Sumitomo Mitsui Financial Group Inc Annual Report 2013

FY2013 Annual Report · Sumitomo Mitsui Financial Group Inc

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ANNUAL REPORT
YEAR ENDED MARCH 31, 2013

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Beyond our boundaries. Beyond our imagination.

We are qualified professionals to provide valuable financial services to our customers based
on our three core strengths — “Spirit of Innovation,” “Speed” and “Solution & Execution.”

Spirit of Innovation

We lead the market by providing innova-

tive, 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 custom-

ers, whether individuals or corporates,

identified through a deep understanding

of their needs and financial situations.

Our Three Core Strengths

Speed

We lead the pace by providing our cus-

tomers with desirable services in a timely

manner with speed and determination.

CONTENTS

6
6
8

• Message from Top Management ............................
• Business Overview .................................................
Consumer Banking .................................................................
Services for Corporate Clients ................................................
Services for Business Owners,
High-Net Worth Individuals and Employees ......................... 12
Investment Banking ................................................................ 13
International Banking .............................................................. 14
Treasury Markets .................................................................... 16
Transaction Banking Business ................................................ 16
• Group Companies .................................................. 18
• Financial Highlights ................................................. 21
• Financial Review ..................................................... 25
• Risk Management .................................................. 33
• Corporate Social Responsibility (CSR) .................... 48
• Initiatives for Enhancing Customer Satisfaction (CS)

and Quality ........................................................... 50
• Corporate Governance ........................................... 51
• Internal Audit System ............................................. 52
• Compliance ............................................................ 53
• Environmental Preservation Initiatives ..................... 55
• Social Contribution Activities .................................. 59
• Human Resources .................................................. 63
• Financial Section and Corporate Data .................... 69
Financial Section .................................................................... 70
Corporate Data ...................................................................... 239

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This document 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,” “believe,” “estimate,” “expect,” “intend,” “may,”
“plan,” “probability,” “risk,” “project,” “should,” “seek,” “target,” “will”
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: deterioration of Japanese and global economic
conditions and financial markets; declines in the value of our securities
portfolio; our ability to successfully implement our business strategy
through our subsidiaries, affiliates and alliance partners; exposure to
new risks as we expand the scope of our business; and incurrence
of significant credit-related costs. 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 document. 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 registration statement on Form 20-F and other docu-
ments submitted to the U.S. Securities and Exchange Commission, as
well as our earnings press releases, for a more detailed description of
the risks and uncertainties that may affect our financial conditions and
our operating results, and investors’ decisions.

September 2013

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 2013

Message from Top Management

Dear Fellow Stakeholders,

We sincerely thank you for your continued support and patronage. In this annual report, we would
like to present our initiatives implemented in fiscal 2012 (fiscal year ended March 2013) and our
management policies going forward.

In fiscal 2012, SMFG achieved record-high net income of ¥794.1 billion, a ¥275.5 billion
increase year-on-year, with a ROE of 14.8%, and all of the financial targets of the medium-term
management plan one year ahead of schedule.

We consider fiscal 2013, the last year of the medium-term management plan, as the year to
“proactively contribute to the revitalization of the Japanese economy, and as a result achieve the
growth of SMFG” and “create new business models and challenge for innovation for our next leap
forward.” We will proactively support the revitalization of the Japanese economy through SME
financing and other measures, and at the same time address changes in the financial needs of our
clients and business environment in order to position us for medium- to long-term growth.

Principal Initiatives in Fiscal 2012

The European economy decelerated in fiscal 2012 as

the sovereign debt crisis intensified, but there were

signs of economic recovery notably in the U.S. and

China. In Japan, although industrial production and

exports decreased markedly, a certain level of recov-

ery was observed toward the end of the fiscal year

mainly due to the yen’s depreciation.

Against this backdrop, we had set fiscal 2012, the

second year of the medium-term management plan

for the three years from fiscal 2011 to 2013, as the

year for moving forward steadily toward the targets

of the medium-term management plan, capturing

opportunities with proactive ideas and actions, and

we proactively strengthened initiatives to achieve the

twin management targets of aiming for top quality

in strategic business areas and establishing a solid

financial base and corporate infrastructure to meet the

challenges of financial regulations and highly competi-

tive environment.

Specifically, we enhanced the product line-up of

SMBC in the securities intermediary business and

insurance business for our retail clients to better

accommodate their diversifying asset management

needs. We also actively supported our corporate cli-

ents by financing their restructuring and other needs,

resulting in a year-on-year increase in loan balance

Koichi Miyata
President
Sumitomo Mitsui Financial Group, Inc.

SMFG 2013
of SMBC’s Middle Market Banking Unit. In the inter-

national business, we provided high quality services

in areas such as project finance and loan syndica-

tion where we have a global competitive advantage,

as demonstrated by SMBC being awarded “Global

Bank of the Year” by the magazine Project Finance

International. In the securities business, SMBC and

SMBC Nikko Securities strengthened their collabo-

ration in the retail securities business and released

an on-line account linkage service called “Bank and

Trade.” In addition, SMBC Nikko Securities continued

to enhance its capabilities in the wholesale securities

business by launching Japanese stock brokerage and

M&A advisory services in Singapore. In the consumer

finance business, we concentrated our business

resources into specific companies: Promise was

made a wholly-owned subsidiary and renamed SMBC

Progress of financial targets
in the medium-term management plan

Common Equity Tier 1
capital ratio*1

Mar. 2011 Mar. 2013

Mar. 2014
Target

Basel III fully-loaded basis*2 above 6%

8.6%

Consolidated net
income RORA

Consolidated overhead
ratio

SMBC non-consolidated
overhead ratio

Overseas banking profit
ratio*3

FY3/2011

FY3/2013

FY3/2014
Target

0.8%

1.3%

0.8%

52.5%

52.4%

50%-55%

45.6%

47.3%

45%–50%

23.3%

30.2%

30%

*1 SMFG consolidated
*2 Based on the definition as of Mar. 31, 2019
*3 Based on the medium-term management plan assumed exchange rate of

1USD = JPY85 for FY3/2012 to FY3/2014

Management Policies for Fiscal 2013

Consumer Finance; shares of ORIX Credit were

In line with our basic policy for fiscal 2013 — “proactively

sold back to ORIX; and SMBC Consumer Finance

contribute to the revitalization of the Japanese economy,

decided to make the loan business of Mobit into a

and as a result achieve the growth of SMFG” and “cre-

wholly-owned subsidiary. In the leasing business, we

ate new business models and challenge for innovation

completed the joint acquisition of the aircraft leas-

for our next leap forward” — we will proactively finance

ing business from The RBS Group, named it SMBC

business activities, and capture opportunities presented

Aviation Capital, and integrated our group’s major

by the shift from savings to investment in Japan and the

aircraft leasing companies into the company.

As a result of these steady performances by the

marketing units of SMBC and other group companies

and low credit cost, SMFG’s consolidated ordinary

profit increased ¥138.2 billion to ¥1,073.7 billion, and

net income increased ¥275.5 billion to record-high

¥794.1 billion with a ROE of 14.8%. We also achieved

all of the financial targets of the medium-term man-

agement plan one year ahead of schedule.

Takeshi Kunibe
President and CEO
Sumitomo Mitsui Banking Corporation

SMFG 2013growth of Asia and other emerging markets. Further, as

build up knowledge on a global basis. Furthermore,

fiscal 2013 is the last year of the medium-term manage-

SMBC Nikko Securities will continue to enhance its

ment plan, we will focus on quality as we proactively

capabilities in the wholesale securities business such

capture opportunities, and continue to implement our

as equity and debt underwriting and M&A advisory,

medium- to long-term initiatives to enhance our client

as well as to intensify its collaboration with SMBC to

base for the sustainable growth of SMFG.

accommodate our clients’ diversifying and increas-

◎ Initiatives by business line
We will reinforce the functions of our group compa-

nies in order to provide even higher quality services to

our clients.

● Consumer banking

Our group companies will provide leading-edge prod-

ucts and services according to the needs and life stage

of our retail clients. Specifically, SMBC will expand its

own line-up of consumer loan and investment prod-

ucts, and also strengthen its collaboration with SMBC

Nikko Securities in asset-management to capture

opportunities presented by the shift from savings to

investment in Japan. In addition, we will serve the

needs for business and asset succession of business

owners and landowners through the enhanced testa-

mentary trust planning and other functions of SMBC.

● Corporate banking

SMBC will continue to meet the financing and busi-

ness restructuring needs of our corporate clients,

mainly medium-sized companies and small and

medium-sized enterprises (SMEs), and thereby con-

tribute to the revitalization of Japanese economy, as

well as continue to provide tailored support to SMEs

after the expiration of SME Financing Facilitation Act.

In addition, SMBC will further enhance its research

and advisory capabilities and strengthen its ability to

support the strategy planning of globally active large

corporations from the planning stage by concentrat-

ing industry experts in the Corporate Advisory Division

which will also deploy overseas representatives to

ingly sophisticated needs.

● International banking

We will continue to strengthen our capabilities in infra-

structure finance and trade finance which demand is

expected to continue to expand around the world,

as well as in transaction banking business, including

ancillary financing, mainly in Asia where commercial

flows are increasing in step with the economic devel-

opment of the region. We will also continue our efforts

to secure stable foreign-currency funding in order to

accommodate the increase in our overseas assets.

In Asia and other rapidly growing emerging markets,

we aim to become a “globally active financial services

group with Asia as our home market” by firmly estab-

lishing a full-scale commercial banking franchise in

those markets. SMBC’s equity investment in PT Bank

Tabungan Pensiunan Nasional Tbk, a commercial

bank in Indonesia, is a good example.

◎ Strengthening our corporate infrastructure
We will further reinforce our corporate infrastructure in

line with our group-wide and global business opera-

tions by enhancing our group-wide risk-management

structure and globally developing human resources

with diverse capabilities. Furthermore, we will intensify

our commitment to diversity by more actively hiring and

promoting talented staff regardless of gender or nation-

ality. We will also continue to reinforce our compliance

and internal control system in line with the expansion

of our group-wide and global business operations to

more effectively comply with laws and regulations gov-

erning our businesses in Japan and other countries.

SMFG 2013Capital and Shareholder Return Policies

profit of ¥1,030 billion and net income of ¥580 billion.

In the medium-term management plan, we have set a

Common Equity Tier 1 capital ratio (fully-loaded basis)

target of 8% as of March 31, 2014. This means that

we aim to achieve a Common Equity Tier 1 capital

ratio of approximately 1 percentage point higher than

the Basel III required level of 7% five years earlier than

the Basel III full implementation deadline of March

2019. The Common Equity Tier 1 capital ratio as of

March 31, 2013 was 8.6% compared to the targeted

8% as of March 31, 2014.

Looking ahead, Global Systemically Important

Financial Institutions (G-SIFIs) may be required to

have additional loss absorption capacity in the form

of a capital surcharge. We believe we will be able

to secure a sufficient level of capital for the pos-

sible G-SIFI capital surcharge by implementing the

initiatives in our medium-term management plan and

maintaining our globally top-level operational effi-

ciency, thereby steadily building up retained earnings.

Meanwhile, SMFG’s basic shareholder return

policy is to secure a payout ratio of over 20% on a

consolidated net income basis through the stable

and consistent distribution of profit, while enhancing

retained earnings to maintain financial soundness in

light of the public nature of our business as a bank

holding company; and to achieve sustainable growth

of enterprise value.

Regarding dividends, we increased the annual

ordinary dividend per share on common stock by ¥10

due mainly to the favorable earnings and achievement

of Common Equity Tier 1 capital ratio target of the

medium-term management plan one year ahead of

schedule. We also added a commemorative dividend

of ¥10 per share for the 10th anniversary of SMFG’s

establishment, resulting in an annual cash dividend

Financial
objectives

per share of ¥120.

For fiscal 2013, we forecast consolidated ordinary

Meanwhile, in line with our basic shareholder return

policy of securing a payout ratio of over 20% on a

consolidated net income basis, we forecast an annual

cash dividend per share for fiscal 2013 of ¥110. This

is the same as in fiscal 2012 excluding the com-

memorative dividend, and the half of which, ¥55, will

be paid as an interim dividend.

We believe that we can meet your expectations

through the initiatives we have described. We hope

that we can continue to count on your understanding

and support in the years ahead.

September 2013

Koichi Miyata
President
Sumitomo Mitsui
Financial Group, Inc.

Takeshi Kunibe
President and CEO
Sumitomo Mitsui
Banking Corporation

Overview of the medium-term
management plan (Announced May 2011)

Basic Policy

To be a globally competitive and trusted financial services group
by maximizing our strengths of Spirit of Innovation, Speed and
Solution & Execution.

Management plan for the coming three years

Medium-term Management Plan (Fiscal 2011 - Fiscal 2013)

Management
targets

(cid:127) Top quality in strategic business areas
(cid:127) A solid financial base and corporate infrastructure to
meet the challenges of financial regulations and
highly competitive environment

Steadily improve financial soundness,
profitability and growth in a balanced way

(cid:127) Achieve the level of Common Equity Tier 1 capital
ratio required for a global player
(cid:127) Enhance risk-return profile by improving asset quality
(cid:127) Aim for top-level cost efficiency among global players
(cid:127) Expand overseas business especially in Asia by
capturing growing business opportunities

Key initiatives to achieve management targets and financial objectives

Strategic
business areas

Financial consulting
for retail customers

Tailor-made solutions

for corporate clients

Commercial banking

in emerging markets,

especially Asia

Broker-dealer/

Investment banking

Non-asset business including

payment & settlement services

and asset management

Corporate base

(cid:127) Implement best practice in management throughout the SMFG group

(cid:127) Develop a solid corporate infrastructure to support the growing international network

(cid:127) Maximize operational efficiency

SMFG 2013

Business Overview

■ Consumer Banking

SMFG group companies work cooperatively to provide better
and highly appreciated services for individual clients.

SMBC strives to enhance its products and services to
appropriately meet the diverse needs of individual clients in
accordance with one of its corporate values of “Providing value
added services to each client.”

Asset Management

SMBC has a wide range of investment
trust products to meet the diversifying
asset management needs of its clients.
In fiscal 2012, we implemented an invest-
ment fund of publicly offered investment
trust in Japan for short-term, high-yield
corporate bonds, denominated in US
dollars. We enhanced our portfolio of
overseas publicly offered investment
trusts by implementing Australian-dollar-
denominated fund for investment in high-yield bonds in newly
emerging markets.

As for deposits in foreign currency, we added to the port-
folio, the Brazilian real fund and Chinese renminbi in April 2012
and July 2012, respectively, in order to respond to the growing
needs of clients for management of assets in foreign currencies.
Furthermore, as we received growing request from retail clients,
we began to accept in September, renminbi-denominated remit-
tances made in Japan, while accommodating management
needs of clients for investment by implementing measures to
offer preferential interest rates.
Working with SMBC Nikko Securities, SMBC continues
to offer its wide-ranging clients intermediary services for
financial products, in areas such as foreign-currency and yen-
denominated bonds. In fiscal 2012, we further expanded our
portfolio by adding a new line of products and products espe-
cially made for high-net worth individuals, to further promote the
cooperative business of the bank and securities firm.

Life Insurance and Estate
SMBC offers life insurance policies over the counter at its
branches throughout Japan. We additionally provide services
enabling our clients to request information materials without
visiting our branches, as long as they make such requests by
using ATMs or the internet. In fiscal 2012, as for single premium
type permanent life insurance products, we enhanced the port-
folio by offering new life insurance products enabling clients to
select a periodical payment plan according to their life plan, or
newly offering insurance policies guaranteeing substantial death
benefits, with functions for asset formation in the long-term.

As for level-premium insurance products, we enhanced our
products for further accommodating the “estate-related” needs
of clients by introducing foreign-currency denominated whole
life insurance and medical insurance with coverage for nursing
care. In addition, the bank meets the inheritance-related needs
of its customers by offering testamentary trust services for

storage and execu-
tion of wills, including
“inheritance disposi-
tion” services assist-
ing with complicated
procedures required
inheritance, or
for
“Relay of Trust to
Family”
services
enabling clients and
family to regularly receive funds.
We also began to offer in February 2013, a new deposit
product of “Support Plan for Newly Employed” especially made
for the young generation of graduated and newly employed
(mainly targeting those newly becoming
non-dependent on their family and living
independently) by offering ordinary bank
accounts with free casualty insurance
coverage. We intend to provide the
young generation with the opportunity to
consider insurance matters and needs.
Our staff at the call-center will periodically
provide information appropriate for such
newly-employed young clients with insur-
ance needs.

Consumer Loans and Settlement
We are working to develop products and
enhance our services in order to be able
to accommodate the diverse needs of
clients for housing loans with critical illness
insurance and housing loans with partial
relief for mortgage payment in the event of
natural disasters.
We also substantially improved con-
venience for clients requesting housing
loans by enabling them to complete their
applications for making either full or partial
prepayments, or changing the interest
rate to floating or fixed, by utilizing SMBC
Direct, the online banking service.

In other

improvements, SMBC
has assigned “Financing Facilitation
Consultant Experts” at all branches and
eight other locations throughout Japan
where a special department is established
for loan support services to provide consultations for clients.
For housing finance for clients affected by the Great East Japan
Earthquake, we offer housing loans with special rates, and we
also offer our existing clients consultation services on more
flexible loan repayments for those who have already taken out
SMBC housing loans. We continue to provide meticulous sup-
port for, and promptly and appropriately respond to, clients who
have difficulties making housing loan repayments.

As for SMBC unsecured consumer loans (card loans), guar-
anteed by SMBC Consumer Finance Co., Ltd.*1, the total loan

SMFG 2013

balance as of March 2013 has exceeded ¥410 billion due to the
steady increase of loans.

Further, we began to provide in February 2013, the “Life
Event Support Package” for the card loan, offering special inter-
est rates for clients who borrow from housing loan. We intend
to accommodate financial needs for
clients, who acquired housing, for major
life events such as childbirth,
education and renovation.

*1 SMBC Consumer Finance Co.,
Ltd. was formerly known as
Promise Co., Ltd. The corporate
name was changed on July 1,
2012.

Transaction Channels
As for SMBC Direct, the online banking services, we consis-
tently enhance services and improve the convenience to
accommodate the needs of clients while developing advanced
services and strengthening security.

Since August 2012, SMBC has provided the “e-Report
Service” enabling clients to be able to view various transaction
reports on SMBC Direct. Those clients who applied to receive
such service will be able to electronically view and save various
reports in PDF-format on SMBC
Direct, instead of receiving such
reports by mail.

In October 2012, SMBC
started a new service for SMBC
Direct members to be able to receive basic price information
for investment trust of their choice by e-mail, according to the
timing they prefer to receive such e-mails. There is also a noti-
fication function to inform clients when the pre-selected basic
price was reached.

Additionally, we have began offering a convenient branch
and ATM location search function and the “SMBC Application”
especially made for smart-phone users enabling clients to easily
verify account balance and make deposits, for improving conve-
nience for clients.

Furthermore, SMBC Direct made the “One-time Password
Service*2” free of charge in March 2013 for further enhancing
security for our clients.

*2 The service which enhances security for internet banking by providing

different password each time.

Our call centers, located in Tokyo, Kobe and Fukuoka for
retail clients, receive calls from online clients who prefer to speak
with our staff on important issues. The operations of these
three call centers improve our system of offering services by
telephone in areas such as consultations for asset management
and loans, direct-marketing of level-premium insurance and
providing information for financial services, by accommodating
to the lifestyle and needs of our clients.

Topics

◆ Business Jointly-Operated by SMBC and SMBC

Nikko Securities

SMBC and SMBC Nikko Securities, as the group, are
improving their capabilities to provide individual clients with
financial products and services by focusing on business
operations of intermediary services for individual clients:
financial instruments, fund wrap services, clients referrals and
banking agency services.

In October 2012, SMBC
began offering “Bank and
Trade” service, especially
made for the internet, by coor-
dinating SMBC bank account with general securities account
of SMBC Nikko Securities. Further, in November 2012,
SMBC Nikko Securities commenced offering testamentary
trust agency services for SMBC.

Additionally, the two companies continue to integrate
their solid platforms, which were built based on know-how for
consulting business, for individual businesses such as their
client base and network of offices and branches.

Specifically, each of SMBC and SMBC Nikko Securities
plans to develop business promotion model for integrating
bank and securities businesses by taking advantage of
strengths of each business, in order to optimize products and
services provided to clients. To develop this business model,
the Securities Business Collaboration Planning Department
was established in the Planning Department, Consumer
Banking Unit and it has been experimentally in operation
since May 2013.

◆ Measures to Address Customers’ Inheritance-

Related Needs

In addition to the testamentary trust services that it has
provided to date, SMBC has commenced the handling of
“inheritance disposition” services at all domestic branches
in February 2013. In March 2013, SMBC began providing
the “Relay of Trust to Family” in order to precisely meet the
inheritance needs of customers.
“Relay of Trust to Family” is a jointly
managed money trust marketed
to individuals that supplements the
principal. SMBC will continue meeting
various customer needs by enhancing
its products, services and consulta-
tion capabilities.

SMFG 2013

■ Services for corporate clients

Providing funding to medium-sized compa-
nies and SMEs
SMBC proactively implements appropriate measures for
finance facilitation and economic vitalization by meticulously
understanding circumstances of each client and making diverse
proposals for finance facilitation, as we strongly believe that our
social responsibilities are to proactively provide funding to meet
the needs of our medium-sized and SME clients and to support
measures for their management improvement.

Specifically, our product of “Business Select Loan,” which
offers unsecured or unguaranteed loans to clients, is being
utilized by many clients.

Additionally, in conjunction with the Business Select Loan,
as for the loans guaranteed by the National Federation of Credit
Guarantee Corporations, SMBC accommodates the funding
needs of clients by offering our specially-designed loans jointly
guaranteed by SMBC and the local credit guarantee corporation
of each region.
We continue to proactively provide funds and support the
management of medium-sized companies and SMEs which
support the Japanese economy.

Support for the establishment of new industry,
new businesses and growing company
At SMBC, a department specializing in supporting clients of
growing companies has been established at its head office.
By cooperating with SMBC Venture Capital Co., Ltd. and
SMBC Nikko Securities, we provide solutions appropriate to the
specific growth stage, such as providing loans especially made
for growing companies, supporting the initial public offering of
shares, or supporting the alliance with the major company.

In April 2012, SMBC and the NEC group jointly established
a venture fund for the purpose of supporting technology venture
companies. We have invested in companies that develop the
packaging business of next-generation semi-conductors, pro-
vide advanced solutions for the Machine-to-Machine and Mobile
Device Management, and develop advanced distributed pro-
cessing technology for the game cloud service. Further, SMBC
and the Osaka University jointly established a “Cooperative Unit
for Creating New Industry” in November 2012, for the purpose
of creating and developing new venture businesses initiated by
the Osaka University.

SMBC and the Group companies are all committed to sup-
porting growing companies while cooperatively working with
diverse external entities.

Support for IPOs (IPO Navigator)
SMBC and SMBC Nikko Securities jointly started providing
free information service exclusively for the registered members
of the “IPO Navigator” since July 2010, for consistently and
comprehensively supporting clients who are considering going

public. The IPO Navigator has become the one-stop platform
for enabling clients to access any necessary information for
IPO, enhanced by information provided by ten affiliated advi-
sory companies and two sponsoring companies. As of March
2013, the IPO Navigator is registered by clients of approximately
600 companies. In February 2013, SMBC and SMBC Nikko
Securities held their fifth “IPO Seminar.”
Mr. Mitsuru Izumo, the president of euglena Co., Ltd., spoke
on his “experience for listing” at the seminar, invited by SMBC
Nikko Securities, the lead manager for the euglena listing for
Mothers on the Tokyo Stock Exchange in December 2012. Mr.
Tomotaka Goji of the University of Tokyo Edge Capital (“UTEC”)
also spoke on the “Points to bear in mind for the growth of ven-
ture company.” SMBC and SMBC Nikko Securities continue to
support clients who wish to go public.

Development of solutions responding to the
corporate needs such as environment, risk
and food safety
The issues for clients, such as measures for environmental
problems of resource and energy conservation or global warm-
ing, countermeasures for natural disasters, or ensuring food
safety, are yearly becoming diversified.

SMBC developed and offered a series of products since
2006, as follows, for supporting clients who promptly respond
to such issues: 1) “SMBC-ECO Loan” which support the
measures taken by SMEs which obtained the certification for
environment management system; 2) “SMBC Environmental
Assessment Loans and Private Placement Bonds” which assess
the measures taken by clients for environment; 3) “SMBC
Environmental Assessment Loans and Private Placement
Bonds, eco Value-Up” which assess the measures taken by
clients of medium-sized companies and SMEs for environment;
4) “SMBC Sustainable Building Assessment Loans and Private
Placement Bonds” which assess environment-friendliness and
measures taken for risk management for the building owned or
to be constructed by clients; 5) “SMBC Business Sustainability
Assessment Loans and Private Placement Bonds” which assess
the measures taken by clients for business sustainability in the
event of emergencies such as earthquakes, floods, etc.; and
6) ”SMBC Food and Agriculture Assessment Loans and Private

SMFG 2013

Placement Bonds” which assess measures taken by clients for
safety and security of food, and agriculture. In 2013, SMBC
began offering “SMBC Sustainability Assessment Loans and
Private Placement Bonds” which assess the measures taken for
environment, society and governance, and appropriateness of
information disclosure.
We continue to support clients who take innovative mea-
sures by developing solutions such as the above.

Measures for finance facilitation

Basic policy
SMBC strives to provide sincere and meticulous services to
clients, facilitate funding, and enhance consultation services, in
accordance with SMBC’s “Basic Policy for Finance Facilitation.”

In particular, we put all of our efforts for facilitating finance
by providing thorough explanations for clients to feel assured
regarding our position for financing, especially after the expiry of
the SME Financing Facilitation Act (March 2013).

SME and
individual clients

● Changing terms and
conditions of a loan

● New borrowing

● Management

consultation and
management support

● Complaints and
consultation

● Corporate Business

Department

● Business Support Plaza
● Branches, etc.

Person in charge
for consultation of

Person in charge for
receiving complains

Consultation desk for
receiving complaints

Basic policy for finance facilitation

1. Conduct appropriate review of applications submitted to
apply for a new loan or request to ease loan conditions
2. Provide support appropriate to the measures taken by
clients for management consultation, management guid-
ance and management improvement

3. Strive to improve the ability to appropriately assess the

value of client’s business

4. Provide appropriate and thorough explanations to clients
for the consultation and application for new loans or for
easing loan conditions

5. Respond appropriately and adequately to clients for their
requests or complaints regarding the consultation or appli-
cation for a new loan or for easing loan conditions

6. In case that there are other relevant financial institutions
involved in the consultation for easing loan conditions or
any other requests, we maintain close liaison with such
financial institutions

System improvement
Head office and branches of SMBC continue to provide consul-
tation services in an integrated manner.

● Each department of

Middle Market/
Consumer Finance
Facilitation Department

Planning and management
of measures associated

facilitation

Information sharing and

in charge of Middle
Market/Consumer
departments, Risk
Management department
and relevant departments

● External organizations

● External experts/professionals

(cid:127) Council supporting vitalization of SMEs
(cid:127) Regional Economy Vitalization Corporation of Japan
(cid:127) Corporation supporting regeneration of businesses

affected by the Great East Japan Earthquake

(cid:127) SMBC Consulting
(cid:127)
(cid:127)

SMFG 2013
Support for career education
In accordance with the amendment adopted for the University
Establishment Criteria in April 2011, the “Career Education/
Guidance Program” of each university is being enhanced.
SMBC puts its efforts into connecting the “needs of career edu-
cation of universities” and “industrial affiliated needs of clients.”
Specifically, SMBC cooperates with each university to support
career education, and we also ask our clients to become
instructors for the education programs to support the program.
For instance, our client presents the business issue of “market-
ing of a new product development.” Students and the person in
charge of the company discuss in the program to jointly come
up with the proposal for resolving such issue. Our clients also
speak on the trends of industry or business.

Through this practical experience of working with participat-
ing companies, students may be able to increase their social
awareness and develop their abilities required in the society for
“working as a team, such as expressing and listening abilities,”
“the ability to think to identify an issue, and creativity.” On the
other hand, our clients appreciate unconventional concepts
and ideas of students which may give our clients new ideas or
perspectives for their businesses.
We continue to contribute to our clients’ business develop-
ment by providing assistance and support while cooperating
beyond our business framework.

Support for overseas development
As the number of clients moving into overseas markets
increases, so their need for fund procurement and management
solutions, and also for help in understanding local business
customs, cultures and systems, has grown. SMBC’s Global
Advisory Department responds, in an integrated manner, to
resolving issues for clients by transmitting overseas informa-
tion of respective economy and holding seminars prepared for
respective country in China, Asia, Europe and U.S.
We provide clients with the up-to-date information of local
conditions, relevant regulations and industrial trends. As for
clients who have already expanded their business to overseas,
we provide high quality support and solutions tailored to each
of their needs. We also support foreign exchange transactions
for clients by giving advices on their trading business or holding
seminars.

Support for management improvement, busi-
ness regeneration and business conversion
Even after the expiry of the SME Financing Facilitation Act,
SMBC continues to provide efficient financial intermediary
services and focus on management issues which clients are
faced with, and to propose solutions appropriate to respective
management issues or life phase in the client’s perspective.
We strive to improve our consultation services by spending
adequate time with the clients.

Specifically, we provide numerous and diverse loan prod-
ucts in order to accommodate the needs of clients for financ-
ing and resolving management issues; and we also provide
solutions for business referrals (as explained below), overseas
business development, or support for business succession
(please refer to p.12 for “Support for business and asset suc-
cession”). Further, we also support clients for management
improvement or business regeneration, while cooperating with
external experts/professionals*1 or external organizations*2, by
supporting measures for the plan of management improvement
or giving advices for management improvement issues such as
expense reduction or sale of assets.

*1 SMBC Consulting, certified tax accountants, certified public

accountants, etc.

*2 Council supporting revitalization of SMEs, Regional Economy

Vitalization Corporation of Japan, etc.

In particular, we continue to propose the most appropriate
solutions and provide support for execution, while cooperat-
ing with the corporation supporting regeneration of businesses
affected by the Great East Japan Earthquake or industrial res-
toration organizations, in order to provide solutions for clients
affected by the Great East Japan Earthquake.

Measures for business referrals
SMBC strives to refer or introduce new business partners
appropriate to the needs of clients by utilizing SMBC’s “busi-
ness referral service” for individually referring and introducing
clients individually, in addition to referring or introducing a group
of clients to the purchasing department of major corporations.

Under the current trend of globalization, the needs are even
more diversified such as expanding distribution channels to
a new overseas market or increasing suppliers mainly in the
emerging countries.

In fiscal 2012, SMBC started to offer the “global business
referral” service which is the business-matching with non-
Japanese companies overseas. We provide support and solu-
tions for clients’ overseas business development through the
process of business referral with non-Japanese companies
overseas. Currently, the business-referral is limited in certain
areas of Asia; however, we are in the process of expanding
the service in order to appropriately accommodate the diverse
needs of clients, through the global business-referral by taking
advantage of SMFG’s domestic and overseas network.

SMFG 2013

medical-related industries in Kobe city and for strategic develop-
ment of growing industry in Kita-Kyushu. In fiscal 2008, Miyagi
Prefecture became the main prefecture in Japan with which
we signed an industrial development cooperation agreement.
We continue to financially assist local governments affected
by the Great East Japan Earthquake for their restoration plan.
Furthermore, SMBC has executed a business alliance agree-
ment to support overseas businesses with THE MINATO BANK,
LTD., Kansai Urban Banking Corporation, Mie Bank, Ltd. and
six other banks.

Topics

◆ Kobe Medical Industrial City
Kobe City is promoting the “Kobe Medical Industrial City
(Kobe Cluster)” project for medical-related industries. This
project started as the restoration business after the Kobe
earthquake, and it consolidates “highly-specialized hospital
facilities,” “advanced medical research facilities,” and “sophis-
ticated computation and science facilities, as represented
by the super-computer ‘K’,” to the Port Island in Kobe. It
works on the clinical application and commercialization of
pharmaceutical products, regeneration medicine and medical
equipment. It is also a national project and designated as
one of the areas for the “Kansai Special District of Integrated
International Strategy for Innovation.”

SMBC has been deeply involved since the conceptual
phase of the “Kobe Medical Industrial City” project, and it has
participated in the project as one of the members of the local
company. In fiscal 2013, we financially supported by provid-
ing the start-up capital for the establishment of the “Kobe
minimally invasive cancer medical center,” a major medical
center for the advanced cancer medical treatment which may
significantly reduce the burdens for the cancer patient. The
development of medical industries is an important measure
taken not only for, the improvement of medical standards, but
also for vitalization of the local economy. SMBC continues to
cooperate for the promotion of the “Kobe Medical Industrial
City” project.

Enhancement of measures for the Greater
China region
Due to the economic slowdown in China, financial results of cer-
tain Japanese companies seem to be adversely affected; how-
ever, the importance of the Greater China market (PRC, Hong
Kong and Taiwan) has not declined and the company’s entry to
the market and business development seem to continue.

SMBC designates Greater China region as an important
market, and we have improved our domestic and overseas
structure to be able to integrally and efficiently provide high-
quality services, while cooperating with SMFG group compa-
nies, in order to respond to the diverse needs of clients of the
region.

In China, Sumitomo Mitsui Banking Corporation (China)
Limited (“SMBCCN”), SMBC’s subsidiary in China, became
the first Japanese bank’s subsidiary to establish a branch in
Chongqing in August 2012 in order to provide meticulous ser-
vices for clients to develop their businesses to the inland of the
mainland China.

As a result, the number of offices in the mainland China
has grown to fifteen, consisting of SMBCCN’s eight branches,
including the Shanghai Head Office, four representative offices,
and two SMBC branches*. Together with SMBC’s Hong Kong
and Taiwan branches, we have established a very adequate
office network in China.

*Representative office in Dalian and Shanghai Branch

Our South China Dept, which was established two years
ago, promptly and consistently provides information regarding
relevant regulations and trends in south China. As the needs
of clients for renminbi-related services are growing steadily,
we thoroughly respond to such needs by cooperating with the
transaction business department established in Tokyo in April
2012.

Our domestic and overseas offices integrally continue to fur-
ther enhance their services provided in Greater China, in order
to appropriately respond to the confidence of clients.

Measures taken for vitalization of local
regions in Japan

Measures taken jointly with local government entities
and regional financial institutions
As the economy changes, the responsibilities and roles of local
government entities and regional financial institutions are also
diversifying. Consequently, the expectation for the support for
local industrial development and overseas development of local
companies continues to increase. The extensive network over-
seas and accurate and timely information collection will become
necessary for such local government entities and regional finan-
cial institutions. To serve such needs, we are forming partner-
ships with local governments and regional financial institutions
using SMBC group networks within Japan and overseas to
provide a wide range of services.

SMBC has been proactively involved since the concep-
tual phase of the industrial development for accumulation of

SMFG 2013

■ Services for Business Owners,
High-Net Worth Individuals and
Employees

Private Advisory Division
SMBC’s Private Advisory Division (“PAD”) provides services for
both individuals and corporate clients by working with other
SMBC Group companies and alliance partners.

To ensure that business owners and high-net worth indi-
viduals can facilitate succession of their important businesses
and assets, PAD offers the following services: (1) support of
business and asset transfers for which we present proposals
and provide information based on our extensive experience and
knowledge accumulated over years, and the additional expertise
provided through alliance partners with major tax accounting
firms; (2) asset management and support services which pro-
vide comprehensive financial services tailored to meet the finan-
cial asset needs of high-net worth individuals; and (3) corporate
employees business which support the HR and financial strat-
egies of our corporate clients to assist with the development
and management of benefit programs and defined-contribution
pension systems.

Business owners

Customers
High-net worth individuals

Heads of wealthy families

Sumitomo Mitsui Financial Group

Sumitomo Mitsui Banking Corporation

Corporate Business Office

Branches

Private Advisory Department

Business
succession
needs

Asset
succession
needs

Asset
management
needs

Financial benefit
program needs

Revised
defined-contribution
pension plan needs

provide our clients with up-to-date information and advice. We
are also asked to provide consultations from many business
owners and high-net worth individuals.

Support for Asset Management
Understanding and sharing client’s attitude toward financial
assets, we offer comprehensive financial advices on asset allo-
cation and management. In June 2010, SMBC, SMBC Nikko
Securities Inc. and Barclays PLC of Great Britain collaborated
to establish the “SMBC Barclays Department” in SMBC Nikko
Securities Inc. for better accommodating the diverse asset-
management needs of our clients.

Specifically, we offer products and asset-allocation propos-
als appropriate for our clients and their portfolio performance by
efficiently utilizing Barclays’ global research capabilities and the
Financial Personality Assessment (“FPA”) based on behavioral
economics (the tool used for understanding investment prefer-
ences and behaviors), and also taking advantage of the diverse
products and services created by the product development
team in the SMBC Barclays Department.

SMBC Group

Partnership

(cid:127) Provide wide range of comprehensive
(cid:127) Provide wide range of comprehensive

life-plan services
life-plan services

(cid:127) Propose asset management using
(cid:127) Propose asset management using
SMBC-transacted instruments
SMBC-transacted instruments

Take stake
0.66% stake
(as of July 2013)

SMBC Barclays
Department

Customers

(cid:127) Provide array of
(cid:127) Provide array of

asset management
asset management
services leveraging
services leveraging
Barclays’ expertise
Barclays’ expertise

SMBC Nikko Securities
SMBC Barclays Department

SMFG Group
companies

Outside specialists (major tax accounting firms and other professionals)

Barclays PLC

Topics

Support for Business and Asset Succession
PAD presents customized proposals for clients who may be
concerned or have problems with succession of their busi-
nesses and assets. We also offer a variety of seminars to

In 2012, SMBC Barclays Department
was named “Best Private Bank Japan”
by The Asset’s “Investment Award.”

Topics

In April 2013, SMBC consolidated and enhanced branches’
assistance and support functions associated with its
inheritance-related services to PAD. Wtih such enhancement,
we will be able to comprehensively accommodate our cor-
porate clients and high-net worth individual clients for their
needs for business and assets succession and any other
inheritance-related needs such as testamentary trust. SMBC
also strives to improve the quality of its consultation services
by facilitating its information sharing and knowledge accumu-
lation within the bank.

Life Planning Support for Employees
Changes in the social environment, such as the increasing aged
population and greater mobility in employment and diversifica-
tion in life planning, may substantially affect corporate clients’
management strategies.

PAD supports clients in creating and managing employees’
financial benefit programs and defined-contribution pension
plans by using the products and services offered
by the bank and its affiliated companies for
responding to personnel and
financial issues that corporate
clients are faced with.

SMFG 2013

■ Investment Banking

SMFG offers and provides the most appropriate financial
products and comprehensive solutions for our clients’ diverse
needs, such as fund raising and fund management, M&A, and
risk hedging, in order to assist their business development or
enhancement of their corporate value. This is achieved by con-
solidating resources of the Group companies, including SMBC
and SMBC Nikko Securities Inc.

Cooperation with SMBC Nikko Securities
As a core securities brokerage within the Group, SMBC Nikko
Securities has been expanding both retail and wholesale
operations in partnership with the bank. Through its securities
intermediary and business introduction services for individuals,
it is developing retail transactions through joint bank-brokerage
formats. Our entire Group continues to respond to offer services
appropriate for the needs of clients by taking advantage of
strengths of both SMBC and SMBC Nikko Securities.

In wholesale operations, the Group was ranked 4th in the
“league table” published by Thomson Reuters for fiscal 2012
(“Global Equity & Equity-Related: Bookrunner”) with a market
share of 11.9%. It also ranked 4th in the “M&A advisory services
category for publicly announced mergers involving Japanese
companies,” with a market share of 17.8% (Thomson Reuters).
It ranked 2nd in the ranking of the “25th Analysts Votes” for the
Nikkei Veritas analysts. As for overseas operations, SMBC Nikko
Securities’ Singapore office has made steady progress, includ-
ing the launch of brokerage services for Japanese stocks and
M&A advisory services. The number of corporate client referrals

made by the bank to SMBC Nikko Securities is increasing, due
to the measures taken for corporate clients. In fiscal 2012, the
total number of client referrals made reached to approximately
4,300 (an increase of 14% compared to the previous fiscal
year). Our entire Group continues to integrally work to enhance
services provided to corporate clients.

SMBC Nikko Securities: Medium-Term
Management Plan (during fiscal years of 2013
to 2015)
SMBC Nikko Securities developed its medium-term manage-
ment plan starting fiscal 2013. We strive to provide value-added
services to clients based on the concepts of “Speed and Scale”
by moving forward from the “Framework Development” phase
to the “Growth” phase, as set forth in the plan.

• Retail Unit: Expand the client base by the aggressive injection
of resources and strategy of integrating banking and securities
business operations.

• Wholesale Unit: Realization of competitive front operation
structure; increase of earning capacity for sales and trad-
ing businesses by the aggressive injection of management
resources; selective and effective overseas business expan-
sion by taking advantage of the banking and securities busi-
ness cooperation and alliance.

• Other: Sophistication of the management infrastructure, stra-
tegic injection of systems and human resources, acceleration
of human resource development.

SMBC Nikko Capital Markets Limited
London

Luxembourg

SMBC Nikko Bank (Luxembourg) S.A.

SMBC Nikko Investment Consulting (Shanghai) Limited

New York

SMBC Nikko Securities America, Inc.

Shanghai

Hong Kong

SMBC Nikko Securities (Hong Kong) Limited

SMBC Nikko Securities (Singapore) Pte. Ltd.

Singapore

Jakarta
P.T. Nikko Securities Indonesia

As of April 1, 2013

Sydney

SMBC Nikko Capital Markets Limited

SMFG 2013
Measures for growth areas
In the emerging countries in Asia, the needs for infrastructure
and development are increasing. SMBC is strengthening its
measures for infrastructure financing by cooperating with the
government-affiliated financial institutions which financially
supports infrastructure projects in Singapore and Indonesia. In
June 2013, we successfully established an infrastructure fund
specifically made for investment in India, together with Kotak
Mahindra group, one of India’s largest private financial groups,
the Brookfield Asset Management Inc., a major asset manage-
ment company in Canada, and the Japan Bank for International
Cooperation.
We continue to provide high-value added services in order
to contribute to the improvement of infrastructure and economic
development of each country by utilizing the expertise and
knowledge accumulated especially in the project finance area.

Our Growth Industry Cluster Department identifies four
fields of “renewable energy,” “environment,” “water” and
“natural resources” as growing fields to promote creating new
business opportunities for clients. It supports the solar power
business and it researches smart city development overseas
and wastewater treatment of industrial complexes by utilizing
the accumulated knowledge and network of the “industry-
government-academia.” It also contributes to the expansion
of clients’ businesses by further venturing into “medical” and
“nursing care” fields.

■ International Banking

SMFG strives to provide high value-added services tailored
to the specific local needs of its globally-operating clients,
including business corporations, financial institutions, govern-
mental organizations and public entities, mainly through the
International Banking Unit of SMBC.

SMBC strives to become the global commercial bank which
is capable of consistently providing up-to-date information
and services by closely cooperating with other SMFG group
companies and overseas subsidiaries throughout the world,
concentrating mainly on the three regional divisions of Asia-
Pacific, Americas and Europe.

Enhancement of our competitive products
In recognition of its strengths in project finance, SMBC was
awarded the Global Bank of the Year 2012 by Project Finance
International. It also placed No. 1 in the Asia Syndicated
Loan Mandated Arrangers ranking (all international currency
syndicated and club loans, Thomson Reuters), and was highly
rated as a foreign bank in many Asian countries in the Cash
Management Poll carried out by ASIAMONEY. It was No. 1
among Japanese banks for the seventh successive year. As
such achievements show, SMBC is making its presence felt
across the board.

Topics

◆ Project Finance
In the project finance field, SMBC was awarded the “Global Bank
of the Year 2012”* for being the most successful bank in project
finance. This was the Bank’s second time winning this award as
a result of our specialized and innovative project finance services,
especially for the energy and resource development businesses
around the world.

* The “Global Bank of the Year” is the prestigious award
given by “Project Finance International” magazine pub-
lished by Thomson Reuters.

SMFG 2013

Expansion of overseas networks
SMBC is expanding overseas networks, to further enhance
services for Japanese corporate clients operating overseas
and strengthen its capability to develop banking businesses in
emerging and growth markets.

Date of
establishment

Country

May 2012

Peru

Lima Representative Office

August 2012

Myanmar

Yangon Representative Office

August 2012

China

Sumitomo Mitsui Banking
Corporation (China) Limited
Chongqing Branch

March 2013

India

New Delhi Branch

April 2013

Australia

Perth Branch

May 2013

Chile

Santiago Representative Office

May 2013

Thailand

Chonburi Exchange Office

Strengthening relationships with local finan-
cial institutions
In order to fully accommodate the needs of clients in emerg-
ing and growth markets, SMBC continues to strengthen its
relationships with local financial institutions in overseas market.
In May 2012, we executed a memorandum of understanding
with the Kanbawza Bank, the largest private bank in Myanmar,
for technical assistance and support; and in August 2012, we
also executed a memorandum for business alliance with the

Acleda Bank Plc., the largest private bank in Cambodia, for
cooperatively working on businesses in Cambodia. In February
2013, we executed an agreement for cooperation with Garanti
Bankasi A.S., one of the largest banks in Turkey, for financial
advisory services for guaranteed or insured projects and project
finance, and also for business cooperation for financial services
provided for Japanese clients.

In India, where a further growth is expected in the foresee-
able future, SMBC and SMBC Nikko Securities entered into an
alliance in December 2012 with the investment bank of Kotak
Mahindra Group, a leading comprehensive financial services
group in India, for providing advisory services for cross-border
M&A between Japanese and Indian companies.

Enhancing measures for businesses in emerg-
ing markets
In April 2013, SMBC established the Emerging Markets
Business Division for strategic planning and business promo-
tion, in order to further strengthen its commitment to the rap-
idly growing emerging markets especially Asia, and to boldly
develop as the full-line commercial bank with Asia as its mother
market. Also in April 2013, we established the Global Business
Planning Department in SMFG for strengthening collaboration
among Group companies in overseas businesses mainly in
emerging markets.

Topics

◆ Investment in local Indonesian bank
On May 8, 2013, SMBC publicly announced that it plans to
acquire up to 40% shares of PT bank Tabungan Pensiunan
Nasional Tbk, upon approval by the Indonesian authorities.
The bank has a solid retail business in Indonesia which is
expected to maintain a high sustainable growth in view of its
world’s 4th largest population and expanding middle class. In
this and other ways, we will continue to diversity our business
in Asia.

◆ Elected to become the “Financial Holding

Company” in the United States of America

On May 7, 2013, SMFG and SMBC were elected by the
Board of Governors of the Federal Reserve System to offi-
cially become Financial Holding Company (FHC) pursuant
to the Bank Holding Company Act in the U.S., enabling us
to significantly expand the scope of services we provide in
the U.S., including the underwriting and trading of securities
and other investment banking services. Our Group continues
to provide better financial services in the U.S., the leading
financial market in the world.

SMFG 2013
■ Treasury Markets

Topics

◆ Expanded Offerings of Currencies of Asia and

Other Emerging Markets

In order to meet our clients’ market transactional needs,
we propose diverse hedging strategies for foreign curren-
cies, mainly Asian and other emerging-market currencies.
We also brief our clients on the latest changes affecting
foreign-exchange transactions through seminars conducted
by economists specialized in Asian financial markets and
through various foreign-exchange-related tools that we pro-
vide to our clients.

◆ Expanded Online Foreign Exchange Transaction

Services

We have upgraded the i-Deal system, which allows our
clients to execute their foreign exchange transactions on
the Internet. In order to ensure attentive handling for clients’
limit orders, we have substantially improved the convenience
for transactions by enhancing the leave orders function and
strengthening the price quote function.

■ Transaction Banking Business

Strengthening Transaction Banking Business
At SMBC, the “Transaction Business Division,” which con-
sists of “Global Advisory Department,” “Transaction Banking
Department,” “Global Transaction Banking Department” and
“Asset Finance Department,” is being established in order to
integrally and flexibly provide products and services for appro-
priately accommodating the needs for transactions, trade
finance and financing associated with clients’ commercial
distribution.

SMFG and SMBC established the “Transaction Business
Planning Department” in order to strengthen functions of stra-
tegic and business planning for the entire Transaction Banking
Business and also improve the settlement system and infra-
structure, in terms of mid-to-long term and cross-departmental
plan for the Transaction Banking Business.
We, SMFG, integrally support transaction banking busi-
ness for our domestic and overseas clients under this new
framework.

Through the Treasury Unit of SMBC, the Group offers higher
value-added services to meet further sophisticated and diverse
needs of its clients for transactions in the money, foreign
exchange, bond and derivative markets.

More Solutions and Services for Clients’
Market Transactions
SMBC’s Treasury Unit offers solutions appropriate for the
market transactional needs of its clients through its network in
Japan and overseas by working with branches to present to
its corporate clients with pertinent proposals for such as hedg-
ing transactions, reflecting the shifting trends in the financial
markets. The Unit also continues to improve the functions of
i-Deal, a system which allows our clients to execute their foreign
exchange transactions on the Internet. It will continue to support
clients by meeting their market transactional needs and offering
the highest level of services in the industry.

ALM and Trading Operations
The Treasury Unit strives to ensure sound Asset-Liability
Management (“ALM”) and stable earnings by comprehensively
controlling the balance of assets, such as loans’ and liabilities’
including deposits, through ALM operations. The Unit is com-
mitted to maximizing its earnings in trading operations by the
accurate assessment made on the trend of the global financial
market by experts of diverse products such as interest-rate,
foreign-exchange and commodity derivatives.

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

SMFG 2013
Transaction Business

Clients

Identifying needs

Small and Medium
Corporations

Front office operations

Large Corporations

Global Corporations
Global Supply Chain
Finance Dept.

Providing information,
solutions

Transaction Business Division

Global Advisory Dept.

(Foreign exchange, overseas business advisory services)

Global Transaction Banking Dept.

Overseas transaction solution, global fund management services

Transaction Banking Dept.

Domestic exchange, domestic transaction solution services

Asset Finance Dept.

Transaction financing, SCF planning and promotion support services

n
t
e
g
r
a
t
e
d
m
a
n
a
g
e
m
e
n
t

Collaboration

Transaction Business Planning Dept.

Transaction-related departments/
Transaction-related group companies

Topics

◆ Establishment of the Global Supply Chain Finance

Department

In April 2013, SMBC established the “Global Supply Chain
Finance Department” in Global Trade Finance Department to
strengthen the promotion system for finance business associ-
ated with the transactions in overseas. We will appropriately
respond to the diverse needs of clients who globally conduct
their businesses, by further enhancing cooperation with each
department of transaction business division and providing
the supply-chain finance especially focused on commercial
distribution.

Strengthening Transaction Banking Products
to Respond to Clients’ Needs
SMBC is enhancing transaction banking products to respond to
domestic and overseas clients’ transactions and cash manage-
ment needs.
We continue to improve and enhance electronic bank-
ing services, for the “PC Bank Web21” and a new means of
settlement of “Densai Net” in order to support our clients’ daily
cash management, “Global e-Trade Service” in order to sup-
port foreign exchange and trade transactions in Japan, and
“SMAR&TS” in overseas etc.
We also continue to strengthen our support for our clients in
Japan and overseas by providing high value-added information;
providing the system to support cash and financial management
for the corporate group; improving foreign currency transactions
including renminbi; and allocating specialized professionals.

High Value-Added Services integrally provided
by SMFG
SMFG works at providing high value-added services with
respect to the transaction banking business of clients.

The services provided by SMBC Finance Service are mainly
the “Convenience store’s payment collection agency business”
and “Collection agency service (account transfer payment).” The
handling volumes for these services are the largest in Japan.

On the other hand, as for yearly expanding EC market, we
provide diverse settlement solutions as one of core companies
in charge of transaction banking business for SMFG, by provid-
ing the “Settlement Station” which collectively manages multiple
means of settlements.

Further, Financial Link integrally provides “SMFG-BPO
Service” (BPO: Business Process Outsourcing) by appropriately
accommodating the substantial needs for outsourcing service
associated with the fund collection and payment.

Enhancing each Settlement System and
Settlement Infrastructure
It is imperative that we appropriately enhance the settlement
system and settlement infrastructure which support the provi-
sion of secure settlement services for our clients. We are actively
involved in various industrial initiatives, such as SWIFT* and
BOJ-Net. We also engage in the Japanese Government Bond
settlement cycle reform to reduce settlement-related risks.

* Society for Worldwide Interbank Financial Telecommunication
A member-owned cooperative that provides the communica-
tions platform connected more than 10,000 financial institu-
tions in 210 countries.

Group Companies mainly associated with Settlement

Corporate Name:
Business Description:
Establishment Date:
Location of Head Office: 5-27, Mita 3-chome, Minato-ku,
Tokyo

SMBC Finance Service Co., Ltd.
Collecting agent, factoring business
December 5, 1972

Representative Director: Kazuhiko Kashikura

(Appointed on June 28, 2013)

Number of Employees: 422

Corporate Name:
Business Description:

Financial Link Company, Limited
Data processing service and consultation
business
April 1, 2004

Establishment Date:
Location of Head Office: 1-11, Shinbashi 3-chome, Minato-ku, Tokyo
Representative Director: Koichi Okamura
Number of Employees: 22

SMFG 2013

Group Companies (as of March 31, 2013)

The companies of the Sumitomo Mitsui Financial Group (SMFG) offer a
diverse range of financial services, centered on banking operations, and
including leasing, securities, consumer finance, system development and
information services.

Business Mission
• To found our own prosperity on providing valuable
services which help our customers to build their
prosperity

• To create sustainable value for our shareholders

founded on growth in our business

• 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)
Capital: ¥2,337.8 billion
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 implementa-
tion of strategies, and an extensive lineup of
financial products and services that leverage
the expertise 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 sophisti-
cated, 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: 22,569
Number of branches and other business locations:

In Japan:
Branches:

1,554*
505
(Including 46 specialized deposit account branches)
151
Sub-branches:
Banking agencies:
4
Offices handling non-banking business: 23
871
Automated service centers:
36
Overseas:
16
Branches:
12
Sub-branches:
8
Representative offices:
* The number of domestic branches excludes ATMs located
at the business sites of companies and at retail convenience
stores. The number of overseas branches excludes overseas
subsidiaries.

Credit Ratings (as of June 30, 2013)

Moody’s
Standard & Poor’s
Fitch Ratings
R&I
JCR

Long-term Short-term
P–1
A–1
F1
a–1
J–1+

Aa3
A+
A–
AA–
AA

Financial Information (Consolidated basis, years ended March 31)

2013

Billions of yen
2011
2012

2010

For the Year:
Ordinary income .....
Ordinary profit .......
Net income (loss) ....
At Year-End:
¥8,257.0
Net assets...............
Total assets ............ 143,203.1

¥2,810.6
928.7
734.5

¥2,687.9
857.9
533.8

¥2,711.3
751.2
450.8

¥2,579.9
557.7
332.4

¥7,276.7
138,251.6

¥6,983.1
132,715.6

¥6,894.5
120,041.3

Sumitomo Mitsui Finance and Leasing
Company, Limited (SMFL) was formed in
October 2007 as a result of the merger
of SMBC Leasing Company, Limited and
Sumisho Lease Co., Ltd., striving to become
one of the top leasing companies in Japan
in terms of both quantity and quality. SMFL
meets the diversifying needs of our clients
by consolidating and leveraging the client
portfolios and expert knowledge of the bank-
affiliated leasing company, SMBC Leasing
Company and the trading-firm-affiliated leas-
ing company, Sumisho Lease Company.

In June 2012, SMFL acquired a glob-
ally renowned aircraft leasing company, as
part of our progression to a new stage
of growth. Through provision of global

www.smfl.co.jp/english/

leasing and other financial solutions, SMFL
aims to establish a reputation for unrivaled
excellence.

Credit Ratings (as of June 30, 2013)

R&I
JCR

Long-term Short-term
a–1
J–1+

A+
AA–

Financial Information (Years ended March 31)

2013

Billions of yen
2011
2012

2010

For the Year:
Leasing transaction
volume ....................
Operating revenue ....
Operating profit ........

¥855.1
754.6
48.6

¥770.9
816.8
59.4

¥800.8
812.8
50.2

¥733.6
894.7
43.8

Company Name: Sumitomo Mitsui Finance and

Leasing Company, Limited

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
Number of Employees: 1,495

SMFG 2013

Company Name: SMBC Nikko Securities Inc.
Business Profile: Securities services
Establishment: June 15, 2009
Head Office: 3-1, Marunouchi 3-chome,

Chiyoda-ku, Tokyo
President & CEO: Tetsuya Kubo

(Appointed on April 1, 2013)

Number of Employees: 7,541

www.smbcnikko.co.jp/en

Credit Ratings (as of June 30, 2013)

Moody’s
Standard & Poor’s
R&I
JCR

Long-term Short-term
P–1
A–1
a–1+
—

A1
A+
AA–
AA

Financial Information (Years ended March 31)

2013

2012

2011

Billions of yen
2010

For the Year:
Operating
revenue ........... ¥280.5
Operating
income ............

72.7

¥233.6

¥218.6

¥85.6

¥104.9

39.9

38.5

20.9

23.5

*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)

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: Koichi Danno

Number of Employees: 1,929

(Appointed on June 24, 2013)

Financial Information (Years ended March 31)

For the Year:
Operating revenue ...
Operating profit ......

2013

¥59.6
18.0

Billions of yen
2011
2012

¥47.5
8.3

¥53.2
10.2

2010

¥67.4
22.7

SMBC Nikko Securities Inc. (formerly Nikko
Cordial Securities Inc.), which was estab-
lished in July 1918, has developed solid
relationships of trust with its individuals and
corporate clients over the last nine decades.
It became a member of the SMFG Group
in October 2009. In April 2011, its corpo-
rate name was changed to SMBC Nikko
Securities from Nikko Cordial Securities.
Consistently working closely with SMBC,
SMBC Nikko Securities provides comprehen-
sive and highly sophisticated securities and
investment banking services.

As a core member of SMFG, SMBC Nikko
Securities strives to become the leading
securities and investment banking company
in Japan.

SMBC Friend Securities Co., Ltd. is a securi-
ties 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
becoming “one of the leading Japanese
securities companies in the retail securities
market,” offering high-quality products and
services accommodating the needs of its cli-
ents and building trust for its clients.

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 fur-
ther dramatic advances as a leading brand in

its industry sector.

Company Name: Sumitomo Mitsui Card

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: 2,353

www.smbc-card.com
(Japanese only)

Credit Ratings (as of June 30, 2013)

R&I
JCR

Long-term Short-term
a–1+
J–1+

AA–
AA–

Financial Information (Years ended March 31)

2013

Billions of yen
2011
2012

2010

For the Year:
Revenue from credit
card operations ........ ¥8,194.6
185.6
Operating revenue ......
Operating profit ..........
44.7
At Year-End:
Number of cardholders
(in thousands) ...........

22,400

¥7,560.6
182.2
43.1

¥6,896.2
185.2
32.6

¥6,209.0
183.5
24.3

21,647

20,770

20,504

SMFG 2013www.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 SMFG, it strives to become
“the number one credit card business 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: Satoshi Nakanishi

(Appointed on June 28, 2013)

Number of Employees: 2,776

Credit Ratings (as of June 30, 2013)

JCR

Long-term Short-term
J–1

A+

Financial Information (Years ended March 31)

For the Year:
Operating revenue ......
Operating profit ..........
At Year-End:
Number of cardholders
(in thousands) ................

2013

Billions of yen
2011
2012

2010

¥164.0
13.4

¥176.2
(27.6)

¥203.2
0.8

¥223.9
(40.8)

19,480

21,091

22,513

24,933

Since its establishment in 1962, with the original
goal of striving to be the best in offering innova-
tive financial services for consumers, Promise
Co., Ltd., currently known as SMBC Consumer
Finance Co., Ltd., has developed convenient
loan products for individuals to accommodate
to the changing times and has created an
appropriate system for offering loan consulta-
tion services and executing loan agreements.

Based on a corporate philosophy “Be
appreciated by customers and cooperate
with society to realize mutual harmony and
benefit together with employees,” SMBC
Consumer Finance, as a member of SMFG,
will continue to develop its specialized ser-
vices in pursuit of sustainable growth.

www.smbc-cf.com/english/

Credit Ratings (as of June 30, 2013)

Long-term Short-term

R&I
JCR

A
A–

Financial Information (Years ended March 31)

—
—

2010

Billions of yen
2011
2012

¥172.2
(166.6)

¥187.5
(54.1)

¥212.7
11.7

For the Year:
Operating revenue ....
Operating profit ........

2013

¥164.6
42.3

Company Name: SMBC Consumer Finance Co., Ltd.
Business Profile: Consumer finance business
Establishment: March 20, 1962
Head Office: 1-2-4, Otemachi, Chiyoda-ku, Tokyo
President & CEO: Ryoji Yukino
Number of Employees: 1,867

The Japan Research Institute, Limited (JRI),
an intelligence engineering company, pro-
vides high value-added information system,
consultation and think-tank services. In addi-
tion to providing financial consultation ser-
vices 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 analy-
sis, policy recommendations 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: 2-18-1 Higashi-Gotanda,

Shinagawa-ku, Tokyo

Osaka Head Office: 2-2-4, Tosabori,
Nishi-ku, Osaka

President & CEO: Junsuke Fujii
Number of Employees: 2,136

www.jri.co.jp/english/

Financial Information (Years ended March 31)

For the Year:
Operating revenue ....
Operating profit ........

2013

¥96.2
1.8

Billions of yen
2011
2012

¥87.5
0.8

¥84.8
1.5

2010

¥81.7
0.9

SMFG 2013Financial Highlights

Sumitomo Mitsui Financial Group

◆ Consolidated

Year ended March 31
For the Year:

2013

2012

Total income ................................................................
Total expenses .............................................................
Net income (loss) .........................................................
Comprehensive income ...............................................

¥ 4,326,809
3,262,775
794,059
1,458,107

At Year-End:

¥ 8,443,218
148,696,800
1,687,049
928,866
1,121,598
64,635

Selected Ratios:

Capital ratio ..................................................................
Total capital ratio (International Standard) ...................
Tier 1 capital ratio (International Standard) ..................
Common equity Tier 1 capital ratio
(International Standard) ..............................................
Return on Equity ..........................................................
Price Earnings Ratio .....................................................

/
14.71%
10.93%

9.38%
13.74%
6.44x

Per Share (Yen):

Net assets ....................................................................
Net income (loss) .........................................................
Net income — diluted .................................................

¥4,686.69
586.49
585.94

¥ 3,973,075
3,020,108
518,536
665,232

¥ 7,254,976
143,040,672
1,804,951
978,933
474,984
64,225

16.93%
/
/

/
10.27%
7.28x

¥3,856.37
374.26
373.99

Millions of yen
2011

¥ 3,862,660
3,035,346
475,895
413,375

¥ 7,132,073
137,803,098
1,646,369
1,058,945
370,899
61,555

16.63%
/
/

/
9.76%
7.68x

¥3,533.47
336.85
336.78

2010

2009

¥ 3,184,688
2,626,590
271,559
803,705

¥ 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

¥ 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)
—

Notes: 1. “Net unrealized gains (losses) on other securities” represent the difference between the market prices and acquisition costs (or amortized costs) of “other

securities.” In principle, the values of stocks are calculated using the average market prices during the final month. For details, please refer to page 26.
2. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members but

excludes contract employees and temporary staff.

3. For the calculation of consolidated comprehensive income for fiscal 2009, SMFG has retroactively adopted the “Accounting Standard for Presentation of

Comprehensive Income” (ASBJ Statement No. 25, issued on June 30, 2010).

4. SMFG has retroactively adopted the “Guidance on Accounting Standard for Earnings per Share,” (ASBJ Guidance No. 4) to “Net income — diluted” per

share for fiscal 2010. This change has a little impact on the calculation of diluted net income per share.

SMFG 2013

◆ Nonconsolidated

Year ended March 31
For the Year:

2013

2012

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

¥ 179,560
165,441
24,341
147,981

¥4,641,005
6,266,864
74.04%
2,337,895

¥ 181,372
166,272
24,902
149,919

¥4,527,629
6,153,461
73.57%
2,337,895

Millions of yen
2011

¥ 222,217
206,865
24,467
191,539

¥4,842,914
6,237,655
77.64%
2,337,895

2010

2009

¥ 133,379
118,818
16,641
66,176

¥4,805,574
6,152,774
78.10%
2,337,895

¥ 134,772
117,051
8,790
103,468

¥2,977,547
4,057,313
73.39%
1,420,877

Common stock .................................................... 1,414,055,625
Preferred stock ....................................................
—
Number of employees ..................................................
231

1,414,055,625
—
215

1,414,055,625
70,001
192

1,414,055,625
70,001
183

789,080,477
103,401
167

Selected Ratios:

Return on Equity ..........................................................
Price Earnings Ratio .....................................................
Dividend payout ratio ...................................................

3.23%
35.98x
114.36%

3.27%
25.43x
92.55%

4.02%
19.68x
76.09%

1.59%
57.41x
213.41%

3.52%
28.79x
75.96%

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 (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 .................................................

¥3,290.23

¥3,317.44

¥3,282.75

¥3,256.32

¥3,389.38

120
/
/
/
/
/
/
/
/
/
104.93
104.89

100
/
/
/
/
/
/
/
/
/
107.06
107.04

100
/
/
/
/
/
/
/
/
88,500
131.42
131.42

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
—

Notes: 1. All SMFG employees are on secondment assignment from SMBC, etc.

2. “Net income — diluted” per share for fiscal 2010 was calculated by retroactive application of “Guidance on Accounting Standard for Earnings per Share,”

(ASBJ Guidance No. 4). Had this Guidance not been applied, “Net income — diluted” per share would have come to ¥131.41 in fiscal 2010.

3. The ¥120 dividend per share for the fiscal year ended March 31, 2013 includes a ¥10 commemorative dividend.

SMFG 2013

Sumitomo Mitsui Banking Corporation

◆ Consolidated

Year ended March 31
For the Year:

2013

2012

¥ 2,810,902
1,889,068
734,514
1,373,623

At Year-End:

¥ 8,257,091
143,203,127
1,493,807
806,702
1,072,906
47,852

Selected Ratios:

Capital ratio (International standard) ............................
Total capital ratio (International standard) ...................
Tier 1 capital ratio (International standard) ..................
Common equity Tier 1 capital ratio
(International standard) ..............................................
Return on Equity ..........................................................

/
16.84%
12.69%

11.26%
11.72%

Per Share (Yen):

¥ 2,715,700
1,838,390
533,816
632,889

¥ 7,276,706
138,251,602
1,659,306
867,653
390,602
50,768

19.63%
/
/

/
9.63%

Millions of yen
2011

¥ 2,714,944
1,972,065
450,832
363,689

¥ 6,983,132
132,715,674
1,529,587
943,077
305,968
48,219

19.16%
/
/

/
8.42%

2010

2009

¥ 2,597,675
2,039,296
332,497
835,851

¥ 6,894,564
120,041,369
1,498,271
1,007,160
523,444
47,837

16.68%
/
/

/
8.64%

¥ 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%
/
/

/
—%

¥64,031.58
6,913.18
6,908.19

¥53,960.98
5,024.23
5,023.33

¥50,344.52
4,184.89
4,184.07

¥49,036.12
4,240.20
4,236.01

¥41,492.54
(5,740.34)
—

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. For the calculation of consolidated comprehensive income for fiscal 2009, SMBC has retroactively adopted the “Accounting Standard for Presentation of

Comprehensive Income” (ASBJ Statement No. 25, issued on June 30, 2010).

SMFG 2013

◆ Nonconsolidated

Year ended March 31
For the Year:

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 Act .....................................
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)

Common stock ....................................................
Preferred stock ....................................................
Number of employees ..................................................

Selected Ratios:

Per Share (Yen):

Net assets ....................................................................
Dividends:

Common stock ........................................................
Preferred stock (1st series Type 6) ..........................
Net income (loss) .........................................................
Net income — diluted .................................................

2013

2012

Millions of yen
2011

2010

2009

¥ 2,121,412
1,456,011
617,791

¥ 2,021,042
1,329,050
477,973

¥ 2,110,588
1,521,748
421,180

¥ 2,087,777
1,633,026
317,995

¥ 2,548,073
2,520,286
(301,116)

1,540,095
812,358

812,358
727,736

¥ 6,554,446
125,910,020
91,928,337
59,770,763
41,347,000
1,062,290

1,532,511
856,796

813,015
719,495

¥ 5,709,663
119,037,469
84,392,835
56,411,492
42,441,134
1,143,053

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

1,455,275
778,589

769,522
685,752

¥ 5,397,949
103,536,394
77,630,639
56,619,058
28,536,200
1,068,017

1,524,856
747,647

823,377
701,479

¥ 2,546,493
107,478,218
76,905,708
60,241,266
28,000,515
1,137,058

1,093,465
616,593
1,040,660
2,693,092
131,913
1,076,225
1,770,996

106,248
70
22,569

/
18.62%
13.92%

11.75%
10.07%
29.04%
47.3%

1,182,847
689,215
388,982
1,891,853
235,829
424,478
1,770,996

106,248
70
22,686

21.91%
/
/

/
8.64%
33.00%
46.9%

1,126,269
711,522
305,621
1,576,094
237,383
444,664
1,770,996

106,248
70
22,524

21.45%
/
/

/
7.87%
35.53%
45.6%

1,100,685
758,178
521,377
1,403,236
221,970
457,585
1,770,996

106,248
70
22,460

18.28%
/
/

/
8.28%
48.06%
47.1%

1,194,170
791,885
(42,701)
1,262,993
222,030
392,812
664,986

56,355
70
21,816

13.85%
/
/

/
—%
—%
46.0%

¥61,689.83

¥53,738.81

¥50,317.86

¥48,799.31

¥41,404.62

1,689
/
5,814.59
—

1,485
/
4,498.64
—

1,388
88,500
3,905.80
—

1,620
88,500
4,051.75
—

1,638
88,500
(5,453.06)
—

Notes: 1. Please refer to page 168 for the definitions of risk-monitored loans and problem assets based on the Financial Reconstruction Act.

2. “Net unrealized gains (losses) on other securities” represent the difference between the market prices and acquisition costs (or amortized costs) of “other

securities.” The values of stocks are calculated using the average market prices during the final month. For details, please refer to page 31.

3. “Number of employees” has been reported on the basis of full-time workers. “Number of employees” includes locally hired overseas staff members but

excludes contract employees, temporary staff, and executive officers who are not also Board members.
4. “Net income — diluted” per share is not reported because no potentially dilutive shares have been issued.

SMFG 2013

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, 2013.

1. Operating Results
Operating results for fiscal 2012 include the results of 323
consolidated subsidiaries and 44 subsidiaries and affiliates
accounted for by the equity method.

In fiscal 2012, gross profit increased by ¥198.4 billion
year-on-year to ¥2,792.8 billion as a result of the following
factors, among others: SMBC Consumer Finance Co., Ltd.
became a consolidated subsidiary in December 2011 and
contributed to earnings; and SMBC achieved growth in net
interest income, mainly due to an increase in the balance

of overseas loans and bills discounted, and in net fees and
commissions, primarily due to an increase in fees related
to loan syndication. Ordinary profit after adjustment for
general and administrative expenses, credit cost, net losses
on stocks, equity in losses of affiliates and other items
increased by ¥138.1 billion year-on-year to ¥1,073.7 billion.
Net income after adjustment for extraordinary gains (losses)
and income taxes increased by ¥275.5 billion to ¥794.0
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 ...................................

2013 (A)

2012 (B)

323
44

337
43

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 ........................................................................................................................
Recoveries of written-off claims (B) ..............................................................................
Net losses on stocks .....................................................................................................
Equity in gains (losses) of affiliates ................................................................................
Net other expenses .......................................................................................................
Ordinary profit ...............................................................................................................
Extraordinary gains (losses)...........................................................................................
Gains on step acquisitions ........................................................................................
Gains (losses) on disposal of fixed assets .................................................................
Losses on impairment of fixed assets .......................................................................
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) .........................................................

2013 (A)
¥2,792,891
1,392,636
1,871
908,168
166,617
323,597
(1,496,294)
(183,552)
(133,639)
(104,180)
67,530
(13,262)
10,436
(20,973)
5,309
(34,072)
1,073,745
(9,711)
140
(5,480)
(4,314)
1,064,033

(279,898)
133,930
918,065
(124,006)
¥ 794,059
¥ (173,115)

Millions of yen

2012 (B)
¥2,594,482
1,341,369
1,770
823,580
198,192
229,568
(1,421,363)
(126,055)
(90,305)
(111,227)
106,512
(31,035)
4,800
(27,880)
(31,122)
(57,289)
935,571
17,395
25,050
(3,765)
(3,861)
952,966

(103,478)
(207,860)
641,627
(123,090)
¥ 518,536
¥ (121,255)

Increase (decrease)
(A) – (B)

(14)
1

Increase (decrease)
(A) – (B)
¥198,409
51,267
101
84,588
(31,575)
94,029
(74,931)
(57,497)
(43,334)
7,047
(38,982)
17,773
5,636
6,907
36,431
23,217
138,174
(27,106)
(24,910)
(1,715)
(453)
111,067

(176,420)
341,790
276,438
(916)
¥275,523
¥ (51,860)

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.)

¥ 1,166.2

¥ 1,013.9

¥ 152.3

SMFG 2013
Deposits (excluding negotiable certificates of deposit) as of

March 31, 2013 increased by ¥4,953.2 billion year-on-year
to ¥89,081.8 billion, and the negotiable certificates of deposit
increased by ¥3,162.0 billion to ¥11,755.6 billion.

Meanwhile, loans and bills discounted as of March 31,
2013 totaled ¥65,632.0 billion, a year-on-year increase of
¥2,911.4 billion, mainly in Asia and the U. S., and securities

Assets, Liabilities and Net Assets

totaled ¥41,306.7 billion, a decrease of ¥1,223.2 billion.
Net assets were ¥8,443.2 billion. Of this amount,

stockholders’ equity was ¥5,680.6 billion mainly due to the
recording of net income, and the payment of cash dividends.

March 31
Assets ............................................................................................................................ ¥148,696,800
41,306,731
65,632,091
140,253,582
89,081,811
11,755,654
8,443,218

Securities ...................................................................................................................
Loans and bills discounted ........................................................................................
Liabilities ........................................................................................................................
Deposits.....................................................................................................................
Negotiable certificates of deposit ..............................................................................
Net assets .....................................................................................................................

2013 (A)

Millions of yen

2012 (B)
¥143,040,672
42,529,950
62,720,599
135,785,696
84,128,561
8,593,638
7,254,976

Increase (decrease)
(A) – (B)
¥5,656,128
(1,223,219)
2,911,492
4,467,886
4,953,250
3,162,016
1,188,242

2. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2013
increased by ¥638.6 billion year-on-year to ¥1,182.7 billion,
primarily because of an increase in the unrealized gains
of stocks. Of this amount, net unrealized gains on other

securities (including other money held in trust), which are
directly recorded to net assets, were ¥1,121.6 billion, a
year-on-year increase of ¥646.6 billion.

Unrealized Gains (Losses) on Securities

Consolidated
balance sheet
amount

Net unrealized
gains (losses)
(A)

March 31
Held-to-maturity securities ................. ¥ 5,852,111 ¥ 61,150
Other securities .................................. 35,776,786
1,121,598
Stocks .............................................
771,237
2,806,706
Bonds ............................................. 24,525,328
108,320
Others .............................................
242,040
8,444,750
Other money held in trust ...................
10
22,789
Total .................................................... 41,651,687
1,182,759
Stocks .............................................
771,237
2,806,706
Bonds ............................................. 30,365,341
169,467
Others .............................................
242,054
8,479,639

Millions of yen

2013

Unrealized
gains

(A) – (B)
¥ (8,034) ¥ 61,191
1,256,572
646,614
867,109
499,776
112,202
(3,495)
277,260
150,332
10
56
1,317,774
638,637
867,109
499,776
173,390
(11,531)
277,274
150,392

2012

Consolidated
balance sheet
amount
¥ 5,286,267
37,558,730
2,406,170
27,684,484
7,468,076
22,430
42,867,429
2,406,170
32,957,653
7,503,605

Net unrealized
gains (losses)
(B)
¥ 69,184
474,984
271,461
111,815
91,708
(46)
544,122
271,461
180,998
91,662

Unrealized
gains
¥ 69,288
746,928
490,074
118,164
138,689
—
816,216
490,074
187,444
138,697

Unrealized
losses
¥ 41
134,973
95,872
3,881
35,220
—
135,015
95,872
3,922
35,220

Unrealized
losses
¥ 103
271,943
218,613
6,348
46,981
46
272,093
218,613
6,445
47,034

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 consolidated balance sheet amounts.
Net unrealized gains (losses) on other securities, as of March 31, 2013 and 2012, included gains of ¥29,831 million and ¥196 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,
2013 and 2012, were reduced by ¥29,831 million and ¥196 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).

SMFG 2013

3. Consolidated Capital Ratio
The total capital ratio as of March 31, 2013, stood at
14.71%, the Tier 1 capital ratio was 10.93%, and the com-
mon equity Tier 1 capital ratio was 9.38%.

Please note that from March 31, 2013, the consoli-
dated capital ratio has been calculated according to the
formula specified in the Financial Services Agency (“FSA”)

Notification No. 20 issued in fiscal 2006, which is based on
Article 52-25 of the Banking Act of Japan, amended March
30, 2012.

This provision is used in deciding whether or not capital
should be increased to reflect assets, etc. held by compa-
nies under bank holding companies and their subsidiaries.

Consolidated Capital Ratio (International Standard)

March 31

Common equity Tier 1 capital ...................................................................................
Common equity Tier 1 capital ratio ...........................................................................
Additional Tier 1 capital .............................................................................................
Tier 1 capital ..................................................................................................................
Tier 1 capital ratio ..........................................................................................................
Tier 2 capital ..................................................................................................................
Total capital ...................................................................................................................
Total capital ratio ...........................................................................................................
Risk weighted assets.....................................................................................................

Millions of yen
2013

5,855,852

9.38%

973,168
6,829,021

10.93%

2,356,989
9,186,010

14.71%

62,426,124

4. Dividend Policy
The basic shareholder return policy of SMFG is to sustain
a consolidated payout ratio of over 20% through the stable
and consistent distribution of profit, while enhancing retained
earnings to maintain financial soundness in light of the public
nature of its business as a bank holding company, by ensur-
ing the sustainable growth of enterprise value. Dividends
from retained earnings are basically distributed 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.

In light of current earnings trends and other factors, we

have increased the dividend per share of common stock for
the fiscal year under review by ¥10 year-on-year.

In addition, we have incorporated a commemorative ele-
ment amounting to ¥10 per share into the year-end dividend,
to mark the 10th anniversary of the foundation of the Group
in December 2012.

As a result of the above, the annual dividend per share of

common stock has risen by ¥20 year-on-year to ¥120.
SMFG will employ its retained earnings to increase its

enterprise value by aiming for top quality in strategic business
areas, and establishing a solid financial base and corporate
infrastructure to meet the challenges of financial regulations
and highly competitive environment.

SMFG 2013Sumitomo 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, 2013.

1. Operating Results
Gross banking profit in fiscal 2012 increased by ¥7.5 billion
year-on-year to ¥1,540.0 billion, and expenses (excluding
nonrecurring losses) increased by ¥8.2 billion to ¥727.7 bil-
lion. As a result, banking profit (before provision for general
reserve for possible loan losses) decreased by ¥0.6 billion to
¥812.3 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 gains (losses) on
stocks — decreased by ¥24.4 billion year-on-year to ¥670.8
billion.

Net income after adjustment for ordinary profit for extraor-

dinary gains and losses, and income taxes increased by
¥139.8 billion year-on-year to ¥617.7 billion.

2. Income Analysis
Gross Banking Profit
Gross banking profit increased by ¥7.5 billion year-on-year
to ¥1,540.0 billion despite a ¥38.6 billion decrease in gains
on bonds. This was due to an increase in fees and commis-
sions from syndicated loan and loan arrangement services; a
robust sales of investment trusts supported by the recovery
in the stock market in the second half of the fiscal year; and
an increase in net interest income of International Banking
Unit, mainly in Asia and the Americas.

Expenses
Expenses (excluding nonrecurring losses) increased by ¥8.2
billion year-on-year to ¥727.7 billion. This was due to a com-
bination of an increase in personnel and operational expenses
accompanying the expansion of overseas business and the
yen’s depreciation which outweighed a reduction from the reex-
amination and control of ordinary expenses.

Banking Profit
Banking profit (before provision for general reserve for pos-
sible loan losses) decreased by ¥0.6 billion year-on-year to
¥812.3 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 .......................................................................................
[Gains (losses) on bonds] ..........................................................................................
Expenses (excluding nonrecurring losses) ....................................................................
Personnel expenses ..................................................................................................
Nonpersonnel expenses ............................................................................................
Taxes..........................................................................................................................
Banking profit (before provision for general reserve for possible loan losses) ....
[Gains (losses) on bonds] ..........................................................................................
Provision for general reserve for possible loan losses ..................................................
Banking profit ................................................................................................................

2013 (A)
¥1,540,095
[1,098,912]
[441,182]
971,202
1,823
343,738
(3,781)
227,112
[113,849]
(727,736)
(270,091)
(419,203)
(38,440)
812,358
[113,849]
—
812,358

Banking Profit by Business Unit

Millions of yen

2012 (B)
¥1,532,511
[1,097,760]
[434,750]
956,878
1,736
318,887
84,051
170,957
[152,536]
(719,495)
(259,782)
(422,854)
(36,858)
813,015
[152,536]
43,780
856,796

Increase (decrease)
(A) – (B)
¥ 7,584
[1,152]
[6,432]
14,324
87
24,851
(87,832)
56,155
[(38,687)]
(8,241)
(10,309)
3,651
(1,582)
(657)
[(38,687)]
(43,780)
(44,438)

Year ended March 31, 2013
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

¥90.5
9.8

¥195.5
(2.7)

¥168.4
2.0

¥167.6
24.6

¥274.3
(25.5)

¥(83.9)
(8.8)

¥812.4
(0.6)

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.

SMFG 2013
Nonrecurring Losses (Credit Cost, etc.)
Nonrecurring losses decreased by ¥19.9 billion year-on-year to
¥141.5 billion. This was mainly due to a ¥39.1 billion decrease
to ¥19.5 billion in total credit cost, after adjustments regarding
reversal of reserve for possible loan losses for credit cost, as a
result of our individualized efforts to assist certain borrowers to
improve their business and financial conditions.

Ordinary Profit
As a result of the foregoing, ordinary profit decreased by ¥24.4
billion year-on-year to ¥670.8 billion.

Extraordinary Gains (Losses)
Extraordinary losses increased by ¥2.1 billion year-on-year to
¥5.4 billion.

Net Income
Due to elimination of tax loss carryforwards, current income
taxes came to ¥209.7 billion, a ¥165.0 billion increase in
expenses, but deferred income taxes came to ¥162.0 billion,
an improvement of ¥331.4 billion from the previous year.

This was due to a change in tax effect accounting treat-
ment in line with the elimination of tax loss carryforwards in
the current year, with the effect that the total of deferred tax
assets recognized increased.

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) ............................................................................................................
Gains on reversal of reserve for possible loan losses (C) ..........................................
Recoveries of written-off claims (D) ...........................................................................
Net gains (losses) on stocks ......................................................................................
Gains 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 .......................................................................

Income taxes:

Current .......................................................................................................................
Deferred .....................................................................................................................
Net income ....................................................................................................................

Net total credit cost (A) + (B) + (C) + (D) ........................................................................
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 .................................
Recoveries of written-off claims ................................................................................

2013 (A)
¥812,358
—
812,358
(141,505)
(46,326)
26,747
54
(35,662)
469
(36,131)
(86,319)
670,852
(5,451)
(2,200)
(3,250)

(209,704)
162,095
¥617,791

¥ (19,523)
71,680
(40,258)
(45,102)
(6,067)
168
54

Millions of yen

2012 (B)
¥813,015
43,780
856,796
(161,453)
(103,662)
—
1,234
(15,153)
13,488
(28,642)
(43,871)
695,342
(3,349)
(717)
(2,632)

(44,703)
(169,315)
¥477,973

¥ (58,647)
43,780
(15,797)
(59,196)
(28,767)
98
1,234

Increase (decrease)
(A) – (B)
¥ (657)
(43,780)
(44,438)
19,948
57,336
26,747
(1,180)
(20,509)
(13,019)
(7,489)
(42,448)
(24,490)
(2,102)
(1,483)
(618)

(165,001)
331,410
¥139,818

¥ 39,124
27,900
(24,461)
14,094
22,700
70
(1,180)

SMFG 20133. Assets, Liabilities and Net Assets
Assets
Total assets as of March 31, 2013 increased by ¥6,872.5
billion year-on-year to ¥125,910.0 billion. This was largely
due to a ¥3,359.2 billion increase in loans and bills dis-
counted, principally in Asia and the Americas.

Liabilities
Liabilities as of March 31, 2013 increased by ¥6,027.7 bil-
lion year-on-year to ¥119,355.5 billion, mainly due to a
¥4,202.3 billion increase in deposits. Both individual and
corporate deposits increased in Japan, and in other parts of
the world, deposits increased from the expansion of over-
seas business.

Net Assets
Net assets as of March 31, 2013 amounted to ¥6,554.4
billion. Of this amount, stockholders’ equity was ¥5,762.9
billion, comprising ¥1,770.9 billion in capital stock, ¥2,481.2
billion in capital surplus (including ¥710.2 billion in other
capital surplus), ¥1,720.7 billion in retained earnings, and a
deduction of ¥210.0 billion in treasury stock.

Valuation and translation adjustments were ¥791.4 billion,

comprising ¥742.3 billion in net unrealized gains on other
securities, ¥23.3 billion in net deferred gains on hedges, and
¥25.8 billion in land revaluation excess.

Assets, Liabilities and Net Assets

March 31
Assets ............................................................................................................................ ¥125,910,020
41,347,000
59,770,763
119,355,573
80,006,438
11,921,899
6,554,446

2013 (A)

Millions of yen

2012 (B)
¥119,037,469
42,441,134
56,411,492
113,327,806
75,804,088
8,588,746
5,709,663

Increase (decrease)
(A) – (B)
¥6,872,551
(1,094,134)
3,359,271
6,027,767
4,202,350
3,333,153
844,783

SMFG 20134. Unrealized Gains (Losses) on Securities
Net unrealized gains on securities as of March 31, 2013
increased by ¥648.9 billion year-on-year to ¥1,084.2 billion,
mainly due to an increase in the unrealized gains of stocks.
Of this amount, net unrealized gains on other securities

Unrealized Gains (Losses) on Securities

(including other money held in trust), which are directly
recorded to net assets, amounted to ¥1,040.6 billion, a
year-on-year increase of ¥651.7 billion.

2013

2012

Millions of yen

Non-
consolidated
balance sheet
amount

Net unrealized
gains (losses)
(A)

March 31
Held-to-maturity securities ................. ¥ 5,735,948 ¥ 59,904
Stocks of subsidiaries and affiliates ...
(16,326)
2,474,054
Other securities .................................. 33,655,434
1,040,660
Stocks .............................................
769,685
2,792,916
Bonds ............................................. 23,126,292
95,261
Others .............................................
175,713
7,736,225
Other money held in trust ...................
10
2,372
Total .................................................... 41,867,810
1,084,249
Stocks .............................................
764,286
3,900,774
Bonds ............................................. 28,862,241
155,165
Others .............................................
164,797
9,104,794

Unrealized
gains

(A) – (B)
¥ (7,998) ¥ 59,941
7,274
1,165,723
862,237
98,552
204,933
10
1,232,949
869,511
158,494
204,943

5,173
651,678
541,232
(9,095)
119,541
56
648,911
547,137
(17,094)
118,867

Non-
consolidated
balance sheet
amount
¥ 5,163,764
2,324,041
35,440,979
2,250,672
26,306,672
6,883,634
5,805
42,934,589
3,472,964
31,470,436
7,991,189

Net unrealized
gains (losses)
(B)
¥ 67,902
(21,499)
388,982
228,453
104,356
56,172
(46)
435,338
217,149
172,259
45,930

Unrealized
gains
¥ 67,993
622
672,572
466,871
109,504
96,196
—
741,188
467,494
177,497
96,196

Unrealized
losses
¥ 37
23,600
125,062
92,551
3,291
29,219
—
148,699
105,224
3,328
40,146

Unrealized
losses
¥ 90
22,122
283,590
238,418
5,148
40,024
46
305,850
250,345
5,238
50,266

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 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 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, 2013 and 2012, included gains of ¥29,831 million and ¥196 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,
2013 and 2012, were reduced by ¥29,831 million and ¥196 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 2013

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.

Total

March 31, 2013

(Billions of yen)

March 31, 2012

Balances
(after provisions
and write-offs)
¥ 97.8
0.5
8.5
0.1
¥106.9

Change from
Mar. 31, 2012
¥48.3
(0.2)
(10.9)
0.0
¥37.3

Overseas

¥ 97.8
0.5
8.5
0.1
¥106.9

Change from
Mar. 31, 2012
¥48.3
(0.2)
1.1
(0.0)
¥49.3

Net unrealized
gains/losses
(after write-offs)
¥0.4
2.1
0.5
0.2
¥3.2

Change from
Mar. 31, 2012
¥0.1
0.6
(0.1)
0.1
¥0.8

Balances
(after provisions
and write-offs)
¥49.4
0.7
19.4
0.1
¥69.6

Overseas

¥49.4
0.7
7.4
0.1
¥57.6

Net unrealized
gains/losses
(after write-offs)
¥0.2
1.5
0.6
0.1
¥2.4

Notes: 1. There is no amount of ABCP.

2. Excludes RMBS issued by GSE and Japan Housing Finance Agency, and SMBC’s exposure to subordinated beneficiaries owned through the securitization

of SMBC’s loan receivables.

2. Transactions with Monoline Insurance Companies (Credit Derivatives)

Exposure to CDS transactions with
monoline insurance companies

3. Leveraged Loans

Europe
Japan
United States
Asia (excluding Japan)

Total

(Billions of yen)

March 31, 2013

March 31, 2012

Net
exposure

Change from
Mar. 31, 2012

Amount of
reference
assets

Change from
Mar. 31, 2012

Net
exposure

Amount of
reference
assets

¥1.0

¥(2.0)

¥185.9

¥(50.2)

¥3.0

¥236.1

March 31, 2013

(Billions of yen)

March 31, 2012

Change from
Mar. 31, 2012

Undrawn
commitments

Change from
Mar. 31, 2012

Loans

Undrawn
commitments

¥(41.8)
49.8
(1.8)
(2.2)
¥ 4.0

¥ 16.6
36.2
76.5
5.6
¥135.0

¥ (4.0)
14.0
25.4
(0.1)
¥35.3

¥151.2
131.0
75.6
62.0
¥419.8

¥20.7
22.3
51.1
5.7
¥99.8

Loans

¥109.4
180.8
73.8
59.8
¥423.8

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’

financing needs. Most of the reference assets are high-
grade claims of corporate clients.

Reference assets related to ABCP programs as sponsor

March 31, 2013

March 31, 2012

(Billions of yen)

Notional
amount

Change from
Mar. 31, 2012

Overseas

¥562.8

¥(37.0) ¥308.9

Change from
Mar. 31, 2012
¥78.0

Notional
amount

Overseas

¥599.9

¥230.9

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 are approximately ¥52.6 billion.

5. Others
We have no securities issued by structured investment vehicles.

SMFG 2013

Risk Management

Basic Approach
As risks in the financial services increase in diversity and complexity,

response to changes in the operating environment. The Corporate

Risk Management Department works with the Corporate Planning

risk management—identifying, measuring, and controlling risk—has

Department to comprehensively and systematically manage all

never been more important in the management of a financial holding

these categories of risk across the entire Group.

company.

SMFG has established the basic principles of Groupwide risk

(2) Basic Policies for Risk Management
SMFG has established the “Principal Policy for Group Risk

management in the “Regulations on Integrated Risk Management.”

Management” for the comprehensive risk and risks to be managed,

In the regulations, we identify the location and the type of risk to

and we set forth the specific operational policies for appropriately

be managed in accordance with strategic goals and business struc-

conducting the risk management of the Group companies. Further,

tures. We have set forth the fundamental principles for integrated risk

the Principal Policy is being reviewed regularly and as necessary.

management; managing risk on a consolidated accounting basis,

Under SMFG’s Groupwide basic policies for risk management,

managing risk using quantification methods, ensuring consistency

all Group companies periodically carry out reviews of the basic

with business strategies, setting up a system of checks and bal-

management policies for each risk category, or whenever deemed

ances, contingency planning for emergencies and serious situations

necessary, thus ensuring that the policies followed at any time

and verifying preparedness to handle all conceivable risk situations.

are the most appropriate. The management of SMFG constantly

We manage each risk appropriately according to its characteristics.

monitors the conduct of risk management at Group companies,

Through this approach, we aim to develop sound risk culture.

providing guidance when necessary.

(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

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

■SMFG’s Risk Management System

SMFG

Board of Directors

Corporate Auditors

Management Committee

External Audit

Designated Board Members

Audit Dept.

Guidance for
drafting of basic
policies

Monitoring

Corporate-wide
Risk Management

Corporate Planning Dept./
Corporate Risk
Management Dept.

Report

Corporate Risk
Management
Dept.

Credit Risk

Market Risk

Liquidity Risk

Operational Risk

General Affairs Dept.

Processing Risk

IT Planning Dept.

System Risk

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

Bank-wide
Risk Management

Settle-
ment
Risk

Corporate Planning
Dept./Corporate Risk
Management Dept.

Credit & Investment
Planning Dept.

Credit Risk

Risk
Manage-
ment Unit

Corporate Risk
Management
Dept.

Market Risk

Liquidity Risk

Operational Risk

Operations Planning Dept.

Processing Risk

IT Planning Dept.

System Risk

Transaction Business Planning Dept.

Other Departments

Other Risks

SMBC

SMBC Nikko
Securities

Sumitomo Mitsui
Finance & Leasing

SMBC
Friend
Securities

SMFG
Card & Credit

Sumitomo
Mitsui Card

Cedyna

SMBC
Consumer
Finance

Japan
Research
Institute

SMFG 2013

members, and the relevant risk management departments perform

Committee, which are subcommittees of the Management

risk management according to the basic policies.

Committee. The Management Committee is also attended by the

Risk management systems are in place at the individual Group

relevant department heads.

companies in accordance with SMFG’s Groupwide basic policies

for risk management. For example, at SMBC, specific departments

Integrated Risk Management

have been appointed to oversee the handling of the four risk cat-

egories listed above, in addition to risks associated 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, mar-

ket, liquidity and operational—into the Risk Management Unit and

enhancing our across-the-board risk monitoring ability. A board

(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

member is assigned to oversee the Risk Management Unit com-

risks within the scope of our resources, i.e., capital.

prising the Corporate Risk Management Department and Credit &

Investment Planning Department. The Corporate Risk Management

Department—the unit’s planning department—comprehensively and

systematically manages all categories of risk in cooperation with

the Corporate Planning Department. Moreover, the Internal Audit

Unit—independent of all business units—conducts periodic audits

to ensure that the management system is functioning properly.

Furthermore, under our system top management plays an

active role in the approval of basic policies for risk management.

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

The decision-making process for addressing credit, market, and

whole.

liquidity risk at the operating level is strengthened by the Credit

Risk Management Committee and the Market Risk Management

In this framework, risk capital includes credit concentration

risk and interest rate risk in the banking book which are taken into

■ Risk Management Framework

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 2013

account under the Pillar 2 of Basel Capital Accord. In addition, we

risk-weighted assets.

conduct risk capital-based management activities on a consolidated

(a) Additional recognition of counterparty risk in derivative trans-

basis, including each Group company.

actions (Credit Valuation Adjustment risk)

Liquidity risk is managed within the framework by setting upper

New capital charges for market-price fluctuation risk of credit due to

limit for funding gap, etc. Other risk categories are managed with

deteriorated creditworthiness of a counterparty (counterparty for a

procedures closely attuned to the nature of the risk, as described in

derivatives transaction).

the following paragraphs.

(2) Stress Testing
(a) Use of stress testing in business operations

In the current volatile business environment, stress testing to

analyze and estimate the adverse effects of events such as an eco-

nomic recession and market volatility on the business and financial

conditions of financial institutions is increasingly essential.

When establishing a management plan or as required, we cre-

ate some scenarios such as a global economic slowdown or a JGB

rate rising sharply, and conduct stress testing to appraise the likely

financial impact on the Group, so that we can prepare action to deal

(b) Increase in risk weight on exposures to financial institutions

A multiplier of 1.25 is applied to the correlation parameter of all

exposures to financial institutions.

New capital charges on the exposure related to CCP which was not

levied for the equity capital pursuant to Basel II.

(d) Revised definition of capital

Certain items deducted from capital in Basel II are now required to

be recorded as risk-weighted assets.

■ Main impact on risk-weighted assets in the transition to

with emerging stress events as they occur in advance.

Basel III

We also have in place a system enabling flexible control of

Sumitomo Mitsui Financial Group (Consolidated)

(¥ trillion)

operations at a time of sudden changes in our business environ-

ment, by having a regular meetings between the Risk Management

Unit and the business units and relevant departments for the pur-

pose of reaching a common understanding of the macroeconomic

environment, discussing stress events impacting business opera-

tions, and reviewing responses at the time of occurrence of such

stress events.

(b) Implementation process

Implementation of stress-testing falls broadly into two processes,

establishment of scenarios and analysis and full appraisal of finan-

cial impact. Based on the economic environment and global trends

at the time, highly probable scenarios on macroeconomic indica-

tors including GDP, stock price, interest rate and foreign exchange

rate are created. Based on the degree of macroeconomic impact

of each of the established scenarios on various different financial

items, we analyze and fully appraise the impact on financial items

such as the common equity Tier 1 ratios etc.

Implementation of Basel Capital Accord
Basel III is an international agreement on minimum capital require-

Impact on
risk-weighted assets

Additional recognition of counterparty
risk in derivative transactions

Increase in risk weight on exposures to
financial institutions

Capital charge on exposures to
central counterparty (CCP)

Revised definition of capital

+2.4

+1.2

+0.1

+2.3

Details of our initiatives are provided below, and detailed informa-

tion on the capital ratio is provided in the discussion on Capital Ratio

Information appearing in the Financial Section and Corporate Data.

Credit Risk
1. Basic Approach to Credit Risk Management

(1) Definition of Credit Risk
Credit risk is the possibility of a loss arising from a credit event, such

as deterioration in the financial condition of a borrower, that causes

an asset (including off-balance sheet transactions) to lose value or

ments for internationally active banks. The standard has been

become worthless.

applied in Japan since March 31, 2013.

Overseas credits also include an element of country risk, which

The framework of Basel III is a continuation of Basel II, with

is closely related to credit risk. This is the risk of loss caused by

multiple approaches to calculating capital requirements. With regard

changes in foreign exchange, or political or economic situations.

to credit risk, SMFG has been using the Advanced Internal Ratings-

Based (AIRB) approach since March 31, 2009, and for operational

risk the Advanced Measurement Approach (AMA), since March 31,

2008.

The following are four major changes associated with the transi-

tion from Basel II to Basel III, and their respective implications on

(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

SMFG 2013

credit portfolios quantitatively and using consistent standards.

Credit risk is the most significant risk to which SMFG is

2. Credit Risk Management System
At SMBC, the Credit & Investment Planning Department within

exposed. Without effective credit risk management, the impact of

the Risk Management Unit is responsible for the comprehensive

the corresponding losses on operations can be overwhelming.

management of credit risk. This department drafts and administers

The purpose of credit risk management is to keep credit risk

credit policies, the internal rating system, credit authority guidelines,

exposure to a permissible level relative to capital, to maintain the

and credit application guidelines, and manages non-performing

soundness of Groupwide assets, and to ensure returns commen-

loans (NPLs) and other aspects of credit portfolio management. The

surate with risk. This leads to a loan portfolio that achieves high

department also cooperates with the Corporate Risk Management

returns on capital and assets.

Department in quantifying credit risk (risk capital and risk-weighted

(3) Credit Policy
SMFG’s Group credit policy comprises clearly stated universal

assets) and controls the bank’s entire credit risk. Further, the Credit

Portfolio Management Department within the Credit & Investment

and basic operating concepts, policies, and standards for credit

Planning Department has been strengthening its active portfolio

operations, in accordance with our business mission and rules of

management function for stable credit portfolios mainly through

conduct.

credit derivatives and the sales of loans.

SMFG is promoting the understanding of and strict adherence

The Credit Departments within each business unit conduct

to its Group credit policy among all its managers and employees.

credit risk management along with branches, for loans handled by

By fostering a culture of appropriate levels of risk-taking, and by

their units and manage their units’ portfolios. The credit approval

providing still high-value-added financial services, SMFG aims to

authority is determined based on the credit amount and internal

enhance shareholder value and play a key contributory role in the

grades, while credit departments focus on the analysis and man-

community.

agement of customers and transactions with relatively high credit

risk.

■ SMBC’s Credit Risk Management System

Board of Directors

Corporate Auditors

Management Committee

External Audit (Auditing Firm)

Risk Management Unit

Corporate Risk Management Dept.

(cid:127)Aggregates risk for comprehensive management
(cid:127)Plans and proposes risk quantification methods

Credit & Investment Planning Dept.

(cid:127)Aggregates credit risk for unified management

(cid:127)Plans and proposes basic credit policies

(cid:127)Drafts, administers, and examines internal rating system

Credit Portfolio Management Dept.
(cid:127)Undertakes active portfolio management

Internal Audit Unit

Internal Audit Dept.

(cid:127)Audits credit risk management

Credit Review Dept.

(cid:127)Audits self-assessments, grading (obligors and facilities), and
effectiveness of write-offs and reserves

Corporate Services Unit

Credit Administration Dept.

(cid:127)Manages problem assets (plans, implements corporate rehabilitation
program, sells off the revitalized company)

Consumer Banking Unit

Middle Market Banking Unit

Corporate Banking Unit

International Banking Unit

Business Units

Credit Dept.

Credit Dept.
I & II

Credit Dept.

Credit for Individuals

Small and Medium-Sized Enterprises

Large Domestic Corporations

Structured Finance Credit Dept.

Structured Finance
(Investment Banking Unit, Japan)

Credit Dept., Americas Div.
Credit Dept., Europe Div.
Asia Credit Dept.
Credit Management Dept.

Overseas Corporations
Structured Finance

Corporate Research Dept.

(cid:127)Industry trend research
(cid:127)Credit assessment of major industry players

Credit
Dept.

SMFG 2013

Through industrial and sector-specific surveys, and studies of

borrower and loan using an internal rating system, and quantify that

individual companies, the Corporate Research Department works to

risk for control purposes.

form an accurate idea of the circumstances of borrower companies

(a) Internal Rating System

and quickly identify those with potentially troubled credit positions as

There is an internal rating system for each asset control category

well as promising growth companies.

set according to portfolio characteristics. For example, credits to

The Credit Administration Department of the Corporate Services

commercial and industrial (C&I) companies, individuals for business

Unit is responsible for handling NPLs of borrowers classified as

purposes (domestic only), sovereigns, public-sector entities, and

potentially bankrupt or lower, and draws up plans for their workouts,

financial institutions are assigned an “obligor grade,” which indi-

including write-offs. It works to efficiently reduce the amount of NPLs

cates the borrower’s creditworthiness, and/or “facility grade,” which

through Group company SMBC Servicer Co., Ltd., which engages in

indicates the collectibility of assets taking into account transaction

related services, and by such means as the sell-off of claims.

conditions such as guarantee/collateral, and tenor. An obligor grade

The Internal Audit Unit, operating independently of the business

is determined by first assigning a financial grade using a financial

units, audits asset quality, accuracy of gradings and self-assessment,

strength grading model and data obtained from the obligor’s

and state of credit risk management, and reports the results directly

financial statements. The financial grade is then adjusted taking

to the Board of Directors and the Management Committee.

into account the actual state of the obligor’s balance sheet and

SMBC has established the Credit Risk Committee, as a con-

qualitative factors to derive the obligor grade. In the event that the

sultative body, to round out its oversight system for undertaking

borrower is domiciled overseas, internal ratings for credit are made

flexible and efficient control of credit risk, and ensuring the overall

after taking into consideration country rank, which represents an

soundness of the bank’s loan operations.

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

assessment of the credit quality of each country, based on its politi-

cal and economic situation, as well as its current account balance

and external debt. Self-assessment is the obligor grading process

for assigning lower grades, and the borrower categories used in

self-assessment are consistent with the obligor grade categories.

Obligor grades and facility grades are reviewed once a year,

and, whenever necessary, such as when there are changes in the

credit situation.

■SMBC’s Obligor Grading System

There are also grading systems for small and medium-sized

Obligor Grade

Domestic
(C&I), etc.

Overseas
(C&I), etc.

Definition

Very high certainty of debt repayment

High certainty of debt repayment

Satisfactory certainty of debt repayment

Borrower
Category

Financial Reconstruction
Act Based Disclosure
Category

(Domestic)

Normal
Borrowers

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

Borrowers
Requiring Caution

J7R

G7R

(Of which Substandard Borrowers)

Substandard Borrowers

Substandard Loans

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

J10

G10

Legally or formally bankrupt

Potentially
Bankrupt
Borrowers

Effectively
Bankrupt
Borrowers

Bankrupt
Borrowers

Doubtful Assets

Bankrupt and
Quasi-Bankrupt
Assets

Normal Assets

of main assets following the procedures manual

once a year, to ensure their effectiveness and

enterprises (SME) loans, loans to individuals,

and project finance and other structured finance

tailored according to the risk characteristics of

these types of assets.

The Credit & Investment Planning Department

centrally manages the internal rating systems,

and properly designs, operates, supervises, and

validates the grading models. It validates the

grading models (including statistical validation)

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

SMFG 2013

obligors, and other parameter values are estimated using historical

of clarifying lending conditions utilizing financial covenants.

data of obligors and facilities stored in a database to calculate the

SMBC is also making steady progress in streamlining its credit

credit risk. Then, based on these parameters, we run a simulation of

assessment process. To respond proactively and promptly to cus-

simultaneous default using the Monte Carlo method to calculate our

tomers’ funding needs—particularly those of SMEs—we employ a

maximum loss exposure to the estimated amount of the maximum

standardized credit risk assessment process for SMEs that uses a

losses that may be incurred. Based on these quantitative results,

credit-scoring model. With this process, we are building a regime

we allocate risk capital.

for efficiently marketing our Business Select Loan and other SME

Risk quantification is also executed for purposes such as to

loans.

determine the portfolio’s risk concentration, or to simulate economic

In the field of housing loans for individuals, we employ a credit

movements (stress tests), and the results are used for making

assessment model based on credit data amassed and analyzed

optimal decisions across the whole range of business operations,

by SMBC over many years. This model enables our loan officers

including formulating business plans and providing a standard

to efficiently make rational decisions on housing loan applications,

against which individual credit applications are assessed.

and to reply to the customers without delay. It also facilitates the

(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

quantitative measures, when combined with qualitative analyses of

industrial trends, the enterprise’s R&D capabilities, the competitive-

ness 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

■SMBC’s Credit Monitoring System

effective management of credit risk, as well as the flexible setting of

interest rates.

We also provide loans to individuals who rent out properties

such as apartments. The loan applications are subjected to a

precise credit risk assessment process utilizing a risk assessment

model that factors in the projected revenue from the rental busi-

ness. The process is also used to provide advice to such customers

on how to revise their business plans.

(b) Credit Monitoring System

At SMBC, in addition to analyzing loans at the application stage,

the Credit Monitoring System is utilized to reassess obligor grades

and review self-assessment and credit policies so that problems

can be detected at an early stage, and quick and effective action

can be taken. The system includes periodic monitoring carried out

each time an obligor enterprise discloses financial results, as well

as continuous monitoring performed each time credit conditions

change, as indicated in the diagram below.

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

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

Requiring

Caution

Potentially

Bankrupt

Borrowers

Effectively

Bankrupt

Borrowers

Bankrupt

Borrowers

Final

Obligor

Grade

Grading Outlook Assessment

Performance

Trends

Qualitative

Risk

Factors

•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 2013

(3) Framework for Credit Portfolio Management
In addition to managing individual loans, SMBC applies the follow-

ensuring SMBC’s asset quality and calculating the appropriate level

of write-offs and provisions. Each asset is assessed individually

ing basic policies to the management of the entire credit portfolio to

for its security and collectibility. Depending on the borrower’s cur-

maintain and improve its soundness and profitability over the mid to

rent situation, the borrower is assigned to one of five categories:

long term.

(a) Risk-Taking within the Scope of Capital

Normal Borrowers, Borrowers Requiring Caution, Potentially

Bankrupt Borrowers, Effectively Bankrupt Borrowers, and Bankrupt

To keep credit risk exposure to a permissible level relative to capital,

Borrowers. Based on the borrower’s category, claims on the bor-

SMBC sets credit risk capital limits for internal control purposes.

rower are classified into Classification I, II, III, and IV assets accord-

Under these limits, separate guidelines are issued for each business

ing to their default and impairment risk levels, taking into account

unit and marketing unit, such as for real estate finance, fund invest-

such factors as collateral and guarantees. As part of our efforts to

ment, and investment in securitization products. Regular monitoring

bolster risk management throughout the Group, our consolidated

is conducted to make sure that these guidelines are being followed,

subsidiaries carry out self-assessment in substantially the same

thus ensuring appropriate overall management of credit risk.

manner.

(b) Controlling Concentration Risk

As the equity capital of the bank may be materially impaired in the

Borrower Categories, Defined

event that the credit concentration risk becomes apparent, SMBC

implements measures to manage credit towards an industrial sector

Normal Borrowers

Borrowers with good earnings performances and no
significant financial problems

with excessive risk concentration, introduces credit limit guideline

Borrowers Requiring Caution

Borrowers identified for close monitoring

and conducts intensive loan review for obligors with large exposure.

Potentially Bankrupt Borrowers

To manage country risk, SMBC also has credit limit guidelines

based on each country’s creditworthiness.

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

and Returns

Against a backdrop of drastic change in the business environ-

ment, SMBC rigorously researches borrower companies’ actual

conditions. It runs credit operations on the basic principle of earning

returns that are commensurate with the credit risk involved, and

makes every effort to reduce credit and capital costs as well as

general and administrative expenses.

(d) Prevention and Reduction of Non-Performing Loans

On NPLs and potential NPLs, SMBC carries out regular loan

reviews to clarify handling policies and action plans, enabling it to

swiftly implement measures to prevent deterioration of borrowers’

business situations, support business recoveries, collect on loans,

and enhance loan security.

(e) Toward Active Portfolio Management

SMBC makes active use of credit derivatives, loan asset sales, and

other instruments to proactively and flexibly manage its portfolio to

stabilize credit risk.

(4) Self-Assessment, Asset Write-Offs and Provisions,

and Disclosure of Problem Assets

(a) Self-Assessment

SMBC conducts rigorous self-assessment of asset quality using

criteria based on the Financial Inspection Manual of the Financial

Services Agency and the Practical Guideline published by the

Japanese Institute of Certified Public Accountants. Self-assessment

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

Asset Classifications, Defined

Classification I

Classification II

Classification III

Assets not classified under Classifications II, III, or IV

Assets perceived to have an above-average risk of
uncollectibility

Assets for which final collection or asset value is very 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

uncollectible, referred to as an indirect write-off. Recognition of

indirect write-offs is generally known as provision for the reserve for

possible loan losses.

SMBC’s write-off and provision criteria for each self-assessment

borrower category are shown in the next page. As part of our over-

all measures to strengthen risk management throughout the Group,

all consolidated subsidiaries use substantially the same standards

as SMBC for write-offs and provisions.

SMFG 2013

Self-Assessment
Borrower Categories

Standards for Write-Offs and
Provisions

self-assessments, asset write-offs and provisions, and disclosure of

problem assets at March 31, 2013, please refer to page 169.

Normal Borrowers

Borrowers Requiring Caution

Potentially Bankrupt Borrowers

Effectively Bankrupt/ Bankrupt
Borrowers

General reserve

Notes

Specific reserve

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)

Discounted Cash Flow Method

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.

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 Act

(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

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-

ered to be exposed to both credit risk from the underlying assets as

well as “market risk” and “liquidity risk” that arise from their trading

as financial products. This is referred to as marketable credit risk.

For these types of products, we manage credit risk analyzing

and assessing the characteristics of the 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.

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

SMFG 2013

■ SMBC’s Market Risk and Liquidity Risk Management

SMBC’s limits on market and liquidity risks, and to review and dis-

System

Market
Risk
Manage-
ment

Board of Directors

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)

cuss the SMBC’s ALM operation.

To prevent unforeseen processing errors as well as fraudulent

transactions, it is important to establish a system of checks on the

business units (front office). At SMBC, both the processing depart-

ments (back office) and the administrative departments (middle

office) conduct the checks. In addition, the Internal Audit Unit of

SMBC periodically performs comprehensive internal audits to verify

that the risk management framework is functioning properly.

3. Market and Liquidity Risk Management Methods

(1) Market Risk Management
SMBC manages market risk by setting maximum limits for VaR and

maximum loss. These limits are set within the “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

Front Office

Front/Middle/Back Offices

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.

Department not only monitors the current risk situations, but also

(a) VaR Results

reports regularly to the Management Committee and the Board

The results of VaR calculations for fiscal 2012 are shown in the table

of Directors. Furthermore, SMBC’s ALM Committee meets on a

below. SMBC’s internal VaR model makes use of historical data

monthly basis to examine reports on the state of observance of

to prepare scenarios for market fluctuations and, by conducting

■VaR Results

June 2012

Sept. 2012

Dec. 2012

Mar. 2013

Maximum

Minimum

Average

SMFG (consolidated)

SMBC (consolidated)

SMBC (nonconsolidated)

Trading Book

Banking Book

Trading Book

Banking Book

Trading Book

Banking Book

(Billions of yen)

8.2

11.4

20.9

15.0

25.9

7.1

13.5

30.4

31.2

26.5

31.1

35.2

23.6

29.5

7.3

10.8

20.3

14.3

24.9

6.3

12.7

29.7

30.5

25.8

30.4

34.4

23.1

28.8

2.9

2.4

5.2

2.5

6.7

1.0

3.0

26.6

27.4

22.8

27.4

30.9

20.3

25.7

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)].

SMFG 2013

Actual Profit or Loss (¥ billion)

6.0

4.0

2.0

-2.0

-4.0

-6.0

6.0

4.0

2.0

-2.0

-4.0

-6.0

6.0

4.0

2.0

-2.0

-4.0

-6.0

Actual Profit or Loss (¥ billion)

2.0

4.0

6.0

8.0

10.0

VaR (¥ billion)

2.0

4.0

6.0

8.0

10.0
VaR (¥ billion)

SMBC (nonconsolidated)

Actual Profit or Loss (¥ billion)

2.0

4.0

6.0

8.0

10.0
VaR (¥ billion)

2.0

4.0

6.0

8.0

10.0
VaR (¥ billion)

SMBC (consolidated)

Actual Profit or Loss (¥ billion)

2.0

4.0

6.0

8.0

10.0
VaR (¥ billion)

6.0

4.0

2.0

-2.0

-4.0

-6.0

■Back-Testing Results (Trading Book)

SMFG (consolidated)

Actual Profit or Loss (¥ billion)

6.0

4.0

2.0

-2.0

-4.0

-6.0

2.0

4.0

6.0

8.0

10.0
VaR (¥ billion)

■ Decline in Economic Value Based on Outlier Framework

SMBC (consolidated)

SMBC (nonconsolidated)

March 31, 2012 March 31, 2013 March 31, 2012 March 31, 2013

(Billions of yen)

240.2

144.3

87.3

1.3

96.2

60.5

6.8

16.5

233.9

142.7

85.5

1.1

88.6

56.3

4.6

16.5

Impact of Yen
interest rates
Impact of U.S. dollar
interest rates
Impact of Euro
interest rates

Percentage of total capital

2.6%

1.0%

2.6%

1.0%

Notes: 1. “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).

6.0

2. Figures for the year ended March 31, 2012 are percentages of Tier 1 +

8.0
Tier 2.

10.0
VaR (¥ billion)

■ Composition, by Industry, of Listed Equity Portfolio

(%)
25

M
n
n
g

T
e
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t
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l

e
s

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F
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t
r
y

(March 31, 2013)

SMBC Portfolio
TOPIX
Nikkei Average

P
e
t
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e
u
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/
C
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a

G
a
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/
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a
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e
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F
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a

Total
Actual Profit or Loss (¥ billion)

simulations of gains and losses, the model estimates the maximum

losses that may occur (this is known as the historical simulation

method). This internal SMBC model is evaluated periodically by

an independent auditing firm to assess its appropriateness and

accuracy.

4.0

(b) Back-Testing Results
Actual Profit or Loss (¥ billion)
At SMBC, the relationship between the VaR calculated with the

6.0

model and the actual profit and loss data is back-tested daily. The

back-testing results for SMBC’s trading accounts for fiscal 2012 are

2.0

shown at the top of this page. The data point below the diagonal

line indicates a loss exceeding VaR for that day. Only one day during

-2.0

the period had an actual loss that exceeded VaR. It demonstrates

-4.0

that the SMBC VaR model is sufficiently reliable, with a one-sided
4.0
8.0
0
confidence interval of 99.0%.

10.0
VaR (¥ billion)

-6.0

6.0

2.0

4.0

The market occasionally undergoes extreme fluctuations that

exceed projections. To manage market risk, therefore, it is important

to run simulations of unforeseen situations that may occur in finan-

cial markets (stress testing). SMBC conducts stress tests regularly,

assuming various scenarios, and has measures in place for irregular
Actual Profit or Loss (¥ billion)
events.

(d) Outlier Framework

In the event the economic value of a bank declines by more than

20% of total capital as a result of interest rate shocks, that bank

would fall into the category of “outlier bank,” as stipulated under the

Pillar 2 of Basel Framework.

This ratio, known as the outlier ratio, was 1.0% at SMBC on a

consolidated basis at March 31, 2013, substantially below the 20%
8.0
0
criterion.

10.0
VaR (¥ billion)

2.0

6.0

4.0

(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 1 capital, the maximum level permitted under the Act on

Financial Institutions (,etc.)’, Limits for Share, etc. Holdings.

6.0

4.0

2.0

-2.0

-4.0

-6.0

6.0

4.0

2.0

-2.0

-4.0

-6.0

6.0

4.0

2.0

-2.0

-4.0

-6.0

SMFG 2013

(2) Liquidity Risk Management
At SMBC, liquidity risk is regarded as one of the major risks.

conduct of operational risk management across the entire Group.

Under these regulations, SMFG and SMBC have been working to

SMBC’s liquidity risk management is based on a framework consist-

enhance the operational risk management framework across the

ing of “setting upper limits for funding gaps,” “maintaining highly liq-

whole Group by establishing an effective system for identification,

uid supplementary funding sources,” and “establishing contingency

assessment, controlling, and monitoring of material operational risks

plans.”

and a system for executing contingency and business continuity

A funding gap means the funding amount required in the future,

plans. Based on the framework of Basel Capital Accord, SMFG has

occurring as a result of mismatched operation and funding. SMBC

been continuously pursuing sophisticated quantification of opera-

manages appropriate funding liquidity by setting the upper limit for

tional risks and advanced Groupwide management.

the funding gap amount, and by avoiding overreliance on short-term

funding. Limits are set Bankwide and for each branch, taking into

account cash management planning, external environment, funding

2. Operational Risk Management System
SMFG has designed and implemented an operational risk manage-

status, characteristics of local currencies of each country and other

ment framework for Groupwide basic policies for risk management.

factors. Additionally, risk limits are set by currency as needed for

At SMBC, the Management Committee makes decisions on

more rigorous management. Limit observance is monitored on a

important matters such as basic policies for operational risk man-

daily basis.

agement, and these decisions are authorized by the SMBC’s Board

Further, the stress tests are regularly conducted by simulating

of Directors. In addition, SMBC has established the system to com-

the situations such as the outflow of deposits or having difficulties

prehensively manage operational risks by setting up the Corporate

funding from the money market, in order to thoroughly comprehend

Risk Management Department to oversee overall management of

the funding amount required when the liquidity risk becomes appar-

operational risks together with other departments responsible for

ent. Additionally, the means of funding are secured for maintaining

processing risks and system risks.

the funding liquidity to supplement the liquidity by holding assets,

As the brief overview, this system operates by collecting and

such as U.S. government bonds, which can be immediately con-

analyzing internal loss data occurred at each department or branch

verted to cash, or establishing the framework for borrowing for

as well as comprehensively specifying scenarios involving opera-

emergency, in order not to affect the funding even during market

tional risks based on the operational procedures of each branch on

disruption.

regular-basis and estimating the loss amount and frequency of the

Furthermore, the contingency plan is developed for respond-

occurrence of such losses based on each scenario. Risk severities

ing to the situation of liquidity risk becoming apparent, by creating

are quantified for each scenario and for those scenarios having high

the detailed action plan such as lowering the upper limit for the

severities the risk mitigation plan will be developed by the relevant

funding gap, according to assumed situations (of normal situation,

department and the status on the progress of such risk mitiga-

concerned situation, critical situation) and respective circumstances.

tion plan will be followed up by the Corporate Risk Management

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 Capital Accord—which, in addition to process-

ing risk and system risk, also covers legal risk, personnel risk, and

physical asset risk—defines the following seven types of events

that may lead to the risk of loss: (1) internal fraud, (2) external fraud,

(3) employment practices and workplace safety, (4) clients, products

and business practices, (5) damage to physical assets, (6) busi-

ness disruption and system failures, and (7) execution, delivery, and

process management.

(2) Fundamental Principles for Operational Risk Management
SMFG and SMBC have set forth the Regulations on Operational

Risk Management to define the basic rules to be observed in the

Department. Furthermore, operational risks are quantified, and

quantitatively managed by utilizing the collected internal loss data

and scenarios.

These occurrences of internal loss data, severity of scenarios

and status on risk mitigation are regularly reported to the director in

charge of the Corporate 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 are discussed. In this way, we realize a highly

effective operational risk management framework. The operational

risk situation is also reported to the Management Committee and

the Board of Directors on a regular basis, for review of the basic

policies on operational risk management. Moreover, the bank’s

independent Internal Audit Department conducts periodic audits to

ensure that the operational risk management system is functioning

properly.

SMFG 2013

■SMBC’s Operational Risk Management System

Corporate Auditors

External Audit
(Auditing Firm)

Internal Audit Dept.

Board of Directors

Management Committee

Direction

Reporting

Operational Risk Committee

Audit

Board Member in Charge of Risk Management Unit

Direction

Reporting

Corporate Risk Management Dept.

Supervisor of overall operational risk management
Measurement of operational risk

Feedback of measurement results related to operational risk
Monitoring of progress in risk mitigation plans

Generation of scenarios and development of risk
mitigation actions

Reflection of internal loss data, external
loss data and BEICFs in scenarios

Reporting

Internal loss data

Head Office departments

Consumer
Banking

Middle Market
Banking

Corporate
Banking

Treasury

Investment
Banking

International
Banking

3. Operational Risk Management Methodology
As previously defined, operational risks cover a wide-range of

by 8%) is calculated. In addition, external loss data and BEICFs

along with internal loss data are used for verifying the assessment

cases, including the risks of losses due to errors in operation,

of scenarios to increase objectivity, accuracy and completeness.

system failures, and natural disasters. Also, operational risk events

SMFG, including the Group companies to which the AMA is

can occur virtually anywhere and everywhere. Thus, it is essential

applied, collect the four elements. This is outlined as follows.

to check whether material operational risks have been overlooked,

monitor the overall status of risks, and manage/control them. To this

Corporate Auditors

Board of Directors

end, it is necessary to be able to quantify risks using a measure-

ment methodology that can be applied to all types of operational

Management Committee

External Audit
(Auditing Firm)

risks, and to comprehensively and comparatively capture the status

Direction

of and changes in potential operational risks of business processes.

Internal Audit Dept.

Also, from the viewpoint of internal control, the measurement meth-

Board Member in Charge of Risk Management Unit

Audit

odology used to create a risk mitigation plan must be such that the

Direction

Auditing of management
and measurement system

implementation of the plan quantitatively reduces operational risks.

Corporate Risk Management Dept.

Reporting
(BEICFs)

At the end of March 2008, SMFG and SMBC adopted the

Operational Risk Management Dept.

Advanced Measurement Approach (AMA) set forth by Basel Capital

Accord for calculation of operational risk equivalent amount. The

Reporting

approach has been utilized for the management of operational risks

since then.

Generation of scenarios and development of risk
mitigation actions through risk control assessments
The basic framework for quantifying operational risks consists

Reflection of internal loss data,
external loss data and BEICFs in scenarios

Measurement of
operational risk

Integrated Operational Risk
Supervisory Dept.

(1) Internal Loss Data
Internal loss data are defined as “the information for events which

Decision and authorization of important matters related
SMFG incur losses due to operational risks.”
to operational risk management

(2) External Loss Data
External loss data are defined as “the information for events which

Reporting

other banks, etc. incur losses due to operational risks.”

Operational Risk Committee

(3) Business Environment and Internal Control Factors

Reporting on operational
risk information,
discussion on measures
for risk mitigation

BEICFs are defined as “factors affecting operational risks which are

control of SMFG.”

associated with conditions of business environment and internal

Feedback of
measurement
results related to
operational risk
(4) Scenario Analysis
and direction for
Scenario analysis is defined as a “methodology which identifies
risk mitigation

Internal loss data

Reporting

assumed cases involving any material operational risks and describe

Head Office departments

them in terms of risk scenario, and estimate the frequency and

severity of risk scenarios.” SMFG’s principal business operations are

applicable for this methodology.

Treasury

Investment
Banking

International
Banking

The purposes of scenario analysis are to identify any potential

risks underlying in our business operations; to measure risks based

on the possibility of occurrence of the said potential risks; and to

review and execute any required measures. Furthermore, another

of internal loss data, external loss data, Business Environment and

Internal Control Factors (BEICFs) and scenario analysis. Out of the

above-mentioned four factors, internal loss data and the results

Consumer
Banking

Middle Market
Banking

Corporate
Banking

of scenario analysis (hereinafter, the “assumption data”) are input

into the internal measurement system (hereinafter, the “quantifica-

tion model”) developed by SMBC; and operational risk equivalent

amount and risk asset (operational risk equivalent amount is divided

Decision and authorization of important matters
related to operational risk management

Reporting on operational
risk information,
discussion on measures
for risk mitigation

Auditing of management

and measurement system

SMFG 2013

and loss severity based on the internal loss data and scenario

External Loss Data

Verifi-
cation

Scenario Data

purpose of the scenario analysis is to estimate the frequency of low-

frequency and high-severity events for each scenario (which may be

difficult to estimate using internal loss data alone).

(5) Measurement Using the Quantification Model
The quantification model produces the distribution of loss frequency

data; and it also produces the loss distribution based on the said

distribution of loss frequency (distribution of losses in a year) and

the distribution of loss severity (distribution of loss amount per case)

by making scenarios of the various combination of frequencies

and amount of losses according to the Monte Carlo simulations;

and it calculates the maximum amount of loss expected, due to

operational risks, based on the assumption of one-sided confidence

interval of 99.9% and the holding period of one year. The measure-

■ Basic Framework of Operational Risk Measurement

Internal Loss Data

Data
input

Calculation of
Operational Risk
Equivalent Amount
Using Quantification
Model

BEICFs

Risk Mitigation Initiatives

(6) Risk Mitigation Initiatives
To mitigate risks using the quantitative results of the AMA, SMFG

ment units are SMFG consolidated basis, SMBC consolidated basis

and SMBC implement risk mitigation measures for high severity

and SMBC non-consolidated basis; and it is measured according

scenarios. Furthermore, the risk assets calculated by quantification

to each of seven event types set forth by Basel Capital Accord. The

are allocated to each business unit of SMBC and other Group com-

operational risk equivalent amount is calculated based on AMA by

panies for increasing awareness of operational risks internally in the

simply consolidating the amounts of all event types.

Group companies, improving the effectiveness of their operational

The measurement accuracy is ensured by implementing the

risk management and mitigating operational risks of the entire Group.

regularly conducted verifications of the said quantification model at

pre- and post-occurrences.

Meanwhile, as for the operational risk equivalent amount of

4. Processing Risk Management
Processing risk is the possibility of losses arising from negligent

other Group companies not applicable for AMA and in preparation

processing by employees, accidents, or unauthorized activities.

to become applicable for AMA, it is calculated according to the

SMFG recognizes that all operations entail processing risk.

Basic Indicator Approach (BIA), and the operational risk equivalent

We are, therefore, working to raise the level of sophistication of

amount for SMFG consolidated basis and SMBC consolidated

our management of processing risk across the whole Group by

basis are calculated by consolidating such amount calculated

ensuring that each branch conducts its own regular investigations

based on BIA with the operational risk equivalent amount calculated

of processing risk; minimizing losses in the event of processing

based on AMA.

errors or negligence by drafting exhaustive contingency plans; and

carrying out thorough quantification of the risk under management.

■Measurement Using the Quantification Model

Distribution of Loss Frequency

0.20

0.15

0.10

0.05

15
Number of incidents/year

Sampling of the
number of losses
from the distribution
(e.g., 5 incidents)

0.30

0.25

0.20

0.15

0.10

0.05

Distribution of Loss Severity

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)

(
f
r
e
q
u
e
n
c
y
)

P
r
o
b
a
b

i
l
i
t
y

o
f

o
c
c
u
r
r
e
n
c
e

P
r
o
b
a
b

i
l
i
t
y

o
f

o
c
c
u
r
r
e
n
c
e

Repeat (e.g., 1 million times)

Calculate aggregated
annual loss amount
(e.g., 450)

Total

Aggregated Loss Distribution

Frequency x Severity

99.9%

Aggregated annual loss amount

(
f
r
e
q
u
e
n
c
y
)

0.4

0.3

0.2

0.1

P
r
o
b
a
b

i
l
i
t
y

o
f

o
c
c
u
r
r
e
n
c
e

x conversion factor

99.0%

SMFG 2013

In the administrative regulations of SMBC, in line with

Settlement Risk

Settlement risk is the possibility of a loss arising from a transaction

that cannot be settled as planned. As this risk crosses over numer-

ous risks, including credit, liquidity, processing and system risks, it

is required to appropriately manage according to characteristics of

such risks.

At SMBC, the Transaction Business Planning Department and

the Corporate Risk Management Department jointly manage risks

according to the kinds of risks, and each risk is managed by its

respective department in charge: the Credit & Investment Planning

Department for credit risk, the Corporate Risk Management

Department for liquidity risk, the Operations Planning Department

for processing risk and the IT Planning Department for system risk.

SMFG’s Groupwide basic policies for risk management, the basic

administrative regulations are defined as “comprehending the

risks and costs of administration and transaction processing, and

managing them accordingly,” and “seeking to raise the quality of

administration to deliver high-quality service to customers.” Adding

new policies or making major revisions to existing ones for process-

ing risk management requires the approval of both the Management

Committee and the Board of Directors.

In the administrative regulations, SMBC has also defined specific

rules for processing risk management. The rules allocate processing

risk management tasks among six types of departments: operations

planning departments, compliance departments, operations depart-

ments, transaction execution departments (primarily front-office

departments, branches, and branch service offices), internal audit

departments, and the customer support departments. In addi-

tion, there is a specialized group within the Operations Planning

Department to strengthen administrative procedures throughout the

Group.

5. System Risk Management
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).

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-

terns emerge.

SMFG 2013

Glossary

ALM
Abbreviation for Asset Liability Management
Method for comprehensive management of assets and liabilities, with
appropriate controls on market risk (interest rates, exchange rates, etc.).

LGD
Abbreviation for Loss Given Default
Percentage of loss assumed in the event of default by obligor; ratio of
uncollectible amount of the exposure owned in the event of default.

Advanced Measurement Approach (AMA)
Based on the operational risk measurement methods used in the inter-
nal management of financial institutions, this is a method for obtaining
the operational risk equivalent amount by calculating the maximum
amount of operational risk loss expected over a period of one year, with
a one-sided confidence interval of 99.9%.

Back-testing
Method of verifying the validity of models by comparing the model value
and actual value. For instance, in the case of VaR, comparing and verify-
ing the value of VaR and the profit or loss amount.

Monte Carlo simulation method
General term used for a simulation method which uses random
numbers.

Outlier framework
Monitoring standard for interest rate risk in the banking book, as set
forth in the Pillar 2 of the Basel Capital Accord.

Operational risk equivalent amount
Operational risk capital requirements under the Basel Capital Accord
capital adequacy regulations.

Banking
Market operations which gain profits by controlling interest rates and
term period for assets (funds, bonds, etc.) and liabilities (deposits, etc.).

PD
Abbreviation for Probability of Default
Probability of becoming default by obligor during one year.

Basel II
The Basel Capital Accord, an international agreement, was amended
in June 2004 for ensuring the soundness of banks (minimum capital
requirements) for appropriately responding to the diversification of
banking operations and sophistication of risk management. It has been
implemented in Japan since March 31, 2007.

Basel III
The Basel Capital Accord, an international agreement, was amended in
December 2010 for ensuring the soundness of banks (minimum capital
requirements) for the purpose of enhancing the capabilities of appropri-
ately responding to any financial and economic crisis and reducing risks
which may have originated from financial sector to adversely affect the
actual economy. It has been implemented incrementally since 2013.

Basic Indicator Approach (BIA)
A calculation approach in which an average value for the most recent
three years derived by multiplying gross profit for the financial institution
as a whole by certain level (15%) is deemed to be the operational risk
equivalent amount.

BPV
Abbreviation for Basis Point Value
Potential change in present value of financial product corresponding to
0.01-percentage-point increase in interest rates.

Present value
A future amount of money that has been discounted to reflect its current
value taking into account the interest rate and the extent of credit risk.

Risk capital
The amount of required capital, which is statistically calculated from
the historical market fluctuations, default rates, etc., to cover an unex-
pected loss arising from risks of business operations. It differs from the
minimum regulatory capital requirements, and it is being used in the risk
management framework voluntarily developed by financial institutions for
the purpose of internal management.

Risk factor
Anything which may become a factor for risk. In the case of market risk,
it would be the share price or interest rate; in the case of credit risk, it
would be the default rate or economic environment.

Risk-weighted assets
• Credit risk

Total assets (lending exposures, including credit equivalent amount of
off-balance sheet transactions, etc.) which is reevaluated according to
the level of credit risk.

• Operational risk

Amount derived by dividing the operational risk equivalent amount by
8%.

CCP
Abbreviation for Central Counterparty
In addition to functions of delivering shares, receiving funds, netting
to reduce the unsettled balance (margin settlement), it also serves as
the body guaranteeing the settlement by assuming liabilities, or as an
obligor, it gives instructions to the settlement agency for money transfers
for shares or funds.

Supplementary funding sources for liquidity
Assets or funding method which can be immediately converted to cash
in the event of unexpected occurrence of outgoing funds.

Trading
Market operations which gain profits by taking advantage of fluctuations
of market prices in the short-term or price differences among markets.

Contingency plan
Predetermined countermeasures and procedures for minimizing dam-
ages and losses resulted from foreseen events under the assumption
that unforeseen events such as incidents, accidents and disasters may
occur.

Credit cost
Average losses expected to occur during the coming year.

Historical simulation method
Method of simulating future fluctuations without the use of random num-
bers, by using historical data for risk factors.

Underlying assets
General term used for assets which serve as the source of payments for
principal and interest for securitization exposures, etc.

VaR
Abbreviation for Value at Risk
Forecasted maximum loss incurred by the relevant portfolio under cer-
tain probability.

SMFG 2013Corporate Social Responsibility (CSR)

Key Items of CSR Activities
The key items of our CSR activities are as follows:

First, we shall develop a solid management system by improv-
ing and enhancing corporate governance, internal audit, compliance
and risk management systems.

Second, we shall provide greater value for our four major

groups of stakeholders as follows:

• We shall advance together with our clients by providing highly

valued products and services.

• We shall strive to maintain a sound management and maxi-
mize shareholder value by having appropriate disclosure of
information and improving the internal control system.

• We shall strive to contribute to the society and preserve the
earth’s environment by consistently and proactively involving
and participating in the social and environmental activities and
programs.

• We shall promote free-spirited and open-minded business
culture under which individual employees are respected and
allowed to exercise each individual’s full potential.

Lastly, we shall strive to ultimately contribute to the sustainable

development of society through such activities.

■ CSR Values for SMFG

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
environmental
activities and
programs

Corporate
culture respecting
the individuals

Solid Management Structure
(corporate governance, internal controls, compliance, risk
management, information disclosure, etc.)

Contributing to
the Sustainable Development of Society
Today, mankind is faced with diverse issues such as global warm-
ing, rapid population growth, and declining birthrate and aging
of the population in the advanced countries. How can we, as a
provider of comprehensive financial services, contribute to resolving
such social issues for the sustainable development of the society.
We believe that it would be our corporate social responsibility to
practice by asking ourselves what we could and should do.

Basic CSR Policies
SMFG has set forth the definition and common principles for “busi-
ness ethics” for CSR in order to clearly describe and effectively
promote CSR activities in 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.

SMFG’s Group-Wide 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.

SMFG 2013

Support for initiatives in Japan and overseas
As a corporate citizen of the global society, SMFG is fully aware of
the social impact of the financial institution, and it shall support the
following initiatives in Japan and overseas (the action guidelines for
the corporate activities and principles).

its own checklist for the group companies to self-assess seven
core concepts. We continue to utilize ISO26000 based on the final
assessment made for fiscal 2012 to further strengthen our CSR
management.

Initiatives supported by SMFG in Japan and overseas

• United Nations Global Compact

Ten principles proposed by the United Nations concerning human rights,

labor, environment and corruption prevention

• UNEP Finance Initiative (UNEP FI)

Organization which pursues, develops and promotes the ideal financial

institutions which pay attention to the environment and sustainability.

• CDP (Carbon Disclosure Project)

Four prioritized issues faced by the Group as a
financial institution
As a comprehensive financial services provider, the Group
proactively promotes and pioneers initiatives for resolving four criti-
cal issues which may substantially affect the society (reconstruction
for earthquake damages, environment, declining birthrate and aging
of population and globalization).

Initiatives which measures, manages and reduces effects of climate changes

(1) Support for Reconstruction for the Great East

by prompting institutional investors and business managers to have

dialogues regarding such climate changes

• Equator Principles

Environmental and social standards which are set forth based on the

International Finance Corporation (IFC) guidelines for project finance projects

• Principles for Financial Action toward a Sustainable Society (Principles

for Financial Action for the 21st Century)

Japan Earthquake

The Group shall consistently address and accommodate major
issues for reconstruction of the areas affected by the earthquake
by partnering with diverse stakeholders such as businesses, local
governments and Non-Profit Organizations.

For details, please refer to page 62 (Supporting the Recovery

Principles of action for financial institutions in Japan for the purpose of

after the Great East Japan Earthquake).

expanding and improving the quality of environmental finance

Integral Implementation of CSR Activities and
Business Strategies
CSR activities are the foundation for SMFG Group’s business strate-
gies as well as the management policies and goals.
We consistently verify and confirm whether the direction of busi-
ness strategies of maximizing the “Spirit of Innovativeness,” “Speed”
and “Solution & Execution,” promoted by the Group, is appropri-
ately reflecting the basic CSR policy in our management policies of
“becoming a globally competitive financial group with the highest
trust of our clients and stakeholders.” Furthermore, we properly
reflect needs of our clients and society in our CSR activities.

Completely and fully achieving CSR is truly the “management
itself,” and we also believe that seriously committing to the imple-
mentation of CSR is thought to be the shortest path for achieving
our management policies and goals.

Strengthening CSR management by utilizing the
ISO26000 standards
The Group manages CSR by regularly having discussions with each
group company led mainly by the “Group CSR Committee.”

At the “CSR Liaison Conference” conducted by CSR depart-
ment of each group company since December 2010, the research
group with respect to the International Standard of “ISO26000”
(issued in November 2010) was established for understanding
the outline. ISO26000 is the “guide,” which consists of the basic
principle and seven core concepts (governance, human rights,
labor practices, the environment, fair operating practices, consumer
issues, and community involvement and development), for social
responsibilities of organizations. In fiscal 2012, the Group created

(2) Environment
The Group shall strengthen diverse initiatives, not limited to achiev-
ing the low-carbon society, but also resolving issues associated with
water, soil contamination, energy, biodiversity, etc.

For details, please refer to pages 55-58 (Environmental

Preservation Initiatives).

(3) Declining birthrate and aging of population
The Group shall contribute to developing initiatives which allow
senior citizens to have comfortable and active lives. In anticipation
that many employees may be involved with raising children and
caring for the elderly, the Group shall also enhance the system and
culture which support employees being able to balance work and
to raise children/caring for elderly. Additionally, we consider raising
issues and awareness in the society.

For details, please refer to page 62 (Measures for Addressing
Decreasing Birth Rate and Aging Population) and page 64 (Creating
a Corporate Culture which Derives Strength from Diversity).

(4) Globalization
In anticipation of further business development in the international
society, the Group is moving forward with globalization in Japan and
overseas. As for CSR, we strive to improve sharing of information
and to enhance cooperation with overseas branches to promote
resolving social issues on global-basis and commonly share diver-
sity in thinking in Japan and overseas.

For details, please refer to page 61 (Contributions Made to

Local Communities by Overseas Offices).

SMFG 2013

Initiatives for Enhancing Customer Satisfaction (CS) and Quality

The bank has set up the Quality Management Dept. which
is responsible for developing plans and preparing systems for
improvement of CS and Quality. Additionally, this department
holds meetings for the “CS and Quality Improvement Committee,”
which is chaired by the President, to discuss appropriate cross-
departmental measures for the entire bank in order to achieve
greater satisfaction by customers.

Clients always come first
SMBC sets forth detailed action principles under the “Clients
always come first” of the “Compliance Manual,” along with the
above-mentioned “Management Principles,” in order to enforce
the attitude of “Clients always come first.” Furthermore, the
bank raises awareness for the attitude of “Clients always come
first” for all employees through group training seminars and
study sessions conducted at branches. During such training
seminars and study sessions, the bank specifically incorporates
clients’ opinions and requests for the implementation of “Clients
always come first” attitude into daily business activities.

SMFG strives to improve CS and Quality of the entire Group
and to become the “highly-trusted” financial services group, through
implementation of such measures.

SMFG’s Initiatives
SMFG shall implement measures to improve CS and Quality while
cooperating among group companies by setting forth as one of
our management principles: “To found our own prosperity on pro-
viding valuable services which help our customers to build their
prosperity.”

SMFG regularly holds meetings for the “Group CS Committee”
which is chaired by the senior management executive of the general
affairs section of the Group for promoting cooperation among group
companies. The committee discusses and exchanges opinions and
ideas regarding opinions and suggestions received from our clients
or CS promotion policies, and it strives to further improve CS and
Quality of the entire Group.

Measures Taken by SMBC
The head office of SMBC analyzes opinions and suggestions
received from our clients and proactively incorporates such opinions
and suggestions received from our clients into our management
and training seminars for employees for improvement of products
and services based on such analysis.

Responding to customers’ opinions and requests
The customers’ opinions and requests, which are received at
branches or made through our toll-free telephone service, are
collected and registered into the database for “Voice of the
Customers” (VOC), along with data received from CS surveys and
questionnaires conducted by our bank. The registered data are
widely shared among all departments of the Bank.

Based on such registered data for VOC, there may be cases
in which the head office departments may advise branches, review
individual products and services, or consider measures to be taken
for the entire bank.

■ Measures to improve Customer Satisfaction (CS) and Quality of the Bank

Toll-free telephone service (domestic calls only), CS surveys and questionnaires

Customers

Opinions

Input

Voice of the
Customers (VOC)
Database

Analysis

Guidance at the branch

Branches
and other
offices

Response

Improvement of products and services

Management Principles / Compliance Manual

Training seminars and study sessions

Head office
departments

Reports

CS and
Quality
Improvement
Committee

Quality
Management
Dept.

Directives

SMFG 2013

Corporate Governance

Our Position on Corporate Governance
SMFG and its Group companies follow the SMFG manage-
ment philosophy set forth as the universal guide for the Group
management and consider this philosophy as the foundation for
any corporate activities. We believe that the strengthening and
enhancement of corporate governance is one of the top priori-
tized issues in order to achieve the management philosophy.

The SMFG Corporate Governance System
SMFG implements the corporate auditor system, whereby
six corporate auditors are appointed, out of which three are
outside auditors. The said appointed corporate auditors audit
business operations conducted by SMFG directors by attending
important meetings including the Board of Directors meetings
and receiving reports from directors on the business opera-
tions and reviewing material documents for major business
decisions while reading reports on interviews conducted by the
internal audit department, subsidiaries and external accounting
auditors.

As for the Board, the chairman of SMFG serves as the
chairman of the Board of Directors for SMFG. The role of the
chairman is clearly separated from responsibilities of the presi-
dent who oversees the overall business operations.

Furthermore, the establishment of internal governance com-
mittees under the Board and appointment of outside directors
enhance the effectiveness of the Board.

The Board set up

internal committees:

the
four
Auditing Committee, the Risk Management Committee, the
Compensation Committee, and the Nominating Committee. All
three outside directors have been appointed for these commit-
tees in order to objectively oversee corporate governance.

As the objectivity is explicitly required for both Accounting
Committee and Compensation Committee, the outside direc-
tors are appointed to further enhance such required objectivity.

The outside directors, who are expert professionals (certified
public accountants, attorneys, business management con-
sultants), are selected to ensure the execution of the Group’s
business operations in conformity with both legal regulations
and generally accepted practices.

The Group Management Committee is set up under the
Board to serve as the top decision-making body. The Group
Management Committee is chaired by the president of SMFG
and the directors are appointed by the president.

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 Group
Strategy Committee is set up for matters related to business
plans of each Group company and to exchange opinions, dis-
cuss and report on the management of SMFG and each of the
Group companies. Furthermore, nine directors (out of which
three directors are outside directors) out of twelve directors

(out of which three directors are outside directors) of SMFG
also serve as the directors for SMBC to oversee its business
execution. As for the four major Group companies of Sumitomo
Mitsui Finance and Leasing Company, Limited, SMFG Card &
Credit, Inc., SMBC Consumer Finance Co., Ltd, and The Japan
Research Institute, Limited the SMFG directors also serve as
the directors for each of these subsidiaries to oversee their busi-
ness. Furthermore, in order to maintain the sound management,
SMFG sets forth a system, which firmly maintains the appropri-
ateness of SMFG’s business operations, as the internal control
regulations, pursuant to the Japanese Company Law; and
SMFG considers that the development of a solid management
system is an important management issue by further improving
the internal control system.

The SMBC Corporate Governance System
SMBC implements the corporate auditor system by appointing
six corporate auditors, out of which three corporate auditors are
outside auditors. SMBC implements the executive officer system
by dividing functions of “business execution” and “overseeing
function” in order to increase the transparency and soundness of
management. The executive officers execute business operations
and the Board serves mainly as the overseeing function.

The chairman of the bank also serves as the chairman of
the Board; segregates his functions and duties from the presi-
dent of the bank who controls the overall business operations;
does not concurrently hold the position of executive officer; and
mainly oversees the business execution. Furthermore, SMBC
further strengthens the overseeing function by appointing
three outside directors out of sixteen directors for the bank.
The executive officers, who manage business operations, are
appointed by the Board. There are a total of seventy executive
officers, including the president, as of June 30, 2013 (out of
seventy executive officers, eleven executive officers concurrently
serve as directors).

The Management Committee is set up under the Board
to serve as the highest decision-making body for the bank.
The Management Committee is chaired by the president of the
bank, and the executive officers are appointed by the president.
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.

Furthermore, pursuant to the decisions made by the Board,
the president designates certain members of the Management
Committee to be Authorized Management Committee members
in charge of particular Head Office departments or units. All of
these designated individuals are in charge of implementing the
directives of the Management Committee within the businesses
they oversee.

SMFG 2013

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, the
Internal Auditing Committee is set up as part of the Management
Committee, taking into consideration its critical role and
responsibility for the internal audit for the management, in order
to effectively facilitate the internal audits. The Internal Auditing
Committee meets every quarter, and its members discuss on
important internal auditing matters based on reports prepared
by the departments responsible for conducting internal audits.
Under such structure, the Audit Department is set up as the
independently operated internal auditing unit of the Group.

The Audit Department conducts internal audits on the oper-
ations of all of the Group’s units and departments for optimal
management, proper operations of the Group and the sound-
ness of their assets. These audits also have the functions of
verifying whether the Group’s internal control systems, including
compliance and risk management, are appropriately and effec-
tively operated. Additionally the Audit Department is responsible
for the overall supervision of the internal audit systems of the
Group companies, for its appropriateness and effectiveness
by verifying the accumulated internal audit data and monitoring
activities, including inspections and any other activities based
on the actual sample data; and conducting audits as deemed
necessary. Based on these activities, the Audit Department
provides recommendations and guidance to the business units
and departments as well as to the Group companies.

At SMBC, we have established the Internal Audit which is
independently operated from other business activities. Under
the said Internal Audit Unit, the Internal Audit Department and
the Credit Review Department are set up. Similarly for SMFG,
SMBC also sets up an Internal Auditing Committee, which is
responsible for discussing and reporting important matters
proposed by the Internal Audit Unit, as the committee partially
constituting its Management Committee.

The Internal Audit Unit is responsible for auditing compli-
ance and risk management at SMBC (head office departments,
domestic and overseas branches) and SMBC Group compa-
nies. The audit of operations of the head office departments
is conducted by assessing for appropriateness of overall
internal control systems of each department, in perspective of

functionality of procedures for the “Plan, Do, Check and Act”
(PDCA) method. In addition to these individual audits for each
department, we also focus on specific businesses or specified
critical issues associated with risk management to conduct
the “Audit of Targeted Items” for verifying the bank’s overall
or cross-departmental conditions of the internal control sys-
tems. Moreover, audits of branches and offices are not limited
to simply inspecting for any inadequacies but also specifying
and pointing out issues for the overall internal control systems,
including any problem items associated with compliance and
risk management; and making proposals for improvement mea-
sures or corrective actions.

For other Group companies, internal audit departments
have been set up according to the respective business charac-
teristics of such Group companies.

Initiatives to Enhance the Sophistication and
Efficiency of Internal Audit
The Audit Department has adopted methods in accordance
with the standards of the Institute of Internal Auditors (IIA)*, an
international organization. The Audit Department conducts risk-
based audits and the Group companies also conduct the same.
The Audit Department, as the controlling department for
the Group’s overall internal audit systems, strives to enhance
the expertise of internal auditors such as collection of internal
and external up-to-date information related to internal audit and
forwarding such information to the Group companies; imple-
mentation of seminars conducted by outside professionals for
the Group companies; and promoting the acquisition of interna-
tional qualification for internal audit. Also, the Audit Department
organizes training programs taught by outside experts for the
staff of the Group companies, encouraging them to learn inter-
national standards to enhance their professional knowledge and
skills for internal audit.

To further improve the effectiveness of audit, we also proactively
take measures on a group-wide basis to assess the quality of our
internal audit while taking into account the 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 2013

Compliance

Compliance Systems at SMFG

Basic Compliance Policies
SMFG strives to further strengthen its compliance systems in
order to be able to fulfill its public mission and corporate social
responsibilities as a financial services group offering diversified
products and services for becoming 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 in Compliance Perspective
As a financial holding company, SMFG strives to maintain a
compliance system which provides the appropriate direc-
tions, guidance and monitoring for compliance for its Group
companies.

Specifically, SMFG manages and monitors the selfsustaining
compliance functions of individual Group companies through
regular meetings attended by all Group companies and meet-
ings with individual companies.

Reporting System for Inappropriate Accounting
and Auditing Activities
SMFG has established the “SMFG Group Alarm Line”, the
whistle-blowing system which can be used by all employees,
including employees of group companies for enhancing self-
control effect by promptly detecting and rectifying any actions

which may violate laws and regulations SMFG has implemented
the “SMFG Accounting and Auditing Hotline” to provide the
means for individuals in and out of the Group to report inap-
propriate accounting and auditing activities. This hotline quickly
identifies and takes appropriate actions against any fraudulent
activities or any misconduct associated with accounting and
auditing at SMFG and its consolidated subsidiaries.

SMFG Accounting and Auditing Hotline: Reports may be submitted by
regular mail or e-mail to the following 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 or 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 adequate information is not
provided.

* Personal information will not be disclosed to any third parties without

your consent, unless such disclosure is required by law.

Corporate Auditors

Audit Dept.

Group Business
Management
Dept.

Audit/Monitoring
Group Company

Sumitomo Mitsui Financial Group, Inc.

Audit

Report

Board of Directors
Management Committee

Directions

Report

Compliance Committee

Audit

Audit/Monitoring
Group Company

General Affairs Dept.

Compliance System
Oversight and
Guidelines

Report

Departments and Offices
General Manager responsible for compliance
Compliance Officers to assist and monitor General Managers

Management Report

Group Companies
SMBC, Sumitomo Mitsui Finance and Leasing, SMBC Nikko Securities, SMBC Friend Securities,
Sumitomo Mitsui Card Cedyna, SMBC Consumer Finance, and JRI

* SMFG Card & Credit, Inc. is an intermediary holding company for Sumitomo Mitsui Card and Cedyna.

SMFG 2013

Compliance Systems at SMFG

Strengthening the Compliance System
It is generally required for all corporations to be in compliance
with laws, regulations and other social standards. It is essential
for banks to be fully in compliance to fulfill their public missions
and corporate social responsibilities as financial institutions.

In accordance with the basic policies of SMFG, SMBC
requires its management and staff to give utmost consideration
to people’s trust in the Bank, abide by laws and regulations,
maintain 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 any other
related ordinances, and elimination of anti-social organizations.

Compliance System and its Management
The basic structure of SMBC’s compliance system is a dual
structure whereby firstly, each department and office will be
individually responsible for making preliminary decisions
to ensure that its conducts are in compliance with laws and
regulations, and secondly, an independent Internal Audit Unit
will conduct impartial audits of observance of the compliance
system by individual departments and offices.

In order for the basic dual structure to be maintained and
to effectively function, the Compliance Unit, consisting of the
General Affairs Department and the Legal Department will, at
the direction of management, plan and promote systems to
ensure observance of the compliance system. The Compliance
Unit will issue instructions to and monitor the conduct of each
department and office in SMBC, and assist such department
and offices to make appropriate judgments regarding their
observance of the compliance system.

SMBC commits to the following operations for the said

compliance structure to work effectively.

Preparation of a Compliance Manual
SMBC has prepared its Compliance Manual by stating its
objectives, guiding rules and 60 rules of action in order to assist
the management and staff in selecting optimal actions. This
manual has been approved by the Board of Directors.

Development of Compliance Program
The Board of Directors develops the detailed annual plan for
compliance-related activities for each fiscal year, including
amendments to the rules and regulations, training, etc. for the
effective operation of the compliance system for SMBC and
its consolidated subsidiaries. Especially during fiscal 2013,
SMBC proceeds to strengthen overall compliance system to
promptly respond to any environmental changes, such as the
further development of a system for sales of financial instru-
ments; strengthening of measures for anti-money laundering
or financial crimes; strengthening of the system to eliminate

any transactions associated with anti-social organizations; and
improvement of overseas compliance system.

Appointment of Compliance Officers
In addition to appointing compliance officers to each branch
and department of the bank, the “Area Compliance Officers”,
who independently operate from areas of business promo-
tion, are appointed for the Middle Market Banking Unit and
Consumer Banking Unit of branches and offices to directly
supervise and manage compliance activities.

Set up of the Compliance Committee
The Compliance Committee, which consists of crossde-
partmental compliance members, chaired by the director in
charge of compliance, has been created in order to compre-
hensively 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 received 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 and the specified
non-profit organization of “Financial Instruments Mediation
Assistance Center”, one of “Designated Dispute Resolution
Agencies” under the Financial Instruments and Exchange Act.

Japanese Bankers Association:

Contact information: Consultation office,

Japanese Bankers Association

Telephone numbers: (Japan) 0570-017109 or 03-5252-3772

Business hours:

Mondays through Fridays
(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:

Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:15 pm

Financial Instruments Mediation Assistance Center

Contact information: Financial Instruments Mediation

Assistance Center

Telephone numbers: (Japan) 0120-64-5005 or 03-3669-9833

Business hours:

Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm

SMFG 2013

Environmental Preservation Initiatives

Basic views for environmental preservation

The Group recognizes environmental preservation as one of its most important management issues. Based on our Group Environmental
Policy, we are implementing initiatives to harmonize environmental preservation and corporate activities.

The Group Environmental Policy
Basic concepts
Recognizing the importance of realizing a sustainable society, SMFG is continuously making efforts to harmonize environmental pres-
ervation and pollution control with 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 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: 1) “Reduction of impacts on environment,” 2) “Management of environmental
risks,” and “Promotion of environmental businesses.” We have set environmental objectives for each environmental activity and follow
the procedures of Plan, Do, Check, and Act (PDCA) for such environmental activities.

Environmental Management System (EMS) based on ISO14001 certification
The environmental management certification of ISO14001 has been obtained by SMFG and its major companies (SMBC, Sumitomo
Mitsui Finance and Leasing (“SMFL”), SMBC Nikko Securities, SMBC Friend Securities, Sumitomo Mitsui Card and JRI ). In 1998,
SMBC was the first bank in Japan to obtain this certification. The Group has developed the structure to promote EMS which is orga-
nized and managed mainly by the Corporate Planning Department and senior environmental officers.

Signing of the “Principles for Financial Actions
(the principles for financial actions for the 21st
Century) for achieving the sustainable society”
“Principles for Financial Action towards a Sustainable Society”
were adopted in October 2011, by SMBC, SMBC Nikko
Securities, SMBC Friend Securities, Minato Bank, Kansai Urban
Banking Corporation (“KUBC”) and Japan Net Bank.

The principles have been set forth for the purposes of mak-
ing the environmental financing widely-known and improving the
quality of environmental financing. SMBC has participated since
2012 as a steering member for the Steering Committee which is
made up of 187 financial institutions (as of May 31, 2013).

The Group continues to expand its environmental financing

activities in Japan based on these principles.

Environmental Action Plan and PDCA Procedures

The Group Environmental
Policy

Implementation of
environmental initiatives

Reduce environmental
implications

Manage environmental risks

Promote environmental
businesses

SMFG

PLAN

CHECK

ACT

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

SMBC Friend Securities

Japan Research Institute

Sumitomo Mitsui

Finance and Leasing

Corporate Planning Dept.

General Affairs Dept.

Operational Section

SMBC Nikko Securities

Communications Dept.

SMFG 2013

Managing Environmental Risks
• Environmental and social risks in loan (credit) activities

SMBC believes it is important to take into account the envi-
ronmental risks for conducting credit assessment. Factoring
environmental risks in the credit assessment (environmental
credit risks) is stipulated in SMBC’s Credit Policy, which sets
forth the universal and basic philosophies, guidelines and rules
for credit operations taking into consideration the management
principle and the rules of conduct. For example, to deal with the
risks of soil and asbestos contamination in real estate pledged
as collateral, SMBC requires contamination risk assessment
for such real estate collateral meeting certain criteria. If con-
tamination risks are found to be high, the assessed value of the
potential risks will be deducted from its value. Furthermore, our
Credit Policy clearly stipulates that the credit, which is used for
the production of cluster bombs, is prohibited.

• Managing environmental and social risks in large-scale

development projects

Large-scale development projects may have significant impacts
on society and the environment; therefore, the international
civil society requires financial institutions to assess social and
environmental impacts of the projects when providing financial
support. SMBC has adopted
the Equator Principles, a set
of principles for determining,
assessing and managing
social and environmental
risks in project financing and has established the Environment
Analysis Department (EAD) to assess the social and environ-
mental risks of large-scale development projects in accordance
with the principles. The Equator Principles are based on the
social and environmental policies and guidelines of International
Finance Corporation (IFC), the private sector arm of the World
Bank. These policies and guidelines cover variety of issues
such as social and environmental impact assessment process,
pollution prevention and abatement, considerations to local
communities and natural resources.

• Lawful disposal of properties at the expiration of leases

SMFL is completely in compliance with environment-related
laws and regulations to prevent contamination of the environ-
ment due to illegal disposals of industrial waste materials
triggered by the expiration of leases. In addition, multi-phased
assessment mainly in terms of compliance, local research and
interviews are conducted annually in order to prudently select
the most appropriate company which handles transportation
and disposing of waste materials at the time of expiration of
lease.

Reducing Environmental Impact
• Initiatives for Carbon Neutrality

SMFG sets environmental objectives for reducing energy con-
sumption each fiscal year such as electricity, and it assertively
strives to implement energy-saving measures to reach the
targeted goal.

SMBC has made its Head Office “carbon neutral” through
the purchases of “green energies and carbon credits*.” Osaka
head offices of SMFL are also carbon neutral.

In addition, SMBC Friend Securities is proceeding with
converting its corporate vehicles into more environment-friendly
vehicles while making the rest of unconverted vehicles carbon
neutral for the amount equivalent to CO2 emitted.

* In general, the “carbon credits” are also referred to as “emission allow-

ances.” In this annual report, we use “carbon credits.”

• Proactively using clean energies

In December 2011, we
reopened
the SMBC
branches in Shimo-Takaido
(Tokyo) and Konan (Hyogo)
after converting them into
environment-friendly model
branches. The discarded
forest thinning was partially
used for the architectural
design of these building structures of two branches. The
exterior walls were built by utilizing green plants; the roofs were
installed with solar panels and light collecting equipment; and
the interiors were installed with LED lighting and energy-saving
air-conditioning facilities. As for the Konan Branch, we have
installed wind-generated electricity system and mist-shower
equipment, taking advantage of the winds blowing from Rokko
mountain (only available during summer seasons).

Konan Branch

fiscal 2012, we
exceeded our initial target
of 30% reduction by reduc-
ing 40% of CO2 emissions.
Taking into consideration
this result, we continue to
proactively install highly
environment-friendly sys-
tems such as LED lightings
at the time of newly establishing offices or renovations. In July
2012, SMFG, SMBC and JRI, as part of their own energy-
saving measures, implemented the solar power generation
equipment in the SMFG’s main computer center in order to
control the energy provided during the peak business hours.

Solar power generation equipment at Group’s
main computer center

SMBC Friend Securities converts its branches to more
environment-friendly interiors such as LED lightings and tiled
carpets made of materials which have carbon credits, at the
time of relocation or renovation.

SMFG 2013

Environmental Businesses
• Environmental contributions through core businesses

The Group considers that environmental businesses are means
to preserve and improve the global environment while pursuing
its core business operations as a financial institution. Some of
the examples are: SMBC Environmental Assessment Loan/
Private Placement Bond is provided for clients for promoting
their environmental management. Growth Industry Cluster
Department of Project & Export Finance Department works on

the maintenance or improvement of the global environment
but also the economic development of each country through
providing support for infrastructure improvement projects, such
as the smart community in emerging countries mainly in Asia, or
renewable energy projects.

• Initiatives for Environmental Businesses by Group

Companies

Please refer to the chart shown below for details of the mea-
sures taken for environmental businesses.

Initiatives for Environmental Businesses by Group Companies

Company

SMFG

Program / Product

“SAFE” corporate environmental
magazine

SMFG Environmental Business Forum

SMBC*1 /
JRI*2

SMBC Environmental Assessment Loan/
Private Placement Bond

SMBC Sustainable Building Assessment
Loan/Private Placement Bond

SMBC Sustainability Assessment Loan/
Private Placement Bond

SMBC Environmental Assessment Loan
(Malaysia)

SMBC

SMBC-ECO Loan

Ministry of the Environment and
Ministry of Economy and Trade and
Industry subsidized-interest financing
program
Carbon-credit related business activities
(advisory and consultation services)

Carbon-credit trading
Strengthening alliances with interna-
tional and financial institutions

Environmental campaign program for
JGBs for individuals

DWS New Resource Technology Fund

Participation in the Tokyo Eco Finance
Project

Description

Started in 1996, this bimonthly magazine contains interviews with top management of environmentally advanced companies, analyses of
business trends, and other beneficial information for corporate environmental activities. In March 2013, the 100th issue of the magazine was
published. It can be viewed online at SMFG’s website (in Japanese).
SMFG organized a major three-day event at Eco-Products, one of Japan’s largest environmental exhibitions. Over 1,000 business meetings
were arranged under themes of “new energy” and “environment.” Approximately 40 “global business-matching” were conducted among
Japanese companies and overseas non-Japanese companies of five countries including South Korea, Hong Kong and Singapore.
Terms and conditions for these loans and bonds are set forth according to the assessment conducted on the company’s environmental mea-
sures pursuant to the environmental assessment standards originally created by SMBC and JRI, and SMBC determines terms and conditions for
loans or bonds options according to the results of such assessment.
Terms and conditions for those loans and bonds are set forth according to the assessment conducted on the buildings owned or to be
constructed by companies, pursuant to the assessment criteria created by SMBC and CSR Design & Landscape Co., Ltd., for environment-
friendliness for “energy” and “water,” etc.; seismic adequacy required to maintain the sustainability; and measures taken for “risk management”
of such as BCP.
Terms and conditions for those loans and bonds are set forth by SMBC, according to the assessment conducted on the measures taken by
clients for the Environment, Society and Governance (“ESG”) and appropriateness of information disclosure, pursuant to the assessment criteria
created by SMBC and CSR Design & Landscape Co., Ltd.
Terms and conditions for those loans are set forth according to the assessment conducted on the environmental measures taken by the
company in Malaysia utilizing the scheme as set forth in the “SMBC Environmental Assessment Loan.” The assessment report will be also
provided to further enhance the company’s eco-management related activities.
This loan product offers reductions of interest rates up to 0.25% for SMEs certified with environmental management systems by more than 20
organizations, including NPOs and local governments.
Under this program, companies may conditionally receive loans from financial institutions, with interest subsidized by the government, to
finance capital investment which reduces CO2 emissions. SMBC supports companies taking environmental initiatives as one of the financial
institutions authorized to provide loans under this program.

Through alliances with overseas bases, the bank is involved in a wide range of advisory, financing and other services supporting business and
transactions by our customers wishing to buy carbon credits from sellers in developing countries. In Brazil, SMBC has a consultancy subsidiary
supporting the Clean Development Mechanism project. SMBC’s Brazilian subsidiary has invested in the sustainability fund managed by the
Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social), and it also serves as the environment adviser for the
said fund. It also provides consultation services for the environmental innovation fund which was set up mainly by the Brazilian Development
Bank and other banks.
SMBC was the first Japanese bank to become a carbon-credits trader in June 2009 and began trading carbon credits directly with clients.
In March 2012, SMBC executed a Memorandum of Understanding with Development Bank of Mongolia for financial cooperation for environ-
ment and infrastructure projects which reduce greenhouse gas emissions. SMBC continues to develop the solid global network by MOUs
similarly executed with local financial institutions and economic organizations in Philippines, Brazil and other countries for the promotion of
financing for renewable energy projects and carbon credits trading businesses.
We have contributed to global environmental protection by: (1) trading the amount equivalent to 100kg of carbon credits; and (2) forestation
in the area equivalent to 1m2 per each individual who purchased JGBs. Concurrently, we also have initiatives for supporting the recovery and
reconstruction of areas affected by the Great East Japan Earthquake by obtaining the partial domestic credits generated from northeastern
Japan.
This fund invests mainly in shares of companies around the world with growth potential which conduct businesses associated with three most
discussed issues of (1) local infrastructure; (2) food; and (3) clean energy, in order to accommodate the fluctuating and/or increasing global
demand.
SMBC has been selected as the main financial institution in the Tokyo Eco Finance Project which was implemented in 2009 and in operation
for five years. This project supports individual and corporate clients to accommodate their diverse environmental needs by providing loan, lease,
housing loan, automobile loan and fixed-term deposit by utilizing the deposits accumulated by Tokyo.

SMFG 2013Initiatives for Environmental Businesses by Group Companies

Company
Nikko*3

Program / Product

Nikko Eco Fund

Nikko DWS New Resources Fund

SMBC /
Nikko

SMFL*4

JRI

UBS Climate Change Fund

Nikko World Trust-Nikko Green New
Deal Fund
SMBC Nikko World Bank Bond Fund

Consultation Business for the Amended
Energy Saving Act
Purchase and Sale of Second-Hand
Machinery and Equipment

Support Program conducted by the
Ministry of the Environment
Promotion of CSR and environmental
management
Environmental advisory business

Proposals for energy-related policies

SMCC*5

Cooperation with the Eco-Point program
for housing

SMCC /
Cedyna
Cedyna

SMBCCF*6

Web registration campaign

Issuance of socially contributing
environmental cards
Electronic statement service

Friend*7

Environmental Sustainability Bond

Friend /
Nikko
Minato*8

Electronic statement service

“Minato Eco-Monogatari” Carbon Offset
Time Deposits

Minato ECO Loan/Private Placement
Bond
Minato ECO product purchase loan and
Minato ECO housing loan

KUBC*9

Eco-time deposit

Housing loans for smart homes

Environmental Assessment Loan/Private
Placement Bond
Kansai Urban Environment Support
Loan

Description

SMBC Nikko Securities Inc. was the first firm in Japan to start offering the SRI fund of Nikko Eco Fund taking into account the environmental
perspectives for investments.
This fund invests mainly in shares of companies around the world with growth potential which conduct businesses associated with three
most discussed issues of (1) water; (2) agriculture; and (3) alternate energy, in order to accommodate the fluctuating and/or increasing global
demand.
This fund invests in shares of countries around the world which have innovative technology with respect to preventive measures for global
warming.
This fund invests in shares of companies located in countries where high growth is anticipated through their environmental preservation
activities, focusing on “green new deals” for economic recovery based on measures required for global environment.
In February, 2010, SMBC and SMBC Nikko Securities Inc. started to offer the
Nikko World Bank Bond Fund which is the first fund in the world to invest in green bonds issued by the World Bank (data provided by Nikko
Asset Management Co., Ltd.).
A portion of earnings from the fund is donated to the Japan Committee for UNICEF and the Japanese Red Cross Society to be used to resolve
any social conflicts around the world.
*This fund invests in green bond which is one of the bonds issued by the World Bank
It strengthens its advisory services by appropriately accommodating the Amended Energy Saving Act for proposing comprehensive energy-
saving measures by utilizing the lease.
Real property with expired lease or machinery and equipment purchased from clients are being sold to clients who may need them. It strives to
become the leasing company which is environment-friendly implementing the measures for recycling and reuse by purchasing and selling the
second-hand machinery.
It promotes the implementation of leasing the eco-friendly equipment which meets the criteria set forth by the Ministry of the Environment, by
utilizing the subsidies provided by the Ministry of the Environment for such lease.
JRI supports companies in their CSR and environmental management by assisting them with the development of CSR management strategies
and conducting carbon-credit research and investigation.
It engages in numerous environmental projects mainly in the energy and smart community fields. It strives to contribute to the resolution of
global-warming issues and development of environment-friendly businesses by the creation of new businesses.
The Great East Japan Earthquake led to the substantial review of the Japan’s energy policy. JRI makes recommendations and proposals for
energy systems of next-generation, road map for the realization of separating electric power generation and transmission, measures for energy
of next-generation, and the vision for development of new industry.
SMCC participates in the Eco-Point program for housing promoted by the Ministry of Environment, and also provide Sumitomo Mitsui VISA
Gift Cards as gifts in exchange for eco points accumulated for the eco-points business. We also donate an amount equivalent to 0.1% of the
face value of the Gift Cards to non-profit organizations, for plantation work in deforested areas such as south Kyushu, and other environmental
protection activities.
SMCC is proactively promoting the use of online account statements (breakdown of credits and debits is e-mailed and the details are posted on
its website) for conserving paper and helping to reduce CO2 emissions.
We issue socially contributing environmental credit cards such as “Chikyuni Yasashii Card” and “Cedyna Card AXU,” and the part of payments
for such cards are donated to environmental preservation organizations.
It strives to reduce the consumption of paper resources and CO2 emissions, in addition to increasing convenience for clients by electronically
converting documents especially under the current circumstances that the ratio of contracts made on the internet out of new applications
submitted has the tendency to yearly increase.
SMBC Friend Securities sold the Environmental Sustainability Bonds issued by the European Bank for Reconstruction and Development (EBRD)
in October and November 2012. The funds raised by such bonds are used to support natural energy development, forestry regeneration and
other environmental projects selected by EBRD based on its evaluation standards.
Promoting the usage of online account statements

“Forestry carbon offset usage fee,” a sum equivalent to 0.05% of ¥6 billion (an amount of money to be raised), will be released by Minato
Bank. The money released will be used to maintain the forest environment in Hyogo Prefecture through Hyogo Prefectural Federations of Forest
Owners’ Cooperative Associations.
In certain cases, Minato Bank offers preferential interest rates for loans and preferential underwriting fees for private placement bonds only for
corporations which have obtained the certification for environmental management system.
Minato Bank offers environment-friendly loans especially made for clients who plan to purchase and install new-energy or energy-saving
equipment (solar power generation systems, ECOWILL, ENE-FARM, etc). It additionally offers housing loans with discounted interest rates to
clients who plan to purchase a home installed with such equipment or renovate the home with such equipment; or for those clients who plan to
purchase newly-constructed home which met the certain criteria set forth by Kobe city for residential environment-friendliness.
This fixed-term deposit makes donations to organizations in Osaka or Shiga prefectures, engaged in environmental protection activities, with the
amount equivalent to 0.01% of deposits received from clients.
It is now possible for KUBC to offer the same terms and conditions such as loan term and interest rate for loans for purchasing homes
preinstalled with solar power generation systems or for costs for installation of such systems.
Terms and conditions, and interest rates for those loans and bonds are set forth according to the assessment conducted on the measures taken
by clients for environment-friendliness. The financing method may be selected from either loan or bond.
The predetermined, preferential interest rate for the loan is given to clients who met certain requirements for environment (receipt of certifica-
tion for ISO14001 or Eco Action 21, etc.).

*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 Card Company, Limited *6 SMBC Consumer Finance Co., Ltd. *7 SMBC Friend Securities Co., Ltd. *8 THE MINATO BANK, LTD. *9 Kansai Urban Banking Corporation

SMFG 2013Social Contribution Activities

Fundamental approach for social contribution activities
SMFG and its Group companies recognize that it is important to consider the public nature of the financial institution and contrib-
ute to the development of society through business operations. In addition to the contribution to society through daily business
operations, we should act as a “responsible corporate citizen” by engaging in activities which may assist in making the better
society in the future. SMFG and its Group companies will pursue diverse social contribution activities in order to fulfill responsibili-
ties as a “responsible corporate citizen.”

Policy for social contribution activities
SMFG and its Group companies fully understand their roles as responsible corporate citizens, and perform social contribution activi-
ties for realizing a prosperous and sustainable society. We continue to plan and execute social contribution activities as the corporate
citizen while supporting volunteer activities of employees, in order to proactively perform social contribution activities.

The backbone for our social contribution activities
SMFG and its Group companies consider the following four areas as the core areas for social contributions activities:

1) social welfare; 2) local and international communities; 3) the environment; and 4) cultures, arts and education.

Social Welfare Activities
• Collection and Donation of Mistakenly-Written Postage-

Prepaid Postcards and Recycling of Other Used Items
SMFG collects mistakenly-written postage-prepaid postcards
from employees of the Group companies, exchanges them
for new postage stamps, and donates the stamps to volun-
teer organizations to help them cover their postage costs. In
addition, SMBC collects unused prepaid telephone cards,
and Sumitomo Mitsui Finance and Leasing (“SMFL”), SMBC
Nikko Securities, Sumitomo Mitsui Card, Cedyna, and SMBC
Consumer Finance and collect PET bottle caps. SMBC Nikko
Securities, SMBC Friend Securities, Sumitomo Mitsui Card, and
SMBC Consumer Finance 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.

• Group Blood Donation Program

SMBC, SMBC Nikko Securities, Sumitomo Mitsui Card, and
SMBC Consumer Finance encourage employees to donate
their blood at the workplace. The total of 796 employees from
four companies participated in this program in fiscal 2012.

• Installation of Charitable Vending Machines

The head office of SMBC is installed with vending machines for
the program which make contributions to welfare organizations
every time a drink is purchased from these vending machines.
The bank also sells products made by organizations which
assist and support the physically-challenged.

Local and Overseas Communities

• SMBC Volunteer Fund

SMBC has a system for volunteering employees to have ¥100
deducted from their monthly salaries to donate to volunteer orga-
nizations. More than 11,000 employees participate in this program,
as of May 2013. The organizations are selected based on thor-
ough investigations and discussions by the panel of experts and
volunteering employees. In fiscal 2012, donations were made to
34 organizations which are supported by the volunteer employees

and work to resolve issues for economical difficulties in Japan and
overseas.
Overseas

• The establishment of literacy education environment for
women and children in Cambodia; the establishment of
libraries in refugee camps in Thailand; providing support for
schools attended by orphans in Zambia infected with AIDS,
as well as other projects.

Japan

• The operations of counseling program for children who
are victims of abuse, repairing the hospices facilities for
children, medical support for homeless, and support proj-
ects for vision- and hearing-impaired to be able to become
self-sustaining.

Sakura

935 employees of the Group
company,
KCS
(approximately 80% of the
company’s total employees),
have volunteered (as of May
2013) for welfare and environ-
mental contribution activities.

• Opening of Emergency Accounts and Accepting

Donations for Major Disasters

SMBC has set up an account having no transfer charges
through which clients may make donations in the event of major
disasters in Japan and overseas. Concurrently, it encourages
employees of SMBC and the Group to make donations. Since
fiscal 2012, we have been consistently accepting donations for
damages caused by the rainstorm in Kita-Kyushu, typhoons in
Philippines, and for the damages caused by Great East Japan
Earthquake. We also accepted donations from SMBC and
SMBC Nikko Securities for the damages caused by the hur-
ricane, ”Sandy” in U.S.

•SMBC Pro Bono Project

The bank is also engaged in pro bono activities in which
volunteers offer their business and professional expertise and
skills for the public. The bank set up the new “SMBC Pro Bono

SMFG 2013Project” in fiscal 2012 by taking advantage of characteristics of
financial institutions. The Pro Bono Team, made up of volunteer
employees, supported three NPOs, which support child-raising
process in Tokyo, by giving advices to strengthen the NPOs’
business infrastructure such as organization and improvement
of necessary bookkeeping and administrative procedures for
handling donations and expenses, and information and data
management of contributors. Since fiscal 2011, the bank has
supported nonprofit organizations dedicated to revitalizing
the economy of the Kansai region and resolving social issues
through employees offering their time for pro bono activities. In
fiscal 2012, the team of volunteer employees supported three
NPOs through participation and sponsorship.

• Activities of YUI, SMBC’s Volunteer Organization

SMBC also provides support through the volunteer activities
of YUI, an in-house volunteer organization which provides
opportunities for SMBC employees to plan and perform volun-
teer activities. YUI regularly performs volunteer activities in the
community, including social events at schools for the hearing
impaired, beach cleaning, and the singing performances for
senior citizens.

•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-ups of the local environment of such as parks and other
areas in the vicinity of SMBC branches, and participation in
local festivals and events. Similarly, SMBC Nikko Securities is
proactively involved in local clean-ups and volunteer activities.

•Development of “Customer Service Plaza”

SMBC Consumer Finance Co., Ltd. conducts business activi-
ties which appropriately respond to the needs of society and
clients in the local community, while serving as the center for
communication for the local community. It strives to sustain-
ably develop with the society, through providing household
budget counseling and financial education for local residents
and students, or having proactive measures to vitalize the local
community.

•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 installs donation boxes for foreign currency coins at
the entrances of all manned branches and offices in Japan,
encouraging clients to donate, and it sorts such collected coins
by each currency for delivery to UNICEF.

• Support through Products and Services

SMBC offers clients an ordinary deposit account of which the
accrued interest (after tax) is donated to the UNICEF Donation
Account, and SMBC also matches the donations to the amount
donated by its clients. Sumitomo Mitsui Card collects dona-
tions from cardholders through the World Gifts Point Service of
VJA group companies, and it also provides matching donations
to UNICEF, Japan Red Cross Society, UNESCO, the World
Wildlife Fund Japan and the World Food Program, in addition
to donations given directly to UNICEF by the company. It also
accepts online credit card donations and credit card payments

of other social contributions and donates a portion of credit
card payments made by clients 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 dona-
tions from cardholders using “points” accumulated from their
purchases, and also accepts online donations.

• Participation in the “TABLE FOR TWO” Program

The head offices of SMBC, SMFL, and Sumitomo Mitsui Card
participate in the program which provides donations to the
non-profit organization of the “TABLE FOR TWO International”
to fund school meals in developing countries, for every low-
calorie meal ordered for lunch. In fiscal 2012, SMBC improved
the structure which enables all SMBC branches to participate
in this program. SMBC, SMFL, SMBC Nikko Securities, SMBC
Friend Securities, and Sumitomo Mitsui Card have also installed
vending machines which sell drinks donating part of their sales
to TABLE FOR TWO International.

• Social Contribution Activities of In-House Foundations

SMBC Global Foundation, based in the United States, has
provided scholarships to more than 6,000 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 the participa-
tion in school beautification programs by volunteers from SMBC
and Japan Research Institute (JRI). The foundation also pro-
vides matching gifts for SMBC employees. SMBC Foundation
for International Cooperation, which was established in 1990,
strives to assist in developing human resources required to
achieve sustainable growth in developing economies as well as
to promote international exchange activities. Since its establish-
ment, the foundation has provided financial support for 7-8 stu-
dents from Asian countries every year, enabling them to attend
universities in Japan. The foundation also offers subsidies to
research institutes and researchers undertaking projects which
results to economic development of underdeveloped countries.

Environmental Activities

their

• Participation in Environmental Preservation Initiatives

SMFG organizes “SMFG Clean-Up Day” on which Group
employees volunteer to clean up beaches. In fiscal 2012,
approximately 350 employees
and
family members
participated in this activity in
Arakawa in Tokyo and Suma
Beach in Hyogo. The Minato
Bank independently organized
the beach-cleaning activities at
Suma Beach with 58 people
participation; staff of Kansai Urban Banking Corporation partici-
pated in the clean-up activities along the shore of Lake Biwa in
Shiga Prefecture. JRI participated in the Osaka Marathon clean-
up program, concurrently conducted with the Osaka Marathon.
Since autumn of 2010, SMBC Nikko Securities has designated a
“Green Week” for enhancement of environmental protection and
social contribution activities. In fiscal 2012, 7,265 employees
and their family members in total participated in the clean-up

SMFG 2013and collection of PET bottle caps. Sumitomo Mitsui Finance and
Leasing, Cedyna and SMBC Consumer Finance continuously
conduct the clean-up activities in the vicinity of their offices.

• SMBC Environmental Program NPO C.C.C Furano Field

SMBC also provides support to the environmental project
in Furano in Hokkaido implemented by screenwriter Soh
Kuramoto. SMBC is providing support for forestation in the
closed-down golf course in Furano. It also supports environ-
mental education programs under which children explore nature
by using their five senses.

• Support for the EARTH PHOTO CONTEST

SMFL supports a photography contest for communicating the
importance of resolving environmental problems and encouraging
people to take action. The company presents the Sumitomo Mitsui
Finance and Leasing Prize for outstanding photographic entries.

• Support for Junior Eco Clubs’ All-Japan Festival

SMBC supported the 2012 Junior Eco Club’s All-Japan Festival,
organized by Japan Environment Association, by providing an
information booth at the event.

Contributing to Cultural, Artistic, and
Educational Activities
•SMBC Charity Concert

Since 2006, SMBC has been holding musical concerts for
charity performed by volunteer employees to support under-
privileged children worldwide, where our clients are invited for
free of charge. The donations are collected from the audiences
of concerts and also from the sales of employees’ handcrafted
products. In fiscal 2013, donations were sent to children affected
by the Great East Japan Earthquake and to children in Cambodia

and Vietnam. In addition, people taking refuge in Tokyo from the
earthquake were also invited to the concerts.

• Musical Concerts Held in the Reception Lobbies of

Branches

At the SMBC Tokyo Head Office, Osaka Head Office, KUBC’s
Head Office and Biwako Main Office, lobby concerts are held
for the general public with free of charge.

•Support for Cultural and Artistic Ventures

SMBC Friend Securities supports cultural and artistic activities
by sponsoring special art exhibitions at the Yamatane Museum
of Art. For supporting Kabuki and other traditional performing
arts in Japan, Sumitomo Mitsui Card donates stage curtains to
the National Theatre and the National Engei Hall. The company
also supports the development of classical arts and talented
performers by co-sponsoring children’s Kabuki performances.
SMBC, SMBC Nikko Securities and Cedyna support the pro-
motion 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. In addition to inviting students of
elementary school up to high school to visit the office as well as
having a special tour program of “Natsuyasumi Kodomo Ginko
Tankentai” participated by elementary school students, the bank
supports diverse financial and economic educational activities,
including publishing a book titled “What Does a Bank Do?,”
providing financial, educational games on the SMBC website, co-
sponsoring Kidzania (a vocational experience theme park for chil-
dren), and supporting Shinagawa Financial Park (economic train-
ing programs for junior high school students). SMBC Consumer
Finance organized the event of card games for elementary school
students to teach the origin and the functions of money and
offered lectures on finance for students and adults, primarily at
its “Customer Service Plaza” offices. A total of 2,137 of such
events were organized in fiscal 2012. Kansai Urban Banking
Corporation organizes a tour for elementary school students, and
also offers a work experience program. SMBC, SMFL, SMBC
Nikko Securities, Sumitomo Mitsui Card, JRI, and Minato Bank
also sent instructors to teach classes at universities.

Contributions Made to Local Communities by Overseas Offices
Overseas offices of the Group support projects which contribute to resolving poverty in developing countries, supporting education and
medical services, and supporting women for advancement or achieving equal treatment, through contributions made to non-profit and
non-governmental organizations, including SMBC’s Volunteer Fund, in addition to independent initiatives tailored to specific issues and
cultures of individual countries and regions.
• SMBC (China) established a scholarship program for students of Zhejiang University, Sun Yat-sen University, Soochow University, East China Normal University, Shanghai

International Studies University and Tianjin Foreign Studies University.

• SMBC (China) conducted forestation activities in Shanghai, Beijing, Suzhou, Tianjin and Guangzhou.
• SMBC’s Hong Kong Branch gave donations to support an orchestra made up of young Asian musicians.
• SMBC’s Seoul Branch gave donations to the “National Japanese Drama Competition for Students” to provide opportunities for Korean students to learn Japanese and further

understand Japanese cultures.

• SMBC’s Hanoi Branch provided international school students with vocational experiences.
• SMBC’s Sydney Branch participated in volunteer and donation activities associated with children, intractable diseases, refugees and earthquake disasters, provided by its CSR

committee.

• Manufacturers Bank employees participate in events which raise awareness for the prevention of heart disease and make donations to event-sponsoring groups.
• Employees of Sumitomo Mitsui Banking Corporation Europe (SMBCE) conducted volunteer activities in their spare time. SMBCE contributes to charitable organizations through

an in-house fund, and also uses a matching-gift program under which it donates a certain amount for every donation made by its employees.

• SMBCE provided opportunities for students to gain work experience and business skills and also provided opportunities for underprivileged young people to participate in the

student work experience program.

SMFG 2013Measures for Addressing Decreasing Birth Rate
and Aging Population
• Implementation of Universal Design and Universal

Service at branches

The following initiatives were undertaken to assist clients at
branches of SMBC, Minato Bank and KUBC. SMBC has
completed in March 2013 the complete conversion of all ATMs
in domestic branches and ATMs located outside of SMBC
branches to the ones which can respond to vision- and hearing-
impaired clients.

• Installation of ATMs for the visually-impaired
• Installation of communication boards and similar devices
for writing messages for those clients having difficulties
hearing

• Installation of Automated External Defibrillators (AEDs)*
• Installation of hearing aids at branches (SMBC and Minato

Bank)

• Installation of walking-stick holding brackets (SMBC and

Minato Bank)

• Establishment of priority seating for senior citizens and

mobility-impaired people (Minato Bank)

* AEDs are also installed at SMBC Nikko Securities and SMBC Friend

Securities

Additionally, staffs, trained in the knowledge and the means
to support senior citizens and physically-challenged clients, are
allocated to all branches of SMBC and Minato Bank.

• Business development for accommodating the soci-

ety with extremely large number of senior citizens

SMBC has clarified guidelines for collateral management and
other matters to support building of rental housing for senior
citizens, demand for which is expected to increase hereafter. In
May 2013, we started to offer loans (loans affiliated with nursing-
care facilities) especially made for real estate properties of pay
nursing homes or serviced elderly homes.
We plan to assist and support in developing the system for
senior citizens to have safe and meaningful lives by adapting to
the needs of the society.

• Stakeholders dialogue on the subject of “Japan’s

declining birth rate”

In January 2013, SMBC discussed the issues and countermea-
sures regarding this concept. The internal system needs to be
improved and it is critical to make some kind of approach to the
greater society, taking into consideration the opinions received
from intellectual and influential individuals.

Supporting the Recovery after the Great East
Japan Earthquake
• Volunteer Activities for the areas affected by the

Great East Japan Earthquake

In April 2011, SMBC established the “special leave of absence
for disaster relief volunteer activities,” and it began allowing
executives and staff to regularly go to the disaster affected areas
for volunteering activities in May that year. Volunteer activities are
still ongoing at Ishinomaki, Watari-cho and Higashi-Matsushima
in Miyagi Prefecture. Approximately 280 staff participated in
total during fiscal years of 2011 and 2012. In August 2012,

approximately 30 families or 90 people in total participated in the
programs.

SMBC Nikko Securities
implemented the volunteer
vacation system in April 2011,
and in July 2011, 350 newly-
hired employees and attending
staff participated in the volun-
teer activities in the disaster-hit
areas.

• Support for the Affected Areas by staff of “Customer

Service Plaza”

SMBC Consumer Finance made good use of the “Service
Plaza” (“SP”) to serve clients in the affected areas. SP con-
ducted seminars, at the public conference rooms temporarily
constructed for the people living in the vicinity, on the subject
of “financial awareness to avoid fraudulent activities.” At 18 SP
locations nationwide, the meeting room is provided to support
the disaster-hit areas.

• Donation Activities by Redeeming Points Accumulated

from Using Credit Cards

Sumitomo Mitsui Card and Cedyna accepted donations from
clients using their credit cards, and also donated to the disaster
affected areas by redeeming the points accumulated by clients
from using credit cards.

• Support Fund for Great East Japan Earthquake

SMBC established the system of “Great East Japan Earthquake
Support Fund” for making donations to the disaster affected
areas by deducting ¥400 from employee’s monthly salaries. In
fiscal 2012, we made donations collected from our employees
and the matching donations made by the bank to volunteer
centers and NPO foundations in the disaster-hit areas, in addi-
tion to the volunteer activities conducted by executives and
staff.

• Donation for Disaster Affected Area

Sumitomo Mitsui Card donated 15 music instruments they have
been using within their company club to “Swing Dolphins,”
a jazz orchestra group formed by junior high and elementary
school students of Kesennuma-city, Miyagi.

• Volunteering for interaction with evacuees in Tokyo

The interaction meetings for the people evacuated to Tokyo
from disaster affected areas have been regularly held, par-
ticipated by volunteering employees of SMBC in addition to the
staff of the YUI volunteer organization.

•“Charity Film-Screeing” events

Kansai Urban Banking Corporation held a charity film-
screeing event as part of its support for the disaster-hit areas.
Contributions collected from participants for the film-screening
event and the matching contributions made by the bank were
donated to Fukushima, Iwate and Miyagi prefectures.

SMFG 2013

Human Resources

SMFG and its Group companies strive to create the kind of
work environment in which every employee feels proud and is
able to develop his or her full potential and capabilities. In the
following pages, we describe some of the activities initiated by
SMBC and other Group companies, including Sumitomo Mitsui
Finance and Leasing (“SMFL”), SMBC Nikko Securities, SMBC
Friend Securities, Sumitomo Mitsui Card, Cedyna, SMBC
Consumer Finance, the Japan Research Institute (“JRI”), 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 encourages

values of forward-looking, creative attitudes 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
• Education and Training System

In order to motivate and encourage younger employees and to
promote their personal development, the bank provides employ-
ees with training program consisting of basic practical training,
the Retail Banking College, and the Corporate Banking College.
Our employees may acquire the required business knowledge
and skills through on-the-job (OJT) training and seminars. The
bank creates more practical training programs by assigning
mentors and training instructors to newly hired employees and
regional head office departments, respectively (OJT training is
supported by the head office). SMFL has established “SMFL
Standards,” which annually set forth the human resources devel-
opment plan for sogoshoku (management-track) employees of
not more than five years with the company.

SMFL has created the “Young Employees’ Growth Plan &
Guide,” based on the SMFL Standards, and it has also estab-
lished an in-house business school which supplements OJT
training. SMBC Nikko Securities, as a comprehensive securi-
ties and investment banking firm, is further strengthening its
educational programs to develop employees with expert
knowledge and to improve their professional skills by provid-
ing its newly-hired employees with OJT personally assisted by
instructors, follow-up seminars and other programs such as the
“new employee instructor program.” 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 sophis-
tication and diversification of the securities business. Under a
new business promoting system introduced in May 2012, we
are strengthening the training of subordinates by section chiefs
and the management functions, to make OJT more effective
for newly-hired employees. Following the amendments to
the Money Lending Business Act, Sumitomo Mitsui Card has
enhanced the development of professional expert employees
in the credit business. We have taken measures to proactively
support our employees in becoming licensed money lending
officers by regularly holding in-house seminars and educating
them in product knowledge and related subjects. Cedyna strives
to promote high professional standards and encourage the set-
ting 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. SMBC Consumer Finance is
implementing the competency-development training based on
its personnel system for training human resources to have high
social values and responsibilities. Furthermore, we help employ-
ees grow and advance by promoting education that teaches
those subject matters required to be in full compliance with
the Money Lending Business Act and other legislation. SMBC
Consumer Finance has been supporting the development of
employees. JRI believes that its human resources provide added
value, which is translated into solutions and proposals. With that
in mind, it has established the Human Resources Development
Department in the Systems Development Division, and the
Human Incubation Center in the Research & Consulting Division
for the well-planned development of human resources. Minato
Bank has consistently implemented the Minato Retail-business
College (“MRC”) system which improves the quality of consul-
tation services offered to its individual clients. Kansai Urban
Banking has a basic training program designed for staff in their
first six years of employment with the bank, made for developing
energetic employees. Another training system is Kansai Urban
Business School, created to teach basic banking expertise and
foster employee self-awareness. The bank is also creating locally
based exams as a measure to become a bank which puts more
emphasis on the local area and which prospers with the local
community. We are further strengthening the training systems in
respective Group companies.

Training Seminar at Kansai Urban Banking

Employees’ Training Seminar at SMBC
Nikko Securities

SMFG 2013
•SMFG Joint Training Program

As Team SMFG, eight major group companies (SMBC, SMFL,
SMBC Nikko Securities, SMBC Friend Securities, Sumitomo
Mitsui Card, Cedyna, SMBC Consumer Finance, and JRI) jointly
conducted training seminars for newly-hired employees of those
group companies to be able to understand the SMFG’s vision
and management policy and to increase the sense of identity as
“Team SMFG.”

Creating a Corporate Culture which Derives
Strength from Diversity
•Human Resources Diversity

The Group is implementing its initiatives to create workplace
diversity (e.g. gender, nationality). 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 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’
performances are evaluated not simply in terms of one fiscal
year’s achievements but also on their overall contributions to the
company.

•Developing Employees for Global Operations

In order to respond to the rapid globalization of society
and businesses, SMBC is striving to develop global human
resources with practical language skills and an international
business sense even doing business in Japan. In order to
enhance the overseas market presence and become more inter-
nationalized, the bank is increasing the number of employees
with overseas experience. In addition to the language class,
employment of those with overseas study experiences and of
foreign nationals, the bank encouraged training and appoint-
ment of highly capable national staff, and further expansion
of global personnel changes. At SMFL, overseas training pro-
grams were expanded mainly for young employees in order to
strengthen the training of global personnel, in addition to send-
ing employees to language schools.

•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
began the operations of its Kobe Branch, followed by its

Unagidani Office in Osaka,
February 2009 and Chiba
Office, March 2013. They
created jobs not only for
the physically-challenged
but also for the mentally-
challenged. As of March
2012, physically-challenged
employees accounted for
2.03% of our total number of employees, more than the legally
mandated level of 1.8% (it was modified to 2.0% as of April 1,
2013).

SMBC Global Corporate Banker Training

•Providing Support for a Better 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, SMFL, SMBC Friend Securities, Sumitomo
Mitsui Card, and JRI, developed their “Work-Life Balance
Guidebook,” based on actual experiences at SMBC. All Group
companies have already implemented the programs of parental
leave, leave for taking care of ill children, and shorter working
hours. Such programs provide better employee benefits than
those mandated by law. In addition, SMBC, Sumitomo Mitsui
Card, JRI and Minato Bank provide child-care allowances,
while SMBC, SMFL, Sumitomo Mitsui Card, Cedyna, SMBC
Consumer Finance, Minato Bank and Kansai Urban Banking
have implemented a program for rehiring former employees.
These programs assist the Group’s employees in realizing a
good work-life balance. There are also four workplace-visiting
plans for employees’ children and other family members to give
them an opportunity to better understand what their parents
do for work. The program is available at SMBC, SMFL, SMBC
Friend Securities, Sumitomo Mitsui Card, SMBC Consumer
Finance, and JRI. SMFL and Cedyna encourage their employ-
ees to take their summer vacations and to reduce their overtime
hours, while SMBC conducts the “Go Home Early - Family
Day.” Further, SMBC organizes “Working Mother’s Meeting” and
JRI also organizes “Mama & Papa Lunches,” where employ-
ees exchange information on raising children. SMBC Nikko
Securities and SMBC Consumer Finance have introduced an
online support program for employees returning to work after
parental leave. SMBC, SMBC Consumer Finance, Minato Bank,
and Kansai Urban Banking regularly provide training seminars
for employees on maternity leave. SMBC and Kansai Urban
Banking provide training for employees taking maternity leave.
The above programs aim to support employees to settle in at
work after maternity leave.

SMBC, SMBC Nikko Securities, Sumitomo Mitsui Card,
Cedyna, SMBC Consumer Finance, JRI and Minato Bank have
all obtained “Kurumin certification” issued by the Japanese
Ministry of Health, Labour and Welfare, for programs in com-
pliance with the Law to Promote Measures to Support the

SMFG 2013
Development of the Next
Generation.

Children’s Visitation Day

SMBC Consumer Finance recovery support
seminar

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

Employees
◆ SMBC
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

Male
Female

2011

2012

2013

25,073
13,546
54.03%
11,527
45.97%
36 yrs 5 mos.
40 yrs 3 mos.
31 yrs 11 mos.
13 yrs 5 mos.
16 yrs 9 mos.
9 yrs 7 mos.

24,602
13,274
53.95%
11,328
46.05%
36 yrs 9 mos.
40 yrs 4 mos.
32 yrs 8 mos.
13 yrs 9 mos.
16 yrs 8 mos.
10 yrs 3 mos.

24,212
13,014
53.75%
11,198
46.25%
37 yrs 0 mos.
40 yrs 3 mos.
33 yrs 3 mos.
14 yrs 0 mos.
16 yrs 8 mos.
10 yrs 11 mos.

Number of women in
managerial positions**
Ratio of employees with
disabilities (% of total)***
*

327

398

447

1.95%

1.99%

2.03%

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
*** As of March 1 of the respective years

2012

2011

April 1
Number of new hires
Number of newly employed female
graduates****
Ratio of newly employed females to
total new employees
**** Includes sogoshoku staff, sogoshoku (retail course) staff and consumer service

32.9%

37.1%

32.6%

2013

572

188

610

245

661

199

staff. Business Career Path employees are excluded.

Fiscal
Number of employees taking
parental leave

Number of career hires

2010

2011

2012

476

<26>
6

683

<27>
11

920

<55>
17

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. The promotional campaigns for creating the
corporate statement of promoting individual human rights are
also organized to motivate our employees to reflect on indi-
vidual human rights and to come up with the statement for such
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 reflect and come up
with an individual human rights statement. SMFG and its Group
companies participate 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.

◆ Sumitomo Mitsui Finance and Leasing
2012
March 31
Number of employees*

2011

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

1,648
1,025
62.20%
623
37.80%
37 yrs 8 mos.
40 yrs 6 mos.
33 yrs 0 mos.
12 yrs 10 mos.
15 yrs 6 mos.
8 yrs 7 mos.

1,618
1,007
62.24%
611
37.76%
38 yrs 2 mos.
40 yrs 10 mos.
33 yrs 10 mos.
13 yrs 4 mos.
15 yrs 9 mos.
9 yrs 5 mos.

2013

1,620
1,017
62.78%
603
37.22%
38 yrs 11 mos.
41 yrs 5 mos.
34 yrs 9 mos.
14 yrs 0 mos.
16 yrs 3 mos.
10 yrs 2 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).

April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees

2011

2012

2013

13.6%

15.8%

20.0%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<0>

SMFG 2013 ◆ SMBC Nikko Securities
March*
Number of employees**

2011

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

7,094
4,449
62.71%
2,645
37.29%
38 yrs 11 mos.
40 yrs 3 mos.
36 yrs 8 mos.
11 yrs 11 mos.
12 yrs 4 mos.
11 yrs 2 mos.

2012

2013

7,513
4,771
63.50%
2,742
36.50%
38 yrs 11 mos.
40 yrs 2 mos.
36 yrs 10 mos.
11 yrs 10 mos.
12 yrs 2 mos.
11 yrs 4 mos.

7,656
4,863
63.52%
2,793
36.48%
39 yrs 3 mos.
40 yrs 4 mos.
37 yrs 3 mos.
12 yrs 3 mos.
12 yrs 6 mos.
11 yrs 10 mos.

◆ Sumitomo Mitsui Card
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

2011

2012

2013

2,300
1,146
49.83%
1,154
50.17%
36 yrs 8 mos.
40 yrs 0 mos.
33 yrs 5 mos.
11 yrs 0 mos.
12 yrs 0 mos.
10 yrs 0 mos.

2,323
1,141
49.12%
1,182
50.88%
37 yrs 1 mos.
40 yrs 4 mos.
34 yrs 0 mos.
11 yrs 7 mos.
12 yrs 8 mos.
10 yrs 7 mos.

2,353
1,157
49.17%
1,196
50.83%
37 yrs 7 mos.
40 yrs 6 mos.
34 yrs 8 mos.
12 yrs 2 mos.
13 yrs 1 mos.
11 yrs 4 mos.

Male
Female
As of March 1 of the respective years

*
** The number of full-time employees. The following list of employees is deducted
from the total number of employees: executive officers, part-time employees,
employees of temporary employment agencies, and national staff at overseas
branches.

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.

2011

April 1
Number of new hires***
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees
*** Professional staff (Classes I-II), FA, and specialists

38.5%

190

493

2012

2013

388

165

293

111

42.5%

37.9%

April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees

2011

2012

2013

59.7%

49.0%

52.7%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

229

<0>

248

<1>

262

<0>

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<2>

<6>

<5>

2012

2013

2011

2012

2013

◆ SMBC Friend Securities
March 31
Number of employees*

2011

Average age

Male

Female

Male
Female

Percentage of total

1,897
1,359
71.64%
538
28.36%
37 yrs 7 mos.
39 yrs 8 mos.
32 yrs 5 mos.
14 yrs 0 mos.
15 yrs 9 mos.
9 yrs 5 mos.

1,846
1,336
72.37%
510
27.63%
38 yrs 4 mos.
40 yrs 4 mos.
33 yrs 1 mos.
14 yrs 9 mos.
16 yrs 6 mos.
10 yrs 2 mos.

1,814
1,309
72.16%
505
27.84%
38 yrs 11 mos.
40 yrs 11 mos.
33 yrs 9 mos.
15 yrs 3 mos.
Male
17 yrs 1 mos.
Female
10 yrs 8 mos.
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.

Average years of service

2011

April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
** Both non-area specified and area specified staff

53.0%

149

2012

2013

151

159

49.0%

46.5%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<0>

<5>

<0>

◆ Cedyna
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

3,340
2,021
60.51%
1,319
39.49%
38 yrs 7 mos.
41 yrs 5 mos.
34 yrs 4 mos.
14 yrs 2 mos.
16 yrs 4 mos.
11 yrs 0 mos.

3,192
1,980
62.03%
1,212
37.97%
39 yrs 6 mos.
42 yrs 1 mos.
35 yrs 5 mos.
15 yrs 5 mos.
17 yrs 4 mos.
12 yrs 1 mos.

3,095
1,948
62.94%
1,147
37.06%
40 yrs 5 mos.
42 yrs 8 mos.
36 yrs 6 mos.
16 yrs 4 mos.
18 yrs 1 mos.
13 yrs 4 mos.

Male
Female
Excluding employees seconded from other companies, employees on short-
term contracts and part-time employees.

April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees

2011

2012

2013

50.0%

0.0%

15.0%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<0>

SMFG 20132012

2013

2011

2012

2013

◆ SMBC Consumer Finance
2011
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

2,038
1,263
61.97%
775
38.03%
36 yrs 4 mos.
38 yrs 0 mos.
33 yrs 7 mos.
12 yrs 3 mos.
14 yrs 4 mos.
8 yrs 11 mos.

1,971
1,234
62.61%
737
37.39%
37 yrs 2 mos.
38 yrs 9 mos.
34 yrs 5 mos.
13 yrs 1 mos.
15 yrs 1 mos.
9 yrs 9 mos.

2,121
1,299
61.24%
822
38.76%
37 yrs 9 mos.
39 yrs 5 mos.
35 yrs 1 mos.
12 yrs 11 mos.
15 yrs 2 mos.
9 yrs 5 mos.

◆ THE MINATO BANK
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

1,897
1,226
64.63%
671
35.37%
40 yrs 7 mos.
44 yrs 1 mos.
34 yrs 2 mos.
16 yrs 10 mos.
20 yrs 1 mos.
10 yrs 9 mos.

1,911
1,225
64.10%
686
35.90%
41 yrs 0 mos.
44 yrs 5 mos.
34 yrs 11 mos.
17 yrs 1 mos.
20 yrs 4 mos.
11 yrs 4 mos.

1,921
1,220
63.51%
701
36.49%
41 yrs 3 mos.
44 yrs 8 mos.
35 yrs 5 mos.
17 yrs 4 mos.
20 yrs 7 mos.
11 yrs 8 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.

Male
Female
The number of full-time employees including employees seconded to other
companies or organizations.
The following list of employee is deducted from the total number of employees:
executive officers, employees on short-term contracts, and part-time
employees.

April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees

2011

2012

2013

73.9%

68.8%

50.0%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<0>

<1>

2011

2012

April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
** Includes only sogoshoku staff. Ippanshoku staff are excluded.

23.8%

20.5%

2013

11.8%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<1>

<2>

<1>

2012

2013

2012

2013

◆ Japan Research Institute
2011
March 31
Number of employees*

Male

Percentage of total

Female

Percentage of total

Average age

Male
Female

Average years of service

2,323
1,782
76.71%
541
23.29%
39 yrs 1 mos.
39 yrs 9 mos.
36 yrs 4 mos.
9 yrs 9 mos.
10 yrs 3 mos.
8 yrs 6 mos.

2,272
1,726
75.97%
546
24.03%
39 yrs 3 mos.
40 yrs 1 mos.
36 yrs 7 mos.
10 yrs 2 mos.
10 yrs 6 mos.
8 yrs 11 mos.

2,265
1,705
75.28%
560
24.72%
39 yrs 9 mos.
40 yrs 6 mos.
37 yrs 3 mos.
10 yrs 8 mos.
11 yrs 1 mos.
9 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 agen-
cies, and national staff at overseas branches.

◆ Kansai Urban Banking
March 31
Number of employees*

2011

Average age

Male

Female

Male
Female

Percentage of total

2,809
1,929
68.67%
880
31.33%
39 yrs 10 mos.
43 yrs 4 mos.
32 yrs 3 mos.
16 yrs 8 mos.
19 yrs 9 mos.
10 yrs 1 mos.

2,712
1,850
68.22%
862
31.78%
40 yrs 1 mos.
43 yrs 5 mos.
32 yrs 11 mos.
16 yrs 11 mos.
19 yrs 10 mos.
10 yrs 9 mos.

2,661
1,788
67.19%
873
32.81%
40 yrs 3 mos.
43 yrs 5 mos.
33 yrs 6 mos.
17 yrs 0 mos.
Male
19 yrs 8 mos.
Female
11 yrs 3 mos.
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employee is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment
agencies.

Average years of service

2011

2012

April 1
Number of new hires
Number of newly employed female
graduates**
Ratio of newly employed females to
total new employees
** Includes only sogoshoku staff. Ippanshoku staff are excluded.

37.7%

39.5%

2013

31.3%

April 1
Number of new hires
Number of newly employed female
graduates
Ratio of newly employed females to
total new employees

2011

2012

2013

58.1%

60.4%

57.3%

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<7>

<6>

<4>

Fiscal
Number of employees taking
parental leave

2010

2011

2012

<0>

<1>

• The combined employment ratio for persons with disabilities for the above nine companies was 1.98% as of March 2013.

SMFG 2013Main Work-Life Balance Support Systems (Employee Support Programs)

Parental leave

18 months or maximum of
2 years in case of inability
to place in daycare center

Leave for taking care of
sick children

Until March 31 of the 6th
grade (10 days per annum
per one child; 20 days for
two or more children)

SMBC

Sumitomo Mitsui
Finance and Leasing

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

Until 3 years of age

SMBC Nikko
Securities

the

entry

Until
into
elementary school (5 days
per annum per one child;
10 days for two or more
children)

18 months or maximum of
2 years in case of inability
to place in daycare center

Until March 31 of the 3rd
grade (5 days per annum
per child; 10 days for two or
more children)

SMBC Friend
Securities

Sumitomo Mitsui
Card

18 months or maximum of
2 years in case of inability
to place in daycare center

Until March 31 of the 6th
grade (5 days per annum
per child; 10 days for two or
more children)

Until 3 years of age

Until March 31 of the 3rd
grade (5 days per annum
per child; no upper limit)

Cedyna

1 year or maximum of 18
months in case of inability
to place in daycare center

Until the entry into elemen-
tary school (5 days per
annum per child; 10 days
for two or more children)

SMBC Consumer
Finance

Shorter working hours

Employees can choose
shorter working hours for
each day or fewer days
worked per week, both
applicable until March 31 of
the 6th grade

Employees can
reduce
daily working hours to a
minimum of 5 hours 30
minutes until March 31 of
the 6th grade

Employees may reduce daily
working hours in increments
of 30 minutes up to 2.5
hours until March 31 of the
6th grade

Until March 31 of the 3rd
grade
Employees can reduce daily
working hours to between
6 hours and 6 hours 50
minutes until March 31 of
the 3rd grade

Employees can choose
shorter working hours for
each day or fewer days
worked per week, both
applicable until March 31 of
the 3rd grade

Until March 31 of the 3rd
grade
(Employees can
choose to work 5, 6, or 7
hours a day).

the
Until March 31 of
3rd
Employees
grade
can reduce daily working
hours to a minimum of 6
hours (and a maximum
of 8 hours), by taking off
30-minute blocks

Restrictions on
overtime

Exemption from
late-night work

Until March 31 of the
6th grade

Other principal systems

• Short-term childcare leave
• Work relocations
• Child-care subsidies
• Leave for nursing care
• Shorter working hours allowed for

nursing care

• System for rehiring former employees

Until the entry into
elementary school

• Work relocations
• System for rehiring former employees

Until March 31 of the
6th grade

• Short-term childcare leave
• Use of designated day-care center at

discounted rates

• Leave for nursing care
• Special days off for nursing care
• Shorter working hours allowed for

nursing care

• Short-term leave for nursing care
• Staggered working hours

(shift

system)

Until March 31 of the
3rd grade

• Leave for nursing care
• Shorter working hours allowed for

nursing care

Until March 31 of
the 3rd grade of
elementary school

Until the entry into
elementary school

Japan Research
Institute

18 months or maximum of
2 years in case of inability
to place in daycare center

Until March 31 of the 6th
grade (5 days per annum
per child; no upper limit)

Employees can choose to
work 4, 5, 6 or 7 hours per
day until March 31 of the
3rd grade (this system can
be combined with flextime).

Until the entry into
elementary school

For employees who
are pregnant or have
given birth within
previous 12 months

Until 3 years of age

THE MINATO BANK

Until the entry into elemen-
tary school (5 days per
annum per child; 10 days
for two or more children)

Until the entry into elemen-
tary school, employees can
opt for 6-hour working day

Until the entry into
elementary school

Kansai Urban
Banking

18 months or maximum of
2 years in case of inability
to place in daycare center

Until the entry into elemen-
tary school (5 days per
annum per child; 10 days
for two or more children)

Until the entry into elemen-
tary school, employees can
opt for 6-hour working day

Until the entry into
elementary school

• Work relocations
• Child-care subsidies
• Leave for nursing care
• Shorter working hours allowed for

nursing care

• System for rehiring former employees

• Maternity leave and work
• Short-term childcare leave
• Leave for nursing care
• System for rehiring former employees
• Maternity leave (for men)

• A grace period for job rotation
• Leave for nursing care
• Shorter working hours allowed for

nursing care

• Paid leave by the hour
• Half-day paid leave
• Leave before and after maternity
• Child-care leave (2 days)
• Company-visiting day (2 days a year)
• Rehiring of former employees who quit
for child-care or care-giving reasons
• Husband’s maternity leave (3 days)

• Child-care subsidies
• Leave for nursing care
• Shorter working hours allowed for

nursing care, etc

• More time off and shorter working

hours allowed for nursing care

• Days off for nursing care

• Maternity leave (to help spouse)
• Leave for nursing care
• Shorter working hours allowed for

nursing care

• Child-care allowance

• Short-term childcare leave (5 days)
• System for rehiring former employees
• Leave for nursing care
• Home helpers provided

SMFG 2013Financial Section and Corporate Data

Financial Data

SMFG

Compensation

SMFG

Consolidated Balance Sheets ..................................... 70

Compensation (Consolidated) ..................................... 232

Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income ... 72

SMBC

Consolidated Statements of
Changes in Net Assets .............................................. 73

Consolidated Statements of Cash Flows .................... 75

Notes to Consolidated Financial Statements .............. 77

Independent Auditor’s Report ..................................... 138

SMBC

Compensation ............................................................. 235

Corporate Data

Sumitomo Mitsui Financial Group, Inc.

Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 239

Supplemental Information ........................................... 139

SMFG Organization ................................................. 239

SMFG

Income Analysis (Consolidated) .................................. 145

Assets and Liabilities (Consolidated)........................... 148

Capital (Nonconsolidated) ........................................... 151

SMBC

Sumitomo Mitsui Banking Corporation

Board of Directors, Corporate Auditors,
and Executive Officers .......................................... 240

SMBC Organization ................................................ 242

Income Analysis (Consolidated) .................................. 154

Principal Subsidiaries and Affiliates

Assets and Liabilities (Consolidated)........................... 157

Principal Domestic Subsidiaries ............................. 244

Income Analysis (Nonconsolidated) ............................ 159

Principal Overseas Subsidiaries ............................. 245

Deposits (Nonconsolidated) ........................................ 163

Principal Affiliates .................................................... 246

Loans (Nonconsolidated)............................................. 165

Securities (Nonconsolidated) ...................................... 170

International Directory ................................................. 247

Ratios (Nonconsolidated) ............................................ 172

Capital (Nonconsolidated) ........................................... 174

Others (Nonconsolidated)............................................ 175

Trust Assets and Liabilities (Nonconsolidated) ............ 177

Capital Ratio Information

SMFG

Capital Ratio Information (Consolidated) .................... 178

SMBC

Capital Ratio Information (Consolidated) .................... 213

Capital Ratio Information (Nonconsolidated) .............. 221

SMFG 2013

Consolidated Balance Sheets

Sumitomo Mitsui Financial Group, Inc. and Subsidiaries

March 31

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Assets
Cash and due from banks (Notes 9 and 29) .........................................................
Deposits with banks (Notes 9 and 29)..................................................................
Call loans and bills bought (Notes 9 and 29) ........................................................
Receivables under resale agreements (Note 29) ..................................................
Receivables under securities borrowing transactions (Note 29) ..........................
Monetary claims bought (Notes 9 and 29) ...........................................................
Trading assets (Notes 3, 9 and 29) .......................................................................
Money held in trust (Notes 29 and 30) .................................................................
Securities (Notes 4, 9, 29 and 30) ........................................................................
Loans and bills discounted (Notes 5, 9 and 29) ...................................................
Foreign exchanges (Note 29) ...............................................................................
Lease receivables and investment assets (Notes 9, 28 and 29) ..........................
Other assets (Notes 6, 9, 29 and 31) ....................................................................
Tangible fixed assets (Notes 7, 9 and 15) .............................................................
Intangible fixed assets (Note 8) ............................................................................
Deferred tax assets (Note 24) ...............................................................................
Customers’ liabilities for acceptances and guarantees .......................................
Reserve for possible loan losses (Note 29) ..........................................................
Total assets ..........................................................................................................

¥ 5,202,119
5,597,172
1,353,746
273,217
3,494,398
1,540,516
7,765,554
22,789
41,306,731
65,632,091
2,226,427
1,684,800
4,367,634
1,983,772
790,860
374,258
6,009,575
(928,866)
¥148,696,800

¥ 4,588,858
3,127,432
1,291,818
227,749
4,539,555
1,361,289
8,196,944
23,878
42,529,950
62,720,599
1,280,636
1,699,759
4,622,756
1,180,522
799,773
404,034
5,424,045
(978,933)
¥143,040,672

$ 55,336
59,538
14,400
2,906
37,170
16,387
82,603
242
439,387
698,139
23,683
17,921
46,459
21,102
8,413
3,981
63,925
(9,881)
$1,581,713

SMFGSMFG 2013(Continued)

March 31

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Liabilities and net assets
Liabilities
Deposits (Notes 9, 10 and 29) ..............................................................................
Call money and bills sold (Notes 9 and 29) ..........................................................
Payables under repurchase agreements (Notes 9 and 29) ..................................
Payables under securities lending transactions (Notes 9 and 29) .......................
Commercial paper (Note 29) ................................................................................
Trading liabilities (Notes 9, 11 and 29)..................................................................
Borrowed money (Notes 9, 12 and 29).................................................................
Foreign exchanges (Note 29) ...............................................................................
Short-term bonds (Notes 13 and 29)....................................................................
Bonds (Notes 13 and 29) ......................................................................................
Due to trust account (Note 29) .............................................................................
Other liabilities (Notes 9, 14, 28, 29 and 31) ........................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for employee retirement benefits (Note 27) ............................................
Reserve for executive retirement benefits ............................................................
Reserve for point service program .......................................................................
Reserve for reimbursement of deposits ...............................................................
Reserve for losses on interest repayment ............................................................
Reserve under the special laws ...........................................................................
Deferred tax liabilities (Note 24) ...........................................................................
Deferred tax liabilities for land revaluation (Note 15) ............................................
Acceptances and guarantees (Note 9) .................................................................
Total liabilities ......................................................................................................

Net assets (Note 25)
Capital stock (Note 16) ........................................................................................
Capital surplus .....................................................................................................
Retained earnings ................................................................................................
Treasury stock .....................................................................................................
Total stockholders’ equity ...................................................................................
Net unrealized gains on other securities (Notes 23, 24 and 30) ...........................
Net deferred losses on hedges (Notes 23, 24 and 31) .........................................
Land revaluation excess (Notes 15 and 23) .........................................................
Foreign currency translation adjustments (Note 23) ............................................
Total accumulated other comprehensive income ..............................................
Stock acquisition rights (Note 32) ........................................................................
Minority interests .................................................................................................
Total net assets ....................................................................................................
Total liabilities and net assets .............................................................................

See accompanying notes to consolidated financial statements.

¥100,837,465
2,954,051
2,076,791
4,433,835
1,499,499
6,119,631
4,979,460
337,901
1,126,300
4,750,806
643,350
3,989,794
59,855
4,037
44,579
2,420
19,319
11,195
245,423
481
68,120
39,683
6,009,575
140,253,582

2,337,895
758,630
2,811,474
(227,373)
5,680,627
755,753
(32,863)
39,129
(97,448)
664,570
1,260
2,096,760
8,443,218
¥148,696,800

¥ 92,722,199
2,144,599
1,676,902
5,810,730
1,193,249
6,248,061
8,839,648
302,580
949,388
4,641,927
443,723
4,762,961
48,516
2,875
45,911
2,577
19,350
10,980
401,276
421
53,852
39,915
5,424,045
135,785,696

2,337,895
759,800
2,152,654
(236,037)
5,014,313
330,433
(32,122)
39,158
(141,382)
196,087
692
2,043,883
7,254,976
¥143,040,672

$1,072,625
31,423
22,091
47,163
15,950
65,096
52,967
3,594
11,981
50,535
6,843
42,440
637
43
474
26
205
119
2,611
5
725
422
63,925
1,491,901

24,869
8,070
29,906
(2,419)
60,426
8,039
(350)
416
(1,037)
7,069
13
22,304
89,812
$1,581,713

SMFGConsolidated Balance SheetsSMFG 2013Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
(Consolidated Statements of Income)

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

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) ........................................................
Trading losses ......................................................................................................
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 24):

¥1,707,513
1,292,930
251,675
6,240
6,565
33,191
64,425
52,483
1,871
1,040,126
206,741
1,283,776
86,780
4,326,809

314,876
137,802
56,530
6,301
6,284
87,755
20,200
131,957
40,124
960,179
1,496,294
36,475
282,867
3,262,775
1,064,033

Current ..............................................................................................................
Deferred ............................................................................................................
Income before minority interests ........................................................................
Minority interests in net income ...........................................................................
Net income ...........................................................................................................

279,898
(133,930)
918,065
124,006
¥ 794,059

¥1,631,592
1,226,546
242,086
5,890
6,823
29,742
68,943
51,560
1,770
955,680
198,192
1,110,566
75,272
3,973,075

290,223
134,476
51,522
3,694
6,852
77,816
15,860
132,099
—
880,998
1,421,363
4,244
291,179
3,020,108
952,966

103,478
207,860
641,627
123,090
¥ 518,536

$18,163
13,753
2,677
66
70
353
685
558
20
11,064
2,199
13,656
923
46,025

3,349
1,466
601
67
67
933
215
1,404
427
10,214
15,916
388
3,009
34,707
11,318

2,977
(1,425)
9,766
1,319
$ 8,447

(Consolidated Statements of Comprehensive Income)

Millions of yen

Year ended March 31

Income before minority interests ........................................................................
Other comprehensive income (Note 23) .............................................................
Net unrealized gains on other securities ..........................................................
Net deferred losses on hedges ........................................................................
Land revaluation excess ...................................................................................
Foreign currency translation adjustments ........................................................
Share of other comprehensive income of affiliates ..........................................
Total comprehensive income ..............................................................................
Comprehensive income attributable to shareholders of the parent ...................
Comprehensive income attributable to minority interests ...............................

See accompanying notes to consolidated financial statements.

2013

¥ 918,065
540,041
445,678
(1,076)
—
99,626
(4,187)
1,458,107
1,262,572
195,534

2012

¥641,627
23,605
69,103
(22,964)
5,613
(23,496)
(4,651)
665,232
541,270
123,961

Millions of
U.S. dollars (Note 1)
2013

$ 9,766
5,745
4,741
(11)
—
1,060
(45)
15,510
13,430
2,080

SMFGSMFG 2013Consolidated Statements of Changes in Net Assets

Sumitomo Mitsui Financial Group, Inc. and Subsidiaries

Year ended March 31

Stockholders’ equity
Capital stock

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

¥2,337,895

$24,869

Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................

—
¥2,337,895

—
$24,869

Capital surplus

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

759,800

978,851

8,082

Disposal of treasury stock ............................................................................
Cancellation of treasury stock ......................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................

(1,170)
—
(1,170)
¥ 758,630

(9,047)
(210,003)
(219,050)
¥ 759,800

(12)
—
(12)
$ 8,070

Retained earnings

Balance at the beginning of the 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 ....................................................
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

2,152,654

1,776,433

22,898

(135,252)
794,059
10
0
(9)
(16)
—
29
658,820
¥2,811,474

(142,010)
518,536
15
1
(7)
(16)
(90)
(208)
376,220
¥2,152,654

(1,439)
8,447
0
0
(0)
(0)
—
0
7,008
$29,906

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

(236,037)

(171,760)

(2,511)

Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Cancellation of treasury stock ......................................................................
Net changes in the fiscal year.......................................................................
Balance at the end of the fiscal year ................................................................

(263)
8,927
—
8,663
¥ (227,373)

(321,521)
47,242
210,003
(64,276)
¥ (236,037)

(3)
95
—
92
$ (2,419)

Total stockholders’ equity

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

Cash dividends .............................................................................................
Net income ...................................................................................................
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Cancellation 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 ....................................................
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 ................................................................

5,014,313

4,921,419

53,338

(135,252)
794,059
(263)
7,756
—
10
0
(9)
(16)
—
29
666,313
¥5,680,627

(142,010)
518,536
(321,521)
38,194
—
15
1
(7)
(16)
(90)
(208)
92,893
¥5,014,313

(1,439)
8,447
(3)
83
—
0
0
(0)
(0)
—
0
7,088
$60,426

SMFGSMFG 2013(Continued)

Year ended March 31

Accumulated other comprehensive income
Net unrealized gains on other securities

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

¥ 330,433

¥ 272,306

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 ................................................................

425,320
425,320
¥ 755,753

58,127
58,127
¥ 330,433

$ 3,515

4,524
4,524
$ 8,039

Net deferred losses on hedges

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

(32,122)

(9,701)

(342)

(741)
(741)
¥ (32,863)

(22,420)
(22,420)
¥ (32,122)

(8)
(8)
$ (350)

Land revaluation excess

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

39,158

33,357

417

(29)
(29)
¥ 39,129

5,800
5,800
¥ 39,158

(0)
(0)
$ 416

Foreign currency translation adjustments

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

(141,382)

(122,889)

(1,504)

43,933
43,933
¥ (97,448)

(18,493)
(18,493)
¥ (141,382)

Total accumulated other comprehensive income

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

196,087

173,073

468,483
468,483
¥ 664,570

23,013
23,013
¥ 196,087

Stock acquisition rights

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

692

262

567
567
¥ 1,260

429
429
¥ 692

Minority interests

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

2,043,883

2,037,318

52,877
52,877
¥2,096,760

6,564
6,564
¥2,043,883

Total net assets

Balance at the beginning of the fiscal year ......................................................
Changes in the fiscal year:

Cash dividends .............................................................................................
Net income ...................................................................................................
Purchase of treasury stock ...........................................................................
Disposal of treasury stock ............................................................................
Cancellation 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 ....................................................
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 ................................................................

7,254,976

7,132,073

(135,252)
794,059
(263)
7,756
—
10
0
(9)
(16)
—
29
521,928
1,188,242
¥8,443,218

(142,010)
518,536
(321,521)
38,194
—
15
1
(7)
(16)
(90)
(208)
30,008
122,902
¥7,254,976

See accompanying notes to consolidated financial statements.

467
467
$ (1,037)

2,086

4,983
4,983
$ 7,069

6
6
$ 13

21,741

562
562
$22,304

77,172

(1,439)
8,447
(3)
83
—
0
0
(0)
(0)
—
0
5,552
12,640
$89,812

SMFGConsolidated Statements of Changes in Net AssetsSMFG 2013Consolidated 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 (gains) 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 losses on interest repayment ..................................
Interest income .................................................................................................
Interest expenses .............................................................................................
Net gains on securities .....................................................................................
Net losses from money held in trust .................................................................
Net exchange (gains) losses .............................................................................
Net 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 operating activities..........................................................

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

¥ 1,064,033
184,400
4,314
25,329
(3)
(140)
(5,309)
(45,596)
11,328
1,162
(1,572)
(98)
(30)
214
(155,083)
(1,707,513)
314,876
(91,432)
1,587
(859,265)
5,480
508,869
(217,461)
(2,837,157)
4,601,549
3,122,529
(4,349,415)
(2,195,718)
(187,455)
1,045,156
1,163,090
306,250
(1,376,894)
(912,372)
33,865
27,486
216,900
505,627
199,626
1,732,270
(323,687)
415,235
224,976
(133,520)
91,455

¥ 952,966
165,113
3,861
21,681
—
(25,050)
31,122
(90,007)
2,816
378
(5,083)
(194)
422
1,056
(25,756)
(1,631,592)
290,223
(130,612)
1,464
16,145
3,765
(1,588,903)
1,029,341
(828,051)
2,299,767
228,846
(1,994,204)
462,914
(793,288)
200,855
472,525
856,129
97,497
(205,926)
46,712
30,875
(233,809)
352,424
227,552
1,663,901
(295,539)
327,828
1,940,166
(101,981)
1,838,185

$ 11,318
1,961
46
269
(0)
(1)
(56)
(485)
120
12
(17)
(1)
(0)
2
(1,650)
(18,163)
3,349
(973)
17
(9,140)
58
5,413
(2,313)
(30,179)
48,947
33,215
(46,265)
(23,356)
(1,994)
11,117
12,372
3,258
(14,646)
(9,705)
360
292
2,307
5,378
2,123
18,426
(3,443)
4,417
2,393
(1,420)
973

SMFGSMFG 2013(Continued)

Year ended March 31

Cash flows from investing activities:

Purchases of securities ....................................................................................
Proceeds from sale of securities ......................................................................
Proceeds from maturity of securities ................................................................
Purchases of money held in trust .....................................................................
Proceeds from sale of money held in trust .......................................................
Purchases of tangible fixed assets ...................................................................
Proceeds from sale of tangible fixed assets .....................................................
Purchases of intangible fixed assets ................................................................
Proceeds from sale of intangible fixed assets ..................................................
Purchases of stocks of subsidiaries .................................................................
Purchases of treasury stocks of subsidiaries ...................................................
Purchases of stocks of subsidiaries resulting in change in scope of
consolidation ..................................................................................................
Proceeds from sale of stocks of subsidiaries resulting in change in
scope of consolidation ...................................................................................
Net cash provided by (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 .............................................................................................
Dividends paid ..................................................................................................
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 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 ....................................
Increase in cash and due from banks from newly consolidated subsidiaries ..
Cash and due from banks at the end of the year ..............................................

See accompanying notes to consolidated financial statements.

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

¥(52,234,418)
46,632,816
7,224,688
(3,791)
3,191
(291,609)
96,692
(106,291)
212
(7,549)
—

¥(50,614,876)
32,372,433
15,925,697
(3,011)
1,540
(131,154)
30,343
(101,447)
24
—
(1,773)

(95,721)

(67,369)

34,916
1,253,136

50
(2,589,543)

33,200
(93,000)

106,000
(103,000)

127,263

557,360

(561,289)
(135,202)
(12,500)
(101,352)
(263)
23
(5)
178
(742,948)
11,616
613,260
4,588,858
0
¥ 5,202,119

(306,471)
(141,921)
—
(93,125)
(321,521)
2,390
(14)
183
(300,119)
(4,757)
(1,056,236)
5,645,094
—
¥ 4,588,858

$(555,626)
496,041
76,850
(40)
34
(3,102)
1,029
(1,131)
2
(80)
—

(1,018)

371
13,330

353
(989)

1,354

(5,971)
(1,438)
(133)
(1,078)
(3)
0
(0)
2
(7,903)
124
6,523
48,812
0
$ 55,336

SMFGConsolidated Statements of Cash FlowsSMFG 2013Notes to Consolidated Financial Statements

Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Years ended March 31, 2013 and 2012

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, 2013, which was ¥94.01 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

323 companies
Principal companies:
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Finance and Leasing Company, Limited
SMBC Nikko Securities Inc.
SMBC Friend Securities Co., Ltd.
Sumitomo Mitsui Card Company, Limited
Cedyna Financial Corporation
SMBC Consumer Finance Co., Ltd. (“Promise”)
The Japan Research Institute, Limited
THE MINATO BANK, LTD.
Kansai Urban Banking Corporation
Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Banking Corporation (China) Limited
SMBC Finance Service Co., Ltd.
SMBC Capital Markets, Inc.

Changes in the consolidated subsidiaries in the fiscal
year ended March 31, 2013 are as follows:
43 companies including SMBC Aviation Capital Limited
were included in the scope of consolidated subsidiaries as a
result of acquisitions of stocks and other reasons.
50 companies including ORIX Credit Corporation
were excluded from the scope of consolidated subsidiaries
because they were no longer subsidiaries as a result of sale
of stocks and other reasons.
7 companies including SMFL Speed 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.

186 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 Consolidated Financial Statements
Regulations.

SMFGSMFG 2013 Other unconsolidated subsidiaries including SBCS Co.,
Ltd. 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, as such, they do not hinder a rational judg-
ment of SMFG’s financial position and results of operations
when excluded from the scope of consolidation.

(b) Application of the equity method

Japanese accounting standards also require that any
unconsolidated subsidiaries and affiliates which SMFG is
able to exercise material influence over their financial and
operating policies be accounted for by the equity method.
(i) Unconsolidated subsidiaries accounted for by the equity

method
5 companies
Principal company:
SBCS Co., Ltd.

PT. SBCS INDONESIA became an unconsolidated sub-
sidiary accounted for by the equity method from the fiscal
year ended March 31, 2013 because it became a subsidiary
due to establishment.
(ii) Equity method affiliates

39 companies
Principal companies:
Sumitomo Mitsui Auto Service Company, Limited
Daiwa SB Investments Ltd.

Changes in the equity method affiliates in the fiscal year
ended March 31, 2013 are as follows:
2 companies including China Post & Capital Fund
Management Co., Ltd. became equity method affiliates due
mainly to acquisitions of equity interest.
2 companies including Famima Credit Corporation were
excluded from the scope of equity method affiliates because
they were no longer equity method affiliates due mainly to
mergers.
(iii) Unconsolidated subsidiaries that are not accounted for

by the equity method

186 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 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 also excluded from the scope of equity method
because 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.

(i) The balance sheet dates of the consolidated subsidiaries

are as follows:

4 companies
June 30 .................................................
1 company
September 30 ........................................
1 company
October 31 ............................................
November 30 ........................................
2 companies
December 31 ......................................... 107 companies
51 companies
January 31 .............................................
7 companies
February 28 ...........................................
March 31 ............................................... 150 companies

(ii) The subsidiaries with balance sheets dated June 30,
September 30, November 30 are consolidated using the
financial statements as of March 31 for the purpose of
consolidation. The subsidiaries with balance sheets dated
October 31 are consolidated using the financial statements
as of January 31. Certain subsidiaries with balance sheets
dated December 31 and January 31 are consolidated using
the financial statements as of March 31. Other subsidiaries
are consolidated using them on their respective balance
sheet dates.
Appropriate adjustments were made for material transac-
tions during the periods between their respective balance
sheet dates and the consolidated closing date.

(d) Special purpose entities

(i) Outline of special purpose entities and transactions
SMBC, a consolidated subsidiary of SMFG, provides
credit lines, liquidity lines and loans to 13 special purpose
entities (“SPEs”) for their fund 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.
The combined assets and liabilities of the 13 SPEs as of
their most recent closing dates of 2013 were ¥1,994,975
million ($21,221 million) and ¥1,994,812 million
($21,219 million), respectively. SMBC has no voting rights
in the SPEs and sends no directors or employees.
(ii) The amount of principal transactions with the SPEs as
of and for the fiscal years ended March 31, 2013 and 2012
were as follows:

Millions of yen

2013

March 31
Loans and bills
discounted .................. ¥1,361,877 ¥1,486,284
723,383
Credit lines ...................
352,547
Liquidity lines ..............

715,809
460,059

2012

Year ended March 31
Interest on loans and
discounts ....................
Fees and commissions ...

Millions of yen

2013

2012

¥10,786
1,811

¥13,388
1,842

Millions of
U.S. dollars
2013

$14,487
7,614
4,894

Millions of
U.S. dollars
2013

$115
19

SMFGNotes to Consolidated Financial StatementsSMFG 2013(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. Profit and losses on trading-
purpose transactions are recognized on a trade date basis and
recorded as “Trading income” and “Trading losses” on the
consolidated statements of income.
Securities and monetary claims purchased for trading
purposes are stated at the fiscal year-end market value, and
financial 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.
“Trading income” and “Trading losses” include interest
received or paid during the fiscal year. The year-on-year
valuation differences of securities and monetary claims are
also recorded in the above-mentioned accounts. As for the
derivatives, assuming that the settlement will be made in
cash, the year-on-year valuation differences are also recorded in
the above-mentioned accounts.

(3) Securities

(a) 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 are carried at their average
market prices during the final month of the fiscal year, and
bonds and others are carried at their fiscal year-end market
prices (cost of securities sold is calculated using primarily
the moving-average method). However, other securities
which are 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, excluding those for trading purposes,
are carried at fair value.

(5) Depreciation

(a) Tangible fixed assets (excluding assets for rent and lease
assets)

Buildings owned by SMFG and SMBC are depreciated
using the straight-line method. 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.
(Changes in accounting policies which are difficult to
distinguish from changes in accounting estimates)
In accordance with the amendment of the Corporation Tax
Act, effective from the fiscal year ended March 31, 2013,
SMFG and its consolidated domestic subsidiaries have
changed their depreciation method for those tangible fixed
assets acquired on or after April 1, 2012. This change has
little impact on income before income taxes and minority
interests for the fiscal year ended March 31, 2013.

(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).

Assets for rent are depreciated using the straight-line
method, over the rental period or expected lifetime of
assets as the depreciation period and estimated disposal
values at the expiration date as salvage values.

(d) 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 terms are their expected lifetime and salvage values
are 0.

(6) Reserve for possible loan losses

The reserve for possible loan losses of major consolidated
subsidiaries is provided as detailed 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 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 in the
amount deemed necessary based on an overall solvency assess-
ment of the claims, net of the expected amount of recoveries
from collateral and guarantees.
Discounted cash flows (“DCF”) method is used for claims
on borrowers whose cash flows from collection of principals
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

SMFGNotes to Consolidated Financial StatementsSMFG 2013

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 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 based on the histori-
cal loan-loss ratio.
For claims originated in specific overseas countries, an
additional reserve is provided in the amount deemed necessary
based on the assessment of political and economic conditions.
Branches and credit supervision departments assess all
claims in accordance with the internal rules for self-assessment
of assets, and the Credit Review Department, independent
from these operating sections, audits their assessment.
The reserve for possible loan losses of SMFG and other
consolidated subsidiaries for general claims is provided in the
amount deemed necessary based on the historical loan-loss
ratios, and for doubtful claims in the amount deemed uncol-
lectible 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 ¥653,146
million ($6,948 million) and ¥685,871 million for the years
ended March 31, 2013 and 2012, 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 within the
employees’ average remaining service period at incurrence.
Unrecognized net actuarial gain or loss is amortized using
the straight-line method, primarily over 9 years within the
employees’ average remaining service period, commencing
from the next fiscal year of incurrence.
(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 losses on interest repayment

The reserve for losses 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 provided for
compensation for future eventual operational losses from
securities related transactions or derivative transactions, pursu-
ant 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 full term of the lease, based on the
contractual amount of lease fees per month.

Primarily, installment-sales-related income and installment-
sales-related expenses are recognized on a due-date basis over
the full 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

SMFGNotes to Consolidated Financial StatementsSMFG 2013the correlation between the hedged items and the hedging
instruments.
As for the individual hedges, SMBC also 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, 2013
and 2012 were ¥70 million ($1 million) and ¥309 million,
respectively. Gross amounts of deferred hedge gains on
“macro hedge” (before deducting tax effect) at March 31,
2013 and 2012 were ¥17 million ($0 million) and ¥188
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.

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

subsidiaries or internal transactions between trading
accounts and other accounts (or among internal sections),
SMBC manages the interest rate swaps and currency swaps
that are designated as hedging instruments in accordance
with the strict criteria for external transactions stipulated
in JICPA Industry Audit Committee Report No. 24 and
No. 25. Therefore, SMBC accounts for the gains or losses
that arise from interest rate swaps and currency swaps in its
earnings or defers them, rather than eliminating them.
Certain other consolidated subsidiaries apply the
deferred hedge accounting or fair value hedge accounting
or the special treatment for interest rate swaps.

(18) Amortization of goodwill

Goodwill on SMBC Friend Securities Co., Ltd., Sumitomo
Mitsui Finance and Leasing Company, Limited, SMBC Nikko
Securities Inc., Kansai Urban Banking Corporation, Cedyna
Financial Corporation and SMBC Consumer Finance Co., Ltd.
is amortized using the straight-line method over 20 years.
Goodwill related to SMBC Aviation Capital is amortized
using the straight-line method over 10 years. Goodwill on
other companies is charged or credited to income directly
when incurred.

(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) Unapplied Accounting Standards, etc.

(a) Revisions of Accounting Standard for Consolidated

Financial Statements (ASBJ Statement No. 22, revised on
March 25, 2011)
(i) Outline
A special purpose entity (“SPE”) that meets certain require-
ments was previously assumed not to be regarded as a
subsidiary of the entity that either had invested in the SPE
or assigned assets to the SPE. Following the revisions of
the aforementioned accounting standard, the treatment is
only applied to a case where a company has assigned assets
to an SPE.
(ii) Date of application
SMFG intends to adopt the revised accounting standard
from the fiscal year beginning on April 1, 2013.
(iii) Effects of adoption of the revised accounting standard
Effects of adoption of the revised accounting standard are
immaterial.

(b) Accounting Standard for Retirement Benefits (ASBJ

Statement No. 26, revised on May 17, 2012)
(i) Outline
The accounting standard has been revised in light of
improving financial reporting and trend toward interna-
tional convergence, mainly on i) changes in accounting
methods for unrecognized net actuarial gains or loss and
unrecognized prior service cost, and enhancement of disclo-
sure items; as well as ii) changes of calculation methods for
projected benefit obligation and service cost.

SMFGNotes to Consolidated Financial StatementsSMFG 2013
(ii) Date of application
SMFG intends to adopt i) to consolidated financial state-
ments as of the end of the fiscal year beginning on April
1, 2013, and to adopt ii) from the fiscal year beginning on

April 1, 2014.
(iii) Effects of adoption of the revised accounting standard
Effects of adoption of the revised accounting standard are
currently examined.

3. Trading Assets
Trading assets at March 31, 2013 and 2012 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 .............................................................................................

Millions of yen

2013
¥3,220,858
3,614
26,044
4,327,085
187,952
¥7,765,554

2012
¥4,027,609
3,419
19,503
3,888,692
257,718
¥8,196,944

Millions of
U.S. dollars
2013
$34,261
38
277
46,028
1,999
$82,603

4. Securities
Securities at March 31, 2013 and 2012 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
U.S. dollars
2013
$287,144
3,786
32,071
32,285
84,101
$439,387
*1 Unsecured loaned securities for which borrowers have the right to sell or pledge in the amount of ¥50,716 million ($539 million) and ¥51,022 million are included in Japanese

2013
¥26,994,438
355,883
3,015,019
3,035,072
7,906,318
¥41,306,731

2012
¥29,327,057
474,884
3,155,712
2,615,168
6,957,128
¥42,529,950

Millions of yen

government bonds and Japanese stocks in Securities and in trading securities in Trading assets at March 31, 2013 and 2012, 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,
¥1,238,199 million ($13,171 million) are pledged, and ¥821,378 million ($8,737 million) are held in hand at March 31, 2013. The respective amounts at March 31, 2012 were
¥1,961,135 million and ¥378,167 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 ¥1,823,931 million ($19,401 million) and ¥1,851,841 million at March 31, 2013 and 2012, respectively.

*3 Japanese stocks and other include investments in unconsolidated subsidiaries and affiliates of ¥257,871 million ($2,743 million) and ¥231,200 million at March 31, 2013 and 2012,

respectively.

*4 Japanese stocks and other include investments in jointly controlled entities of ¥125,057 million ($1,330 million) and ¥107,866 million at March 31, 2013 and 2012, respectively.

5. Loans and Bills Discounted

(1) Loans and bills discounted at March 31, 2013 and 2012 consisted of the following:

March 31
Bills discounted ...............................................................................................
Loans on notes .................................................................................................
Loans on deeds .................................................................................................
Overdrafts .......................................................................................................

Millions of yen

2013
¥ 199,057
2,163,861
56,620,452
6,648,720
¥65,632,091

2012
¥ 202,971
2,070,729
53,647,541
6,799,356
¥62,720,599

(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

2013

2012

¥ 55,479
1,130,562
16,044
484,963
¥1,687,049

¥ 74,218
1,145,347
22,502
562,882
¥1,804,951

Millions of
U.S. dollars
2013
$ 2,117
23,017
602,281
70,724
$698,139

Millions of
U.S. dollars
2013

$ 590
12,026
171
5,159
$17,945

SMFGNotes to Consolidated Financial StatementsSMFG 2013*1 “Bankrupt loans” are loans, after write-off, to legally bankrupt borrowers as defined in Articles 96-1-3 and 96-1-4 of the Enforcement Ordinance No. 97 of the Japanese Corporate

Tax Law (issued in 1965) and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest
because they are past due for a considerable period of time or for other reasons.

*2 “Non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are deferred in order to

support the borrowers’ recovery from financial difficulties.

*3 “Past due loans (3 months or more)” are loans on which the principal or interest is past due for 3 months or more, excluding “Bankrupt loans” and “Non-accrual loans.”
*4 “Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of interest

payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Bankrupt loans,” “Non-accrual
loans” and “Past due loans (3 months or more).”

(3) Bills discounted are accounted for as financial transactions in accordance with JICPA Industry Audit Committee Report No. 24. SMFG’s
banking subsidiaries have rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary bills and foreign
exchanges bought without restrictions. The total face value at March 31, 2013 and 2012 was ¥887,690 million ($9,443 million) and
¥754,204 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, 2013 and 2012 were
¥49,706,886 million ($528,740 million) and ¥47,220,313 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, 2013 and 2012 were ¥40,403,061 million
($429,774 million) and ¥39,753,611 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, 2013 and 2012 consisted of the following:

March 31
Prepaid expenses ..................................................................................................
Accrued income ...................................................................................................
Deferred assets .....................................................................................................
Financial derivatives* ..........................................................................................
Other ..................................................................................................................

* Referred to in Note 31

7. Tangible Fixed Assets
Tangible fixed assets at March 31, 2013 and 2012 consisted of the following:

Millions of yen

2013
¥ 38,273
290,923
819,984
785,820
2,432,633
¥4,367,634

2012
¥ 35,779
259,380
779,599
1,264,676
2,283,320
¥4,622,756

Millions of
U.S. dollars
2013
$ 407
3,095
8,722
8,359
25,876
$46,459

Millions of yen

March 31
Assets for rent*1 ...................................................................................................
Buildings ............................................................................................................
Land*2 .................................................................................................................
Lease assets ..........................................................................................................
Construction in progress ......................................................................................
Other tangible fixed assets ...................................................................................
Total ....................................................................................................................
Accumulated depreciation ...................................................................................
*1 “Assets for rent,” which was included in “Buildings,” “Land” and “Other tangible fixed assets” in the previous fiscal year, has been separately presented for the fiscal year ended March

2012
¥ 298,167
297,067
462,428
9,063
12,585
101,210
¥1,180,522
¥ 750,082

2013
¥1,102,755
298,620
455,420
9,065
20,123
97,786
¥1,983,772
¥ 857,513

31, 2013, since its materiality has been increased. To reflect this change in presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, ¥64,137 million, which was included in “Buildings,” ¥92,751 million, which was included in “Land,” and ¥141,278 million, which was included in “Other tangible
fixed assets” in the consolidated balance sheets for the previous fiscal year have been reclassified as “Assets for rent” of ¥298,167 million.

*2 Includes land revaluation excess referred to in Note 15.

Millions of
U.S. dollars
2013
$11,730
3,176
4,844
96
214
1,040
$21,102
$ 9,122

SMFGNotes to Consolidated Financial StatementsSMFG 20138. Intangible Fixed Assets
Intangible fixed assets at March 31, 2013 and 2012 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, 2013 and 2012 consisted of the following:

March 31
Assets pledged as collateral:

Millions of yen

2013
¥296,770
385,625
104
108,359
¥790,860

2012
¥282,797
397,537
200
119,237
¥799,773

Millions of yen

2013

2012

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 .............................................................................

¥ 207,675
496,342
1,744
2,528,418
5,343,900
1,649,598
5,463
12,496
790

20,968
1,045,000
2,067,392
3,520,709
502,841
1,202,622
41,407
125,009

¥ 294,382
490,255
7,096
3,715,510
7,281,341
2,572,382
7,740
14,336
4,412

19,144
825,000
1,676,902
5,180,034
513,941
4,312,097
10,149
109,212

Millions of
U.S. dollars
2013
$3,157
4,102
1
1,153
$8,413

Millions of
U.S. dollars
2013

$ 2,209
5,280
19
26,895
56,844
17,547
58
133
8

223
11,116
21,991
37,450
5,349
12,792
440
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, 2013 and 2012:

March 31
Cash and due from banks and Deposits with banks ..............................................
Trading assets ......................................................................................................
Securities .............................................................................................................
Loans and bills discounted ...................................................................................

2013
¥ 17,766
28,128
24,871,082
735,230

2012
¥ 23,993
86,879
24,367,992
—

Millions of yen

Millions of
U.S. dollars
2013
$ 189
299
264,558
7,821

Moreover, other assets included surety deposits, variation margins of futures market transactions, collateral money deposited for financial
instruments, and other variation margins, and the amount of at March 31, 2013 and 2012 is as follows.

March 31
Surety deposits ....................................................................................................
Variation margins of futures market transactions .................................................
Collateral money deposited for financial instruments ...........................................
Other variation margins.......................................................................................

2013
¥120,705
17,507
255,863
2,414

2012
¥124,516
17,906
—
66,197

Millions of yen

Millions of
U.S. dollars
2013
$1,284
186
2,722
26

SMFGNotes to Consolidated Financial StatementsSMFG 2013
10. Deposits
Deposits at March 31, 2013 and 2012 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, 2013 and 2012 consisted of the following:

March 31
Trading securities sold for short sales ...................................................................
Derivatives of trading securities ...........................................................................
Derivatives of securities related to trading transactions ........................................
Trading-related financial derivatives ....................................................................

Millions of yen

2013
¥ 8,232,048
42,424,870
704,081
6,106,278
27,687,948
11,755,654
3,926,583
¥100,837,465

2012
¥ 7,685,782
40,474,217
690,036
4,497,785
26,866,418
8,593,638
3,914,321
¥92,722,199

Millions of yen

2013
¥1,910,129
11,727
29,396
4,168,379
¥6,119,631

2012
¥2,172,857
7,453
17,455
4,050,294
¥6,248,061

Millions of
U.S. dollars
2013
$ 87,566
451,280
7,489
64,953
294,521
125,047
41,768
$1,072,625

Millions of
U.S. dollars
2013
$20,318
125
313
44,340
$65,096

12. Borrowed Money
Borrowed money at March 31, 2013 and 2012 consisted of the following:

March 31
Borrowed money*2 ...................................................... ¥4,979,460

2013

2012
¥8,839,648

Millions of yen

Millions of
U.S. dollars
2013
$52,967

Average
interest rate*1
2013
0.73%

Due
Jan. 2013–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 ¥314,450 million ($3,345 million) and ¥374,250 million at March 31, 2013 and 2012, respectively.

The repayment schedule over the next 5 years on borrowed money at March 31, 2013 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
2013
¥2,845,802
541,508
406,249
157,702
118,887

Millions of U.S. dollars
2013
$30,271
5,760
4,321
1,678
1,265

SMFGNotes to Consolidated Financial StatementsSMFG 2013
13. Bonds
Bonds at March 31, 2013 and 2012 consisted of the following:

March 31

Issuer

Description

SMBC:
Short-term bonds, payable in Yen ..........................

Straight bonds, payable in Yen ..............................

Straight bonds, payable in Euroyen ........................
Straight bonds, payable in U.S. dollars ..................

Straight bonds, payable in British pound sterling .....

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 ..............................

Straight bonds, payable in U.S. dollars ..................

Straight bonds, payable in Renminbi .....................

Subordinated bonds, payable in Yen ......................
Short-term bonds, payable in Yen ..........................

Millions of yen*1

2013

2012

Millions of
U.S. dollars
2013

Interest rate*2
(%)
2013

Due

¥ 20,000
[20,000]
1,070,929
[187,091]
12,900
1,138,357
($12,108,898 thousand)
[155,095]
35,772
(£250,000 thousand)
116,439
(A$1,189,854 thousand)

1,339,476
[109,491]
229,400
169,904
($1,807,298 thousand)

129,375
(€1,072,231 thousand)

349,386
[58,950]
—

16,665
(RMB¥1,100,000 thousand)
[3,030]
142,200
1,106,300
[1,106,300]
¥5,877,106

¥ 19,999
[19,999]
1,233,795
[216,897]
15,900
574,424
($6,994,089 thousand)

$ 213

0.08

Apr. 2013

11,392

0.09571–1.36

Apr. 2013–Sep. 2024

137
12,109

0.00–1.57789
0.9–3.95

Mar. 2036–Feb. 2037
Jul. 2013–Jan. 2023

—

381

1.05688

Mar. 2016

82,799
(A$969,891 thousand)
[46,096]
1,586,411
[39,999]
346,494
209,352
($2,549,037 thousand)
[61,341]
117,717
(€1,072,787 thousand)

265,916
[49,700]
60,496
($500,000 thousand)
[60,496]
6,520
(RMB¥500,000 thousand)

1,239

3.29–4.28

Dec. 2014–Dec. 2016

14,248

0.87–2.8

Aug. 2013–Dec. 2026

2,440
1,807

0.71–2.97
4.85–5.625

Jun. 2018–Perpetual
Mar. 2022–Perpetual

1,376

4–4.375

Nov. 2020–Perpetual

3,716

0.23446–16.6

Apr. 2013–Mar. 2043

—

177

—

2.5–4

Sep. 2013–Aug. 2015

142,099
929,388
[929,388]
¥5,591,316

1,513
11,768

$62,516

2.19–4.5
0.1–0.43

Aug. 2018–Perpetual
Apr. 2013–Dec. 2013

*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, 2013 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
2013
¥1,639,996
470,638
876,578
566,214
401,556

Millions of U.S. dollars
2013
$17,445
5,006
9,324
6,023
4,271

SMFGNotes to Consolidated Financial StatementsSMFG 201314. Other Liabilities
Other liabilities at March 31, 2013 and 2012 consisted of the following:

March 31
Accrued expenses .................................................................................................
Unearned income .................................................................................................
Income taxes payable ...........................................................................................
Financial derivatives*1 .........................................................................................
Lease liabilities*2 .................................................................................................
Other ..................................................................................................................

Millions of yen

2013
¥ 155,892
148,938
206,968
932,404
97,954
2,447,635
¥3,989,794

2012
¥ 137,287
154,480
59,789
895,750
54,169
3,461,483
¥4,762,961

Millions of
U.S. dollars
2013
$ 1,658
1,584
2,202
9,918
1,042
26,036
$42,440

*1 Referred to in Note 31
*2 Average interest rate on lease liabilities for the year ended March 31, 2013 was 4.25%. 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, 2013 was as follows:

Millions of yen
2013
¥19,801
16,224
13,440
9,865
8,310

Millions of U.S. dollars
2013
$211
173
143
105
88

15. Land Revaluation Excess
SMBC and another consolidated subsidiary revaluated their own land
for business activities in accordance with “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

Another 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).

Another 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).

16. Capital Stock
Capital stock consists of common stock and preferred stock. Common stock and preferred stock at March 31, 2013 and 2012 were as follows:

Number of shares

2013

2012

March 31
Common stock ........................................................................................ 3,000,000,000 1,414,055,625
—
Preferred stock (Type 5) ...........................................................................
—
Preferred stock (Type 6) ...........................................................................
—
Preferred stock (Type 7) ...........................................................................
—
Preferred stock (Type 8) ...........................................................................
Preferred stock (Type 9) ...........................................................................
—
Total ........................................................................................................ 3,000,634,001 1,414,055,625

167,000
70,001
167,000
115,000
115,000

Authorized

Issued

Authorized

Issued

3,000,000,000 1,414,055,625
—
—
—
—
—
3,000,634,001 1,414,055,625

167,000
70,001
167,000
115,000
115,000

SMFGNotes to Consolidated Financial StatementsSMFG 2013

17. Fees and Commissions
Fees and commissions for the fiscal years ended March 31, 2013 and 2012 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

2013

2012

¥ 112,723
130,742
91,999
18,172
5,991
79,376
225,444
162,951
212,725
¥1,040,126

¥ 44,244
87,712
¥ 131,957

¥ 92,397
126,984
90,350
18,896
6,325
71,066
208,853
142,940
197,865
¥955,680

¥ 33,301
98,797
¥132,099

18. Trading Income
Trading income for the fiscal years ended March 31, 2013 and 2012 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

2013
¥202,087
4,286
—
367
¥206,741

2012
¥114,978
7,634
74,328
1,251
¥198,192

19. Other Operating Income
Other operating income for the fiscal years ended March 31, 2013 and 2012 consisted of the following:

Year ended March 31
Gains on sale of bonds .........................................................................................
Gains on redemption of bonds .............................................................................
Lease-related income ............................................................................................
Gains on foreign exchange transactions ................................................................
Other ..................................................................................................................

Millions of yen

2013
¥ 161,423
114
879,822
125,348
117,068
¥1,283,776

2012
¥ 176,344
119
789,509
23,270
121,322
¥1,110,566

20. Other Operating Expenses
Other operating expenses for the fiscal years ended March 31, 2013 and 2012 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 financial derivatives ..............................................................................
Other ..................................................................................................................

Millions of yen

2013
¥ 34,825
6,614
12
3,235
781,211
6,040
128,239
¥960,179

2012
¥ 13,616
5,692
—
2,528
718,104
2,537
138,518
¥880,998

Millions of
U.S. dollars
2013

$ 1,199
1,391
979
193
64
844
2,398
1,733
2,263
$11,064

$ 471
933
$ 1,404

Millions of
U.S. dollars
2013
$2,150
46
—
4
$2,199

Millions of
U.S. dollars
2013
$ 1,717
1
9,359
1,333
1,245
$13,656

Millions of
U.S. dollars
2013
$ 370
70
0
34
8,310
64
1,364
$10,214

SMFGNotes to Consolidated Financial StatementsSMFG 201321. Other Income
Other income for the fiscal years ended March 31, 2013 and 2012 consisted of the following:

Year ended March 31
Gains on sale of stocks and other securities ..........................................................
Gains on money held in trust ...............................................................................
Equity in gains of affiliates ..................................................................................
Gains on disposal of fixed assets ...........................................................................
Recoveries of written-off claims ...........................................................................
Gains on step acquisitions ...................................................................................
Other ..................................................................................................................

Millions of yen

2013
¥38,412
71
5,309
240
10,436
140
32,168
¥86,780

2012
¥15,654
10
—
2,741
4,800
25,050
27,014
¥75,272

22. Other Expenses
Other expenses for the fiscal years ended March 31, 2013 and 2012 consisted of the following:

Year ended March 31
Write-off of loans.................................................................................................
Losses on sale of stocks and other securities ..........................................................
Losses on devaluation of stocks and other securities ..............................................
Losses on money held in trust ..............................................................................
Losses on sale of delinquent loans .........................................................................
Equity in losses of affiliates ..................................................................................
Losses on disposal of fixed assets ..........................................................................
Losses on impairment of fixed assets* ..................................................................
Other ..................................................................................................................

*Losses on impairment of fixed assets consisted of the following:

Millions of yen

2013
¥133,639
29,440
29,944
1,659
10,532
—
5,721
4,314
67,614
¥282,867

2012
¥ 90,305
11,659
31,875
1,474
25,364
31,122
6,507
3,861
89,008
¥291,179

Millions of
U.S. dollars
2013
$409
1
56
3
111
1
342
$923

Millions of
U.S. dollars
2013
$1,422
313
319
18
112
—
61
46
719
$3,009

Year ended
March 31
Tokyo metropolitan area ........................................ Branches (—)

Area

Purpose of use
2013

Kinki area ............................................................. Branches (5 branches)
Idle assets (34 items)
Other (2 items)

Idle assets (47 items)
Other (2 items)

Type
Land and buildings, etc.

Land and buildings, etc.

Other .................................................................... Branches (—)

Land and buildings, etc.

Idle assets (12 items)
Other (1 item)

Millions of yen

2013

2012
¥ — ¥ 198
1,168
2,523
58
55
393
206
1,630
1,169
2
22
27
—
381
274
—
62

Millions of
U.S. dollars
2013
$—
27
1
2
12
0
—
3
1

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 SMFG and other consolidated subsidiaries, a branch or other group is the small-
est asset grouping unit as well.
SMBC and other consolidated 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 idle assets, and other consolidated subsidiaries reduced the carrying amounts of their
branches and idle assets. The recoverable amount is calculated using net realizable value which is basically determined by subtracting the
expected disposal cost from the appraisal value based on the Real Estate Appraisal Standard.

SMFGNotes to Consolidated Financial StatementsSMFG 201323. Other Comprehensive Income
Reclassification adjustment and tax effect of other comprehensive income

Years ended March 31
Net unrealized gains on other securities:

Amount arising during the fiscal year ..............................................................
Reclassification adjustment ..............................................................................
Before adjustment to tax effect .....................................................................
Tax effect .....................................................................................................
Net unrealized gains on other securities .......................................................

Net deferred losses on hedges:

Amount arising during the fiscal year ..............................................................
Reclassification adjustment ..............................................................................
Adjustment on the cost of the assets ................................................................
Before adjustment to tax effect .....................................................................
Tax effect .....................................................................................................
Net deferred losses on hedges .......................................................................

Land revaluation excess:

Amount arising during the fiscal year ..............................................................
Reclassification adjustment ..............................................................................
Before adjustment to tax effect .....................................................................
Tax effect .....................................................................................................
Land revaluation excess ................................................................................

Foreign currency translation adjustments:

Amount arising during the fiscal year ..............................................................
Reclassification adjustment ..............................................................................
Before adjustment to tax effect .....................................................................
Tax effect .....................................................................................................
Foreign currency translation adjustments .....................................................

Share of other comprehensive income of affiliates

Amount arising during the fiscal year ..............................................................
Reclassification adjustment ..............................................................................
Before adjustment to tax effect .....................................................................
Tax effect .....................................................................................................
Share of other comprehensive income of affiliates .........................................
Total other comprehensive income ............................................................

Millions of yen

2013

2012

¥696,090
(78,619)
617,471
(171,793)
445,678

(4,728)
3,658
(260)
(1,329)
253
(1,076)

—
—
—
—
—

99,611
15
99,626
—
99,626

(1,135)
(3,051)
(4,187)
—
(4,187)
¥540,041

¥241,713
(136,762)
104,950
(35,846)
69,103

(26,643)
(7,882)
(16)
(34,543)
11,578
(22,964)

—
—
—
5,613
5,613

(24,429)
1,059
(23,369)
(126)
(23,496)

(7,105)
2,453
(4,651)
—
(4,651)
¥ 23,605

Millions of
U.S. dollars
2013

$7,404
(836)
6,568
(1,827)
4,741

(50)
39
(3)
(14)
3
(11)

—
—
—
—
—

1,060
0
1,060
—
1,060

(12)
(32)
(45)
—
(45)
$5,745

SMFGNotes to Consolidated Financial StatementsSMFG 201324. Deferred Tax Assets and Liabilities

(1) Significant components of deferred tax assets and liabilities at March 31, 2013 and 2012 were as follows:

March 31
Deferred tax assets:

Millions of yen

2013

2012

Reserve for possible loan losses ...............................................................
Net operating loss carryforwards ............................................................
Write-off of securities ............................................................................
Write-off of loans ...................................................................................
Reserve for employee retirement benefits ...............................................
Net unrealized gains on other securities .................................................
Net deferred losses on hedges .................................................................
Depreciation ..........................................................................................
Other .....................................................................................................
Subtotal .................................................................................................
Valuation allowance ...............................................................................
Total deferred tax assets .........................................................................

Deferred tax liabilities:

Net unrealized losses on other securities .................................................
Gains on securities contributed to employee retirement benefits trust ....
Leveraged lease ......................................................................................
Securities returned from employee retirement benefits trust ...................
Undistributed earnings of subsidiaries ...................................................
Other .....................................................................................................
Total deferred tax liabilities ...................................................................
Net deferred tax assets ...............................................................................

¥ 483,074
364,406
211,445
127,601
65,743
20,182
18,667
15,346
207,499
1,513,968
(735,017)
778,950

(313,945)
(38,524)
(18,725)
(10,708)
(9,232)
(81,676)
(472,812)
¥ 306,137

¥ 506,971
383,270
224,012
115,438
68,402
39,485
18,425
12,554
212,036
1,580,597
(942,722)
637,874

(146,715)
(38,524)
(19,692)
(9,298)
(5,684)
(67,776)
(287,692)
¥ 350,182

Millions of
U.S. dollars
2013

$ 5,139
3,876
2,249
1,357
699
215
199
163
2,207
16,104
(7,818)
8,286

(3,339)
(410)
(199)
(114)
(98)
(869)
(5,029)
$ 3,256

(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 38.01 and 40.69% for the years ended March 31, 2013 and 2012, respectively.
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, 2013 and 2012 was as follows:
March 31
Statutory tax rate ...............................................................................................................................
Valuation allowance .......................................................................................................................
Difference in the effective statutory tax rate between SMFG and
consolidated overseas subsidiaries .................................................................................................
Dividends exempted for income tax purposes .................................................................................
Gains on step acquisitions ..............................................................................................................
Equity in (gains) losses of affiliates .................................................................................................
Effects of changes in the corporate income tax rate .........................................................................
Other .............................................................................................................................................
Effective income tax rate ....................................................................................................................

(3.61)
(0.99)
—
(0.19)
1.19
(0.63)
13.72%

—
(1.15)
(1.07)
1.33
4.42
0.21
32.67%

2013
38.01%
(20.06)

2012
40.69%
(11.76)

SMFGNotes to Consolidated Financial StatementsSMFG 201325. Changes in Net Assets

(1) Type and number of shares issued and treasury stock are as follows:

Year ended March 31, 2013
Shares issued

March 31,
2012

Number of shares

Increase

Decrease

March 31,
2013

Common stock ................................................... 1,414,055,625
Total .............................................................. 1,414,055,625

—
—

1,414,055,625
1,414,055,625

Treasury stock

Common stock ...................................................
Total ..............................................................

62,939,559
62,939,559

88,729*1
88,729

2,848,912*2
2,848,912

60,179,376
60,179,376

*1 Increase of 88,729 shares in the number of treasury common stock due to increase of 85,533 shares through purchase of fractional shares, increase of 396 shares through

acquisition of fractional shares incurred as a result of a share exchange associated with SMBC Consumer Finance Co., Ltd. (formerly Promise Co., Ltd.) becoming a wholly-
owned subsidiary and increase of 2,800 shares through acquisition of treasury stock associated with dissenting shareholders’ share purchase demand against such share
exchange.

*2 Decrease of 2,848,912 shares in number of treasury common stock due to sale of fractional shares, reduction of 8,836 shares through exercise of stock options and reduction
of 2,840,076 shares through the issuance of treasury stock as a result of a share exchange associated with SMBC Consumer Finance Co., Ltd. (formerly Promise Co., Ltd.)
becoming a wholly-owned subsidiary.

Year ended March 31, 2012
Shares issued

March 31,
2011

Number of shares

Increase

Decrease

March 31,
2012

Common stock ................................................... 1,414,055,625
70,001
Preferred stock (First series Type 6) ....................
Total .............................................................. 1,414,125,626

—
—
—

—
70,001*1
70,001

1,414,055,625
—
1,414,055,625

Treasury stock

Common stock ...................................................
Preferred stock (First series Type 6) ....................
Total ..............................................................

32,581,914
—
32,581,914

45,686,368*2
70,001*1

45,756,369

15,328,723*2
70,001*1

15,398,724

62,939,559
—
62,939,559

*1 Increase in number of treasury stock of the First Series Type 6 Preferred Stock:

• 70,001 shares due to acquisition of the treasury stock that was executed on April 1, 2011 in accordance with the provision of Article 18 of the Articles of Incorporation of

SMFG

Decrease in number of both treasury stock and shares issued of the First Series Type 6 Preferred Stock:
• 70,001 shares respectively due to cancellation of those shares that was executed on April 1, 2011
*2 Increase in number of treasury common shares issued:

• 45,686,368 shares due to purchase of fractional shares and also acquisition of SMFG shares through market purchases in accordance with the provision of Article 8 of the
Articles of Incorporation of SMFG that were subsequently delivered to the shareholders of SMBC Consumer Finance Co., Ltd. (formerly Promise Co., Ltd.) in consider-
ation for a share exchange

Decrease in number of treasury common shares issued:
• 15,328,723 shares due to reduction of 7,363 shares through sale of fractional shares and exercise of stock options and reduction of 15,321,360 shares through the alloca-
tion of SMFG shares held by SMFG Card & Credit, Inc., a consolidated subsidiary of SMFG for the purpose of acquiring 100% stake of Cedyna Financial Corporation, to
the shareholders of Cedyna Financial Corporation on May 1, 2011, and sale of SMFG shares by consolidated subsidiaries

SMFGNotes to Consolidated Financial StatementsSMFG 2013Effective date
June 29, 2011
June 29, 2011

Effective date

(2) Information on stock acquisition rights is as follows:

Year ended March 31, 2013
SMFG ..............................
Consolidated subsidiaries ...
Total ................................

Year ended March 31, 2012
SMFG ..............................
Consolidated subsidiary ...
Total ................................

Detail of stock
acquisition rights
Stock options
—

Type of
shares
—
—

March 31,
2012
—
—

Number of shares

Increase
—
—

Decrease
—
—

March 31,
2013
—
—

Detail of stock
acquisition rights
Stock options
—

Type of
shares
—
—

March 31,
2011
—
—

Number of shares

Increase
—
—

Decrease
—
—

March 31,
2012
—
—

Millions of
U.S. dollars
March 31,
2013
$12
1
$13

Millions of yen
March 31,
2013
¥1,140
120
¥1,260

Millions of yen
March 31,
2012
¥598
94
¥692

(3) Information on dividends is as follows:

(a) Dividends paid in the fiscal year ended March 31, 2012

Type of shares
Common stock ......................................................
Preferred stock (First series Type 6) ........................

Aggregate amount
of dividends
¥70,514
3,097

Millions of yen, except per share amount
Cash dividends
per share
¥ 50
44,250

Record date
March 31, 2011
March 31, 2011

Date of resolution: Ordinary general meeting of shareholders held on June 29, 2011

Type of shares
Common stock ......................................................

Aggregate amount
of dividends
¥70,514

Date of resolution: Meeting of the Board of Directors held on November 14, 2011

Millions of yen, except per share amount
Cash dividends
per share
¥50

Record date

September 30, 2011 December 2, 2011

(b) Dividends paid in the fiscal year ended March 31, 2013

Type of shares
Common stock ......................................................

Aggregate amount
of dividends
¥68,230

Millions of yen, except per share amount
Cash dividends
per share
¥50

Record date
March 31, 2012

Effective date
June 28, 2012

Date of resolution: Ordinary general meeting of shareholders held on June 28, 2012

Type of shares
Common stock ......................................................

Aggregate amount
of dividends
¥70,513

Date of resolution: Meeting of the Board of Directors held on November 14, 2012

Millions of yen, except per share amount
Cash dividends
per share
¥50

Record date

September 30, 2012 December 4, 2012

Effective date

Type of shares
Common stock ......................................................

Aggregate amount
of dividends
¥98,713

Date of resolution: Ordinary general meeting of shareholders held on June 27, 2013
* Cash dividends per share of ¥70 includes ¥10 of the commemorative dividend.

Millions of yen, except per share amount
Source
of dividends
Retained earnings

Cash dividends
per share
¥70*

Record date

Effective date
March 31, 2013 June 27, 2013

SMFGNotes to Consolidated Financial StatementsSMFG 2013
26. Cash Flows
Fiscal year ended March 31, 2013

8 companies including SMBC Aviation Capital Limited were newly consolidated following the acquisition of shares by SMBC and Sumitomo
Mitsui Finance and Leasing Company, Limited. Major assets and liabilities as of the beginning of consolidation and a summary of share
acquisition cost and net expenses for the acquisition are as follows:

Assets ...................................................................................................................................
[Tangible fixed assets] .......................................................................................................
Liabilities .............................................................................................................................
[Borrowed money] ............................................................................................................
Minority interests .................................................................................................................
Goodwill ..............................................................................................................................

Millions of yen
¥668,091
568,479
(571,377)
(478,581)
(9,453)
7,484

Stock acquisition cost of the 8 companies .............................................................................
Cash and cash equivalents of the 8 companies .......................................................................

94,745
—

Difference: Expenses required for acquisition of the 8 companies ..........................................

¥ 94,745

Millions of U.S. dollars

$7,107
6,047
(6,078)
(5,091)
(101)
80

1,008
—

$1,008

Fiscal year ended March 31, 2012

7 companies including SMBC Consumer Finance Co., Ltd. (formerly Promise Co., Ltd.) were newly consolidated following a tender offer by
SMBC for shares and a subscription by SMFG for new shares by way of a third-party allotment. Major assets and liabilities as of the begin-
ning of consolidation and a summary of share acquisition cost and net expenses for the acquisition are as follows:
Millions of yen
¥1,671,681
795,148
564,528
(1,511,980)
(300,884)
(367,220)
(564,528)
(56)
(3,576)
57,300

Assets ...................................................................................................................................
[Loans and bills discounted] ..............................................................................................
[Customers’ liabilities for acceptances and guarantees] ......................................................
Liabilities .............................................................................................................................
[Borrowed money] ............................................................................................................
[Reserve for losses on interest repayment] .........................................................................
[Acceptances and guarantees] ............................................................................................
Stock acquisition rights ........................................................................................................
Minority interests .................................................................................................................
Goodwill ..............................................................................................................................

Stock acquisition cost of the 7 companies .............................................................................
Cash and cash equivalents of the 7 companies .......................................................................
Fair value of common stock of SMBC Consumer Finance Co., Ltd. owned before business
combination .......................................................................................................................
Fair value of common stock of SMBC Consumer Finance Co., Ltd. additionally acquired
through subscription for shares issued by way of third-party allotment ...............................

213,369
(4,300)

(21,699)

(119,999)

Difference: Expenses required for acquisition of the 7 companies ..........................................

¥ 67,369

SMFGNotes to Consolidated Financial StatementsSMFG 201327. Employee Retirement Benefits

(1) Outline of employee retirement benefits

Consolidated subsidiaries in Japan have contributory funded defined-benefit pension plans such as employee pension plans and lump-
sum severance indemnity plans. Certain domestic consolidated subsidiaries in Japan adopt the defined-contribution pension plan and
have a general type of employee pension plans. They may grant additional benefits 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) ...................................

2013
¥(1,117,085)
1,036,130
(80,955)
262,349
(1,254)

(F)=(C)+(D)+(E) ..............
(G) ..................................
(F)–(G) ...........................

180,139
224,719
¥ (44,579)

Note: Some consolidated subsidiaries adopt the simple method in calculating the projected benefit obligation.

2012
¥(990,449)
902,254
(88,194)
261,128
(6,624)

166,309
212,221
¥ (45,911)

(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 ..........................................................................................................

2013
¥25,350
23,988
(27,788)
29,296
(4,773)
6,201
¥52,274

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.”

2012
¥24,646
24,013
(27,169)
38,736
(6,542)
5,136
¥58,820

(4) Assumptions

Millions of
U.S. dollars
2013
$(11,883)
11,021
(861)
2,791
(13)

1,916
2,390
$ (474)

Millions of
U.S. dollars
2013

$270
255
(296)
312
(51)
66
$556

The principal assumptions used in determining benefit obligation and pension expenses at or for the fiscal years ended March 31, 2013
and 2012 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

2012
1.15% to 2.5%
4.7% to 7.0%
0% to 4.1%
3.8% to 5.5%

0.9% to 2.0%
4.1% to 6.0%
0% to 4.3%
3.8% to 4.5%

2013

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, 2013 and 2012.
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, 2013 and 2012.

SMFGNotes to Consolidated Financial StatementsSMFG 2013
28. Lease Transactions

(1) Financing leases
(a) Lessee side

(i) Lease assets
Tangible fixed assets mainly consisted of branches, data centers 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.

(b) Lessor side

(i) Breakdown of lease investment assets

March 31
Lease receivables ...................................................................................
Residual value ......................................................................................
Unearned interest income .....................................................................
Total .....................................................................................................

2013
¥1,123,573
88,530
(164,413)
¥1,047,691

2012
¥1,172,940
89,463
(179,638)
¥1,082,766

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 .....................................................................................................

2013
¥244,425
153,383
101,441
73,707
37,667
111,437
¥722,062

2012
¥229,520
172,714
95,022
60,591
46,063
93,592
¥697,504

Lease payments receivable related to investment assets

Millions of yen

2013
¥ 355,846
246,504
186,131
127,014
73,846
134,230
¥1,123,573

2012
¥ 365,967
283,506
185,126
126,973
73,022
138,342
¥1,172,940

Millions of
U.S. dollars
2013
$11,952
942
(1,749)
$11,144

Millions of
U.S. dollars
2013
$2,600
1,632
1,079
784
401
1,185
$7,681

Millions of
U.S. dollars
2013
$ 3,785
2,622
1,980
1,351
786
1,428
$11,952

(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, 2013 and 2012 were ¥5,940 million ($63 million)
and ¥8,849 million, respectively, 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, 2013 and 2012 were as follows:

March 31
Due within 1 year .................................................................................
Due after 1 year ....................................................................................
Total .....................................................................................................

2013
¥ 45,180
286,516
¥331,697

2012
¥ 42,247
294,411
¥336,658

Millions of yen

Millions of
U.S. dollars
2013
$ 481
3,048
$3,528

SMFGNotes to Consolidated Financial StatementsSMFG 2013(b) Lessor side

Future minimum lease payments on operating leases which were not cancelable at March 31, 2013 and 2012 were as follows:

2013
¥113,679
467,799
¥581,478

2012
¥ 35,329
158,814
¥194,143

Millions of yen

Millions of
U.S. dollars
2013
$1,209
4,976
$6,185

Future lease payments receivable on operating leases which were not cancelable at March 31, 2013 and 2012 amounting to ¥0
million ($0 million) and ¥0 million, respectively, on the lessor side were pledged as collateral for borrowings.

29. Financial Instruments

(1) Status of financial instruments

(a) Policies on financial instruments

The Group conducts banking and other financial services
such as leasing, securities, consumer finance, and system
development and information processing. Its banking
business includes deposit taking, lending, securities trad-
ing and investment, remittance, foreign exchange, bond
subscription agent, trust business, and over-the-counter
sales of securities investment trusts and insurance products.
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”). At SMBC, SMFG’s major
consolidated subsidiary, derivative transactions for ALM
purposes are undertaken by the Treasury Department and
the International Treasury Department of the Treasury
Unit, while derivative transactions for trading purposes
are undertaken by the Trading Department of the Treasury
Unit.

(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.

(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

SMFGNotes to Consolidated Financial StatementsSMFG 2013framework, 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
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

SMFGNotes to Consolidated Financial StatementsSMFG 2013

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
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. Regarding banking book (market opera-
tions for generating profit through management of
interest rates, terms, and other aspects of assets (loans,
bonds, etc.) and liabilities (deposits, etc.)) and trading
book (market operations for generating profit by
taking advantage of short-term fluctuations in market
values and differences in value among markets), SMBC
calculates the maximum loss that may occur as a result
of market fluctuations in one day with a probability
of 1% based on four years of historical observation.
Concerning the holding of shares (listed shares) for the
purpose of strategic investment, SMBC calculates the
maximum loss that may occur as a result of market
fluctuation in one year with a probability of 1% based
on ten years of historical observation.
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, 2013, total VaR of SMBC and other
major consolidated subsidiaries was ¥31.1 billion in the
banking book, ¥15.0 billion in the trading book and
¥977.4 billion in the holding of 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 fluctuating
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

SMFGNotes to Consolidated Financial StatementsSMFG 2013

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.

(2) Fair value of financial instruments

(a) “Consolidated balance sheet amount,” “Fair value” and “Net unrealized gains (losses)” of financial instruments as of March 31,

2013 and 2012 are as follows. The amounts shown in the following table do not include financial instruments whose fair values are
extremely difficult to determine, such as unlisted stocks classified as “other securities,” and stocks of subsidiaries and affiliates.

March 31

1) Cash and due from banks and Deposits with banks*1 .......................
2) Call loans and bills bought*1 ...........................................................
3) Receivables under resale agreements ................................................
4) Receivables under securities borrowing transactions ........................
5) Monetary claims bought*1 ...............................................................
6) Trading assets

Securities classified as trading purposes ........................................
7) Money held in trust .........................................................................
8) Securities

Bond classified as held-to-maturity ..............................................
Other securities ...........................................................................
9) Loans and bills discounted ...............................................................
Reserve for possible loan losses*1 .................................................

10) Foreign exchanges*1 ........................................................................
11) Lease receivables and investment assets*1 .........................................
Total assets ......................................................................................
1) Deposits ..........................................................................................
2) Negotiable certificates of deposit .....................................................
3) Call money and bills sold .................................................................
4) Payables under repurchase agreements .............................................
5) Payables under securities lending transactions .................................
6) Commercial paper ...........................................................................
7) Trading liabilities

Trading securities sold for short sales ...........................................
8) Borrowed money .............................................................................
9) Foreign exchanges ...........................................................................
10) Short-term bonds .............................................................................
11) Bonds ..............................................................................................
12) Due to trust account ........................................................................
Total liabilities ................................................................................
Derivative transactions*2

Consolidated balance
sheet amount
¥ 10,790,611
1,352,783
273,217
3,494,398
1,533,638

3,408,810
22,789

5,840,512
34,597,867
65,632,091
(695,077)
64,937,014
2,220,409
1,674,220
¥130,146,271
¥ 89,081,811
11,755,654
2,954,051
2,076,791
4,433,835
1,499,499

1,910,129
4,979,460
337,901
1,126,300
4,750,806
643,350
¥125,549,591

Millions of yen
2013

Fair value
¥ 10,798,156
1,354,011
274,216
3,494,398
1,545,517

3,408,810
22,789

5,901,662
34,597,867

66,306,879
2,224,866
1,742,524
¥131,671,699
¥ 89,084,089
11,755,929
2,954,050
2,076,791
4,433,835
1,499,503

1,910,129
5,016,127
337,901
1,126,291
4,920,741
643,350
¥125,758,742

Hedge accounting not applied .....................................................
Hedge accounting applied ...........................................................
Total ................................................................................................

¥ 167,039
[166,382]
¥ 657

Net unrealized gains
(losses)
¥ 7,544
1,228
998
—
11,879

—
—

61,150
—

1,369,865
4,457
68,303
¥1,525,427
¥ 2,277
275
(0)
—
—
4

—
36,666
—
(8)
169,935
—
¥ 209,150

¥ —
—
¥ —

100

SMFGNotes to Consolidated Financial StatementsSMFG 2013March 31

Securities classified as trading purposes ........................................
7) Money held in trust .........................................................................
8) Securities

Consolidated balance
sheet amount
¥ 7,711,078
1,290,685
227,749
4,539,555
1,354,400

4,285,328
23,878

5,277,668
36,403,944
62,720,599
(757,820)
61,962,778
1,276,510
1,690,977
¥126,044,556
¥ 84,128,561
8,593,638
2,144,599
1,676,902
5,810,730
1,193,249

2,172,857
8,839,648
302,580
949,388
4,641,927
443,723
¥120,897,808

Millions of yen
2012

Fair value
¥ 7,715,673
1,291,614
228,471
4,539,555
1,360,792

4,285,328
23,878

5,346,853
36,403,944

63,076,899
1,281,154
1,771,120
¥127,325,285
¥ 84,136,544
8,593,118
2,144,599
1,676,902
5,810,730
1,193,249

2,172,857
8,856,720
302,580
949,385
4,771,814
443,723
¥121,052,227

¥ [102,744]
308,082
¥ 205,338

Net unrealized gains
(losses)
¥ 4,594
928
722
—
6,391

—
—

69,184
—

1,114,120
4,643
80,143
¥1,280,729
¥ 7,982
(519)
(0)
—
—
—

—
17,072
—
(3)
129,886
—
¥ 154,418

¥ —
—
¥ —

101

SMFGNotes to Consolidated Financial StatementsSMFG 2013Millions of U.S. dollars
2013

March 31

Securities classified as trading purposes ........................................
7) Money held in trust .........................................................................
8) Securities

Consolidated balance
sheet amount
$ 114,782
14,390
2,906
37,170
16,314

36,260
242

62,126
368,023
698,139
(7,394)
690,746
23,619
17,809
$1,384,388
$ 947,578
125,047
31,423
22,091
47,163
15,950

20,318
52,967
3,594
11,981
50,535
6,843
$1,335,492

Fair value
$ 114,862
14,403
2,917
37,170
16,440

36,260
242

62,777
368,023

705,317
23,666
18,536
$1,400,614
$ 947,602
125,050
31,423
22,091
47,163
15,950

20,318
53,357
3,594
11,981
52,343
6,843
$1,337,717

$ 1,777
[1,769]
$ 7

Net unrealized gains
(losses)
$ 80
13
11
—
126

—
—

650
—

14,571
47
727
$16,226
$ 24
3
(0)
—
—
0

—
390
—
(0)
1,808
—
$ 2,225

$ —
—
$ —

*1 The amounts 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. Debts and credits arising from derivative transactions are presented on a net basis, with a net debt
presented in square brackets.

(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

102

SMFGNotes to Consolidated Financial StatementsSMFG 2013bankrupt 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.

103

SMFGNotes to Consolidated Financial StatementsSMFG 2013
(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

2013

2012

Millions of U.S.
dollars
2013

Monetary claims bought without market prices*1 ........................................

¥ 5,845

¥ 6,062

$ 62

Securities:

Unlisted stocks, etc.*2, 4 ..............................................................................
Investments in partnership, etc.*3, 4 .............................................................
Total ................................................................................................................
*1 They are beneficiary claims that (a) behave more like equity than debt, (b) do not have market prices, and (c) it is difficult to rationally estimate fair values.
*2 They are 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 They are 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

268,535
341,945
¥616,326

271,149
345,987
¥623,198

2,856
3,637
$6,556

changes in their balance sheets and statements of income.

*4 Unlisted stocks and investments in partnership totaling ¥5,603 million ($60 million) and ¥9,292 million were written-down in the fiscal years ended March 31, 2013 and 2012,

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
¥ 9,772,670
1,333,721
205,025
3,494,398
1,013,317
9,733,436
1,314,759
1,180,000
57,477
77,282
—
8,418,676
6,935,299
28,145
527,501
927,729
14,162,034
2,221,938
529,689
¥42,466,232

Millions of yen
2013

After 1 year
through 5 years
¥ 11,211
20,024
68,192
—
216,129
23,314,246
4,403,679
4,215,000
101,175
87,504
—
18,910,566
12,023,326
163,468
1,908,257
4,815,515
25,421,519
1,868
877,062
¥49,930,255

After 5 years
through 10 years
¥ —
—
—
—
86,143
3,146,358
112,000
110,000
—
1,500
500
3,034,358
2,381,700
1,289
287,634
363,734
9,822,057
—
122,531
¥13,177,090

After 10 years
¥ —
—
—
—
200,559
635,641
—
—
—
—
—
635,641
5,000
40
61,081
569,519
8,662,488
—
36,684
¥9,535,374

104

SMFGNotes to Consolidated Financial StatementsSMFG 2013March 31
Deposits with banks .....................................................
Call loans and bills bought ...........................................
Receivables under resale agreements .............................
Receivables under securities borrowing transactions .....
Monetary claims bought*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
¥ 6,723,816
1,264,667
168,028
4,539,555
950,515
8,586,192
310,255
210,000
17,934
81,321
1,000
8,275,936
7,128,558
44,336
551,651
551,389
13,712,810
1,276,515
522,191
¥37,744,292

Within 1 year
$103,954
14,187
2,181
37,170
10,779
103,536
13,985
12,552
611
822
—
89,551
73,772
299
5,611
9,868
150,644
23,635
5,634
$451,720

Millions of yen
2012

After 1 year
through 5 years
¥ 3,166
27,150
59,721
—
129,125
26,436,600
4,773,397
4,465,000
159,310
149,086
—
21,663,203
14,798,646
233,668
1,893,545
4,737,343
23,762,958
1,276
919,013
¥51,339,012

After 5 years
through 10 years
¥ —
—
—
—
69,604
3,252,686
181,500
170,000
—
8,000
3,500
3,071,186
2,399,100
12,738
348,066
311,281
8,932,653
—
114,458
¥12,369,403

Millions of U.S. dollars
2013

After 1 year
through 5 years
$ 119
213
725
—
2,299
247,998
46,843
44,836
1,076
931
—
201,155
127,894
1,739
20,298
51,223
270,413
20
9,329
$531,116

After 5 years
through 10 years
$ —
—
—
—
916
33,468
1,191
1,170
—
16
5
32,277
25,335
14
3,060
3,869
104,479
—
1,303
$140,167

After 10 years
¥ —
—
—
—
194,114
629,654
—
—
—
—
—
629,654
—
42
58,126
571,486
8,445,738
—
40,969
¥9,310,476

After 10 years
$ —
—
—
—
2,133
6,761
—
—
—
—
—
6,761
53
0
650
6,058
92,144
—
390
$101,429

*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 ..........................................................................................

2013
¥ 69
33,995
1,080,983
2,620
20,513

2012
¥ —
28,667
1,116,378
2,845
5,960

Millions of yen

Millions of
U.S. dollars
2013
$ 1
362
11,499
28
218

*2 Does not include “Monetary claims bought” and “Loans and bills discounted” without tenure totaling ¥8,277 million ($88 million) and ¥6,482,020 million ($68,950 million) at
March 31, 2013, respectively. Does not include “Monetary claims bought” and “Loans and bills discounted” without tenure totaling ¥1,789 million and ¥6,750,883 million at
March 31, 2012, respectively.

105

SMFGNotes to Consolidated Financial StatementsSMFG 2013(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
¥ 84,003,627
11,266,119
2,954,051
2,076,791
4,433,835
1,499,499
2,845,802
337,901
1,126,300
513,696
643,350
¥111,700,975

Within 1 year
¥ 79,446,175
8,535,575
2,144,599
1,676,902
5,810,730
1,193,249
6,931,770
302,580
949,400
474,539
443,723
¥107,909,247

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
$ 893,561
119,840
31,423
22,091
47,163
15,950
30,271
3,594
11,981
5,464
6,843
$1,188,182

* Demand deposits are included in “Within 1 year.” Deposits include current deposits.

Millions of yen
2013

After 1 year
through 5 years
¥4,504,407
489,535
—
—
—
—
1,224,348
—
—
2,314,988
—
¥8,533,279

After 5 years
through 10 years
¥ 310,546
—
—
—
—
—
573,101
—
—
1,615,690
—
¥2,499,338

Millions of yen
2012

After 1 year
through 5 years
¥4,052,815
58,062
—
—
—
—
1,349,848
—
—
1,995,686
—
¥7,456,413

After 5 years
through 10 years
¥ 362,805
—
—
—
—
—
323,272
—
—
1,912,623
—
¥2,598,701

Millions of U.S. dollars
2013

After 1 year
through 5 years
$47,914
5,207
—
—
—
—
13,024
—
—
24,625
—
$90,770

After 5 years
through 10 years
$ 3,303
—
—
—
—
—
6,096
—
—
17,186
—
$26,586

After 10 years
¥263,230
—
—
—
—
—
336,207
—
—
308,847
—
¥908,285

After 10 years
¥266,577
—
—
—
—
—
234,757
—
—
260,837
—
¥762,172

After 10 years
$2,800
—
—
—
—
—
3,576
—
—
3,285
—
$9,662

106

SMFGNotes to Consolidated Financial StatementsSMFG 201330. 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 ........................

2013

¥36,731

2012

¥16,879

Millions of yen

(b) Bonds classified as held-to-maturity

March 31
Bonds with unrealized gains:

Consolidated balance
sheet amount

Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other ..................................................................................................
Subtotal ..........................................................................................

Bonds with unrealized losses:

¥5,244,786
158,758
165,154
500
¥5,569,198

¥ 269,713
373
1,227
11,599
¥ 282,913
¥5,852,111

March 31
Bonds with unrealized gains:

Consolidated balance
sheet amount

Bonds with unrealized losses:

¥4,787,498
175,423
237,210
2,695
¥5,202,828

¥ 70,020
2,302
713
10,402
¥ 83,438
¥5,286,267

Millions of yen
2013

Fair value

¥5,301,500
160,657
167,728
503
¥5,630,390

¥ 269,676
372
1,223
11,599
¥ 282,871
¥5,913,262

Millions of yen
2012

Fair value

¥4,849,443
178,243
241,726
2,703
¥5,272,117

¥ 69,930
2,298
710
10,396
¥ 83,335
¥5,355,452

Millions of U.S.
dollars
2013

$391

Net unrealized
gains (losses)

¥56,714
1,899
2,574
3
¥61,191

¥ (37)
(0)
(3)
—
¥ (41)
¥61,150

Net unrealized
gains (losses)

¥61,944
2,819
4,515
8
¥69,288

¥ (90)
(3)
(3)
(6)
¥ (103)
¥69,184

107

SMFGNotes to Consolidated Financial StatementsSMFG 2013Millions of U.S. dollars
2013

March 31
Bonds with unrealized gains:

Consolidated balance
sheet amount

Bonds with unrealized losses:

$55,790
1,689
1,757
5
$59,240

$ 2,869
4
13
123
$ 3,009
$62,250

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:

¥ 2,143,981
22,538,258
19,823,867
194,380
2,520,010
5,705,192
¥30,387,433

¥ 403,579
1,987,069
1,656,071
2,371
328,627
2,382,377
¥ 4,773,026
¥35,160,459

March 31
Other securities with unrealized gains:

Consolidated balance
sheet amount

Other securities with unrealized losses:

¥ 1,193,663
24,475,020
21,717,683
289,456
2,467,880
4,649,021
¥30,317,706

¥ 946,993
3,209,463
2,751,854
7,702
449,906
2,461,368
¥ 6,617,825
¥36,935,531

Fair value

$56,393
1,709
1,784
5
$59,891

$ 2,869
4
13
123
$ 3,009
$62,900

Millions of yen
2013

Acquisition cost

¥ 1,276,872
22,426,056
19,759,082
192,766
2,474,207
5,427,931
¥29,130,860

¥ 499,451
1,990,951
1,656,285
2,384
332,281
2,417,597
¥ 4,908,000
¥34,038,861

Millions of yen
2012

Acquisition cost

¥ 703,589
24,356,856
21,654,331
287,307
2,415,217
4,510,332
¥29,570,777

¥ 1,165,606
3,215,812
2,752,509
7,717
455,585
2,508,349
¥ 6,889,769
¥36,460,546

Net unrealized
gains (losses)

$603
20
27
0
$651

$ (0)
(0)
(0)
—
$ (0)
$650

Net unrealized
gains (losses)

¥ 867,109
112,202
64,785
1,614
45,802
277,260
¥1,256,572

¥ (95,872)
(3,881)
(214)
(13)
(3,653)
(35,220)
¥ (134,973)
¥1,121,598

Net unrealized
gains (losses)

¥ 490,074
118,164
63,351
2,149
52,663
138,689
¥ 746,928

¥(218,613)
(6,348)
(654)
(15)
(5,678)
(46,981)
¥(271,943)
¥ 474,984

108

SMFGNotes to Consolidated Financial StatementsSMFG 2013March 31
Other securities with unrealized gains:

Other securities with unrealized losses:

Millions of U.S. dollars
2013

Consolidated balance
sheet amount

Acquisition cost

Net unrealized
gains (losses)

$ 22,806
239,743
210,870
2,068
26,806
60,687
$323,236

$ 4,293
21,137
17,616
25
3,496
25,342
$ 50,771
$374,008

$ 13,582
238,550
210,181
2,050
26,319
57,738
$309,870

$ 5,313
21,178
17,618
25
3,535
25,716
$ 52,207
$362,077

$ 9,224
1,194
689
17
487
2,949
$13,366

$ (1,020)
(41)
(2)
(0)
(39)
(375)
$ (1,436)
$11,931

Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥29,831 million ($317 million) for the fiscal year ended March 31, 2013 and ¥196

million for the fiscal year ended March 31, 2012 that are recognized in the fiscal year’s earnings by applying fair value hedge accounting.

2. Other securities whose fair values are extremely difficult to determine are as follows:

March 31
Stocks .........................................................................................................................
Other .........................................................................................................................
Total ...........................................................................................................................

2013
¥259,145
357,180
¥616,326

2012
¥265,512
357,686
¥623,198

Millions of yen

Millions of U.S. dollars
2013
$2,757
3,799
$6,556

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 fiscal year ended March 31, 2013 and 2012

There are no corresponding transactions.

(e) Consolidated balance sheet amounts of other securities sold during the fiscal year ended March 31, 2013 and 2012

Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................

Sales amount
¥ 85,334
26,982,437
26,558,059
140,003
284,375
19,715,537
¥46,783,309

Sales amount
¥ 33,752
16,676,636
16,261,807
178,423
236,405
15,598,701
¥32,309,090

Millions of yen
2013
Gains on sales
¥ 19,436
60,772
59,471
542
758
110,118
¥190,326

Millions of yen
2012
Gains on sales
¥ 8,921
39,724
38,204
553
966
143,163
¥191,809

Losses on sales
¥(25,912)
(7,845)
(7,730)
(85)
(29)
(29,874)
¥(63,632)

Losses on sales
¥ (3,221)
(2,586)
(2,115)
(256)
(214)
(16,788)
¥(22,596)

109

SMFGNotes to Consolidated Financial StatementsSMFG 2013
Year ended March 31
Stocks .....................................................................................................
Bonds .....................................................................................................
Japanese government bonds ................................................................
Japanese local government bonds ........................................................
Japanese corporate bonds ....................................................................
Other .....................................................................................................
Total .......................................................................................................

Sales amount
$ 908
287,017
282,502
1,489
3,025
209,717
$497,642

Millions of U.S. dollars
2013
Gains on sales
$ 207
646
633
6
8
1,171
$2,025

Losses on sales

$(276)
(83)
(82)
(1)
(0)
(318)
$(677)

(f) Change of classification of securities

There are no corresponding transactions.

(g) Write-down of securities

Securities other than those classified as trading purpose, stocks of subsidiaries and affiliates (excluding securities whose fair value are
extremely difficult to determine) are considered as impaired if the fair value of the securities decreases materially below the acquisi-
tion cost and such decline is not considered to be recoverable. The securities are recognized at fair value on the consolidated balance
sheet and the amount of write-down is accounted for as valuation loss for the fiscal year. Valuation loss for the fiscal year ended March
31, 2013 and 2012 were ¥34,340 million ($365 million) and ¥27,988 million, respectively. The rule for determining “material
decline” is as follows and is based on the classification of issuers under the rules of self-assessment of assets.
Bankrupt/Effectively bankrupt/Potentially bankrupt issuers:

Issuers requiring caution:

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.

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.

(2) Money held in trust

(a) Money held in trust classified as trading purposes

March 31
Valuation gains (losses) included in the earnings for the fiscal year .............

2013
¥—

2012
¥(2)

Millions of yen

(b) Money held in trust classified as held-to-maturity

There are no corresponding transactions.

March 31
Consolidated balance sheet amount ............................................................
Acquisition cost .........................................................................................
Net unrealized gains (losses) ......................................................................
Unrealized gains ....................................................................................
Unrealized losses ....................................................................................

2013
¥22,789
22,778
10
10
—

2012
¥22,430
22,477
(46)
—
(46)

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
2013
$—

Millions of
U.S. dollars
2013
$242
242
0
0
—

110

SMFGNotes to Consolidated Financial StatementsSMFG 2013

(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 .....................................................

2013
¥1,092,274
1,092,264
10
310,233
782,041
29,086

2,798
¥ 755,753

2012
¥474,803
474,849
(46)
138,439
336,363
13,124

7,194
¥330,433

Millions of
U.S. dollars
2013
$11,619
11,619
0
3,300
8,319
309

30
$ 8,039

Notes: 1. Gains of ¥29,831 million ($317 million) for the fiscal year ended March 31, 2013 and ¥196 million for the fiscal year ended March 31, 2012 recognized in the fiscal

year’s earnings by applying fair value hedge accounting are deducted from net unrealized gains on other securities.

2. Net unrealized gains included foreign currency translation adjustments on non-marketable securities denominated in foreign currencies.

31. 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:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 21,572,140
20,511,203

¥ 4,963,621
4,707,254

¥ (5,339)
4,575

Interest rate options:

254,486
11,402,713

123,780
4,063,212

(65)
450

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 ......................................

3,097,651
2,649,874
396,830,384
184,255,645
186,042,853
26,416,803

—
—
316,834,888
150,002,766
148,516,797
18,223,607

Interest rate swaptions:

2,921,053
2,404,120

Caps:

13,771,179
7,023,311

Floors:

Sold ...................................................................................................
Bought ...............................................................................................

Other:

212,166
154,884

171,867
2,310,792
/

1,712,745
1,656,899

7,555,232
4,411,178

143,963
133,779

139,814
1,698,266
/

461
(507)
68,978
6,851,752
(6,780,304)
(7,528)

711
11,641

(624)
(2,553)

(3,534)
4,009

461
(507)
68,978
6,851,752
(6,780,304)
(7,528)

711
11,641

(624)
(2,553)

(3,534)
4,009

22,927
(6,433)
¥ 94,697

111

SMFGNotes to Consolidated Financial StatementsSMFG 2013
March 31
Listed
Interest rate futures:

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 13,701,646
12,963,619

¥ 2,323,383
1,931,357

¥ (9,067)
9,046

Interest rate options:

16,413
49,239

—
—

(1)
5

Over-the-counter
Forward rate agreements:

4,433,489
4,386,457
369,468,218
169,758,863
173,687,207
25,888,092

37,687
68,390
281,215,701
132,573,198
132,110,404
16,402,974

Interest rate swaptions:

4,070,533
3,114,421

2,032,320
1,987,178

Caps:

15,725,631
6,947,188

11,272,029
3,066,687

Floors:

Other:

877,557
7,991,968

—
3,589,273
/

250,823
1,984,956

—
1,798,757
/

(166)
(148)
75,045
5,648,845
(5,573,527)
(3,475)

(56,297)
49,318

(6,675)
6,717

(4,549)
4,192

(166)
(148)
75,045
5,648,845
(5,573,527)
(3,475)

(56,297)
49,318

(6,675)
6,717

(4,549)
4,192

—
19,137
¥ 86,557

March 31
Listed
Interest rate futures:

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

$ 229,466
218,181

$ 52,799
50,072

$ (57)
49

Interest rate options:

2,707
121,293

1,317
43,221

(1)
5

Over-the-counter
Forward rate agreements:

32,950
28,187
4,221,151
1,959,958
1,978,969
281,000

Interest rate swaptions:

31,072
25,573

Caps:

146,486
74,708

Floors:

Other:

2,257
1,648

1,828
24,580
/

—
—
3,370,225
1,595,604
1,579,798
193,848

18,219
17,625

80,366
46,922

1,531
1,423

1,487
18,065
/

5
(5)
734
72,883
(72,123)
(80)

8
124

(7)
(27)

(38)
43

5
(5)
734
72,883
(72,123)
(80)

8
124

(7)
(27)

(38)
43

244
(68)
$ 1,007

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.

112

SMFGNotes to Consolidated Financial StatementsSMFG 2013
(b) Currency derivatives

March 31
Listed
Currency futures:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 47,549
21

¥ —
—

¥ 45
0

Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:

March 31
Listed
Currency futures:

21,453,976

14,141,154

(4,479)

(21,243)

422,405
809,571
42,212,725

2,770,832
2,651,869
/

271,989
478,117
3,549,857

1,481,667
1,363,754
/

(3,142)
8,197
64,824

(179,925)
181,758
¥ 67,277

(3,142)
8,197
64,824

(179,925)
181,758
¥ 50,513

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 295,297
1,119,349

¥ —
—

Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:

March 31
Listed
Currency futures:

19,742,032

12,527,350

(396,973)

(38,094)

654,616
702,295
36,189,143

2,904,319
2,744,179
/

473,930
530,318
2,989,559

1,623,064
1,504,605
/

(16,082)
27,032
84,518

(229,554)
315,643
¥(215,415)

Millions of U.S. dollars
2013

(16,082)
27,032
84,518

(229,554)
315,643
¥143,463

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

$ 506
0

$ —
—

$ 0
0

Over-the-counter
Currency swaps .......................................................................................
Currency swaptions:

228,210

150,422

4,493
8,612
449,024

29,474
28,208
/

2,893
5,086
37,760

15,761
14,506
/

(48)

(33)
87
690

(1,914)
1,933
$ 716

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.

$ 0
0

(226)

(33)
87
690

(1,914)
1,933
$ 537

113

SMFGNotes to Consolidated Financial StatementsSMFG 2013
(c) Equity derivatives

March 31
Listed
Equity price index futures:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥302,369
94,137

Equity price index options:

24,887
17,906

Over-the-counter
Equity options:

206,603
210,013

Equity index forward contracts:

Equity index swaps:

Receivable equity index/payable short-term floating rate ....................
Receivable short-term floating rate/payable equity index ....................
Total .......................................................................................................

—
16,984

13,650
21,885
/

¥ —
—

4,350
1,250

206,351
204,754

—
—

12,000
19,485
/

¥ (9,376)
1,391

(860)
436

(47,769)
47,653

—
745

(101)
84
¥ (7,796)

¥ (9,376)
1,391

(860)
436

(47,769)
47,653

—
745

(101)
84
¥ (7,796)

March 31
Listed
Equity price index futures:

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥298,239
71,550

¥ —
—

¥ (6,384)
913

Equity price index options:

390
240

—
—

(1)
2

Over-the-counter
Equity options:

194,646
197,500

192,842
191,432

Equity index forward contracts:

Equity index swaps:

—
21,965

8,795
9,495
/

—
—

7,295
7,895
/

(49,023)
49,205

—
822

(154)
152
¥ (4,467)

(49,023)
49,205

—
822

(154)
152
¥ (4,467)

114

SMFGNotes to Consolidated Financial StatementsSMFG 2013March 31
Listed
Equity price index futures:

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

Equity price index options:

$3,216
1,001

265
190

Over-the-counter
Equity options:

2,198
2,234

Equity index forward contracts:

Equity index swaps:

—
181

145
233
/

$ —
—

46
13

2,195
2,178

—
—

128
207
/

$(100)
15

(9)
5

(508)
507

—
8

(1)
1
$ (83)

$(100)
15

(9)
5

(508)
507

—
8

(1)
1
$ (83)

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.

(d) Bond derivatives

March 31
Listed
Bond futures:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥4,093,218
3,875,544

¥ —
—

¥(28,436)
23,993

Bond futures options:

57,278
26,980

—
—

(145)
2

Over-the-counter
Bond options:

138,870
198,900
/

—
104,126
/

(102)
558
¥ (4,130)

March 31
Listed
Bond futures:

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥2,804,083
2,565,575

Bond futures options:

92,483
181,010

Over-the-counter
Forward bond agreements:

Bond options:

1,150
2,924

38,894
38,894
/

¥—
—

—
—

—
—
/

¥(1,426)
1,791

35
(53)

126
30

35
(53)

126
30

(53)
115
¥ 566

115

SMFGNotes to Consolidated Financial StatementsSMFG 2013
March 31
Listed
Bond futures:

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

$43,540
41,225

Bond futures options:

609
287

Over-the-counter
Bond options:

1,477
2,116
/

$ —
—

—
—

—
1,108
/

$(302)
255

(2)
0

(1)
6
$ (44)

$(302)
255

(2)
0

(1)
6
$ (44)

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.

(e) Commodity derivatives

March 31
Listed
Commodity futures:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 2,472
913

¥ —
—

¥ (84)
43

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:

115,493
95,861
11,303

12,132
3,559
/

85,791
69,325
9,556

9,191
2,832
/

(18,951)
37,496
(333)

(99)
109
¥18,181

(18,951)
37,496
(333)

(99)
109
¥18,181

March 31
Listed
Commodity futures:

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥ 5,949
5,788

¥ —
—

¥ 107
(116)

Over-the-counter
Commodity swaps:

Commodity options:

139,982
111,479
13,822

12,779
4,929
/

117,754
91,310
13,014

10,821
4,177
/

(29,523)
57,246
1,500

(223)
58
¥29,049

(29,523)
57,246
1,500

(223)
58
¥29,049

116

SMFGNotes to Consolidated Financial StatementsSMFG 2013
March 31
Listed
Commodity futures:

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

$ 26
10

Over-the-counter
Commodity swaps:

Commodity options:

1,229
1,020
120

129
38
/

$ —
—

913
737
102

98
30
/

$ (1)
0

(202)
399
(4)

(1)
1
$193

$ (1)
0

(202)
399
(4)

(1)
1
$193

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.

(f) Credit derivative transactions

March 31
Over-the-counter
Credit default options:

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥876,007
930,144
/

¥622,577
668,544
/

¥ (744)
(444)
¥(1,189)

March 31
Over-the-counter
Credit default options:

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

¥793,663
783,152
/

¥649,116
575,684
/

¥(18,420)
19,385
¥ 964

March 31
Over-the-counter
Credit default options:

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

Valuation
gains (losses)

$9,318
9,894
/

$6,622
7,111
/

$ (8)
(5)
$(13)

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.

117

SMFGNotes to Consolidated Financial StatementsSMFG 2013

(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

March 31

Hedge accounting method
Deferral hedge method

Interest futures:

Type of derivative

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 ............................................................

Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposits

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
payable

March 31

Hedge accounting method
Deferral hedge method

Interest futures:

Type of derivative

Interest rate swaptions:

Sold .................................................................
Bought ............................................................

Caps:

Sold .................................................................
Bought ............................................................

Floors:

Sold .................................................................
Bought ............................................................

Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposits

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 .......
Receivable floating rate/payable floating rate ...

Interest rate swaps: .............................................. Loans and bills discounted;

borrowed money; bonds
payable

Millions of yen
2013

Contract amount

Total

Over 1 year

Fair value

¥ 94,056
1,985,000
39,492,082
25,598,136
13,877,319
16,626

¥ 94,056
—
36,189,984
23,250,742
12,922,615
16,626

¥ (18)
675
49,356
601,178
(551,782)
(39)

11,222
—

4,112
4,112
83,607
83,607
98,437
1,000
89,437
8,000
/

11,222
—

4,112
4,112
76,029
76,029
51,391
—
46,391
5,000
/

262
—

251
(251)
(6,879)
(6,879)

(Note 3)

¥ 43,395

Millions of yen
2012

Contract amount

Total

Over 1 year

Fair value

¥ 739,170
7,306,784
36,107,314
24,074,085
12,003,883
29,345

¥ — ¥ (146)
(96)
27,467
443,546
(416,369)
290

356,484
29,296,886
18,722,477
10,565,063
9,345

330,000
—

3,340
3,340

—
7,850
1,641
1,361
280
218,688
3,000
193,688
22,000
/

3,340
3,340

—
—
—
—
—
137,515
1,000
125,515
11,000
/

2,719
—

265
(265)

—
0
(43)
(39)
(3)

(Note 3)

¥ 29,900

118

SMFGNotes to Consolidated Financial StatementsSMFG 2013March 31

Hedge accounting method
Deferral hedge method

Interest futures:

Type of derivative

Interest rate swaptions:

Sold .................................................................
Bought ............................................................

Caps:

Sold .................................................................
Bought ............................................................

Principal items hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securi-
ties (bonds), deposits and
negotiable certificates of
deposits

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;

borrowed money; bonds
payable

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

$ 1,000
21,115
420,084
272,292
147,615
177

$ 1,000
—
384,959
247,322
137,460
177

119
—

44
44
889
889
1,047
11
951
85
/

119
—

44
44
809
809
547
—
493
53
/

$ (0)
7
525
6,395
(5,869)
(0)

3
—

3
(3)
(73)
(73)

(Note 3)

$ 462

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 “29. Financial Instruments.”

(b) Currency derivatives

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 swap ..................................................... Foreign currency denomi-
Forward foreign exchange ....................................

nated loans and bills
discounted; other securities
(bonds); deposits; foreign
currency exchange, etc.

Currency swaps. ................................................... Loans and bills discounted;
Forward foreign exchange ....................................
Currency swap ..................................................... Other securities (bonds);
Forward foreign exchange ....................................
Total ....................................................................

foreign currency exchange

borrowed money

Millions of yen
2013

Contract amount

Total
¥4,439,554
18,153

Over 1 year
¥2,856,987
—

Fair value
¥(180,171)
(492)

31,665
277,155
10,897
3,179
/

28,208
—
9,087
3,179
/

(2,342)
(2,671)

(Note 3)

¥(185,677)

119

SMFGNotes to Consolidated Financial StatementsSMFG 2013

March 31

Hedge accounting method
Deferral hedge method

Type of derivative

Principal items hedged
Currency swap ..................................................... Foreign currency denomi-
Forward foreign exchange ....................................

nated loans and bills
discounted; other securities
(bonds); deposits; foreign
currency exchange, etc.

Millions of yen
2012

Contract amount

Total
¥3,315,230
244,547

Over 1 year
¥2,666,423
—

Fair value
¥278,690
211

Recognition of gain or loss
on the hedging instrument

Allocation method

Currency swap ..................................................... Deposits; borrowed

36,306

32,133

(383)

money; bonds payable

Currency swap ..................................................... Other securities (bonds);
Forward foreign exchange ....................................
Total ....................................................................

borrowed money

70,320
3,179
/

8,465
3,179
/

(Note 3)

¥278,518

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 swap ..................................................... Foreign currency denomi-
Forward foreign exchange ....................................

nated loans and bills
discounted; other securities
(bonds); deposits; foreign
currency exchange, etc.

Currency swap ..................................................... Loans and bills discounted;
Forward foreign exchange ....................................
Currency swap ..................................................... Other securities (bonds);
Forward foreign exchange ....................................
Total ....................................................................

foreign currency exchange

borrowed money

Millions of U.S. dollars
2013

Contract amount

Total
$47,224
193

Over 1 year
$30,390
—

Fair value
$(1,917)
(5)

337
2,948
116
34
/

300
—
97
34
/

(25)
(28)

(Note 3)

$(1,975)

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 other securities 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 “29. Financial Instruments.”

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

Millions of yen
2013

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 ....................................................................

¥ —
158,716
/

¥ —
66,668
/

¥ —
(24,100)
¥(24,100)

Type of derivative

Equity price index swaps:

Principal items hedged
Other securities (equity)

Total

Over 1 year

Fair value

Millions of yen
2012

Contract amount

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 ....................................................................

¥ —
13,056
/

¥ —
9,175
/

¥ —
(335)
¥(335)

Millions of U.S. dollars
2013

Contract amount

Total

Over 1 year

Fair value

$ —
1,688
/

$ —
709
/

$ —
(256)
$(256)

Note: Fair value is calculated using discounted present value.

120

SMFGNotes to Consolidated Financial StatementsSMFG 2013

32. Stock Options
1. Share-based compensation expenses which were accounted for as general and administrative expenses in the fiscal years ended March 31,

2013 and 2012 are as follows:

Year ended March 31
Share-based compensation expenses .................................................................

2. Amount of profit by non-exercise of stock options in the fiscal year

Year ended March 31
Other income ..................................................................................................

3. Outline of stock options and changes is as follows:

(1) SMFG

(a) Outline of stock options
Date of resolution
Title and number of grantees .....

June 27, 2002
Directors and employees of
SMFG and SMBC: 677

Number of stock options*1 ......
Grant date ...............................
Condition for vesting ...............

Common shares: 162,000*2
August 30, 2002
N.A.

Requisite service period ...........

N.A.

Exercise period ........................

June 28, 2004 to June 27, 2012

Date of resolution
Title and number of grantees .....

Number of stock options*1 ......
Grant date ...............................
Condition for vesting ...............

Requisite service period ...........

July 29, 2011
Directors of SMFG: 9
Corporate auditors of SMFG: 3
Executive officers of SMFG: 2
Directors, corporate auditors,
executive officers of SMBC: 71
Common shares: 268,200
August 16, 2011
Stock acquisition right holders 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, 2011 to the closing of the ordinary
general meeting of shareholders of SMFG for the
fiscal year ended March 31, 2012.
August 16, 2011 to August 15, 2041

Exercise period ........................
*1 Reported in terms of shares of stock.
*2 Reported in consideration of the 100-for-1 stock split implemented on January 4, 2009.

Millions of yen

2012
¥431

2012
¥—

2013
¥584

2013
¥10

Millions of
U.S. dollars
2013
$6

Millions of
U.S. dollars
2013
$0

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
Stock acquisition right holders 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

July 30, 2012
Directors of SMFG: 9
Corporate auditors of SMFG: 3
Executive officers of SMFG: 2
Directors, corporate auditors,
executive officers of SMBC: 71
Common shares: 280,500
August 15, 2012
Stock acquisition right holders 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 28, 2012 to the closing of the ordinary
general meeting of shareholders of SMFG for the
fiscal year ended March 31, 2013.
August 15, 2012 to August 14, 2042

121

SMFGNotes to Consolidated Financial StatementsSMFG 2013(b) Stock options granted and changes
Number of stock options*
Date of resolution
Before vested

Previous fiscal year-end ..................
Granted .........................................
Forfeited ........................................
Vested............................................
Outstanding ..................................

After vested

Previous fiscal year-end ..................
Vested............................................
Exercised .......................................
Forfeited ........................................
Exercisable .....................................

* Reported in terms of shares of stock.

Price information (Yen)
Date of resolution
Exercise price .....................................
Average exercise price ........................
Fair value at the grant date ................

June 27, 2002

July 28, 2010

July 29, 2011

July 30, 2012

—
—
—
—
—

108,100
—
—
108,100
—

74,400
—
—
23,600
50,800

25,800
23,600
1,200
—
48,200

260,300
—
1,600
14,000
244,700

5,900
14,000
1,900
—
18,000

—
280,500
1,100
2,200
277,200

—
2,200
—
—
2,200

June 27, 2002

July 28, 2010

July 29, 2011

July 30, 2012

¥6,649
—
—

¥ 1
3,235
2,215

¥ 1
2,986
1,872

¥ 1
—
2,042

Stock options granted in the fiscal year ended March 31, 2013 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 16, 2008 and August 15, 2012.
*2 The average expected life could not be estimated rationally due to insufficient amount of data.

July 30, 2012
46.26%
4 years
¥100 per share
0.14%

Therefore, it was estimated based on average assumption periods of officers of SMFG and SMBC.

*3 Expected dividends are based on the expected dividends on common stock for the fiscal year ended March 31, 2013 of the date of grant.
*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

(a) Outline of stock options
Date of resolution
Title and number of grantees ...........................................

Number of stock options* ................................................

June 27, 2002 June 27, 2003 June 29, 2004 June 29, 2005 June 29, 2006

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

Grant date ....................................................................... July 31, 2002
Condition for vesting .......................................................
Requisite service period ...................................................
Exercise period ................................................................

N.A.

June 28, 2004
to June 27,
2012

July 31, 2003

July 30, 2004

July 29, 2005

July 31, 2006

N.A.

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

122

SMFGNotes to Consolidated Financial StatementsSMFG 2013

Date of resolution
Title and number of grantees ..........................................

June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
Officers not
Officers not
Directors 11
doubling as
doubling as
Officers not
directors 14
directors 14
doubling as
Employees 48
Employees 46
directors 14
Employees 57

Directors 9
Officers not
doubling as
directors 16
Employees 45

Directors
10

Number of stock options* ................................................

Common shares
115,000

Common shares
174,000

Common shares
112,000

Common shares
289,000

Common shares
350,000

Grant date ....................................................................... July 31, 2006
Condition for vesting .......................................................
Requisite service period ...................................................
Exercise period ................................................................

N.A.

June 30, 2008
to June 29,
2016

July 31, 2007

July 31, 2008

July 31, 2009

N.A.

June 29, 2009
to June 28,
2017

June 28, 2010
to June 27,
2018

June 27, 2011
to June 26,
2019

* Reported in terms of shares of stock.

(b) Stock options granted and changes
Number of stock options*
Date of resolution
Before vested

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 ................................................ 106,000
—
Vested..........................................................................
—
Exercised .....................................................................
Forfeited ...................................................................... 106,000
Exercisable ...................................................................

192,000
—
—
26,000
— 166,000

285,000
—
—
40,000
245,000

392,000
—
—
58,000
334,000

162,000
—
—
32,000
130,000

Date of resolution
Before vested

June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009

—
—
—
—
—

After vested

Previous fiscal year-end ................................................ 115,000
—
Vested..........................................................................
—
Exercised .....................................................................
29,000
Forfeited ......................................................................
86,000
Exercisable ...................................................................

174,000
—
—
16,000
158,000

112,000
—
—
7,000
105,000

289,000
—
—
—
289,000

350,000
—
—
—
350,000

* Reported in terms of shares of stock.

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 27, 2002 June 27, 2003 June 29, 2004 June 29, 2005 June 29, 2006
¥202
—
—

¥490
—
138

¥179
—
—

¥313
—
—

¥131
—
—

June 29, 2006 June 28, 2007 June 28, 2007 June 27, 2008 June 26, 2009
¥461
—
96

¥302
—
37

¥490
—
138

¥193
—
51

¥461
—
96

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.

123

SMFGNotes to Consolidated Financial StatementsSMFG 2013

(3) THE MINATO BANK, LTD. (“MINATO”)

(a) Outline of stock options
Date of resolution
Title and number of grantees ...............

Number of stock options* ..................
Grant date .........................................
Condition for vesting .........................

Requisite service period .....................

Exercise period ..................................
* Reported in terms of shares of stock.

(b) Stock options granted and changes
Number of stock options*
Date of resolution
Before vested

After vested

* Reported in terms of shares of stock.

June 28, 2012
Directors: 7,
Officers: 12
Common shares: 368,000
July 20, 2012
Stock acquisition right holders may exercise
stock acquisition rights from the day when
they are relieved of their positions either as a
director or executive officer of MINATO.
June 28, 2012 to the closing of the ordinary
general meeting of shareholders of MINATO for
the fiscal year ended March 31, 2013.
July 21, 2012 to July 20, 2042

June 28, 2012

—
368,000
12,000
44,000
312,000

—
44,000
—
—
44,000

Price information (Yen)
Date of resolution
Exercise price .....................................
Average exercise price ........................
Fair value at the grant date ................

June 28, 2012

¥ 1
—
132

Stock options granted in the fiscal year were valuated using the following valuation technique.
- Valuation technique: Black-Scholes option-pricing model
- Principal parameters used in the option-pricing model

Date of resolution
Expected volatility *1 ........................................................................
Average expected life *2 .....................................................................
Expected dividends *3 ........................................................................
Risk-free interest rate *4 ....................................................................
*1 Calculated based on the actual stock prices during 2 years from July 21, 2010 to July 20, 2012.
*2 The average expected life could not be estimated rationally due to insufficient amount of data.

Therefore, it was estimated based on average assumption periods of officers of MINATO.

June 28, 2012
34.34%
2 years
¥5 per share
0.10%

*3 Expected dividends are based on the actual dividends on common stock for the fiscal year ended March 31, 2012.
*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.

124

SMFGNotes to Consolidated Financial StatementsSMFG 201333. Segment Information
Fiscal years ended March 31, 2013 and 2012
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 leasing, securities, consumer finance, and system develop-
ment and information processing. The primary businesses, “Banking business,” “Leasing,” “Securities services,” and “Consumer finance,” are
separate, reportable segments, and other businesses are aggregated as “Other business.”
“Banking business” includes deposit taking, lending, securities trading and investment, remittance, foreign exchange, bond subscription
agent, trust business, and over-the-counter sales of securities investment trusts and insurance products. 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.
SMFG’s consolidated subsidiary, SMBC Consumer Finance Co., Ltd. (formerly Promise Co., Ltd.), became a wholly owned subsidiary fol-
lowing a share exchange that went into effect on April 1, 2012. As a result, certain reportable segment changed during the fiscal year ended
March 31, 2013. Specifically, Consumer finance has been established as a new reportable segment, which includes the formerly Credit card
services segment.
From the fiscal year ended March 31, 2013 onward, the column designating consolidated net business profit for major SMFG Group
companies, excluding SMBC, has been moved from operating income to ordinary profit, and the column designating consolidated net busi-
ness profit for Sumitomo Mitsui Finance and Leasing Co., Ltd. is listed under consolidated operating profit for Sumitomo Mitsui Finance and
Leasing Co., Ltd.

Information on profit and loss amount by reportable segment for the fiscal year ended March 31, 2012 has been formulated based on the

above changes.

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
banking unit
Year ended March 31, 2013
Gross profit ........................... ¥374,927
307,746
67,181
(284,389)
(26,893)
—

Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit ..................... ¥ 90,538

Sumitomo Mitsui
Finance and
Leasing Company,
Limited

Year ended March 31, 2013
Gross profit ........................... ¥114,814
40,825
73,988
(51,722)
(4,003)
(4,086)

Middle market
banking unit
¥412,200
236,170
176,030
(216,726)
(22,625)
—

Corporate
banking unit
¥208,013
128,212
79,801
(39,616)
(5,603)
—

SMBC
International
banking unit
¥240,516
141,958
98,558
(72,920)
(8,928)
—

Treasury
unit
¥295,304
125,485
169,819
(20,997)
(3,972)
—

Subtotal

Head office
account
¥ 9,135 ¥1,540,095
971,202
568,892
(727,736)
(79,240)

31,631
(22,496)
(93,088)
(11,219)
—

Others

Total

¥258,466 ¥1,798,561
1,127,159
155,956
671,402
102,509
(876,944)
(149,207)
(89,702)
(10,462)
(30,334)
— (30,334)

¥195,474

¥168,397

¥167,596

¥274,307

¥(83,953) ¥ 812,358

¥ 78,923 ¥ 891,282

Leasing

Securities services

Millions of yen

Others
¥ 5,544
5,372
171
908
(561)
3,857

Total
¥120,358
46,198
74,160
(50,813)
(4,565)
(228)

SMBC
Nikko
Securities
Inc.
¥268,913
(720)
269,634
(194,920)
(2,826)
(557)

SMBC
Friend
Securities
Co., Ltd.
¥59,409
432
58,976
(41,415)
(1,861)
(3)

Others
¥13,130
232
12,897
(10,933)
(1,249)
(1,470)

Total
¥341,452
(55)
341,508
(247,269)
(5,937)
(2,030)

¥10,310

¥ 69,316

¥ 73,435

¥17,990

¥ 726

¥ 92,152

125

SMFGNotes to Consolidated Financial StatementsSMFG 2013

Millions of yen

Sumitomo
Mitsui Card
Company,
Limited
¥183,050
15,477
167,573
(132,594)
(9,796)
(5,657)

Consumer finance
SMBC
Consumer
Finance
Co., Ltd.
¥165,777
117,628
48,148
(66,198)
(2,720)
(47,715)

Cedyna
Financial
Corporation
¥153,542
29,422
124,120
(118,184)
(9,221)
(21,704)

Others
¥24,132
1,486
22,645
(14,252)
(1,733)
1,996

Total
¥526,503
164,014
362,488
(331,229)
(23,471)
(73,081)

Other
Grand total
business
¥15,525 ¥2,802,402
61,584 1,398,901
(46,058) 1,403,501
61,799 (1,444,457)
(134,641)
(10,964)
(191,770)
(86,095)

¥ 44,799

¥ 13,653

¥ 51,863

¥11,876

¥122,192

¥ (8,770) ¥1,166,174

Year ended March 31, 2013
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................

Millions of yen
Banking business

Consumer
banking unit
Year ended March 31, 2012
Gross profit ........................... ¥383,666
326,923
56,743
(289,506)
(27,400)
—

Middle market
banking unit
¥422,825
256,800
166,025
(222,756)
(23,177)
—

Corporate
banking unit
¥212,650
136,592
76,058
(38,214)
(5,558)
—

SMBC
International
banking unit
¥197,436
111,625
85,811
(64,941)
(7,102)
—

Treasury
unit
¥319,333
123,120
196,213
(19,206)
(3,443)
—

Subtotal

Head office
account
¥ (3,398) ¥1,532,511
956,878
575,632
(719,495)
(75,503)

1,818
(5,217)
(84,872)
(8,823)
—

Others

Total

¥231,326 ¥1,763,837
1,113,505
156,627
650,331
74,698
(851,257)
(131,761)
(85,858)
(10,354)
(20,529)
— (20,529)

¥200,069

¥174,436

¥132,495

¥300,127

¥(88,271) ¥ 813,015

¥ 79,035 ¥ 892,050

Leasing

Securities services

Millions of yen

Sumitomo Mitsui
Finance and
Leasing Company,
Limited
¥99,062
58,813
40,249
(43,208)
(3,486)
7,011

Others
¥3,059
3,477
(417)
611
(410)
1,289

Total
¥102,122
62,290
39,831
(42,597)
(3,896)
8,300

SMBC
Nikko
Securities
Inc.
¥222,116
(1,674)
223,790
(180,076)
(3,044)
(1,736)

SMBC
Friend
Securities
Co., Ltd.
¥47,981
503
47,477
(39,083)
(1,862)
(7)

Others
¥7,771
423
7,348
(5,356)
(655)
(797)

Total
¥277,869
(747)
278,617
(224,516)
(5,561)
(2,541)

¥62,865

¥4,960

¥ 67,825

¥ 40,303

¥ 8,890

¥1,617

¥ 50,811

Year ended March 31, 2012
Gross profit ...........................
Interest income ..................
Non-interest income ..........
Expenses ................................
Depreciation ......................
Other profit or loss ................
Consolidated net
business profit .....................

Millions of yen

Consumer finance

Sumitomo
Mitsui Card
Company,
Limited

Cedyna
Financial
Corporation
Year ended March 31, 2012
Gross profit ........................... ¥179,328 ¥160,083
36,379
123,704
(120,545)
(9,888)
(67,198)

18,544
160,784
(126,589)
(8,839)
(9,587)

126

Total

Others
¥96,787 ¥436,199
111,634
324,564
(291,861)
(23,053)
(134,622)

56,710
40,076
(44,726)
(4,325)
(57,836)

Other
business
Grand total
¥30,053 ¥2,610,082
62,827 1,349,510
(32,773) 1,260,572
35,705 (1,374,526)
(129,403)
(11,032)
(221,609)
(72,217)

¥ (5,774) ¥ 9,715

¥ (6,457) ¥1,013,946

SMFGNotes to Consolidated Financial StatementsSMFG 2013Millions of U.S. dollars
Banking business

Consumer
banking unit
$3,988
3,274
715
(3,025)
(286)
—

Middle market
banking unit
$4,385
2,512
1,872
(2,305)
(241)
—

Corporate
banking unit
$2,213
1,364
849
(421)
(60)
—

SMBC
International
banking unit
$2,558
1,510
1,048
(776)
(95)
—

Treasury
unit
$3,141
1,335
1,806
(223)
(42)
—

Head office
account

$ 97
336
(239)
(990)
(119)
—

Subtotal
$16,382
10,331
6,051
(7,741)
(843)
—

Others
$2,749
1,659
1,090
(1,587)
(111)
(323)

Total
$19,132
11,990
7,142
(9,328)
(954)
(323)

$ 963

$2,079

$1,791

$1,783

$2,918

$(893)

$ 8,641

$ 840

$ 9,481

Sumitomo Mitsui
Finance and
Leasing Company,
Limited
$1,221
434
787
(550)
(43)
(43)

Leasing

Others

$ 59
57
2
10
(6)
41

Millions of U.S. dollars

Securities services

SMBC
Nikko
Securities
Inc.
$2,860
(8)
2,868
(2,073)
(30)
(6)

SMBC
Friend
Securities
Co., Ltd.
$632
5
627
(441)
(20)
(0)

Total
$1,280
491
789
(541)
(49)
(2)

Others

$140
2
137
(116)
(13)
(16)

Total
$3,632
(1)
3,633
(2,630)
(63)
(22)

$ 628

$110

$ 737

$ 781

$191

$ 8

$ 980

Millions of U.S. dollars

Sumitomo
Mitsui Card
Company,
Limited

$1,947
165
1,783
(1,410)
(104)
(60)

Consumer finance
SMBC
Consumer
Finance
Co., Ltd.
$1,763
1,251
512
(704)
(29)
(508)

Cedyna
Financial
Corporation
$1,633
313
1,320
(1,257)
(98)
(231)

Others

$257
16
241
(152)
(18)
21

Total
$5,600
1,745
3,856
(3,523)
(250)
(777)

Other
business
$165
655
(490)
657
(117)
(916)

Grand total
$29,810
14,880
14,929
(15,365)
(1,432)
(2,040)

$ 477

$ 145

$ 552

$126

$1,300

$ (93)

$12,405

Notes: 1. Consolidated net business profit = SMBC’s nonconsolidated banking profit + SMFG’s nonconsolidated 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. For the fiscal year ended March 31, 2013, Consolidated net business profit = Consolidated operating profit of each company for Sumitomo Mitsui Finance and Leasing
Company, Limited and SMBC Consumer Finance Co., Ltd., and Consolidated net business profit = Operating profit of each company for SMBC Nikko Securities Inc.,
SMBC Friend Securities Co., Ltd., Sumitomo Mitsui Card Company, Limited, and Cedyna Financial Corporation.
For the fiscal year ended March 31, 2012, Consolidated net business profit = Consolidated operating profit of Sumitomo Mitsui Finance and Leasing Company, Limited
and Consolidated net business profit = Operating profit of each company for SMBC Nikko Securities Inc., SMBC Friend Securities Co., Ltd., Sumitomo Mitsui Card
Company, Limited, and Cedyna Financial Corporation.

4. “Other business” includes profit or loss to be offset as internal transactions between segments.

127

SMFGNotes to Consolidated Financial StatementsSMFG 2013

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 .....................................................................................................
Total credit cost of SMBC ...............................................................................................................
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
2013

¥1,166,174
(19,523)
(35,662)
(23,303)
89,523
(17,964)
(3,952)
(81,545)
¥1,073,745

Millions of
U.S. dollars
2013

$12,405
(208)
(379)
(248)
952
(191)
(42)
(867)
$11,422

Notes: 1. Total credit cost = Write-off of loans + Losses on sales of delinquent loans – Gains on reversal of reserve for possible loan losses – Recoveries of written-off claims

2. 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

Year ended March 31
Profit
Consolidated net business profit .....................................................................................................
Total credit costs of SMBC ..............................................................................................................
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
2012

¥1,013,946
(58,647)
(15,153)
(31,632)
81,398
(14,996)
(5,553)
(33,790)
¥ 935,571

Notes: 1. Total 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 – Recoveries of written-off clames

5. Related information

(1) Business segment information
Year ended March 31, 2013
Ordinary income to external customers

Millions of yen

Millions of U.S. dollars

Banking business .......................................................................................................
Leasing ......................................................................................................................
Securities services .......................................................................................................
Consumer finance ......................................................................................................
Other business ...........................................................................................................
Total ..........................................................................................................................

Year ended March 31, 2012
Ordinary income to external customers

¥2,349,835
506,267
396,531
1,021,137
52,654
¥4,326,424

Millions of yen

¥2,245,549
380,053
285,252
957,514
76,912
¥3,945,282

$24,996
5,385
4,218
10,862
560
$46,021

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.

128

SMFGNotes to Consolidated Financial StatementsSMFG 2013

(2) Geographic segment information

(a) Ordinary income

Year ended March 31, 2013
Japan .......................................................................................................................
The Americas ..........................................................................................................
Europe and Middle East ...........................................................................................
Asia and Oceania .....................................................................................................
Total ........................................................................................................................

Year ended March 31, 2012
Japan .......................................................................................................................
The Americas ..........................................................................................................
Europe and Middle East ...........................................................................................
Asia and Oceania .....................................................................................................
Total ........................................................................................................................

Notes: 1. Ordinary income is presented as a counterpart of sales of companies in other industries.

Millions of yen
¥3,555,350
198,817
284,686
287,570
¥4,326,424

Millions of yen
¥3,400,848
169,271
138,987
236,175
¥3,945,282

Millions of U.S. dollars
$37,819
2,115
3,028
3,059
$46,021

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

(3) Information by major customer

There are no major customers individually accounting for 10% or more of ordinary income.

6. Information on losses on impairment of fixed assets by reportable segment

Year ended March 31, 2013
Banking business ..................................................................................................................
Leasing .................................................................................................................................
Securities services .................................................................................................................
Consumer finance .................................................................................................................
Other business ......................................................................................................................
Total .....................................................................................................................................

Year ended March 31, 2012
Banking business ..................................................................................................................
Leasing .................................................................................................................................
Securities services .................................................................................................................
Consumer finance .................................................................................................................
Other business ......................................................................................................................
Total .....................................................................................................................................

Millions of yen
¥1,186,126
17,913
763,870
15,861
¥1,983,772

Millions of yen
¥1,100,866
14,333
57,842
7,479
¥1,180,522

Millions of yen
¥3,591
—
537
107
78
¥4,314

Millions of yen
¥3,264
—
383
202
11
¥3,861

Millions of U.S. dollars
$12,617
191
8,125
169
$21,102

Millions of U.S. dollars

$38
—
6
1
1
$46

129

SMFGNotes to Consolidated Financial StatementsSMFG 2013

7. Information on amortization of goodwill and unamortized balance by reportable segment

Millions of yen

Millions of U.S. dollars

Year ended March 31, 2013
Banking business .............................................................
Leasing ............................................................................
Securities services ............................................................
Consumer finance ............................................................
Other business .................................................................
Total ................................................................................

Year ended March 31, 2012
Banking business .............................................................
Leasing ............................................................................
Securities services ............................................................
Consumer finance ............................................................
Other business .................................................................
Total ................................................................................

Amortization
of goodwill
¥ 554
6,388
14,112
4,274
—
¥25,329

Unamortized
balance
¥ 9,351
86,036
216,238
73,999
—
¥385,625

Millions of yen

Amortization
of goodwill
¥ 545
5,307
14,108
1,718
—
¥21,681

Unamortized
balance
¥ 9,904
83,173
230,347
74,111
—
¥397,537

Amortization
of goodwill
$ 6
68
150
45
—
$269

Unamortized
balance
$ 99
915
2,300
787
—
$4,102

8. Information on gains on negative goodwill by reportable segment
There is no material information to be reported for the fiscal year ended March 31, 2013 and 2012.
9. Information on total credit cost by reportable segment

Millions of yen
¥ 63,693
5,289
315
69,342
34,473
¥173,115

Millions of yen
¥ 83,903
(3,977)
1,213
46,199
(6,083)
¥121,255

Millions of U.S. dollars
$ 678
56
3
738
367
$1,841

Notes: 1. Total credit cost = Provision for reserve for possible loan losses + Write-off of loans + Losses on sales of delinquent loans – Recoveries of written-off claims

2. “Other business” includes profit or loss to be offset as internal transactions between segments.

130

SMFGNotes to Consolidated Financial StatementsSMFG 2013
34. Business Combinations
Fiscal year ended March 31, 2013

Joint acquisition of the aircraft leasing business from The Royal Bank
of Scotland Group plc
SMBC and Sumitomo Mitsui Finance and Leasing Company,
Limited (“SMFL”), both are consolidated subsidiaries of SMFG, and
Sumitomo Corporation (“SC”), through the consortium composed
of these three companies, completed the joint acquisition of the
aircraft leasing business under The Royal Bank of Scotland Group plc
(“RBS”), a major financial institution in the UK, on June 1, 2012,
pursuant to the agreement with RBS on January 16, 2012. The
outline of the business combination through acquisition is as follows:

1. Outline of the business combination

(1) Name of the acquired companies and their business

(a) Name of the acquired company: RBS Aerospace Limited
(Renamed as SMBC Aviation Capital Limited in June
2012)
Content of its business: Leasing

(b) Name of the acquired company: RBS Aerospace (UK)

Limited
(Renamed as SMBC Aviation Capital (UK) Limited in June
2012)
Content of its business: Leasing

Limited
(Renamed as SMBC Aviation Capital Australia Leasing Pty
Limited in June 2012)
Content of its business: Leasing
(2) Main reasons for the business combination

The aircraft leasing industry expects the demand for commer-
cial aircraft to continue to grow steadily, underpinned by the
increasing number of passengers associated with the growth
of emerging markets, especially in Asia, and the rapid growth
of low cost carriers (LCC). In this perspective, the consortium
jointly acquired RBS’s aircraft leasing business, one of the
market leaders and the fourth largest player in the world in
terms of asset size, aiming to further expand the existing
aircraft leasing business jointly developed by SMFL and SC.

(3) Date of business combination

June 1, 2012

(4) Legal form of the business combination

Acquisition of 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
90%
(a) RBS Aerospace Limited ......................................
90%
(b) RBS Aerospace (UK) Limited .............................
(c) RBS Australia Leasing Pty Limited ..................... 100%*
* Acquisition through a consolidated subsidiary (percentage share of voting
rights: 90%) newly established by the consortium composed of the three
companies

(7) Main reason SMFG became the controlling entity

SMFG acquired a majority of voting rights of the companies
above (1) and consolidated it as subsidiaries.

2. Period of the acquired companies’ financial results included in the

consolidated financial statements of SMFG
From June 1, 2012 to March 31, 2013

3. Acquisition cost of the acquired companies

Total acquisition cost of the companies above 1. (1) is as follows:
Millions of
U.S. dollars
$ 993

Millions of yen
¥93,325

Consideration for acquisition .....
Expenses directly required
for acquisition .........................
Acquisition cost of the
acquired companies .................

1,419

¥94,745

$1,008

4. Amount of goodwill, reason for recognizing goodwill, amortiza-

tion method and the period
(1) Amount of goodwill

¥7,484 million ($80 million)
(2) Reason for recognizing goodwill

SMFG accounted for the difference between the acquisition
cost and the amount of SMFG’s interests in the company above
1. (1) as goodwill.

(3) Amortization method and the period
Straight-line method over 10 years

5. Amounts of assets and liabilities acquired on the day of the

business combination
(1) Assets

Total assets ................................
Tangible fixed assets ..............

(2) Liabilities

Total liabilities ..........................
Borrowed money ....................

Millions of yen
¥668,091
568,479

Millions of yen
¥571,377
478,581

Millions of
U.S. dollars
$7,107
6,047

Millions of
U.S. dollars
$6,078
5,091

6. Approximate amounts and their calculation method of impact on
the consolidated statements of income for the fiscal year ended
March 31, 2013, assuming that the business combination had been
completed at the beginning of the fiscal year
(1) Estimates of the differences between the ordinary income and

other income data, assuming that the business combination
had been completed at the beginning of the fiscal year and
the actual ordinary income and other income data that are
recorded in the consolidated statements of income are as
follows:

Ordinary income .......................
Ordinary profit ..........................
Net income ...............................

Millions of yen
¥11,365
3,220
1,326

Millions of
U.S. dollars
$121
34
14

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
beginning of the fiscal year based on the amounts stated in the
company above 1. (1) and its consolidated subsidiaries’ state-
ments of income for the period from April 1, 2012 to May 31,
2012, 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 at the begin-
ning of the fiscal year.

131

SMFGNotes to Consolidated Financial StatementsSMFG 2013

The information mentioned in (1) above has not been
audited by KPMG AZSA LLC.

Making SMBC Consumer Finance Co., Ltd. a wholly-owned
subsidiary
SMFG made SMBC Consumer Finance Co., Ltd. (formerly Promise
Co., Ltd. “Promise”) a wholly-owned subsidiary by a share exchange
with an effective date of April 1, 2012 (the “Share Exchange”). The
outline of transactions under common control is as follows:
1. Outline of the transactions

(1) Name and business of combined entities

Acquisition company: Sumitomo Mitsui Financial Group, Inc.
(Bank holding company)
Acquired company: Promise (Consumer finance)

(2) Date of business combination

April 1, 2012

(3) Form of reorganization
Exchange of shares

(4) Name of the entity after the reorganization
Sumitomo Mitsui Financial Group, Inc.
(5) Outline and purpose of the transaction

SMFG has considered it as our basic policy to wholly-own
Promise in order to i) strengthen Promise’s financial base to
effectively achieve expansion of the consumer finance business
with Promise acting at its core in SMFG through further
enforcement of cooperation between Promise and SMFG group
companies and the establishment of a competitive advantage
in the industry of Promise as the initiative, and ii) build up
an infrastructure accommodating more timely and flexible
group-wide decision making. In line with this policy, SMFG
made Promise a wholly-owned subsidiary.

2. Accounting methods

SMFG applies the accounting procedures stipulated by Articles 45
and 46 of the “Accounting Standard for Business Combinations”
(ASBJ Statement No. 21).

3. Acquisition cost of the additionally acquired stocks of subsidiary
Millions of
U.S. dollars

Millions of yen

Fair value of common stock of
Promise additionally acquired ..
Expenses directly required for
acquisition ...............................
Acquisition cost of the
additionally acquired stocks
of subsidiary ............................

¥7,733

¥7,794

$82

$83

4. Share exchange ratio, its basis for determination, number of shares

delivered
(1) Type of shares and share exchange ratio

Common shares
SMFG 1: Promise 0.36
Note: 0.36 shares of SMFG common stock was allotted and
delivered per share of Promise common stock.
(2) Basis for determination of share exchange ratio

SMFG and Promise separately appointed a financial advisor or
third party valuation institution, both independent of the two
companies, in order to ensure fairness and appropriateness in
determining the share exchange ratio for the Share Exchange.
SMFG appointed Goldman Sachs Japan Co. Ltd. as the
financial advisor while Promise appointed Houlihan Lokey
K.K. as the third party valuation institution. To determine the
share exchange ratio, SMFG and Promise separately considered
it carefully with reference to the share exchange ratio provided
by the above financial advisor and third party valuation
institution, with which they also engaged in discussions and
negotiations. With regard to the valuation of Promise’s share
price, SMFG and Promise took account of the tender offer
price for Promise’s common stock, undertaken by SMBC
prior to the Share Exchange as a benchmark in addition to the
conditions and results of the tender offer, SMFG’s share price
movements and other factors. As a result, SMFG and Promise
concluded that the share exchange ratio set forth in (1) above
was reasonable and beneficial to the shareholders of the two
companies, subsequently agreeing and accepting it for the
transaction.

(3) Number of shares delivered

45,660 thousand shares of common stock of SMFG
5. Amount of goodwill, reason for recognizing goodwill, amortiza-

tion method and the period
(1) Amount of goodwill

¥3,916 million ($42 million)
(2) Reason for recognizing goodwill

SMFG accounted for the difference between the acquisition
cost and the amount of SMFG’s interests in Promise as
goodwill.

(3) Amortization method and the period
Straight-line method over 20 years

132

SMFGNotes to Consolidated Financial StatementsSMFG 2013

35. Per Share Data

March 31
Net assets per share .............................................................................................

2013
¥4,686.69

2012
¥3,856.37

Yen

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.

2013
¥586.49
585.94

2012
¥374.26
373.99

U.S. dollars
2013
$49.85

U.S. dollars
2013
$6.24
6.23

Year ended March 31
Net income per share:

Millions of yen, except number of shares

2013

2012

Millions of U.S. dollars
2013

Net income ..........................................................................................................................
Amount not attributable to common stockholders ...............................................................
Net income attributable to common stock ...........................................................................
Average number of common stock during the year (in thousands) ........................................

¥794,059
—
¥794,059
1,353,925

Net income per share (diluted):

Adjustment for net income ..................................................................................................
Adjustment for dilutive shares issued by subsidiaries ......................................................
Increase in number of common stock (in thousands) ............................................................
Stock acquisition rights ..................................................................................................

¥ (437)
(437)
519
519

¥518,536
—
¥518,536
1,385,505

¥ (278)
(278)
243
243

$8,447
—
$8,447
/

$ (5)
(5)
/
/

Outline of dilutive shares which were not included in the calculation of “Net income per share (diluted)” for the fiscal years ended March 31, 2013 and 2012 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:

March 31
Net assets .................................................................................................................................
Amounts excluded from Net assets ...........................................................................................
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) ..........................................................................................

Millions of yen, except number of shares

2013
¥8,443,218
2,098,020
1,260
2,096,760
¥6,345,197

2012
¥7,254,976
2,044,575
692
2,043,883
¥5,210,400

Millions of U.S. dollars
2013
$89,812
22,317
13
22,304
$67,495

1,353,876

1,351,116

36. Subsequent Events
Not applicable.

133

SMFGNotes to Consolidated Financial StatementsSMFG 2013

37. 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 ....................................................................................................
Total liabilities ...........................................................................................

¥ 111,290
76,692
29
15
33,100
1,452
6,155,573
2
0
2
83
83
6,155,487
6,155,487
¥6,266,864

¥1,232,959
1,228,030
939
3,102
15
7
133
97
634
392,900
392,900
1,625,859

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 ..................................................................

2,337,895
1,583,717
1,559,374
24,343
730,333

30,420
699,913
(12,082)
4,639,865
1,140
4,641,005
¥6,266,864

134

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

¥ 101,852
67,323
29
17
33,266
1,216
6,051,608
0
0
0
16
16
6,051,591
6,051,591
¥6,153,461

¥1,232,931
1,228,030
990
3,082
16
6
127
83
594
392,900
392,900
1,625,831

2,337,895
1,622,966
1,559,374
63,592
721,096

30,420
690,676
(154,926)
4,527,031
598
4,527,629
¥6,153,461

$ 1,184
816
0
0
352
15
65,478
0
0
0
1
1
65,477
65,477
$66,662

$13,115
13,063
10
33
0
0
1
1
7
4,179
4,179
17,295

24,869
16,846
16,587
259
7,769

324
7,445
(129)
49,355
12
49,367
$66,662

SMFGNotes to Consolidated Financial StatementsSMFG 2013(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 income .............................................................
Other nonoperating income ...................................................................

Nonoperating expenses ...........................................................................
Interest on borrowings ...........................................................................
Fees and commissions payments .........................................................
Other nonoperating expenses ...............................................................
Ordinary profit ...........................................................................................

2013
¥179,560
165,441
14,119

24,341
7,873
16,468
155,219

144
83
3
57

7,378
7,362
15
0
147,985

2012
¥181,372
166,272
15,100

24,902
8,434
16,468
156,470

109
88
0
19

6,657
6,485
163
8
149,922

Income before income taxes ...................................................................
Income taxes:

147,985

149,922

Current ...................................................................................................
Net income ................................................................................................

3
¥147,981

3
¥149,919

Millions of
U.S. dollars (Note 1)
2013
$1,910
1,760
150

259
84
175
1,651

2
1
0
1

78
78
0
0
1,574

1,574

0
$1,574

Per share data:

Net income ............................................................................................
Net income — diluted ...........................................................................

¥104.93
104.89

¥107.06
107.04

$1.12
1.12

Yen

2013

2012

U.S. dollars (Note 1)
2013

135

SMFGNotes to Consolidated Financial StatementsSMFG 2013(3) Nonconsolidated Statements of Changes in Net Assets

Sumitomo Mitsui Financial Group, Inc.

Year ended March 31
Stockholders’ equity
Capital stock

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Balance at the beginning of the fiscal year ...........................................
Changes in the fiscal year:

¥2,337,895

$24,869

Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................

—
¥2,337,895

—
$24,869

Capital surplus

Capital reserve

Balance at the beginning of the fiscal year ........................................
Changes in the fiscal year:

1,559,374

16,587

Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................

—
¥1,559,374

—
$16,587

Other capital surplus

Balance at the beginning of the fiscal year ........................................
Changes in the fiscal year:

63,592

273,652

676

Disposal of treasury stock .............................................................
Cancellation of treasury stock .......................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................

(39,249)
—
(39,249)
¥ 24,343

(57)
(210,003)
(210,060)
¥ 63,592

(417)
—
(417)
$ 259

Total capital surplus

Balance at the beginning of the fiscal year ........................................
Changes in the fiscal year:

1,622,966

1,833,027

17,264

(39,249)
—
(39,249)
¥1,583,717

(57)
(210,003)
(210,060)
¥1,622,966

(417)
—
(417)
$16,846

Retained earnings

Other retained earnings
Voluntary reserve

Balance at the beginning of the fiscal year ....................................
Changes in the fiscal year:

30,420

324

Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................

—
¥ 30,420

—
$ 324

Retained earnings brought forward

Balance at the beginning of the fiscal year ....................................
Changes in the fiscal year:

690,676

684,883

7,347

Cash dividends ..........................................................................
Net income .................................................................................
Net changes in the fiscal year ....................................................
Balance at the end of the fiscal year..............................................

(138,743)
147,981
9,237
¥ 699,913

(144,126)
149,919
5,792
¥ 690,676

(1,476)
1,574
98
$ 7,445

Total retained earnings

Balance at the beginning of the fiscal year ........................................
Changes in the fiscal year:

721,096

715,303

7,670

Cash dividends ..............................................................................
Net income .....................................................................................
Net changes in the fiscal year ........................................................
Balance at the end of the fiscal year .................................................

(138,743)
147,981
9,237
¥ 730,333

(144,126)
149,919
5,792
¥ 721,096

(1,476)
1,574
98
$ 7,769

136

SMFGNotes to Consolidated Financial StatementsSMFG 2013(Continued)

Year ended March 31
Stockholders’ equity
Treasury stock

Millions of yen

2013

2012

Millions of
U.S. dollars (Note 1)
2013

Balance at the beginning of the fiscal year ...........................................
Changes in the fiscal year:

Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Cancellation of treasury stock ...........................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................

Total stockholders’ equity

Balance at the beginning of the fiscal year ...........................................
Changes in the fiscal year:

Cash dividends ..................................................................................
Net income ........................................................................................
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Cancellation of treasury stock ...........................................................
Net changes in the fiscal year............................................................
Balance at the end of the fiscal year .....................................................

Stock acquisition rights

Balance at the beginning of the 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 beginning of the fiscal year ...........................................
Changes in the fiscal year:

Cash dividends ..................................................................................
Net income ........................................................................................
Purchase of treasury stock ................................................................
Disposal of treasury stock .................................................................
Cancellation 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 .....................................................

¥ (154,926)

¥ (43,482)

$ (1,648)

(263)
143,107
—
142,844
¥ (12,082)

(321,521)
74
210,003
(111,444)
¥ (154,926)

(3)
1,522
—
1,519
$ (129)

4,527,031

4,842,743

48,155

(138,743)
147,981
(263)
103,858
—
112,833
¥4,639,865

(144,126)
149,919
(321,521)
17
—
(315,711)
¥4,527,031

(1,476)
1,574
(3)
1,105
—
1,200
$49,355

598

170

542
542
¥ 1,140

427
427
¥ 598

6
6
$ 12

4,527,629

4,842,914

48,161

(138,743)
147,981
(263)
103,858
—

(144,126)
149,919
(321,521)
17
—

542
113,375
¥4,641,005

427
(315,284)
¥4,527,629

(1,476)
1,574
(3)
1,105
—

6
1,206
$49,367

137

SMFGNotes to Consolidated Financial StatementsSMFG 2013Independent Auditor’s Report

To the Board of Directors of
Sumitomo Mitsui Financial Group, Inc.:

We have audited the accompanying consolidated financial statements of Sumitomo Mitsui Financial Group, Inc.
(“SMFG”) and subsidiaries, which comprise the consolidated balance sheets as at March 31, 2013 and 2012, and the
consolidated statements of income, comprehensive income, changes in net assets and cash flows for the years then
ended, and basis of presentation, significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accor-
dance with accounting principles generally accepted in Japan, and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatements,
whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We con-
ducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on our judgement, including the assessment of
the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making
those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
SMFG and subsidiaries as at March 31, 2013 and 2012, and their financial performance and cash flows for the years
then ended in accordance with accounting principles generally accepted in Japan.

Convenience Translation

The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March
31, 2013 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dol-
lar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to the consolidated
financial statements.

June 27, 2013
Tokyo, Japan

138

SMFGSMFG 2013Supplemental 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

2013

2012

¥ 5,133,711
5,522,090
1,353,746
273,217
3,454,499
1,426,281
7,619,413
14,883
41,294,005
66,665,737
2,226,427
164,189
2,195,969
843,653
409,001
295,860
5,117,140
(806,702)
¥143,203,127

¥ 4,526,372
3,073,702
1,291,818
227,749
4,493,570
1,271,745
8,101,100
17,763
42,379,194
63,584,767
1,280,636
143,978
2,609,882
849,074
514,332
340,592
4,412,973
(867,653)
¥138,251,602

Millions of
U.S. dollars
2013

$ 54,608
58,739
14,400
2,906
36,746
15,172
81,049
158
439,251
709,135
23,683
1,747
23,359
8,974
4,351
3,147
54,432
(8,581)
$1,523,275

139

SMBCSMFG 2013(Continued)

March 31
Liabilities and net assets
Liabilities
Deposits ...............................................................................................................
Call money and bills sold .....................................................................................
Payables under repurchase agreements ..............................................................
Payables under securities lending transactions ...................................................
Commercial paper ................................................................................................
Trading liabilities ...................................................................................................
Borrowed money ..................................................................................................
Foreign exchanges ...............................................................................................
Short-term bonds .................................................................................................
Bonds ...................................................................................................................
Due to trust account ............................................................................................
Other liabilities ......................................................................................................
Reserve for employee bonuses ............................................................................
Reserve for executive bonuses ............................................................................
Reserve for employee retirement benefits............................................................
Reserve for executive retirement benefits ............................................................
Reserve for point service program .......................................................................
Reserve for reimbursement of deposits ...............................................................
Reserve for losses 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 ................................................................................................
Treasury stock ......................................................................................................
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

2013

2012

Millions of
U.S. dollars
2013

¥101,315,909
2,956,172
2,076,791
4,399,084
1,499,499
6,084,053
2,910,334
337,901
277,500
4,585,859
643,350
2,604,970
45,241
3,378
15,776
1,267
2,632
11,195
1,017
159
17,116
39,683
5,117,140
134,946,036

1,770,996
2,717,397
1,869,906
(210,003)
6,148,297
754,804
(30,781)
39,055
(108,123)
654,954
120
1,453,718
8,257,091
¥143,203,127

¥ 93,113,430
2,144,599
1,676,902
5,809,603
1,193,249
6,208,087
6,835,091
302,580
244,988
4,540,708
443,723
3,539,191
38,118
2,419
23,766
1,465
3,230
10,980
336,956
98
52,811
39,915
4,412,973
130,974,895

1,770,996
2,717,397
1,299,484
(210,003)
5,577,875
286,413
(30,674)
39,078
(139,425)
155,391
94
1,543,345
7,276,706
¥138,251,602

$1,077,714
31,445
22,091
46,794
15,950
64,717
30,958
3,594
2,952
48,781
6,843
27,709
481
36
168
13
28
119
11
2
182
422
54,432
1,435,443

18,838
28,905
19,891
(2,234)
65,400
8,029
(327)
415
(1,150)
6,967
1
15,463
87,832
$1,523,275

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 ¥94.01 to US$1, the exchange rate prevailing at March 31, 2013.

140

SMBCSupplemental InformationSMFG 2013
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 ........................................................................
Trading losses ......................................................................................................
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:

¥1,487,807
1,134,497
252,439
6,240
6,527
32,978
5,429
49,694
1,823
719,640
175,868
362,186
63,575
2,810,902

281,199
138,158
29,665
6,300
6,252
83,778
17,043
145,763
40,124
94,549
1,133,426
9,234
184,772
1,889,068
921,833

228,602
(122,120)
815,351
80,836
¥ 734,514

Millions of yen

2013

2012

Millions of
U.S. dollars
2013

¥1,503,442
1,168,180
238,443
5,890
6,788
29,512
4,905
49,720
1,736
689,790
178,791
274,440
67,498
2,715,700

264,340
134,661
30,356
3,694
6,828
75,962
12,837
138,337
—
64,269
1,142,170
13,411
215,861
1,838,390
877,310

63,156
190,576
623,577
89,760
¥ 533,816

$15,826
12,068
2,685
66
69
351
58
529
19
7,655
1,871
3,853
676
29,900

2,991
1,470
316
67
67
891
181
1,551
427
1,006
12,056
98
1,965
20,094
9,806

2,432
(1,299)
8,673
860
$ 7,813

141

SMBCSupplemental InformationSMFG 2013(Continued)

(Consolidated Statements of Comprehensive Income)

Millions of yen

Year ended March 31
Income before minority interests ........................................................................
Other comprehensive income .............................................................................
Net unrealized gains on other securities ..........................................................
Net deferred gains (losses) on hedges .............................................................
Land revaluation excess ...................................................................................
Foreign currency translation adjustments ........................................................
Share of other comprehensive income of affiliates ..........................................
Total comprehensive income ..............................................................................
Comprehensive income attributable to shareholders of the parent ...................
Comprehensive income attributable to minority interests ...............................

2013
¥ 815,351
558,271
482,569
43
—
80,281
(4,622)
1,373,623
1,234,101
139,522

2012
¥623,577
9,312
53,988
(21,897)
5,613
(23,912)
(4,479)
632,889
544,544
88,345

Millions of
U.S. dollars
2013
$ 8,673
5,938
5,133
0
—
854
(49)
14,611
13,127
1,484

Per share data:

Net income .......................................................................................................
Net income — diluted ......................................................................................

¥6,913.18
6,908.19

¥5,024.23
5,023.33

$73.54
73.48

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 ¥94.01 to US$1, the exchange rate prevailing at March 31, 2013.

Yen

U.S. dollars

142

SMBCSupplemental InformationSMFG 2013
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 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 ................................................................................................
Treasury stock ......................................................................................................
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

2013

2012

¥ 3,378,033
6,038,323
514,967
229,826
701,890
795,514
4,085,739
2,372
41,347,000
59,770,763
1,319,175
1,894,382
733,157
167,159
185,941
5,391,645
(616,593)
(29,280)
¥125,910,020

¥ 91,928,337
2,450,065
1,704,650
2,654,478
1,499,499
3,590,373
2,963,075
351,885
20,000
4,277,003
643,350
1,817,920
11,436
665
1,945
10,050
39,190
5,391,645
119,355,573

1,770,996
2,481,273
1,720,728
(210,003)
5,762,995
742,338
23,301
25,810
791,451
6,554,446
¥125,910,020

¥ 4,192,690
2,426,035
547,240
203,768
726,677
626,146
3,777,835
7,253
42,441,134
56,411,492
1,024,074
1,981,695
730,939
154,892
185,428
4,299,577
(689,215)
(10,195)
¥119,037,469

¥ 84,392,835
1,877,900
562,867
4,539,644
1,193,249
3,503,085
5,181,294
341,400
19,999
4,215,610
443,723
2,693,465
10,798
609
2,503
9,854
39,385
4,299,577
113,327,806

1,770,996
2,481,273
1,255,108
(210,003)
5,297,375
281,109
105,391
25,786
412,288
5,709,663
¥119,037,469

Millions of
U.S. dollars
2013

$ 35,933
64,231
5,478
2,445
7,466
8,462
43,461
25
439,815
635,792
14,032
20,151
7,799
1,778
1,978
57,352
(6,559)
(311)
$1,339,326

$ 977,857
26,062
18,133
28,236
15,950
38,191
31,519
3,743
213
45,495
6,843
19,338
122
7
21
107
417
57,352
1,269,605

18,838
26,394
18,304
(2,234)
61,302
7,896
248
275
8,419
69,721
$1,339,326

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 ¥94.01 to US$1, the exchange rate prevailing at March 31, 2013.

143

SMBCSupplemental InformationSMFG 2013
Millions of yen

2013

2012

Millions of
U.S. dollars
2013

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 ........................................................................
Trading losses ......................................................................................................
Other operating expenses ....................................................................................
General and administrative expenses ..................................................................
Provision for reserve for possible loan losses ......................................................
Other expenses ....................................................................................................
Total expenses .....................................................................................................
Income before income taxes ..............................................................................
Income taxes:

¥1,270,673
958,912
245,917
5,009
1,601
19,440
39,792
1,823
489,310
5,780
278,366
75,457
2,121,412

299,478
101,522
97,695
5,311
4,688
78,900
11,360
145,572
9,562
51,254
759,295
—
190,849
1,456,011
665,400

¥1,239,535
943,216
226,631
3,726
1,330
18,625
46,006
1,736
453,877
84,051
193,341
48,500
2,021,042

282,668
99,235
93,389
2,050
5,318
70,530
12,144
134,989
—
22,384
752,436
16,175
120,394
1,329,050
691,992

209,704
(162,095)
¥ 617,791

44,703
169,315
¥ 477,973

$13,516
10,200
2,616
53
17
207
423
19
5,205
61
2,961
803
22,566

3,186
1,080
1,039
56
50
839
121
1,548
102
545
8,077
—
2,030
15,488
7,078

2,231
(1,724)
$ 6,572

Per share data:

¥5,814.59
—

¥4,498.64
—

$61.85
—

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 ¥94.01 to US$1, the exchange rate prevailing at March 31, 2013.

Yen

U.S. dollars

144

SMBCSupplemental InformationSMFG 2013
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 ..................................................... ¥1,297,908
Interest expenses ..................................................
274,444
Net interest income ................................................... 1,023,463
Trust fees ...................................................................
1,871
Fees and commissions .........................................
896,691
Fees and commissions payments ........................
108,673
Net fees and commissions ........................................
788,018
Trading income......................................................
229,721
Trading losses .......................................................
69,493
Net trading income ....................................................
160,228
Other operating income ........................................ 1,084,654
Other operating expenses.....................................
837,374
Net other operating income.......................................
247,280

2013

Overseas
operations Elimination

Total

¥527,972
158,458
369,513
—
146,465
23,558
122,906
34,767
28,378
6,389
199,825
123,000
76,824

(118,034)
(333)
—
(3,030)
(274)
(2,755)
(57,747)
(57,747)

¥(118,367) ¥1,707,513
314,868
1,392,644
1,871
1,040,126
131,957
908,168
206,741
40,124
— 166,617
1,283,776
960,179
323,597

(703)
(195)
(508)

Domestic
operations
¥1,314,718
268,775
1,045,943
1,770
827,374
119,947
707,426
223,100
9,273
213,827
1,029,399
836,155
193,243

2012

Overseas
operations Elimination

Total

¥432,440
135,995
296,444
—
130,911
12,943
117,968
19,768
35,403
(15,634)
81,633
45,118
36,515

(114,559)
(1,006)
—
(2,606)
(791)
(1,814)
(44,676)
(44,676)

¥(115,566) ¥1,631,592
290,211
1,341,380
1,770
955,680
132,099
823,580
198,192
—
— 198,192
1,110,566
880,998
229,568

(466)
(275)
(190)

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 (2013, ¥7 million; 2012, ¥11 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 .............................................. ¥ 95,457,643
51,071,487
36,951,823
303,572
30,138

Loans and bills discounted ...................................
Securities ..............................................................
Call loans and bills bought ....................................
Receivables under resale agreements ..................

Average balance

Receivables under securities
borrowing transactions .......................................
Deposits with banks ..............................................
Lease receivables and investment assets ............

3,731,493
389,585
1,434,859

Interest-bearing liabilities .......................................... ¥101,571,811
76,014,488
6,279,011
1,233,732
1,069,954
3,900,722
—
6,934,146
964,542
4,943,650

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 ....................................................................

2013
Interest
¥1,297,908
970,431
217,956
1,519
46

6,565
1,505
48,427

¥ 274,444
47,239
8,989
1,039
1,497
6,284
—
104,684
1,356
100,042

Earnings yield

1.36%
1.90
0.59
0.50
0.16

0.18
0.39
3.38

0.27%
0.06
0.14
0.08
0.14
0.16
—
1.51
0.14
2.02

Average balance
¥ 96,305,891
52,955,134
35,985,772
340,099
33,409

3,916,819
320,621
1,502,065

¥103,590,027
74,462,781
6,553,470
1,434,362
1,034,848
3,873,427
—
10,594,792
1,016,300
4,403,844

2012
Interest
¥1,314,718
971,576
218,377
2,080
38

6,823
2,853
56,844

¥ 268,775
54,738
10,059
1,564
1,048
6,852
—
104,790
1,540
86,133

Earnings yield

1.37%
1.83
0.61
0.61
0.11

0.17
0.89
3.78

0.26%
0.07
0.15
0.11
0.10
0.18
—
0.99
0.15
1.96

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 (2013, ¥1,648,570 million; 2012, ¥1,950,185

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 (2013, ¥24,916 million; 2012, ¥24,556 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2013, ¥24,916 million; 2012, ¥24,556 million) and corresponding
interest (2013, ¥7 million; 2012, ¥11 million).

145

SMFGSMFG 2013

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
¥25,635,638
14,830,669
2,569,373
1,141,432
285,240

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 ....................................................................

—
4,689,360
295,034

¥17,830,372
8,410,005
5,264,852
659,919
1,081,172
—
1,580,650
737,037
—
54,832

2013
Interest
¥527,972
383,510
50,542
13,038
6,193

—
32,199
16,000

¥158,458
49,448
32,638
3,508
4,805
—
5,703
17,172
—
2,825

Millions of yen

Earnings yield
2.06%
2.59
1.97
1.14
2.17

Average balance
¥19,015,055
11,282,653
1,794,991
830,607
193,189

—
0.69
5.42

0.89%
0.59
0.62
0.53
0.44
—
0.36
2.33
—
5.15

—
3,739,091
230,789

¥12,388,251
7,419,147
2,981,411
376,447
647,974
—
511,690
325,402
—
102,081

2012
Interest
¥432,440
312,938
40,659
12,671
5,852

—
27,497
12,099

¥135,995
48,104
22,399
2,032
2,646
—
1,986
13,098
—
6,610

Earnings yield
2.27%
2.77
2.27
1.53
3.03

—
0.74
5.24

1.10%
0.65
0.75
0.54
0.41
—
0.39
4.03
—
6.48

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 (2013, ¥85,807 million; 2012, ¥71,630 million).

Total of Domestic and Overseas Operations

Millions of yen

Year ended March 31
Interest-earning assets .............................................. ¥119,009,060
64,313,060
39,175,534
1,445,004
315,280

Average balance

3,731,493
4,945,879
1,729,893

Interest-bearing liabilities .......................................... ¥117,416,948
84,218,862
11,543,863
1,893,652
2,151,027
3,900,722
1,580,650
6,298,037
964,542
4,605,583

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 ....................................................................

2013
Interest
¥1,707,513
1,278,372
251,675
14,557
6,240

6,565
33,191
64,425

¥314,868
96,175
41,627
4,547
6,301
6,284
5,703
46,280
1,356
86,399

Earnings yield

1.43%
1.99
0.64
1.01
1.98

0.18
0.67
3.72

0.27%
0.11
0.36
0.24
0.29
0.16
0.36
0.73
0.14
1.88

Average balance
¥113,479,948
62,913,741
37,433,545
1,170,707
226,579

3,916,819
3,904,411
1,732,854

¥114,072,487
81,683,045
9,534,881
1,810,794
1,682,804
3,873,427
511,690
9,616,933
1,016,300
4,113,026

2012
Interest
¥1,631,592
1,211,794
242,086
14,752
5,890

6,823
29,742
68,943

¥290,211
102,018
32,458
3,596
3,694
6,852
1,986
45,939
1,540
76,276

Earnings yield

1.44%
1.93
0.65
1.26
2.60

0.17
0.76
3.98

0.25%
0.12
0.34
0.20
0.22
0.18
0.39
0.48
0.15
1.85

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 (2013, ¥1,735,120 million; 2012, ¥2,024,133

million).

4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets” are

146

SMFGIncome Analysis (Consolidated)SMFG 2013

Fees and Commissions

Millions of yen

2013

Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥896,691
23,348
118,486
75,331
18,172
5,989
67,379
225,444
161,394

Deposits and loans ...............................................
Remittances and transfers ....................................
Securities-related business ...................................
Agency ..................................................................
Safe deposits ........................................................
Guarantees ............................................................
Credit card business .............................................
Investment trusts ..................................................

Overseas
operations Elimination
¥146,465
89,445
12,260
18,206
—
2
12,142
—
1,556

¥(3,030)
(69)
(5)
(1,538)
—
—
(145)
—
—

Total
¥1,040,126
112,723
130,742
91,999
18,172
5,991
79,376
225,444
162,951

Domestic
operations
¥827,374
21,619
117,283
65,090
18,896
6,322
59,283
208,853
141,372

2012

Overseas
operations Elimination
¥130,911
70,789
9,704
25,625
—
2
11,892
—
1,567

¥(2,606)
(11)
(3)
(366)
—
—
(109)
—
—

Total
¥955,680
92,397
126,984
90,350
18,896
6,325
71,066
208,853
142,940

Fees and commissions payments ............................. ¥108,673
27,923

Remittances and transfers ....................................

¥ 23,558
16,381

¥ (274)
(59)

¥ 131,957
44,244

¥119,947
27,256

¥ 12,943
6,156

¥ (791)
(111)

¥132,099
33,301

Notes: 1. Domestic operations comprise the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic

consolidated subsidiaries. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and
overseas consolidated subsidiaries.

2. Intersegment transactions are reported in the “Elimination” column.

Trading Income

2013

2012

Millions of yen

Domestic
Year ended March 31
operations
Trading income .......................................................... ¥229,721
210,551

Gains on trading securities ...................................

Overseas
operations Elimination

¥34,767
—

¥(57,747)
(8,463)

Total
¥206,741
202,087

Domestic
operations
¥223,100
132,055

Overseas
operations Elimination

¥19,768
—

¥(44,676)
(17,077)

Total
¥198,192
114,978

Gains on securities related to
trading transactions ............................................
Gains on trading-related financial derivatives .......
Others ...................................................................

4,225
14,577
367

Trading losses............................................................
Losses on trading securities .................................

69,493
—

Losses on securities related to
trading transactions ............................................
Losses on trading-related financial derivatives .....
Others ...................................................................

—
69,493
—

60
34,707
—

28,378
8,463

—
19,914
—

—
(49,284)
—

(57,747)
(8,463)

—
(49,284)
—

4,286
—
367

40,124
—

—
40,124
—

7,313
83,188
542

320
18,739
708

—
(27,599)
—

7,634
74,328
1,251

¥ 9,273

¥35,403
— 17,077

¥(44,676)
(17,077)

¥ —
—

—
9,273
—

—
18,326
—

—
(27,599)
—

—
—
—

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.

147

SMFGIncome Analysis (Consolidated)SMFG 2013

Assets and Liabilities (Consolidated)

Sumitomo Mitsui Financial Group, Inc. and Subsidiaries

Deposits and Negotiable Certificates of Deposit
Year-End Balance

March 31
Domestic operations:

Millions of yen

2013

2012

Liquid deposits ............................................................................................
Fixed-term deposits ....................................................................................
Others ..........................................................................................................
Subtotal .......................................................................................................
Negotiable certificates of deposit ................................................................
Total .............................................................................................................

Overseas operations:

¥ 51,018,457
25,178,398
3,834,791
80,031,646
5,553,909
¥ 85,585,556

¥ 6,448,821
2,509,550
91,792
9,050,165
6,201,744
¥ 15,251,909
¥100,837,465

¥48,497,851
25,121,271
3,792,990
77,412,113
5,327,489
¥82,739,603

¥ 4,849,970
1,745,146
121,331
6,716,447
3,266,149
¥ 9,982,596
¥92,722,199

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

2013

2012

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 .................................................................................................................

¥ 6,003,907
152,463
887,269
4,281,888
4,159,359
3,706,937
7,584,206
3,915,730
1,115,839
20,072,016
¥51,879,618

¥ 62,765
579,557
11,634,862
1,475,287
¥13,752,473
¥65,632,091

11.57%
0.29
1.71
8.25
8.02
7.15
14.62
7.55
2.15
38.69
100.00%

0.46%
4.21
84.60
10.73
100.00%
—

¥ 6,076,691
137,269
897,228
4,237,675
4,117,071
3,448,010
7,443,777
3,612,303
1,054,492
20,907,113
¥51,931,633

¥ 73,593
510,896
9,165,963
1,038,512
¥10,788,965
¥62,720,599

11.70%
0.26
1.73
8.16
7.93
6.64
14.33
6.96
2.03
40.26
100.00%

0.68%
4.73
84.96
9.63
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.

148

SMFGSMFG 2013

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 ..............................................................................

2013
¥539,305
389,555
5
¥928,866
¥653,146

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

2013
¥ 55,479
1,130,562
16,044
484,963
¥1,687,049
¥ 585,789

Millions of yen

2012
¥593,338
385,416
178
¥978,933
¥685,871

2012
¥ 74,218
1,145,347
22,502
562,882
¥1,804,951
¥ 596,075

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 Act

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

2013
¥ 248,161
973,057
505,130
1,726,349
74,273,608
¥75,999,958
¥ 653,146

Millions of yen

2012
¥ 259,670
1,017,631
580,351
1,857,653
69,826,134
¥71,683,787
¥ 685,871

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

149

SMFGAssets and Liabilities (Consolidated)SMFG 2013

Securities
Year-End Balance

March 31
Domestic operations:

Millions of yen

2013

2012

Overseas operations:

Unallocated corporate assets:

¥26,994,438
355,883
3,015,019
2,986,503
5,432,893
¥38,784,738

¥ —
—
—
—
2,473,424
¥ 2,473,424

¥ —
—
—
48,568
—
¥ 48,568
¥41,306,731

¥29,327,057
474,884
3,155,712
2,567,288
5,015,264
¥40,540,207

¥ —
—
—
997
1,941,863
¥ 1,942,861

¥ —
—
—
46,881
—
¥ 46,881
¥42,529,950

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 ........................................................... ¥7,101,829
Trading securities .................................................. 3,185,210
Derivatives of trading securities ............................
3,614
Securities related to trading transactions .............
—

Derivatives of securities related to
trading transactions ............................................
26,022
Trading-related financial derivatives ..................... 3,699,030
Other trading assets..............................................
187,952

2013

2012

Millions of yen

Overseas
operations Elimination

¥(60,261)

¥723,986
35,647
—
—

Total
¥7,765,554
— 3,220,858
3,614
—
—
—

Domestic
operations
¥7,546,567
4,008,205
3,419
—

¥698,785
19,403
—
—

Overseas
operations Elimination

¥(48,408)

Total
¥8,196,944
— 4,027,609
3,419
—
—
—

22
688,317
—

—
(60,261)
—

26,044
4,327,085
187,952

19,498
3,262,485
252,958

5
674,615
4,759

—
(48,408)
—

19,503
3,888,692
257,718

Trading liabilities ........................................................ ¥5,454,843
Trading securities sold for short sales .................. 1,906,428
Derivatives of trading securities ............................
11,010

¥725,049
3,700
716

¥(60,261)

¥6,119,631
— 1,910,129
11,727
—

¥5,505,475
2,169,852
7,409

¥790,993
3,005
43

¥(48,408)

¥6,248,061
— 2,172,857
7,453
—

Securities related to trading transactions
sold for short sales ..............................................

—

Derivatives of securities related to
trading transactions ............................................
29,372
Trading-related financial derivatives ..................... 3,508,033
Other trading liabilities ..........................................
—

24
720,607
—

—
(60,261)
—

29,396
4,168,379
—

17,442
3,310,771
—

13
787,931
—

—
(48,408)
—

17,455
4,050,294
—

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.

150

SMFGAssets and Liabilities (Consolidated)SMFG 2013

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
157,151
(16,700)

April 30, 2008*1 ........................................
May 16, 2008*2 ........................................
January 4, 2009*3 .................................... 781,189,672.23
June 22, 2009*4 ....................................... 219,700,000
July 27, 2009*5 ........................................
8,931,300
January 27, 2010*6 .................................. 340,000,000
January 28, 2010*7 ..................................
36,343,848
February 8, 2010*8 ...................................
(33,400)
February 10, 2010*9 .................................
20,000,000
April 1, 2011*10 ........................................
(70,001)

Balances
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
1,414,055,625

Changes
¥ —
—
—
413,695
16,817
459,477
—
—
27,028
—

Balances
¥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
2,337,895

Changes
¥ —
—
—
413,695
16,817
459,477
—
—
27,028
—

Balances
¥ 642,355
642,355
642,355
1,056,050
1,072,868
1,532,345
1,532,345
1,532,345
1,559,374
1,559,374

Remarks:
*1 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)
*2 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)
*3 Increase in shares of common stock of 781,189,672.23 as a result of 100-for-1 stock split
*4 Public offering: Common stock: 219,700,000 shares

Issue price: ¥3,766 Capitalization: ¥1,883
*5 Allotment to third parties: Common stock: 8,931,300 shares

*6 Public offering: Common stock: 340,000,000 shares

Issue price: ¥2,702.81 Capitalization: ¥1,351.405

Issue price: ¥3,766 Capitalization: ¥1,883

*7 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)

*8 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)
*9 Allotment to third parties: Common stock: 20,000,000 shares

Issue price: ¥2,702.81 Capitalization: ¥1,351.405

*10 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)

Number of Shares Issued

March 31, 2013
Common stock ...............................................................................................................................................................
Total ................................................................................................................................................................................

Number of shares issued
1,414,055,625
1,414,055,625

151

SMFGSMFG 2013Stock Exchange Listings
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Nagoya Stock Exchange (First Section)
New York Stock Exchange*
* SMFG listed its ADRs on the New York Stock Exchange.

Number of Common Shares, Classified by Type of Shareholders

March 31, 2013
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
363
91
8,121
913
245
313,967
323,707
—

Number of
units

4,774
4,250,090
635,587
1,441,645
5,918,516
3,822
1,861,061
14,115,495
2,506,125

Percentage of
total
0.03%

30.11
4.50
10.21
41.93
0.03
13.19
100.00%
—

Notes: 1. Of 3,860,472 shares in treasury stock, 38,604 units are included in “Individuals and others” and the remaining 72 shares are included in “Fractional shares.”

2. “Other institutions” and “Fractional shares” includes 30 units and 48 shares, held at Japan Securities Depository Center, Incorporated.
3. In the column “Fractional shares,” title in the Register of Shareholders is in the name of Sumitomo Mitsui Banking Corporation, but 60 of the shares listed

are not substantially in the ownership of the bank.

4. The number of shares constituting 1 unit is 100.

Principal Shareholders

March 31, 2013
Japan Trustee Services Bank, Ltd. (Trust Account) ......................................................................................
The Master Trust Bank of Japan, Ltd. (Trust Account) .................................................................................
Sumitomo Mitsui Banking Corporation ........................................................................................................
SSBT OD05 Omnibus Account — Treaty Clients*.......................................................................................
Japan Trustee Services Bank, Ltd. (Trust Account 9) ...................................................................................
State Street Bank and Trust Company 505225** .........................................................................................
Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension** ...................................................
Nomura Securities Co., Ltd. .........................................................................................................................
The Bank of New York, Treaty JASDEC Account*** .....................................................................................
NATSCUMCO**** ..........................................................................................................................................
Total ..............................................................................................................................................................

Number of
shares
76,570,818
70,319,200
56,160,924
38,096,284
27,142,700
22,957,272
17,660,849
17,347,000
14,973,601
14,283,505
355,512,153

Percentage of
shares outstanding
5.41%
4.97
3.97
2.69
1.91
1.62
1.24
1.22
1.05
1.01
25.14%

* Standing agent: The HongKong and Shanghai Banking Corporation Limited’s Tokyo Branch
** Standing agent: Mizuho Corporate Bank, Ltd.
*** Standing agent: The Bank of Tokyo-Mitsubishi UFJ, Ltd.
**** Standing agent: Sumitomo Mitsui Banking Corporation
Notes: 1. Pursuant to Article 67 of the Enforcement Ordinance of the Companies Act, the exercise of voting rights of common shares held by Sumitomo Mitsui

Banking Corporation is restricted. Likewise, for common shares held by the bank, title in the Register of Shareholders is in the name of the bank, but 60 of
the shares listed are not substantially in the ownership of the bank.

2. Sumitomo Mitsui Trust Bank, Limited has submitted a Report of Possession of Large Volume regarding its shareholding as of February 21, 2013. It stated
that Sumitomo Mitsui Trust Bank, Limited and two other shareholders hold common shares in SMFG as of February 15, 2013. But these three are not
included in the above Principal Shareholders because SMFG was unable to confirm the number of shares owned by them at the end of the fiscal year
under review.
The Report of Possession of Large Volume is detailed as follows.

Principal Shareholder: Sumitomo Mitsui Trust Bank, Limited (and two other joint shareholders)
Number of shares held: 70,423,800 (including joint ownership)
Shareholding ratio:

4.98%

3. Nomura Securities Co., Ltd. has submitted a Report of Possession of Large Volume regarding its shareholding as of October 22, 2012, and an amended

report regarding the above-mentioned as of October 23, 2012. It stated that Nomura Securities Co., Ltd. and two other shareholders hold common shares
in SMFG as of October 15, 2012. But these three are not included in the above Principal Shareholders because SMFG was unable to confirm the number
of shares owned by them at the end of the fiscal year under review.
The Report of Possession of Large Volume is detailed as follows.

Principal shareholder: Nomura Securities Co., Ltd. (and two other joint shareholders)
Number of shares held: 42,463,537 (including joint ownership)
Share holding ratio:

3.00%

152

SMFGCapital (Nonconsolidated)SMFG 2013

Stock Options

March 31
Number of shares granted........................................................................................................
Type of stock ............................................................................................................................
Issue price ................................................................................................................................
Amount capitalized when shares are issued ............................................................................
Exercise period of stock options ..............................................................................................

2013

99,000 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

2013

262,700 shares
Common stock
¥1,873 per share
¥937 per share
From August 16, 2011 to August 15, 2041

Date of resolution: Meeting of the Board of Directors held on July 29, 2011

2013

279,400 shares
Common stock
¥2,043 per share
¥1,022 per share
From August 15, 2012 to August 14, 2042

Date of resolution: Meeting of the Board of Directors held on July 30, 2012

Common Stock Price Range
Stock Price Performance

Year ended March 31
High .......................................................................................
Low ........................................................................................

2013
¥4,255
2,231

2012
¥2,933
2,003

Notes: 1. Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).

Yen
2011
¥3,355
2,235

2010
¥4,520
2,591

2009
¥9,640
2,585

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.

Six-Month Performance

Yen

High ..............................................................
Low ...............................................................

October 2012
¥2,499
2,330

November 2012
¥2,675
2,357

December 2012
¥3,125
2,627

January 2013
¥3,690
3,090

February 2013
¥3,935
3,555

March 2013
¥4,255
3,685

Note: Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).

153

SMFGCapital (Nonconsolidated)SMFG 2013
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 ..................................................... ¥1,096,908
Interest expenses ..................................................
237,412
Net interest income ...................................................
859,495
Trust fees ...................................................................
1,823
Fees and commissions .........................................
576,012
Fees and commissions payments ........................
122,477
Net fees and commissions ........................................
453,535
Trading income......................................................
198,848
Trading losses .......................................................
69,493
Net trading income ....................................................
129,354
Other operating income ........................................
308,105
Other operating expenses.....................................
84,618
Net other operating income.......................................
223,486

Millions of yen

2013

Overseas
operations Elimination
¥(105,774)
¥496,673
(105,459)
149,238
(315)
347,434
—
—
(2,831)
146,459
(272)
23,558
122,900
(2,558)
(57,747)
34,767
(57,747)
28,378
—
6,389
(617)
54,698
9,930
—
(617)
44,768

Total
¥1,487,807
281,192
1,206,615
1,823
719,640
145,763
573,877
175,868
40,124
135,744
362,186
94,549
267,637

Domestic
operations
¥1,200,347
234,598
965,749
1,736
561,482
126,179
435,302
203,699
9,273
194,426
234,609
57,071
177,537

2012

Overseas
operations Elimination
¥(100,773)
¥403,868
(100,890)
130,621
116
273,246
—
—
(2,550)
130,857
(785)
12,943
(1,764)
117,914
(44,676)
19,768
(44,676)
35,403
—
(15,634)
(427)
40,258
—
7,197
(427)
33,061

Total
¥1,503,442
264,329
1,239,113
1,736
689,790
138,337
551,452
178,791
—
178,791
274,440
64,269
210,171

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 (2013, ¥7 million; 2012, ¥11 million) related to the management of money held in trust.

3. Intersegment transactions are reported in the “Elimination” column.

Average Balance, Interest and Earnings Yield of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations

Millions of yen

Year ended March 31
Average balance
Interest-earning assets ................................... ¥94,161,776
51,558,441
36,757,204
303,408
30,138

Loans and bills discounted .........................
Securities ....................................................
Call loans and bills bought .........................
Receivables under resale agreements ........
Receivables under securities
borrowing transactions .............................
Deposits with banks ...................................

2013

Interest
¥1,096,908
814,057
218,720
1,519
46

Earnings yield
1.16%
1.58
0.60
0.50
0.16

Average balance
¥ 95,201,464
53,624,379
35,812,965
329,845
33,409

2012

Interest
¥1,200,347
914,742
214,736
2,069
38

Earnings yield
1.26%
1.71
0.60
0.63
0.11

3,689,947
330,176

6,527
1,359

0.18
0.41

3,873,332
289,927

6,788
2,741

0.18
0.95

Interest-bearing liabilities ............................... ¥98,618,767
76,183,139
6,435,488
1,233,579
1,068,990

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 .........................................................

3,870,048
—
5,035,564
186,527
4,366,856

6,252
—
87,374
218
80,734

¥ 237,412
47,445
9,125
1,039
1,496

0.24%
0.06
0.14
0.08
0.14

0.16
—
1.74
0.12
1.85

¥100,596,463
74,584,401
6,690,572
1,434,354
1,034,285

¥ 234,598
54,758
10,128
1,563
1,047

3,849,958
—
8,585,479
278,485
3,917,314

6,828
—
89,062
417
68,933

0.23%
0.07
0.15
0.11
0.10

0.18
—
1.04
0.15
1.76

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 (2013, ¥1,598,185 million; 2012, ¥1,909,038

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 (2013, ¥17,906 million; 2012, ¥19,144 million). “Interest-bearing liabilities” are shown
after deduction of amounts equivalent to the average balance of money held in trust (2013, ¥17,906 million; 2012, ¥19,144 million) and corresponding
interest (2013, ¥7 million; 2012, ¥11 million).

154

SMBCSMFG 2013

Overseas Operations

Year ended March 31
Average balance
Interest-earning assets ................................... ¥24,914,597
14,696,165
2,176,455
1,141,432
285,240

—
4,665,188

—
32,078

Millions of yen

2013

Interest
¥496,673
382,465
34,073
13,038
6,193

Earnings yield
1.99%
2.60
1.57
1.14
2.17

Average balance
¥18,397,039
11,192,798
1,402,073
830,607
193,189

2012

Interest
¥403,868
310,883
23,707
12,671
5,852

Earnings yield
2.20%
2.78
1.69
1.53
3.03

—
0.69

0.85%
0.59
0.62
0.53
0.44

—
3,726,846

—
27,382

¥12,284,079
7,419,165
2,981,411
376,447
647,974

¥130,621
48,104
22,399
2,032
2,646

¥149,238
49,448
32,638
3,508
4,805

Interest-bearing liabilities ............................... ¥17,503,492
8,410,034
5,264,852
659,919
1,081,172

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 .........................................................

—
1,580,650
410,128
—
54,832
Notes: 1. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.

—
511,690
221,212
—
102,081

—
5,703
8,623
—
2,825

—
0.36
2.10
—
5.15

—
1,986
7,895
—
6,610

—
0.73

1.06%
0.65
0.75
0.54
0.41

—
0.39
3.57
—
6.48

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 (2013, ¥85,149 million; 2012, ¥71,493 million).

Total of Domestic and Overseas Operations

Year ended March 31
Average balance
Interest-earning assets ................................... ¥117,570,430
64,889,690
38,933,660
1,444,840
315,280

Millions of yen

2013

Interest
¥1,487,807
1,119,939
252,439
14,557
6,240

Earnings yield
1.27%
1.73
0.65
1.01
1.98

Average balance
¥112,123,576
63,510,882
37,215,039
1,160,453
226,579

2012

Interest
¥1,503,442
1,153,439
238,443
14,741
5,890

Earnings yield
1.34%
1.82
0.64
1.27
2.60

3,689,947
4,870,733

6,527
32,978

0.18
0.68

3,873,332
3,862,569

6,788
29,512

0.18
0.76

Interest-bearing liabilities ............................... ¥114,579,932
84,429,208
11,700,340
1,893,498
2,150,064

3,870,048
1,580,650
4,080,888
186,527
4,421,689

¥ 281,192
96,394
41,763
4,547
6,300

6,252
5,703
19,415
218
83,559

0.25%
0.11
0.36
0.24
0.29

0.16
0.36
0.48
0.12
1.89

¥111,374,120
81,813,864
9,671,984
1,810,786
1,682,240

¥ 264,329
102,133
32,528
3,596
3,694

3,849,958
511,690
7,500,718
278,485
4,019,396

6,828
1,986
24,773
417
75,544

0.24%
0.12
0.34
0.20
0.22

0.18
0.39
0.33
0.15
1.88

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 (2013, ¥1,682,995 million; 2012, ¥1,980,197

million).

4. Income and expenses resulting from money held in trust are included in “Other income” and “Other expenses.” Therefore, “Interest-earning assets” are

155

SMBCIncome Analysis (Consolidated)SMFG 2013

Fees and Commissions

2013

2012

Millions of yen

Domestic
Year ended March 31
operations
Fees and commissions .............................................. ¥576,012
23,372
118,500
63,898
16,643
5,989
36,971
6,434
144,757

Overseas
operations Elimination
¥146,459
89,445
12,260
18,206
—
2
12,137
—
1,556

¥(2,831)
(11)
(1)
(1,538)
—
—
(142)
—
—

Total
¥719,640
112,805
130,760
80,566
16,643
5,991
48,965
6,434
146,314

Domestic
operations
¥561,482
22,408
118,183
56,610
16,805
6,323
42,030
6,298
122,610

Overseas
operations Elimination
¥130,857
70,789
9,704
25,625
—
2
11,892
—
1,567

¥(2,550)
(10)
(1)
(361)
—
—
(106)
—
—

Total
¥689,790
93,187
127,886
81,874
16,805
6,325
53,816
6,298
124,177

Fees and commissions payments ............................. ¥122,477
27,923

Remittances and transfers ....................................

¥ 23,558
16,381

¥ (272)
(59)

¥145,763
44,244

¥126,179
27,256

¥ 12,943
6,156

¥ (785)
(111)

¥138,337
33,301

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.

Trading Income

2013

2012

Millions of yen

Domestic
Year ended March 31
operations
Trading income .......................................................... ¥198,848
179,677

Gains on trading securities ...................................

Overseas
operations Elimination
¥(57,747)
(8,463)

¥34,767
—

Total
¥175,868
171,214

Domestic
operations
¥203,699
112,654

Overseas
operations Elimination
¥(44,676)
— (17,077)

¥19,768

Total
¥178,791
95,577

4,225
14,577
367

60
34,707
—

—
(49,284)
—

4,286
—
367

7,313
83,188
542

320
18,739
708

—
(27,599)
—

7,634
74,328
1,251

Trading losses............................................................ ¥ 69,493
—

Losses on trading securities .................................

¥28,378
8,463

¥(57,747)
(8,463)

¥ 40,124
—

¥ 9,273

¥35,403
— 17,077

¥(44,676)
(17,077)

¥ —
—

—
69,493
—

—
19,914
—

—
(49,284)
—

—
40,124
—

—
9,273
—

—
18,326
—

—
(27,599)
—

—
—
—

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.

156

SMBCIncome Analysis (Consolidated)SMFG 2013

Assets and Liabilities (Consolidated)

Sumitomo Mitsui Banking Corporation and Subsidiaries

Deposits and Negotiable Certificates of Deposit
Year-End Balance

March 31
Domestic operations:

Millions of yen

2013

2012

Overseas operations:

¥ 51,231,871
25,186,988
3,837,962
80,256,822
5,776,809
¥ 86,033,632

¥ 6,471,045
2,517,694
91,792
9,080,532
6,201,744
¥ 15,282,277
¥101,315,909

¥48,688,932
25,121,952
3,796,048
77,606,933
5,518,289
¥83,125,222

¥ 4,855,580
1,745,146
121,331
6,722,058
3,266,149
¥ 9,988,207
¥93,113,430

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

2013

2012

¥ 5,995,285
150,712
886,516
4,264,739
4,136,162
5,697,927
7,544,508
4,011,560
1,115,839
18,951,459
¥52,754,711

11.36%
0.29
1.68
8.09
7.84
10.80
14.30
7.60
2.12
35.92
100.00%

¥ 6,071,389
137,101
896,269
4,221,483
4,095,171
4,904,325
7,377,705
3,684,426
1,054,492
20,433,201
¥52,875,567

11.48%
0.26
1.70
7.98
7.75
9.28
13.95
6.97
1.99
38.64
100.00%

Overseas operations:

¥ 73,593
510,896
9,086,200
1,038,510
¥10,709,200
¥63,584,767

¥ 62,765
619,212
11,783,976
1,445,071
¥13,911,026
¥66,665,737

0.45%
4.45
84.71
10.39
100.00%
—

0.69%
4.77
84.84
9.70
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.

157

SMBCSMFG 2013

Risk-Monitored Loans

2013
¥ 54,846
1,006,497
9,953
422,509
¥1,493,807
¥ 549,257

Millions of yen

2012
¥ 73,378
1,060,320
18,178
507,428
¥1,659,306
¥ 558,926