CRM) 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.
190
SMFG 2011
Capital Ratio Information
SMFG
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.
(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 34). 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
IRB approach ...........................................................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Standardized approach ............................................................
Total ..........................................................................................
Billions of yen
2011
2010
Eligible financial
collateral
¥ 115.2
115.2
—
—
3,044.5
¥3,159.7
Other eligible
IRB collateral
¥45.6
45.6
—
—
—
¥45.6
Eligible financial
collateral
¥ 85.7
85.7
—
—
1,833.1
¥1,918.7
Other eligible
IRB collateral
¥59.3
59.3
—
—
—
¥59.3
Billions of yen
2011
2010
March 31
IRB approach ...........................................................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Residential mortgage exposures ..........................................
QRRE ....................................................................................
Other retail exposures ..........................................................
Standardized approach ............................................................
Total ..........................................................................................
Guarantee
¥7,076.9
6,382.9
271.6
232.2
190.3
—
—
74.2
¥7,151.1
Credit derivative
¥264.5
264.5
—
—
—
—
—
—
¥264.5
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
■ 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.
SMFG 2011 191
SMFG
Capital Ratio Information
2. Credit Equivalent Amounts
(1) Derivative Transactions and Long Settlement Transactions
A. Calculation Method
Current exposure method
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 ..........................................................................................................................
Eligible financial collateral .........................................................................................................
Other eligible IRB collateral .......................................................................................................
Net credit equivalent amount
(after taking into account the CRM effect of collateral) ...............................................................
Billions of yen
2011
¥4,897.5
3,232.7
8,130.3
2,989.5
4,859.0
—
63.1
—
144.0
74.7
4,541.8
3,588.5
16.5
16.5
—
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
—
¥3,572.0
¥3,785.6
(2) Notional Principal Amounts of Credit Derivatives
Credit Default Swaps
Billions of yen
2011
Notional principal amount
2010
Notional principal amount
March 31
Protection purchased .........................................................
Protection provided ............................................................
Total
¥803.0
793.6
Of which
for CRM
¥264.5
—
Total
¥ 841.6
1,147.2
Of which
for CRM
¥258.5
—
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.
192
SMFG 2011
Capital Ratio Information
SMFG
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
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, 2011
Underlying asset amount
Asset
transfer type
¥ 44.6
1,486.3
Synthetic
type
¥ 0.0
—
Total
¥ 44.6
1,486.3
228.7
244.4
¥2,004.1
194.3
36.6
¥1,761.9
34.4
207.8
¥242.2
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
Billions of yen
Fiscal 2010
Securitized
amount
¥ —
51.4
—
31.2
¥82.6
Default
amount
¥ 5.2
1.6
7.6
0.0
¥14.4
Loss
amount
¥ 3.0
0.5
18.2
0.1
¥21.8
Gains/losses
on sales
¥ —
4.1
—
—
¥4.1
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
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 exposures.”
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 are no amounts that represent “exposure to products subject to early amortization 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
¥ 31.3
203.0
68.1
158.4
¥460.7
Billions of yen
2011
To be
deducted
from capital
¥ 1.2
34.4
58.4
5.7
¥99.7
Increase
in capital
equivalent
¥ —
36.0
0.4
—
¥36.3
2010
To be
deducted
from capital
¥ 3.6
36.6
7.1
7.7
¥55.0
Increase
in capital
equivalent
¥ —
37.5
—
—
¥37.5
Term-end
balance
¥ 48.9
191.2
21.3
140.0
¥401.4
SMFG 2011 193
SMFG
Capital Ratio Information
b. Risk Weights
Billions of yen
2011
2010
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥149.0
34.7
1.0
1.8
274.2
¥460.7
Required
capital
¥ 1.0
0.9
0.2
1.1
99.7
¥102.9
Term-end
balance
¥175.0
13.2
—
—
213.3
¥401.4
Required
capital
¥ 1.1
0.5
—
—
55.0
¥56.6
(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 ...
2011
¥16.3
2010
¥ —
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, 2011
Underlying asset amount
Asset
transfer type
¥484.7
—
181.4
74.1
¥740.1
Total
¥484.7
—
181.4
74.1
¥740.1
Synthetic
type
¥ —
—
—
—
¥ —
Fiscal 2010
Securitized
amount
¥3,845.2
—
391.2
132.7
¥4,369.1
Default
amount
¥ 81.3
3.3
22.6
5.2
¥112.4
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
Loss
amount
¥ 79.0
3.3
23.0
5.1
¥110.4
Loss
amount
¥ 90.8
1.9
9.2
8.1
¥110.0
Notes: 1. The above amounts include the amount of underlying assets securitized during the term without entailing “securitization exposures.”
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 conservatively
in (1) above.
4. “Other claims” includes lease fees.
5. Following Articles 230 and 248 of the Notification, there are no amounts that represent “exposure to products subject to early amortization provisions” to
investors.
194
SMFG 2011
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
2011
To be
deducted
from capital
¥0.8
—
1.2
—
¥2.0
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥384.6
—
172.3
70.0
¥626.9
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
Billions of yen
2011
2010
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥582.7
42.2
—
—
2.0
¥626.9
Required
capital
¥3.8
1.9
—
—
2.0
¥7.7
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
(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 ...
2011
¥ —
2010
¥ —
Billions of yen
(2) Securitization Transactions in which the Group is the Investor
Securitization Exposures
(A) Underlying Assets by Asset Type
Billions of yen
2011
To be
deducted
from capital
¥35.8
—
—
0.8
¥36.6
Increase
in capital
equivalent
¥ —
—
—
—
¥ —
Term-end
balance
¥296.8
33.5
2.9
16.8
¥349.9
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
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
2011
2010
March 31
20% or less ..................................................................
100% or less ................................................................
650% or less ................................................................
Less than 1250% .........................................................
Capital deduction .........................................................
Total ..............................................................................
Term-end
balance
¥224.8
39.3
3.3
—
82.5
¥349.9
Required
capital
¥ 0.9
2.2
0.5
—
36.6
¥40.1
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
(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 ...
2011
¥ —
2010
¥2.1
Billions of yen
SMFG 2011 195
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 “available-for-sale 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. Available-for-sale 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 available-for-sale 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
2011
2010
Balance sheet amount
¥2,470.7
Fair value
¥2,470.7
Balance sheet amount
¥2,570.5
Fair value
¥2,570.5
609.1
¥3,079.7
—
¥ —
629.8
¥3,200.3
—
¥ —
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 available-for-sale securities in the consolidated statements of income.
Billions of yen
Fiscal 2010
¥ (91.9)
27.5
4.6
114.9
Fiscal 2009
¥(10.1)
57.2
34.8
32.5
5. Unrealized Gains (Losses) Recognized on Consolidated Balance Sheets but Not on Consolidated Statements of Income
March 31
Unrealized gains (losses) recognized on consolidated balance sheets
but not on consolidated statements of income....................................................................................
Note: The above amount is for stocks of Japanese companies and foreign stocks with market prices.
Billions of yen
2011
2010
¥383.8
¥483.6
6. Unrealized Gains (Losses) Not Recognized on Consolidated Balance Sheets or Consolidated Statements of Income
March 31
Unrealized gains (losses) not recognized on
consolidated balance sheets or consolidated statements of income ..................................................
Note: The above amount is for stocks of affiliates with market prices.
Billions of yen
2011
2010
¥(52.7)
¥(39.7)
196
SMFG 2011
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, 2011
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
¥ 9,366.5
230.1
1,280.5
4,986.5
5,626.2
20,169.6
8,301.7
4,778.1
1,824.8
23,725.1
¥80,289.2
¥ 2,746.8
3,381.7
9,799.3
1,918.8
¥17,846.5
¥98,135.7
¥ 220.7
0.0
35.8
178.7
65.5
428.6
309.4
110.1
648.6
30,730.3
¥32,727.9
¥ 686.6
351.4
248.7
220.7
¥ 1,507.4
¥34,235.3
¥ 532.1
12.4
8.8
225.7
565.2
1,157.3
53.8
72.5
11.8
40.5
¥2,680.2
¥ 5.0
564.0
310.6
11.1
¥ 890.6
¥3,570.8
¥2,056.6
28.9
152.8
640.7
571.8
306.8
388.5
412.2
5.8
4,070.0
¥8,634.1
¥ 12,175.8
271.4
1,478.0
6,031.6
6,828.7
22,062.4
9,053.5
5,372.9
2,491.1
58,565.9
¥124,331.3
¥ — ¥ 3,438.3
4,297.1
10,358.6
2,763.2
¥ 20,857.2
¥145,188.5
0.0
—
612.6
¥ 612.7
¥9,246.7
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 ...............................................................................................
Notes: 1. The above amounts are exposures after CRM.
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
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.
SMFG 2011 197
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Capital Ratio Information
2. Exposure Balance by Type of Assets and Residual Term
March 31, 2011
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.
¥34,370.8
14,534.6
10,020.8
3,917.6
23,783.5
11,508.6
¥98,135.7
Bonds
¥12,960.0
9,091.8
6,603.8
1,574.9
4,004.8
—
¥34,235.3
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
Bonds
¥ 8,940.2
4,768.3
5,114.9
696.2
3,007.3
—
¥22,526.9
Billions of yen
Derivatives
¥ 443.3
1,004.7
1,111.3
359.8
651.8
—
¥3,570.8
Billions of yen
Derivatives
¥ 477.9
1,059.2
1,117.7
359.0
765.3
—
¥3,779.1
Others
¥ 350.8
858.4
855.4
233.5
259.8
6,688.8
¥9,246.7
Total
¥ 48,124.8
25,489.5
18,591.3
6,085.7
28,699.8
18,197.4
¥145,188.5
Others
¥ 329.7
873.5
963.9
243.3
217.6
6,821.6
¥9,449.6
Total
¥ 40,319.4
22,928.1
17,110.5
5,194.9
27,606.7
13,893.0
¥127,052.7
Notes: 1. The above amounts are exposures after CRM.
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 .................................................................................................................................................
2011
¥2,413.9
227.4
22.0
67.2
138.2
¥2,641.3
2010
¥2,285.0
220.5
19.1
101.5
99.9
¥2,505.5
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.
(2) By Industry
Billions of yen
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 ......................................................................................................
2011
¥ 273.0
7.9
147.0
167.0
317.8
19.5
738.4
364.3
379.0
¥2,413.9
¥ 39.5
187.9
¥ 227.4
¥2,641.3
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
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.
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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 .................................................................................................
2011 (A)
¥ 696.2
0.6
1,230.0
1,148.2
81.8
16.0
24.3
41.5
¥1,926.8
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
Billions of yen
2010 (B)
¥ 702.6
0.6
1,208.9
1,126.3
82.6
20.0
25.1
37.5
¥1,912.1
2009
¥ 691.5
1.3
1,102.1
970.4
131.7
19.3
75.8
36.5
¥1,794.9
Increase (decrease)
(A) – (B)
¥ (6.4)
0.0
21.1
21.9
(0.8)
(4.0)
(0.8)
4.0
¥14.7
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.
(2) By Industry
Billions of yen
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 ......................................................................................................
2011 (A)
¥ 696.2
0.6
1,230.0
1,148.2
167.3
3.5
73.5
46.3
175.1
12.2
325.0
156.4
188.9
81.8
26.1
55.7
¥1,926.8
2010 (B)
¥ 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
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)
(A) – (B)
¥ (6.4)
(0.0)
21.1
21.9
23.8
0.2
(12.5)
(28.4)
5.8
(2.6)
(11.7)
(4.6)
51.9
(0.8)
(10.6)
9.8
¥14.7
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
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.
5. Loan Write-Offs by Industry
Billions of yen
Fiscal 2010
Fiscal 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, goods rental and leasing ....................................................
Services ..................................................................................................
Other industries ......................................................................................
Subtotal ..................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ...............................................................................
C&I companies .......................................................................................
Subtotal ..................................................................................................
Total ............................................................................................................
¥ 27.6
0.2
5.3
5.7
20.0
0.0
6.5
7.8
80.2
¥153.3
¥ 0.8
2.5
¥ 3.3
¥156.6
¥ 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
Note: “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.
SMFG 2011 199
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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 Nikko 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 Nikko 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 2010
¥1.3
3.2
1.1
1.9
Fiscal 2009
¥1.5
2.8
1.2
1.6
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 2010
¥48.6
50.9
29.7
40.5
Fiscal 2009
¥33.8
44.0
31.8
37.7
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.
200
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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, 2011, 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.
Among consolidated subsidiaries adopting the BIA, the following companies are preparing to implement the AMA.
Cedyna Financial Corporation, SMBC Nikko Securities Inc.
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
BEICFs
B. Verification
(1) Scenario Analysis through
Risk Control Assessments
A. Data input
(2) Measurement
Using the
Quantification Model
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 2011 201
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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
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
Score
1
0
2
1
0
0
0
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
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
Score
1
0
1
0
0
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SMFG
(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.
(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).
SMFG 2011 203
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Capital Ratio Information
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.
(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.
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SMFG
(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 2011 205
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
¥5 billion or more
Once in 10 years
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
206
SMFG 2011
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 2011 207
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.
208
SMFG 2011
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:
Tier I risk-weighted
capital ratio:
Total risk-weighted
capital ratio:
Required capital:
Capital stock ....................................................................................................
Capital surplus .................................................................................................
Retained earnings ............................................................................................
Cash dividends to be paid ...............................................................................
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 reserve ..............
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..........................................................
Excess of eligible reserves relative to expected 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
2011
¥ 1,770,996
2,717,397
929,336
(25,197)
(119,696)
91
1,419,231
(215,021)
(35,967)
—
6,441,170
140,213
35,739
52,519
66,209
2,210,287
2,504,969
2,504,969
289,305
¥ 8,656,834
¥34,672,732
6,539,408
570,867
3,394,595
¥45,177,603
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
¥50,073,039
(A) / (E) ✕ 100 ....................................................................................................
14.25%
12.33%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
19.16%
¥ 3,614,208
16.68%
¥ 4,005,843
SMFG 2011 209
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:
Tier I risk-weighted
capital ratio:
Total risk-weighted
capital ratio:
Required capital:
Capital stock ....................................................................................................
Capital reserve .................................................................................................
Other capital surplus ........................................................................................
Other retained earnings ....................................................................................
Others ...............................................................................................................
Cash dividends to be paid ...............................................................................
Gain on sale on securitization transactions......................................................
Amount equivalent to 50% of expected losses in excess of reserve ..............
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 ................................................................................................
Total risk-weighted assets (E) ...........................................................................
Millions of yen
2011
¥ 1,770,996
1,771,043
710,229
938,155
1,203,675
(25,197)
(35,967)
(6,792)
6,326,143
134,515
29,307
2,112,250
2,276,073
2,276,073
283,395
¥ 8,318,821
¥30,584,554
5,523,613
212,024
2,461,316
¥38,781,507
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
¥43,869,835
(A) / (E) ✕ 100 ....................................................................................................
16.31%
13.75%
(D) / (E) ✕ 100 ...................................................................................................
(E) ✕ 8% ...........................................................................................................
21.45%
¥ 3,102,520
18.28%
¥ 3,509,586
210
SMFG 2011
Corporate Data
Sumitomo Mitsui Financial Group, Inc.
*Authorized Management Committee Members
■ Board of Directors, Corporate Auditors, and Executive Officers (as of June 30, 2011)
BOARD OF DIRECTORS
Masayuki Oku
Chairman of the Board
Koichi Miyata
President
Takeshi Kunibe
Director
Tetsuya Kubo*
Director
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Subsidiaries & Affiliates Dept.
Satoru Nakanishi*
Director
Consumer Business Planning Dept.
Kazuya Jono*
Director
Corporate Risk Management Dept.
Koichi Danno*
Director
Audit Dept.
Yoshinori Yokoyama
Director (outside)
Kuniaki Nomura
Director (outside)
CORPORATE AUDITORS
Jun Mizoguchi
Corporate Auditor
Yoji Yamaguchi
Corporate Auditor
Shin Kawaguchi
Corporate Auditor
Hiroshi Araki
Corporate Auditor (outside)
Ikuo Uno
Corporate Auditor (outside)
Satoshi Ito
Corporate Auditor (outside)
Yujiro Ito*
Director
General Affairs Dept., Human Resources Dept.
Masahiro Fuchizaki*
Director
IT Planning Dept., Director of The Japan Research Institute, Limited
Shigeru Iwamoto
Director (outside)
EXECUTIVE OFFICERS
Hidetoshi Furukawa*
Managing Director
Investment Banking Planning Dept.
Ikuhiko Morikawa*
Managing Director
Card Business Dept.
President of SMFG Card & Credit, Inc.
■ SMFG Organization (as of June 30, 2011)
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.
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 2011 211
Sumitomo Mitsui Banking Corporation
*1 Executive Officers
*2 Authorized Management Committee Members
■ Board of Directors, Corporate Auditors, and Executive Officers (as of June 30, 2011)
BOARD OF DIRECTORS
Chairman of the Board
Teisuke Kitayama
President and CEO
Takeshi Kunibe*1
Director
Koichi Miyata
Deputy Presidents
Keiichi Ando*1
Located at Osaka (in charge of West Japan)
Tetsuya Kubo*1 *2
Public Relations Dept., Corporate Planning Dept., Financial
Accounting Dept., Subsidiaries & Affiliates Dept.
Satoru Nakanishi*1 *2
Head of Consumer Banking Unit
Senior Managing Directors
Kazuya Jono*1 *2
Risk Management Unit (Corporate Risk Management Dept., Credit &
Investment Planning Dept.)
Yoshihiko Shimizu*1 *2
Head of Middle Market Banking Unit
Global Advisory Dept.
Hiroshi Minoura*1 *2
Head of International Banking Unit
Koichi Minami*1 *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*1 *2
Internal Audit Dept., Credit Review Dept.,
Human Resources Dept., Human Resources Development Dept.
Mitsunori Watanabe*1 *2
Head of Corporate Banking Unit, Global Advisory Dept.
Managing Director
Yujiro Ito*1 *2
Human Resources Dept., Human Resources Development Dept.,
Quality Management Dept., General Affairs Dept., Legal Dept.,
Administrative Services Dept.
Directors (outside)
Shigeru Iwamoto
Yoshinori Yokoyama
Kuniaki Nomura
CORPORATE AUDITORS
Hiroki Yaze
Corporate Auditor
Yasuyuki Hayase
Corporate Auditor
212
SMFG 2011
Hiroshi Araki
Corporate Auditor (outside)
Ikuo Uno
Corporate Auditor (outside)
Satoshi Ito
Corporate Auditor (outside)
Jun Mizoguchi
Corporate Auditor
EXECUTIVE OFFICERS
Managing Directors
Shuichi Kageyama
Head of Corporate Advisory Division
Seiichiro Takahashi*2
Head of Treasury Unit
Hidetoshi Furukawa*2
Head of Investment Banking Unit
Ikuhiko Morikawa
Head of Private Advisory Dept.,
President of SMFG Card & Credit, Inc.
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
Hiroyuki Iwami
Head of Europe Division
President of Sumitomo Mitsui Banking Corporation Europe Limited
Yuichiro Ueda
Deputy Head of Middle Market Banking Unit (Credit Dept. I)
Masaki Tachibana
Head of The Americas Division
Kohei Hirota
Deputy Head of Middle Market Banking Unit (in charge of West
Japan)
Yoshimi Miura
Tokyo Corporate Banking Division (Tokyo Corporate Banking Depts.
I, II, and V)
Masahiro Fuchizaki*2
IT Planning Dept., IT Business Strategy Planning Dept., Operations
Planning Dept., Operations Support Dept., Director of The Japan
Research Institute, Limited
Shinichi Hayashida
Deputy Head of International Banking Unit (Credit Depts., Americas
Division and Europe Division, Asia Credit Dept., Credit Management
Dept.)
Toshimi Tagata
Deputy Head of Investment Banking Unit (Real Estate Finance Dept.)
Atsuhiko Inoue
Osaka Corporate Banking Division (Osaka Corporate Banking Depts.
I, II, and III)
Shogo Sekimoto
Tokyo Corporate Banking Division (Tokyo Corporate Banking Depts.
III, IV, and VI)
Toshiyuki Teramoto
Deputy Head of Middle Market Banking Unit (in charge of East Japan)
Manabu Narita
General Manager, Planning Dept., Corporate Banking Unit & Middle
Market Banking Unit
Kunio Yokoyama
Deputy Head of Middle Market Banking Unit (in charge of East Japan)
Kozo Ogino
Nagoya Corporate Banking Division (Nagoya Corporate Banking
Dept.)
Head of Nagoya Middle Market Banking Division
William M. Ginn
Deputy Head of The Americas Division
General Manager, Corporate Banking Dept.-II, Americas Division
Chairman of SMBC Leasing and Finance, Inc.
Chan Chi Keung, Chris
General Manager, Corporate Banking Dept., Greater China
Directors
Kazunori Okuyama
Vice Chairman and President of Sumitomo Mitsui Banking
Corporation (China) Limited
Etsutaka Inoue
Head of Osaka Minami Middle Market Banking Division
Katsuhiko Kanabe
IT Planning Dept.
IT Business Strategy Planning Dept., Operations Planning Dept.,
Operations Support Dept.
Yasushi Sakai
Financial Accounting Dept.
Hiroshi Mishima
General Manager, Planning Dept., Treasury Unit
Jun Ota
General Manager, Planning Dept., Investment Banking Unit
Yasuyuki Kawasaki
General Manager, Planning Dept., International Banking Unit
Fumiaki Kurahara
General Manager, Structured Finance Dept.
Makoto Takashima
General Manager, Corporate Planning Dept.
Ryoji Yukino
Deputy Head of Consumer Banking Unit (in charge of East Japan)
Hiroaki Hattori
Head of Kobe Middle Market Banking Division
Kiyoshi Miura
Head of Osaka Kita Middle Market Banking Division
Masaki Ashibe
Deputy Head of Middle Market Banking Unit (Credit Dept. II)
Seiichi Ueno
General Manager, Credit Dept., Corporate Banking Unit
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
Head of Tokyo Higashi Middle Market Banking Division
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 The Asia Pacific Division
Katsunori Tanizaki
General Manager, IT Planning Dept.
Tomohiro Nishikawa
Head of Kyoto Hokuriku Middle Market Banking Division and General
Manager, Kyoto Corporate Business Office-I
Takafumi Yamahiro
Head of Shinjuku Middle Market Banking Division
Minami Aida
General Manager, Seoul Branch, Global Korea Corporate Banking
Department
Shigeki Azumai
Deputy Head of Consumer Banking Unit (in charge of West Japan)
Tatsufumi Ishibashi
Deputy Head of Corporate Advisory Division
Mitsuru Ono
General Manager, Credit Management Dept., International Banking
Unit
Hirobumi Koga
Head of Tokyo Toshin Middle Market Banking Division and Saitama
Ikebukuro Middle Market Banking Division
Toshiki Ito
Head of Shibuya Middle Market Banking Division and Yokohama
Middle Market Banking Division
Takashi Matsushita
General Manager, Credit & Investment Planning Dept.
Noboru Rachi
General Manager, Shinjuku Nishiguchi Corporate Business Office-I
Takehisa Ikeda
General Manager, Tokyo Corporate Banking Dept. VI
Yukihiko Onishi
General Manager, Human Resources Dept.
Hiroyuki Okutani
General Manager, Planning Dept., Consumer Banking Unit
Hajime Kunisaki
General Manager, Operations Planning Dept.
Hisanori Kokuga
General Manager, Osaka Corporate Banking Dept. I
Koichi Noda
General Manager, Tokyo Corporate Banking Dept. II
Shosuke Mori
General Manager, Tokyo Corporate Banking Dept. I
SMFG 2011 213
■ SMBC Organization (as of June 30, 2011)
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Consumer
Banking Unit
Middle Market
Banking Unit
Corporate
Banking Unit
International
Banking Unit
Treasury Unit
Investment
Banking Unit
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
CSR Dept.
Financial Accounting Dept.
Equity Portfolio Management 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
214
SMFG 2011
Planning Dept., Consumer Banking Unit
Consumer Compliance Dept.
Marketing Dept.
Next W-ing Project Dept.
Consumer Facilitating Financing Dept.
Retail Human Resources 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.
Global Business Strategy 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., International Banking Unit
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
Branch
Consumer Loan Promotion Office
Apartment House Loan Promotion Office
Loan Support Office
Private Banking Dept.
Direct Banking Dept.
Consumer Finance Promotion Office
Middle Market Banking Division
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
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 2011 215
Principal Subsidiaries and Affiliates (as of March 31, 2011)
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
Note: Figures in parentheses ( ) in the voting rights columns indicate voting rights held indirectly via subsidiaries and affiliates.
Company Name
Sumitomo Mitsui Banking Corporation
SMFG Card & Credit, Inc.
Sumitomo Mitsui Card Company, Limited
Cedyna Financial Corporation*1
Sumitomo Mitsui Finance and Leasing Company, Limited
The Japan Research Institute, Limited
SMBC Friend Securities Co., Ltd.
Nikko Cordial Securities Inc.*2
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 Venture Capital 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 Services Co., Ltd.
Issued Capital
(Millions of Yen)
1,770,996
49,859
34,000
82,843
15,000
10,000
27,270
10,000
7,438
22,170
7,700
37,250
100,010
10
187,720
10
71,705
10
160
500
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
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
100
100
(65.99)
(69.19)
60
100
100
—
—
—
—
—
—
—
Jun. 6, 1996
Commercial banking
Oct. 1, 2008
Business management
Dec. 26, 1967
Credit card services
Sep. 11, 1950
Credit card services
Feb. 4, 1963
Leasing
Nov. 1, 2002
System engineering, data processing,
management consulting, and economic research
Mar. 2, 1948
Securities
(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)
(100)
(100)
(100)
(100)
(100)
(100)
(40)
100
Apr. 1, 2004
Management support services
(100)
Apr. 1, 1998
Consulting and agency services for
consumer loans and non-life insurance
(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)
Sep. 29, 2000
Data processing service and e-trading
consulting
(40)
Sep. 22, 2005
Venture capital
0
0
0
0
0
0
(100)
50
(25)
May 1, 1981
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
(60.21)
49.41 (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
Apr. 16, 2009
Electronic monetary claims recording
(50.1)
50.1
Mar. 1, 2010
Provision and translation of business tools and
research information
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
0
0
0
*1 Cedyna Financial Corporation became a wholly-owned subsidiary of SMFG Card & Credit, Inc., a consolidated subsidiary of SMFG, on May 1, 2011.
*2 Nikko Cordial Securities Inc. changed its company name to SMBC Nikko Securities Inc. on April 1, 2011.
216
SMFG 2011
■ 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
ZAO Sumitomo Mitsui Rus Bank
Russia
PT Bank Sumitomo Mitsui
Indonesia
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
SMBC Leasing and Finance, Inc.
SMBC Capital Markets, Inc.
SMBC Nikko Securities America,
Inc.
SMBC Financial Services, Inc.
Indonesia
Malaysia
U.S.A.
U.S.A.
U.S.A.
U.S.A.
SMBC Cayman LC Limited*3
Cayman Islands
SBTC, Inc.
SB Treasury Company L.L.C.
U.S.A.
U.S.A.
SFVI Limited
British Virgin Islands
Sakura Finance (Cayman) Limited
Cayman Islands
SMBC International Finance N.V.
Netherlands Antilles
SMBC Leasing Investment LLC
SMBC Capital Partners LLC
U.S.A.
U.S.A.
US$1,600 million
CNY7.0 billion
US$80.786 million
C$244 million
R$667.807 million
RUB1.6 billion
Rp2,873.9 billion
MYR350 million
US$1,620
US$100
US$111.10
US$3 million
US$500
US$50 million
US$470 million
US$300
US$100,000
US$200,000
US$470 million
US$10,000
SMBC MVI SPC
Cayman Islands
US$195 million
SMBC DIP Limited
Cayman Islands
US$8 million
SMBC Nikko Capital Markets
Limited
U.K.
SMBC Derivative Products Limited U.K.
SMBC Capital India Private Limited India
Sumitomo Mitsui Finance Dublin
Limited
Ireland
US$654 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
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
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
(100)
99
(1)
May 8, 2009
Commercial banking
(98.47)
98.47
Aug. 22, 1989
Commercial banking
(100)
100
Dec. 22, 2010
Commercial banking
(100)
89.69
(7.69)
Nov. 9, 1990
Leasing, investments
(100)
90
(10)
Dec. 4, 1986
Derivatives and investments
(100)
81.00 (18.99)
Aug. 8, 1990
Securities, investments
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
Aug. 8, 1990
Feb. 7, 2003
Investments,
investment advisor
Credit guarantee,
bond investment
Jan. 26, 1998
Investments
0
(100)
Jan. 26, 1998
Loans
100
100
100
Jul. 30, 1997
Investments
Feb. 11, 1991
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,
securities services
(100)
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
*3 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 2011 217
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$662.647 million
Cayman Islands
£78.121 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 Securities SMBC Principal
Investments Co., Ltd.
Daiwa SB Investments Ltd.
Sumitomo Mitsui Asset Management
Company, Limited
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
Vietnam Export Import Commercial Joint Stock
Bank
VND12,526.947
billion
Promise Co., Ltd.*
At-Loan Co., Ltd.*
POCKET CARD CO., LTD.
80,737
10,912
14,374
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Established
Main Business
100
0
(40)
2,000
43.96
40
—
Feb. 1, 2010
Investments, fund management
Apr. 1, 1999
Investment advisory and investment trust
management
2,000
5,000
600
0
0
0
0
0
0
0
(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
(15.00)
15.00
May 24, 1989
Commercial banking
(22.02)
22.02
Mar. 20, 1962
Consumer loans
(100)
49.99 (50.00)
Jun. 8, 2000
Consumer loans
(35.55)
35.55
May 25, 1982
Credit card services
Sumitomo Mitsui Auto Service Company, Limited
6,950
39.99
—
Feb. 21, 1981
Leasing
* At-Loan Co., Ltd. was merged with Promise Co., Ltd. on April 1, 2011.
218
SMFG 2011
International Directory (as of June 30, 2011)
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
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: 65-6882-0000/0001
Fax: 65-6887-0220/0330
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 Office
Level 51, Vista Tower, The
Intermark, 182, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2168-1700
Fax: 60 (3) 2168-1785
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
#1217, 12A Floor Sakura Tower,
No.339 Bogyoke Aung San Road,
Kyauktada Township, Yangon,
Myanmar
Tel: 95 (1) 255397
*relocated on August 1, 2011
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
New Delhi Representative Office
B-14/A, Qutab Institutional Area,
Katwaria Sarai, New Delhi-110016,
India
Tel: 91 (11) 4670-9945
Fax: 91 (11) 4056-6216
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
SMFG 2011 219
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
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) 3810-2028/2038
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
220
SMFG 2011
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
Changshu Sub-Branch
8F, Science Innovation Building
(Kechuang Building), No.333
Dongnan Road, Changshu
Southeast Economic Development
Zone of Jiangsu, Changshu,
Jiangsu, The People’s Republic of
China
Tel: 86 (512) 5235-5553
Fax: 86 (512) 5235-5552
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,
The People’s Republic of China
Tel: 86 (24) 3128-7000
Fax: 86 (24) 3128-7005
Sumitomo Mitsui Banking
Corporation (China) Limited
Shenzhen Branch
23/F, Tower Two, Kerry Plaza, 1
Zhongxinsi Road, Futian District,
Shenzhen 518048, The People’s
Republic of China
Tel: 86 (755) 2383-0980
Fax: 86 (755) 2383-0707
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 Banking
Corporation Malaysia Berhad
Level 50 & 51, Vista Tower, The
Intermark, 182, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2168-1500
Fax: 60 (3) 2168-1770
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 (Asia)
Limited
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., Limited
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
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-
110016, India
Tel: 91 (11) 4607-8366
Fax: 91 (11) 4607-8355
The Japan Research Institute
(Shanghai) Solution Co., Ltd.
Unit 141, 18F, Hang Seng Bank 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
The Japan Research Institute
(Shanghai) Consulting Co., Ltd.
Unit 41, 18F, Hang Seng Bank 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
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.
Unit 913, 9/F, Miramar Tower,
132 Nathan Road, Tsim Sha Tsui,
Kowloon, Hong Kong
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 10330, 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
PROMISE (SHENYANG) CO., LTD.
Room 1501/1502, No.1 Yuebin Street,
Shenhe District, Shenyang,
Liaoning Province 110013,
The People’s Republic of China
Tel: 86 (24) 2250-6200
Fax: 86 (24) 2250-6220
SMFG 2011 221
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
Neo Building, Rue Montoyer 51,
Box 6, 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
World Trade Center, Tower D Level
12, Strawinskylaan 1733,
1077 XX 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
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, Toronto
Dominion Centre, Suite 1400,
P.O. Box 172, 222 Bay Street,
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 Nikko Securities America,
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) 224-4379
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
Bogota Representative Office
Carrera 9 #113-52 Oficina 808,
Edificio Torres Unidas 2, Bogotá
D.C., Colombia
Tel: 57 (1) 619-7200
Fax: 57 (1) 629-4288
222
SMFG 2011
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) 8879-4586/4587
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 Nikko 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 2011 223
**SMBCE:Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Finance Dublin Limited
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Nikko Capital
Markets Limited
SMBCE** Paris Branch
Madrid Representative Office
SMBC Amsterdam
Representative Office
Brussels Branch
Prague Representative Office
Düsseldorf Branch
SMBCE** Milan Branch
SMBCE**
Moscow Representative Office
ZAO Sumitomo Mitsui Rus Bank
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
Dubai Branch
Doha QFC Office
New Delhi Representative 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)
Tianjin Binhai Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Branch
Suzhou Industrial Park Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Guangzhou Branch
Changshu Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ 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
Shenzhen Branch
Shanghai Puxi Sub-Branch
■ Shanghai Branch
■ Dalian Representative Office
■ Chongqing Representative Office
■ Hong Kong Branch
SMBC Capital Markets (Asia) Limited
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Labuan Branch Kuala Lumpur Office
■ Labuan Branch
■ 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
■ New Delhi Representative Office
SMBC Capital India Private Limited
224
SMFG 2011
Overseas service network (as of June 30, 2011)
Branches*: 15 Sub-Branches*: 7
Representative Offices: 12 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
Sumitomo Mitsui Banking Corporation of Canada
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
Beijing Branch
Tianjin Branch
Tianjin Binhai Sub-Branch
Manufacturers Bank
Dalian
Representative
Office
Seoul
Branch
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Branch
Houston Representative Office
Mexico City
Representative Office
Cayman Branch
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing
Representative Office
Hangzhou
Branch
Guangzhou
Branch
Taipei Branch
Yangon Representative Office
Hanoi Branch
Shenzhen Branch
Hong Kong Branch
SMBC Capital Markets (Asia) Limited
Bogota Representative Office
Bangkok Branch
SBCS Co., Limited
Manila Representative Office
SMBC Metro Investment Corp.
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Labuan Branch
Kuala Lumpur Office
Ho Chi Minh City Branch
Vietnam Export Import
Commercial Joint Stock Bank
Labuan Branch
Singapore Branch
PT Bank Sumitomo Mitsui Indonesia
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
Banco Sumitomo Mitsui Brasileiro S.A.
The Americas
■ New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
■ Los Angeles Branch*
■ San Francisco Branch*
■ Houston Representative Office*
■ Mexico City Representative Office*
■ Bogota 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 Nikko 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
■ ZAO Sumitomo Mitsui Rus Bank
Sumitomo Mitsui Banking Corporation
Europe Limited Moscow Representative
Office
■ 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 2011 225
226
SMFG 2011
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