2016
ANNUAL REPORT
YEAR ENDED MARCH 31, 2016
Editorial
Policy
This annual report conveys financial and non-financial information about the
overall picture, business strategy, and corporate infrastructure of Sumitomo
Mitsui Financial Group (SMFG). It has been compiled with reference to the
International Integrated Reporting Framework issued by the International
Integrated Reporting Council (IIRC) in December 2013.
Scope of Report
Period covered: Fiscal 2015 (April 2015 to March 2016)
Some subsequent information is also included.
Organizations covered: Sumitomo Mitsui Financial Group and
its subsidiaries and affiliates
Published
August 2016
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 finan-
cial 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 documents 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.
2
Financial and Non-Financial
Highlights (Fiscal 2015)
46 Corporate
Infrastructure
Contents
4
To Our Stakeholders
14 SMFG Overview
14
16
18
SMFG’s History
SMFG Group Outline
SMFG’s Value Creation Process
20 Business Strategy
21
Business Outline
22 Wholesale Banking Unit (SMBC)
48
50
Corporate Governance
Special Feature:
Outside Director Interview
52
SMFG Directors and
54
58
60
61
62
64
Corporate Auditors
Risk Management
Compliance
Internal Audit System
Customer Satisfaction (CS)
and Quality Improvement
Human Resources
Corporate Social
Responsibility (CSR)
24
26
28
30
32
34
36
38
Retail Banking Unit (SMBC)
International Banking Unit (SMBC)
Treasury Unit (SMBC)
68
Financial Review
Sumitomo Mitsui Finance and Leasing
SMBC Nikko Securities
Consumer finance / Credit card
Services with Competitive Advantage,
New Businesses
Support for Mid-Sized Corporations
and SMEs, Vitalization of Local
72 Websites
73
115
Appendix I
Appendix II
Regions in Japan
40
Special Feature:
BTPN—“Do Good and Do Well”
42
Special Feature:
PRESTIA—the New Brand Launch
44
Special Feature:
FinTech—Promoting Innovation with IT
1
2016 Annual Report
Financial and Non-Financial Highlights (Fiscal 2015)
(SMFG consolidated basis unless stated otherwise)
Fiscal 2015 Performance
Consolidated gross
profit
¥2,904.0 billion
Profit attributable to
owners of parent
¥646.7 billion
(Billions of yen)
ROE*
8.9%
(%)
4,000
3,000
2,000
1,000
0
2,904.0
646.7
’11
’12
’13
’14
’15
(FY)
20
15
10
5
0
8.9
’11
’12
’13
’14
’15
(FY)
Gross profit
Profit attributable to owners of parent
* Calculated using stockholders’ equity as the denominator
Common Equity Tier 1 capital ratio*
11.9%
Dividend per share
¥150
(Yen)
(%)
20
15
10
5
0
11.9
’12
’13
’14
’15
(FYE)
200
150
100
50
0
Commemorative
dividend
150
’11
’12
’13
’14
’15
(FY)
* Basel III fully-loaded basis, based on the definition applicable at
March 31, 2019
Loan balance (SMBC non-consolidated)
¥69.3 trillion
Non-performing loan ratio
1.15% (SMBC non-consolidated: 0.78%)
(Trillions of yen)
(%)
80
60
40
20
0
69.3
’11
’12
’13
’14
’15
(FYE)
3
2
1
0
1.15
0.78
’11
’12
’13
’14
’15
(FYE)
Domestic offices
Overseas offices and Japan offshore banking accounts
SMFG consolidated
SMBC non-consolidated
2
2016 Annual Report Domestic Business
Environment, Social, Governance (ESG)
Assessment Loans / Private Placement Bonds*
Approx. ¥1.6 trillion (SMBC)
Number of participants at financial and economic
education programs organized by SMFG companies
Approx. 170,000 (cumulative number)
Number of staff participating in voluntary activities
Approx. 6,100 (cumulative number)
Approx. 9% of the workforce
Number of directors and outside directors
(As of June 30, 2016)
14 directors
Of whom 5 are outside directors (SMFG)
* Cumulative, from commencement of financing to March 31, 2016
Human Resources
Number of employees
Approx. 70,000
Number and ratio of female managers
743
15.7% (SMBC)
Male recipients of childcare leave
466 (SMBC)
Number of offices
506 main office and branches (SMBC)
123 branches (SMBC Nikko Securities)
Number of ATMs (including partner ATMs)
Approx. 50,000 (SMBC)
Number of corporate loan clients
Approx. 90,000 (SMBC)
Operating assets
Approx. ¥2.5 trillion
(Sumitomo Mitsui Finance and Leasing)
Number of retail banking accounts
Approx. 27 million (SMBC)
Number of brokerage accounts
Approx. 3 million
(SMBC Nikko Securities + SMBC Friend Securities)
Number of cardholders
Approx. 41 million
(Sumitomo Mitsui Card Company + Cedyna (cumulative number))
Number of consumer finance customers
Approx. 1.6 million
(SMBC Consumer Finance consolidated)
International Business
Number of overseas offices
72 offices in 38 countries and regions
(SMBC and others*)
* Includes SMBC's overseas offices and major overseas banking
subsidiaries and affiliates, etc.
Overseas banking profit ratio
Approx. 35%
(Managerial accounting basis, net business profit)
Approx. 10 percentage point increase from fiscal 2013
3
2016 Annual Report To our stakeholders
Koichi Miyata
President
Sumitomo Mitsui
Financial Group, Inc.
Takeshi Kunibe
President and CEO
Sumitomo Mitsui
Banking Corporation
We will become a global financial group that,
by earning the highest trust of our customers,
leads the growth of Japan and the Asian region
4
2016 Annual Report We sincerely thank you for your continued support and patronage. The 2016 Annual
Report summarizes our initiatives aimed at increasing corporate value, together
with financial and non-financial information. We would like to explain about
(a) the progress of the medium-term management plan and the financial results of
fiscal 2015 (fiscal year ended March 2016), (b) the current business environment,
(c) our management policy going forward and, (d) delivering value to stakeholders.
Progress of the medium-term management plan and financial
results of fiscal 2015
As part of the current medium-term management plan (from fiscal 2014 to 2016),
Sumitomo Mitsui Financial Group, Inc. (SMFG) and Sumitomo Mitsui Banking Corporation
(SMBC) set four three-year management goals in order to realize our vision for the next
decade: “We will become a global financial group that, by earning the highest trust of our
customers, leads the growth of Japan and Asian region”. While we are making solid
progress in many areas, adjustments need to be made in some areas due to changes
in the business environment.
Vision for the next decade
We will become a global financial group that,
by earning the highest trust of our customers,
leads the growth of Japan and the Asian region
We will become a truly
Asia-centric institution
We will develop the best-in-class
earnings base in Japan
We will realize true globalization and continue to evolve our business model
Three-year management goals
(1) Develop and evolve client-centric business models
for main domestic and international businesses
(2) Build a platform for realizing Asia-centric operations
and capture growth opportunities
(3) Realize sustainable growth of top-line profit while
maintaining soundness and profitability
(4) Upgrade corporate infrastructure to support
next stage of growth
5
2016 Annual Report To our stakeholders
“ While we are making solid progress
in many areas, adjustments need to be
made in some areas due to changes
in the business environment.”
We will now go over the initiatives we have implemented in accordance with each of the
three-year management goals.
(1) Develop and evolve client-centric business models for main domestic and
international businesses
First, as for developing and evolving client-centric business models, we have bolstered our
capabilities as a group by strengthening collaboration and integration between our banking
and securities businesses, domestic and international offices, and wholesale and retail
operations to enhance our ability to meet our clients’ needs which are becoming more
diverse and sophisticated. In the international business, we are promoting cross-selling
of products and services, such as securities and transaction-related services, to our clients
and making efforts to improve the profitability and diversity of our portfolio by increasing
high-profit assets.
These initiatives have led to an increase in (a) domestic loans, (b) individual clients’
assets under management, and (c) profits from our overseas securities operations as
well as securing margins in our international businesses, which have steadily enhanced
SMFG’s competitiveness.
(2) Build a platform for realizing Asia-centric operations and capture growth
opportunities
With the aim of realizing Asia-centric operations, we have strengthened our presence in
Asia by opening new offices in the region and turning local banks such as the Bank of
East Asia of Hong Kong and ACLEDA Bank of Cambodia into equity-method affiliates. In
Indonesia, where we are aiming to create a new franchise in addition to our franchise in
Japan, we are collaborating with PT Bank Tabungan Pensiunan Nasional (BTPN), a local
bank and our equity-method affiliate, in the mobile banking business. We are making
steady progress in becoming a leading financial group in Asia and establishing the
reputation that we are the Asia experts.
p.40
For more about BTPN,
please see page 40.
6
2016 Annual Report (3) Realize sustainable growth of top-line profit while maintaining soundness
and profitability
While we made a good start in the first year of the medium-term management plan, growth
in our top-line profit slowed down in fiscal 2015, the second year of the plan. The main
reason behind the slowdown was the deterioration of market conditions, especially in the
second half of the fiscal year; for example declining stock prices and the yen’s appreciation.
In addition, one-off factors such as provisions for losses on interest repayments at our
consumer finance subsidiaries and an impairment loss on goodwill of investments in BTPN
resulted in consolidated ordinary profit of ¥985.3 billion and consolidated net income*1 of
¥646.7 billion. We feel that the progress made against our financial targets, apart from finan-
cial soundness, were disappointing. As we will explain in more detail later on, we believe that
it is important to place more focus on our bottom-line profit given the significant changes in
our business environment since we developed the medium-term management plan.
*1 Profit attributable to owners of parent
Progress on financial targets
p.68
For more about financial
review, please see page 68.
Growth
Growth rate of Consolidated gross profit
Consolidated ROE
Profitability
Consolidated net income RORA
Consolidated overhead ratio
Soundness
Common Equity Tier 1 capital ratio*3
*2 Consolidated gross profit increase in comparison with FY 3/14 figure
*3 Basel III fully-loaded basis. Based on the definition as of March 31, 2019
FY 3/15
FY 3/16
FY 3/17 Targets
+2.8%
11.2%
1.1%
55.7%
12.0%
+0.2%*2
around+15%*2
8.9%
0.97%
59.4%
11.9%
around 10%
around 1%
in the mid 50%
around 10%
(4) Upgrade corporate infrastructure to support the next stage of growth
We implemented various initiatives aimed at enhancing corporate governance and promot-
ing diversity as part of our efforts to upgrade our corporate infrastructure. In May 2015 we
established the “SMFG Corporate Governance Guideline”, which sets out SMFG’s principles
and guidelines on corporate governance. We also increased the number of external board
members in June 2015 with the aim of bringing more varied external perspectives into
management. We believe that we have been able to establish a more effective corporate
governance framework through these initiatives.
7
2016 Annual Report In the promoting of diversity, we are continuously working to create an environment
that enables women to actively participate in the workplace. For example, we established
a “Diversity and Inclusion Committee” at SMBC chaired by the President and CEO to
implement a variety of measures to support the career development of female employees.
Such initiatives have led to solid results as the percentage of women in managerial positions
increased from 10.5% as of March 31, 2014 to 15.7% as of March 31, 2016. We also
introduced initiatives overseas to appoint locally hired officers to senior positions. The
number of locally hired executive officers at SMBC has increased from two at the start of
the medium-term management plan to seven as of June 30, 2016. We can confidently say
that we have made steady progress in the diversification of human resources.
Current business environment
When we turn our eyes to the current business environment, we see a lot of uncertainty
in the global economy given the slowdown of emerging markets, including China, and
resource exporting countries, in addition to the rise of geopolitical risks. Also, although
maintaining a virtuous cycle, the Japanese economy lacks momentum due to the sluggish
global economy and financial markets. Consequently, our business environment is becom-
ing increasingly challenging. Moreover, we cannot ignore the tremendous pace at which IT
is evolving. While the spread of IT in the finance industry has great potential to drastically
improve client experience and reduce our costs, we must keep in mind that such trends
may lead to intensifying competition between not only established industry players, but also
with non-financial corporates.
Furthermore, we are seeing uncertainty in the regulatory environment surrounding
financial institutions. An international regulatory framework, referred to as “Basel III”, was
introduced in fiscal 2012 in response to the global financial crisis of 2008 to 2009. There
are now ongoing discussions on further tightening of regulations. While the regulations
of financial institutions have a stabilizing affect on the financial system, introduction of
excessive regulations may limit the financial intermediary function of such institutions.
To this end, we will work with relevant authorities as well as other financial institutions,
and voice our opinion when necessary.
On the other hand, “change” brings opportunity. For example, one of the major changes
that occurred in fiscal 2015 was the Bank of Japan introducing the negative interest rate
policy. Although it may take some time for the policy to show effects on the real economy,
as long as we fully address our clients’ needs, the policy should act as a tailwind in the
“shift from savings to investments”, as we will explain in more detail later.
To our stakeholders
8
2016 Annual Report p.20
For more about business
strategy, please see page 20.
Our management policy going forward
Next, we will explain our management policy from the following three perspectives: “Busi-
ness strategy”, “Enhancing corporate governance and business management framework”
and, “Capital policy”.
Business strategy
Although the business environment has changed since we announced our medium-term
management plan, the set of medium- to long-term assumptions such as a maturing
domestic market with an aging population, the shift from savings to investments, growth
in Asia, and technological innovation have not changed. Consequently, our visions for the
future such as “becoming a truly Asia-centric institution” and “developing the best-in-class
earnings base in Japan” also remain unchanged. However, taking into consideration the
current changes in the economic and regulatory environments, we believe it is necessary
to become more risk sensitive and to strengthen our focus on bottom-line profit, instead of
aggressively pursuing top-line growth. We will prioritize our efforts on further solidifying our
strengths – profitability and efficiency.
Specifically, we will work to expand non-interest income and secure margins both in our
domestic and international businesses by continuing to focus on promoting collaboration
and integrating operations within the group.
Some examples of our domestic initiatives are (a) providing appropriate consulting services
and investment products to individual clients who are having difficulty in investing under
the current negative interest rate environment and (b) increasing loans that provide solutions
such as cross-border M&A finance to Japanese corporate clients whose operations are
increasingly becoming more global. The objective of the merger between SMBC Nikko
Securities and SMBC Friend Securities, and the consolidation of Sumitomo Mitsui Asset
Management Company, both announced in May 2016, was to enhance our ability to
respond to our clients’ needs.
“ We will prioritize our efforts on
further solidifying our strengths—
profitability and efficiency.”
9
2016 Annual Report To our stakeholders
p.48
For more about corporate
governance, please see page 48.
10
In regards to our international business, our overall policy is to expand cross-selling to
non-Japanese clients and improve the profitability of our asset portfolio, while paying close
attention to credit and foreign currency liquidity risks given the current business environ-
ment. As for the Asia region, we will set priorities and allocate resources to capture Asia’s
growth over the medium to long term as well as globally enhance the services we offer to
our global clients by leveraging our strengths in the region.
We will also make efforts to reduce expenses. In addition to our on-going efforts to control
expenses on a group basis, we established a group-wide expense reduction committee this
fiscal year to thoroughly review our medium- to long-term expense structure. We will review
and eliminate redundant operations and functions in areas such as administration, systems,
personnel and Corporate Real Estate (CRE) within the group. We will also share business
infrastructure and further prioritize strategic areas.
With regard to IT, we engaged in various new initiatives including the introduction of elec-
tronic loan contracts and the establishment of a joint venture with GMO Payment Gateway, a
major E-Commerce payment services company. Moving forward, under the open innovation
concept, we will continue to proactively utilize both internal and external expertise and
resources, including forming cross-industrial alliances, so that we can provide cutting-edge
services that address our clients’ changing needs in a timely manner. We believe that
amendments to Japan’s Banking Act enacted in the Diet this year, which included provi-
sions facilitating investments in FinTech companies by financial groups, will also boost
SMFG’s initiatives.
Enhancing corporate governance and business management framework
The year 2015 is said to be year one for corporate governance in Japan. In June 2015,
“Japan’s Corporate Governance Code” formulated by The Tokyo Stock Exchange became
effective. We believe that robust corporate governance and business management frame-
work play an extremely important role in increasing corporate value in the medium to long
term. We will continue to make every effort to enhance these two areas.
In order to further enhance our corporate governance framework, SMFG announced in
May 2016 the transformation into a Company with Three Committees, subject to approval
by its ordinary general meeting of shareholders scheduled in June 2017. While we already
had been working to establish a robust corporate governance framework, we believe that
this change will improve accountability towards our stakeholders, strengthen the supervisory
function of the Board of Directors, and further expedite the execution of operations. We will
continue our efforts to reinforce corporate governance as one of the Global Systemically
Important Financial Institutions (“G-SIFIs”).
In addition, we announced (a) the implementation of a CxO*4 system in which the CxO
will oversee the respective planning and administrative functions of the group and (b) the
setting up of group-wide business units, both of which will be introduced in April 2017. The
objective is to implement an integrated business management framework, strategy planning
and business promotion on a group-wide basis. We will strive to enhance the profitability
and efficiency of our group by establishing a framework that is both highly effective and
enables us to fully address our clients’ needs.
2016 Annual Report p.54
For more about risk management
initiatives, please see page 54.
Moreover, we have implemented the Risk Appetite Framework (“RAF”) in order to secure
an appropriate risk-return profile. RAF is a framework used to control risk on a group-wide
basis, based on the proper understanding of the current business environment, by clarify-
ing the category and quantity of risk (“risk appetite”) that will be taken to achieve profit
growth, and managing these risk through the application of certain measures (risk appetite
measures). RAF is becoming increasingly important amid the rapidly changing business
environment and we will strive to achieve sustainable growth by continuously upgrading
this framework.
*4 General term for group chief officers such as Chief Financial Officer and Chief Risk Officer
Capital policy
Capital policy is an important factor that affects corporate value. As mentioned earlier,
regulatory authorities are undertaking an ongoing review of international financial regulations
which may affect the adequacy of financial institutions’ capital; however, the impact of such
discussions is still unclear. Under such circumstances, we will continue to pay close attention
to regulatory trends and implement a capital policy that strikes an appropriate balance
between investments in growth opportunities, return to shareholders, and capital accumula-
tion while working to secure financial soundness so that we can fulfill our role in society.
We will strengthen shareholder returns by aiming to increase the dividend per share in a
stable manner. For the fiscal year ending March 31, 2017, our dividend payout ratio fore-
cast is 30.2% based on our earnings and dividend targets. We have stated that we are
targeting a dividend payout ratio of 30% in the medium to long term, and we are honoring
our commitment to our shareholders.
Dividend per share
(JPY)
200
150
100
50
0
Commemorative
dividends
100
10
110
120
140
150
150
3/12
3/13
3/14
3/15
3/16
3/17
(FY)
11
2016 Annual Report To our stakeholders
12
From the standpoint of strengthening our capital base and corporate governance, we also
view the reduction of strategic shareholdings as a key management issue. We will continue
our efforts to reduce strategic shareholdings to a level appropriate for a G-SIFI in order to
mitigate the impact of stock price fluctuations on our capital. As a first step, we aim to have
the assurance of reducing the Ratio of Stocks*5-to-CET1 capital*6 from 28% at the end of
September 2015 to 14% within approximately five years. We will also annually examine the
rationale of individual strategic shareholdings for our major counterparties at the Board of
Directors meeting. We feel that our clients are becoming more open to giving us consent on
selling their shares as a result of the introduction and spread of the corporate governance
code in Japan.
*5 Domestic listed stocks held by the group
*6 Basel III fully-loaded basis, excluding net unrealized gains on Other securities
Transition and reduction plan of strategic shareholdings (SMFG consolidated basis)
(JPY tn)
8
6
4
2
0
6.09
33%
5.97
5.35
30%
6.40
6.55
Reduction plan (announced Nov. 2015)
28%
27%
Reduce the
ratio by half
within approx.
5 years
Toward a level
appropriate
for G-SIFIs
1.79
1.78
1.80
1.79
～～
Apr. 01
Mar. 14
Mar. 15
Sep. 15
Mar. 16
to 14% by around 2020
CET1 (Basel III fully-loaded basis, excluding net unrealized gains on Other securities)
Book value of domestic listed stocks within Other securities
Ratio of Stocks-to-CET1 capital
Delivering value to stakeholders
To achieve sustainable growth of our corporate value, it is important to deliver value not only
to shareholders but also to various stakeholders including clients, society, and employees.
“Our Mission” states, “We grow and prosper together with our customers, by providing
services of greater value to them.” We also set forth “Customer First” as the first of the “Five
Values” which are shared among our employees. Using such values as a basis, we will
consistently and sincerely work with our clients to address their various needs. In March
2016, we announced “Our commitment to fiduciary duties” that describes our client
oriented approach in our wealth management business. In accordance with this announce-
ment, we will strive to further improve the quality of our services.
Moreover, contributing to the sustainable growth of society is an essential mission for us.
As for our Corporate Social Responsibility (CSR) initiatives, we have identified three priority
themes, “Environment,” “Next Generation”, and “Community”, that we need to address.
2016 Annual Report p.64
For more about CSR,
please see page 64.
p.62
For more about human
resources strategy,
please see page 62.
Based on the themes, we have implemented various initiatives such as using financial
services to address global environmental issues and contributing to the development of a
safe community in which the next generation can play an active part vigorously. In fiscal
2015, our eight major group companies obtained or renewed the ISO 14001 environmental
certification and SMBC issued a green bond, which limits the use of funds to environmentally
friendly projects. Furthermore, we are engaging in financial and economic education initia-
tives in response to the increasing needs of society for such education, and also playing an
active part in supporting rebuilding efforts following the Great East Japan Earthquake and
Kumamoto Earthquake. These efforts are made on a group-wide basis.
From the standpoint of delivering value to employees, it is important to create a work
environment in which a diversified workforce can fully demonstrate their characteristics and
skills. This will lead to the enhancement of our competitiveness. In addition to implementing
various measures supporting women’s career development, we announced numerical targets
and action plans regarding the appointing of women to managerial positions in response
to the Act to Advance Women's Success in their Working Life. We have also implemented
initiatives to support the balancing of work with caring for elder parents, the reduction of
excessive working hours, and the introduction of flexible working hours. We will continue
to make every effort to ensure that such initiatives are maintained and strengthened.
In closing
Japan is now facing a crucial moment of whether it will be able to exit from its long-lasting
deflation and return to sustainable growth. We believe it is our mission to support Japan
revitalize its economy and beat deflation by supporting the growth of our clients and their
innovation related initiatives by actively responding to changes in the business environment
and firmly carrying out our responsibilities as a financial intermediary. Furthermore, we
are supporting the Tokyo 2020 Olympic and Paralympic Games as a Gold Partner in the
Banking category. We are further strengthening our will to “create a new Japan with you”
before the upcoming nationwide major event.
We will make every effort to create value for all our stakeholders while ensuring that
the “Five Values” (Customer First, Proactive and Innovative, Speed, Quality, Team SMBC /
SMFG) are shared by all SMFG members. We hope that we can earn your continued
understanding and support.
August 2016
Koichi Miyata
President
Sumitomo Mitsui Financial Group, Inc.
Takeshi Kunibe
President and CEO
Sumitomo Mitsui Banking Corporation
13
2016 Annual Report SMFG OVERVIEW
SMFG’s History
Our business can be traced back more than 400 years.
1590
• Riemon Soga
(Brother-in-law of
Masatomo Sumitomo)
starts copper
refining business
1895
• Sumitomo Bank established as a private enterprise
1673
• Takatoshi Mitsui
opens Mitsui
Echigoya
Kimono Dealer
1876
• Mitsui Bank established as a private bank
2002
• Sumitomo Mitsui Financial Group established
2001
• Sumitomo Mitsui Banking Corporation
is formed
2004
• Promise (Current SMBC
Consumer Finance)
becomes equity
method affiliate
Becomes
wholly owned
subsidiary in 2012
2003
• Sumitomo Mitsui Card Company,
SMBC Leasing (Current Sumitomo
Mitsui Finance and Leasing),
and Japan Research Institute
become wholly owned subsidiaries
1936
• Kobe Bank established
1992
• Renamed to Sakura Bank
1990
• Mitsui Taiyo Kobe Bank formed
1973
• Taiyo Kobe Bank formed
1940
• Dai Nihon
1968
• Renamed to Taiyo Bank
Mujin established
Key economic developments
1996
• Japanese Big Bang
1973
• First oil shock
1979
• Second oil
shock
1882
• Bank of Japan
established
1999
• Bank of Japan introduces zero interest rate policy
2000
• Financial Services Agency formed
2005
• Blanket
guarantee
of deposits
fully lifted
Early 1950s to early 1970s
Japan’s high growth period
Late 1980s to early 1990s
Japan’s economic bubble and its implosion
14
2016 Annual Report SMFG’s History
2006
• Public offering
• Fully repaid
public funds
2009
• Public
offering
2010
• Public offering
• Listed on New York Stock Exchange
• Relocated Head Office
2006
• SMBC Friend Securities
becomes wholly owned
subsidiary
2009
• Nikko Cordial Securities (Current SMBC
Nikko Securities) joins SMFG
• Cedyna is formed (Equity method affiliate)
Becomes wholly owned
subsidiary in 2011
2013
• Societe Generale Private
Banking Japan joins SMFG
(Current SMBC Trust Bank)
• Bank Tabungan Pensiunan
Nasional (BTPN), of
Indonesia, becomes
equity method affiliate
2015
• Citibank Japan’s
retail banking
operations are
integrated into
SMBC Trust Bank
(Current SMBC Trust
Bank PRESTIA)
2007
• Sumitomo Mitsui Finance and Leasing is formed
from merger of SMBC Leasing and Sumisho Lease
2008
• Vietnam Exim Bank becomes
equity method affiliate
2012
• Royal Bank of Scotland’s aircraft leasing
business is acquired and integrated into SMFG
(Current SMBC Aviation Capital)
2007
• Subprime mortgage crisis
2006
• Bank of Japan rescinds
zero interest rate policy
2008
• Financial crisis
2010
• European sovereign debt crisis
• Dodd-Frank Act comes
into force in U.S.
2013
• Bank of Japan introduces
quantitative and qualitative
monetary easing
2016
• Bank of Japan
introduces negative
interest rate policy
15
2016 Annual Report SMFG OVERVIEW
SMFG Group Outline
The companies of SMFG offer a wide range of financial services,
centered on banking operations.
Banking
Leasing
Securities
Consumer Finance
and Credit Cards
System Development,
Information
Management
Strengthening our competitiveness as a financial services group
(1) Merger of SMBC Nikko Securities and SMBC Friend Securities
• SMBC Nikko Securities and SMBC Friend Securities are scheduled to merge with the aim of further strengthening
SMFG’s securities business. We are targeting January 2018 for the merger after a process of consideration
and discussions.
• Prior to the merger, our plans call for the holding company SMFG to make SMBC Nikko Securities a direct wholly
owned subsidiary in October 2016.
SMFG
SMFG
100%
100%
100%
SMBC Friend Securities
SMBC
SMBC Nikko Securities
(Merger with SMBC Friend Securities)
100%
SMBC
100%
SMBC Nikko Securities
(2) Consolidation of Sumitomo Mitsui Asset Management
• The holding company SMFG is to make Sumitomo Mitsui Asset Management a directly owned subsidiary. The conversion
is scheduled for October 2016. In taking this step, we will reinforce efforts to fulfill our fiduciary duty to provide enhanced
customer-oriented investment services.
SMFG
SMFG
100%
SMBC
40%
Sumitomo Mitsui
Asset Management
16
100%
60%
SMBC
Sumitomo Mitsui
Asset Management
2016 Annual Report SMFG Group Outline
SMBC Network (As of June 30, 2016)
(1) Domestic network
506
main office
and branches
32
sub-branches
107
Area Main
Offices
171
Corporate
Business
Offices
(2) Overseas network*
* Includes SMBC's overseas offices and major overseas banking subsidiaries and affiliates, etc. (excludes offices planned to be closed)
Europe,
Middle East,
Africa
20
Asia,
Oceania
39
Americas
13
Total
72
SMBC overseas offices
Branches
17
17
Sub-branches
Representative offices 3
Major overseas subsidiaries and affiliates, etc.
Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Banking Corporation (China) Limited
Others
7
16
12
17
2016 Annual Report SMFG OVERVIEW
SMFG’s Value Creation Process
SMFG, guided by “Our Mission,” strives to
achieve sustainable corporate value growth.
Our Mission
We grow and prosper together with
our customers, by providing services
of greater value to them.
We aim to maximize our shareholders’
value through the continuous growth
of our business.
We create a work environment that
encourages and rewards diligent and
highly-motivated employees.
Five Values
Values shared by our staff and directors
in Japan and overseas to guide us in
our client-centric approach
Customer First
Proactive and Innovative
Speed
Quality
Sources of
Value Creation
Solid customer base
Domestic and
international network
Specialized and
wide-ranging know-how
Diverse, dedicated, and
highly-motivated workforce
Long history and
strong brand
Team SMBC / SMFG
Stable financial base
18
2016 Annual Report SMFG’s Value Creation Process
Value Creation
Process
Business Strategy
p.20
Vision for the next decade*
We will become a
global financial group that,
by earning the highest trust
of our customers, leads the
growth of Japan and
the Asian region
Corporate Infrastructure
p.46
* Announced in May 2014
Value
We Create
Greater value
of services
Maximization of our
shareholders’ value
Positive contribution
to society as a good
corporate citizen
Work environment
that allows employees
to fully exert their
ability
19
2016 Annual Report Business Strategy
21
Business Outline
22 Wholesale Banking Unit (SMBC)
24
26
28
30
32
34
36
38
Retail Banking Unit (SMBC)
International Banking Unit (SMBC)
Treasury Unit (SMBC)
Sumitomo Mitsui Finance and Leasing
SMBC Nikko Securities
Consumer finance / Credit card
Competitive Advantage in Services,
New Businesses
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
40
Special Feature:
BTPN—“Do Good and Do Well”
42
Special Feature:
PRESTIA—the New Brand Launch
44
Special Feature:
FinTech—Promoting Innovation with IT
20
2016 Annual Report BUSINESS STRATEGY
Business Outline
Wholesale Banking Unit (SMBC)
The Wholesale Banking Unit provides services primarily for large and
mid-sized corporate clients in Japan. The services include financing,
investment management, hedging, and settlement, in addition to a variety
of solutions such as assisting overseas business development, M&A and
advising on corporate turnarounds and restructuring.
Retail Banking Unit (SMBC)
The Retail Banking Unit provides loans, investment products, and
insurance products primarily for individuals and SMEs in Japan in
accordance with their financial needs. The unit also offers inheritance
and business succession support.
International Banking Unit (SMBC)
The International Banking Unit is a growth driver for SMFG. The unit
responds to the needs of international companies operating mainly outside
of Japan and that are active in Japan by utilizing our global network.
Consolidated
gross profit
¥721.2 billion
Consolidated net
business profit
¥421.8 billion
Consolidated
gross profit
¥481.5 billion
Consolidated net
business profit
¥98.3 billion
Consolidated
gross profit
¥644.8 billion
Consolidated net
business profit
¥397.9 billion
Treasury Unit (SMBC)
The Treasury Unit offers services to meet the needs of clients for
transactions in the money, foreign exchange, bond, and derivative
markets. The unit also undertakes banking operations for balance sheet
control and trading operations for trading marketable financial products.
Consolidated
gross profit
¥325.6 billion
Consolidated net
business profit
¥286.8 billion
Sumitomo Mitsui Finance and Leasing
Sumitomo Mitsui Finance and Leasing is a leading, full-service leasing
company in Japan providing financial products and services to assist
domestic and overseas corporate clients cope with capital expenditure
and financial issues.
SMBC Nikko Securities
SMBC Nikko Securities is a leading, full-service securities company
in Japan providing sophisticated retail and wholesale services in
collaboration with SMBC.
Consumer finance / Credit card
This business centers on Sumitomo Mitsui Card Company, Cedyna, and
SMBC Consumer Finance, which undertake credit card, installment,
and consumer finance businesses.
Consolidated
gross profit
¥142.8 billion
Consolidated net
business profit
¥80.7 billion
Consolidated
gross profit
¥318.0 billion
Consolidated net
business profit
¥60.8 billion
Consolidated
gross profit
¥607.1 billion
Consolidated net
business profit
¥221.0 billion
p.22
p.24
p.26
p.28
p.30
p.32
p.34
Note: Consolidated gross profit and consolidated net business profit stated in “Business Strategy” pages are on a SMFG managerial
accounting basis. Also, year-on-year changes are adjusted for changes in interest rates and exchange rates, etc.
21
2016 Annual Report BUSINESS STRATEGY
Wholesale Banking Unit (SMBC)
Masaki Tachibana
Deputy President,
Co-Head of Wholesale Banking Unit,
Sumitomo Mitsui Banking Corporation
Fiscal 2015 performance
While the first half of fiscal 2015 showed strong results with favorable market
conditions, the second half was effected by the significant change of business
environment, including the shift of the market triggered by falling resource prices,
slowdown of the Chinese economy, and the introduction of the negative interest
policy in Japan. As a result, consolidated gross profit of the Wholesale Banking
Unit declined by ¥1.5 billion from fiscal 2014, to ¥721.2 billion, and consolidated
net business profit declined by ¥6.0 billion, to ¥421.8 billion.
Business environment and strategy going forward
Globalization is accelerating among large companies in particular and the value
and number of M&A, including cross-border transactions, is on the rise. With a
lot of growth companies emerging, the number of IPO transactions has reached
a high level in recent years. These trends are expected to continue and the
Wholesale Banking Unit will seek to provide solutions that are finely tuned
to companies’ business content and growth stage amid diversification in client
business strategies and issues. The unit aims to grow with its clients and
contribute to development of the Japanese economy.
Lending in the Wholesale Banking Unit (SMBC non-consolidated)*1 *2
Fumiaki Kurahara
Senior Managing Director,
Co-Head of Wholesale Banking Unit,
Sumitomo Mitsui Banking Corporation
(Trillions of yen)
15
14
13
0
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
(FY)
’13
’14
’15
Mid-sized corporations and SMEs (Corporate Banking Division)
Large corporations (Global Corporate Banking Division)
*1 Managerial accounting rules were revised.
*2 Quarterly average
SMFG’s support system for start-up companies
Support start-up companies throughout their growth stage on a Group basis
Incubation investment
SMBC Venture Capital
IPO support
Number of IPO lead manager deals (fiscal 2015)
Ranked No. 2
Loans
22
Ideation
Scale up
Growth / Expansion
Please see SMBC Nikko Securities on page 32 for SMFG’s wholesale securities business.
2016 Annual Report Wholesale Banking Unit (SMBC)
Business matching
In fiscal 2015, we arranged business
matching for more than 10,000 businesses
in response to client needs for sales channel
expansion and collaboration. We also hosted
an event on the themes of inbound business
and aging society business, which are of
great corporate interest. The event was
well received by the many companies
that participated.
Aging society business matching
SMBC inbound business matching
Assessment loans / Private Placement bonds
SMBC provides assessment loans / bonds to
support client involvement in social issues,
such as environmental matters, the role
of women workforces, natural disaster
response, and food safety. As of March
2016, this funding amounted to ¥1.6 trillion.
* Assessment loans / bonds are a product that provide
assessment and consulting for our clients’ social initiatives.
These are conducted through collaboration with external
think tanks.
Year
2010
Name of launched products
Description
SMBC Environmental Friendliness Assessment
Loans and Private Placement Bonds (Eco Value-up)
Support for mid-sized corporation and SME
environment management
SMBC Food and Agriculture Assessment Loans
and Private Placement Bonds
Evaluation of / support for food safety and food
culture initiatives
2011
SMBC Sustainable Building Assessment Loans
and Private Placement Bonds
Evaluation of / support for buildings’ environmental
performance and earthquake resistance
SMBC Business Sustainability Assessment Loans
and Private Placement Bonds
Evaluation of / support for business continuity
initiatives for such events as earthquakes and floods
2013
SMBC Sustainability Assessment Loans
and Private Placement Bonds
Evaluation of / support for ESG (environment,
society, governance) initiatives and the disclosure’s
appropriateness
2015
SMBC Nadeshiko Loans and Private
Placement Bonds
Evaluation of / support for clients’ initiatives to
promote the role of women
Support for overseas business development
SMBC holds seminars to provide clients with
information about global economic trends,
the foreign exchange market, and invest-
ment conditions in individual countries.
Clients considering starting a business over-
seas are encouraged to come to us at an
early stage so that we can provide tailored
information on local laws and regulations
and on Japanese companies already
present in the country.
For clients who already have business over-
seas, our Japan and overseas business units
collaborate to provide high-quality solutions
in such areas as business expansion and
reorganization. We also provide wide-ranging
advice and practical seminars on foreign
trade to support clients in foreign exchange
transactions generally.
Nikkei and Nikko joint seminar
Southeast Asian subsidiary management seminar
23
2016 Annual Report BUSINESS STRATEGY
Retail Banking Unit (SMBC)
Yukihiko Onishi
Senior Managing Director,
Consumer Business Planning Dept.,
Consumer Finance & Transaction
Business Dept.,
Sumitomo Mitsui Financial Group, Inc.
Senior Managing Director,
Head of Retail Banking Unit,
Sumitomo Mitsui Banking Corporation
Fiscal 2015 performance
Consolidated gross profit of the Retail Banking Unit increased by ¥4.4 billion from
fiscal 2014, to ¥481.5 billion in fiscal 2015. This was a result of an increase in
sales of investment products while spreads of mortgage loans declined. However,
consolidated net business profit declined by ¥3.3 billion, to ¥98.3 billion, due to
higher expenses.
Business environment and strategy going forward
The business environment is changing, driven by factors such as a prolonged
period of extremely low interest rates, an accelerating shift from saving to invest-
ments, the evolution of IoT, particularly rapid advances in digitization on the
spread of smartphones, the advent of a major inheritance phase, and changes in
lifestyle. We expect these trends to continue. The Retail Banking Unit is constantly
refining its customer-oriented business model as it assesses change in the busi-
ness environment with the aim of enhancing its level of service. The unit is
working with SMFG companies, such as SMBC Nikko Securities and SMBC Trust
Bank, to pinpoint the evolving needs of clients with the aim of becoming the most-
trusted and No. 1 comprehensive financial service institution.
Total net assets of publicly offered investment trusts
(Trillions of yen)
100
80
60
40
20
0
94
16
77
98
16
82
82
16
65
57
11
47
64
11
53
’11
’12
’13
’14
’15
(CY)
Stock investment trusts
Bond investment trusts
Source: The Investment Trusts Association, Japan
Transitions in household ownership rates for ICT devices
(%)
100
80
60
40
20
0
90.5
75.7
’10
’11
’12
’13
’14
(CY)
PCs
Smartphones and tablets
Source: Ministry of Internal Affairs and Communications
24
2016 Annual Report Retail Banking Unit (SMBC)
Asset growth driven by banking-securities collaboration
SMBC and SMBC Nikko Securities are
promoting a new business model (Bank-
securities integration model) that fully
leverages the specialties of the two compa-
nies in all of our branches, which is leading
to an increase of assets under management.
Increase balance of investment
products*
(Billions of yen)
1,000
Bank-securities retail integration
Build up of
financial assets
Investment
and succession
Proactively meeting personal
wealth management needs
750
500
250
0
’14
’15
(FYE)
Meeting the needs for asset
and business succession
* The net value of SMBC investment product sales and maturities / cancellations plus SMBC Nikko
Securities assets, including the assets of customers introduced by SMBC
Card loan growth (Unsecured)
Card loans (unsecured) posted strong
growth, reaching approximately ¥1.7 trillion
as of March 31, 2016 (the aggregate of
SMBC, SMBC Consumer Finance, and
Mobit). We will continue to operate with a
view to contribute for the sound development
of the consumer finance market, seeking
to enhance convenience for card loan
customers while also protecting them.
Appropriate response to customer needs
is our underlying approach.
“SMBC” brand enhancements
As part of raising brand awareness to
the younger generation, SMBC opened an
official account on LINE in September 2014
and now has more than 10 million friends.
In tandem, we developed an image charac-
ter called “Midosuke.” We have also worked
on increasing convenience for customers
by making our smartphone app screen
friendlier, with an emphasis on simplicity
and easy understanding.
Card loan balance (Unsecured)
(Billions of yen)
1,800
1,700
1,600
1,500
～～
0
’13
’14
’15
(FYE)
Midosuke
SMBC smartphone app screen
LINE friends
More than
10 million
(As of March 31, 2016)
25
2016 Annual Report BUSINESS STRATEGY
International Banking Unit (SMBC)
Fiscal 2015 performance
International Banking Unit was a growth driver for SMFG in fiscal 2015, with
consolidated gross profit increasing by ¥58.3 billion, to ¥644.8 billion, and consoli-
dated net business profit by ¥28.1 billion, to ¥397.9 billion. This growth was
achieved through expansion of M&A financing for clients and businesses other than
loans, such as securities, deposits, and foreign exchange as well as the acquisition
of LBO*1 assets in Europe from the General Electric Group (GE Group). Overseas
deposits reached a record high, reflecting our constant efforts to increase deposits
with a view to fleshing out stable foundations for foreign currency financing.
Business environment and strategy going forward
The business environment for financial institutions is characterized by worsening
visibility and growing uncertainty due to such factors as U.S. monetary policy,
China’s economy, resource price movement, and geopolitical risk. Against this
backdrop, we will tighten controls for credit, liquidity, and other categories of risk.
We will play our part fully as an SMFG growth driver, maintaining our “Asia-
centric” efforts while clarifying priority segments in Asia. In this way, we aim to
engage with Asian growth over the medium to long term and also expand our
services for clients in Europe and the Americas on the basis of our advantage in
Asia. We will step up cross-selling in securities, deposits, and foreign exchange,
which are central to overseas banking, while working to increase the profitability
and diversity of our portfolio in areas of SMFG strength. These areas include
subscription finance*2, asset finance, such as aircraft and railcar leasing, and
LBO assets (for example, the above mentioned assets in Europe acquired from the
GE Group in fiscal 2015).
*1 LBO (leveraged buyout): An M&A method used, for example, by private equity funds
*2 Subscription finance: Bridge finance provided, for example, to real estate funds
Overseas lending
(Billions of U.S. dollars)
Foreign deposits
(Billions of U.S. dollars)
300
200
100
0
300
200
100
0
240
153
206
210
108
121
’13
’14
’15
(FYE)
172
47
54
70
181
45
62
74
195
52
72
71
’13
’14
’15
(FYE)
Asia
Americas
EMEA
Customer deposits (including central bank deposits)
CD, CP (3 months upward)
CD, CP (less than 3 months)
Yasuyuki Kawasaki
Senior Managing Director,
Global Business Planning Dept.,
Sumitomo Mitsui Financial Group, Inc.
Senior Managing Director,
Co-Head of International Banking Unit
(Planning Dept., International Banking Unit,
Emerging Markets Business Division,
Asia Pacific, East Asia),
Sumitomo Mitsui Banking Corporation
Makoto Takashima
Senior Managing Director,
Co-Head of International Banking Unit
(Europe, Middle East and Africa, Americas),
Sumitomo Mitsui Banking Corporation
26
2016 Annual Report
International Banking Unit (SMBC)
Expansion of our global network
Our global network has increased to 72
offices in 38 countries and regions. In 2015,
we added the Yangon Branch in Myanmar
in April, the Manila Branch in the Philippines
in September, and the Frankfurt Branch in
Germany in December. In April 2016, we
added the Dalian Branch in China. We will
use our network to provide wide-ranging
responses to the needs of clients developing
business in all parts of the world.
Note: In April 2016, we obtained approval to open a
front office in the Thilawa Special Economic Zone
in Myanmar. In May 2016, we received approval for
a sub-branch in Mumbai in India.
Pursuit of inorganic growth
We are pursuing inorganic growth to expand
our business base and diversify and
increase the profitability of our asset portfo-
lio in the interests of sustainable growth.
Asset finance
We are developing SMFG’s strength in asset
finance centered on SMBC Aviation Capital,
which has become a leading global aircraft
leasing company, and SMBC Rail Services,
the North American railcar leasing business
we acquired in December 2013.
SMBC Aviation
Capital
Ranking for number of aircraft
owned and managed*1: No. 3
SMBC Rail
Services
North American
railcar lease ranking*2: No. 6
*1 Sources: Ascend and Airline Business (as of
December 2015)
*2 Source: Progressive Railroading (as of July 2015)
Examples of inorganic growth in fiscal 2015
June
2015
Investment in Financiera de Desarrollo Nacional S.A., of Colombia
September
2015
Acquisition of LBO assets of non-Japanese, mid-sized corporations in
Europe from the GE Group
September
2015
Purchase of additional shares of ACLEDA Bank Plc., of Cambodia,
which became an equity method affiliate of SMBC
March
2016
Investment in Indonesian automotive finance companies PT Oto
Multiartha and PT Summit Oto Finance, which became equity method
affiliates of SMBC
Please see page 31 for details of aircraft leasing.
27
2016 Annual Report BUSINESS STRATEGY
Treasury Unit (SMBC)
Seiichiro Takahashi
Deputy President,
Head of Treasury Unit,
Sumitomo Mitsui Banking Corporation
28
Fiscal 2015 performance
Consolidated gross profit of the Treasury Unit declined by ¥58.1 billion from fiscal
2014, to ¥325.6 billion, and consolidated net business profit declined by ¥60.6
billion, to ¥286.8 billion. Concerns over global economic slowdown and weakening
commodity prices made financial markets unstable beginning in the summer,
but we were able to secure steady profits through investments mainly in stock
index funds.
Business environment and strategy going forward
We anticipate further heightened volatility in markets due to factors such as
monetary policies in developed countries, economic trends in emerging countries,
and geopolitical risks. We also expect global financial regulations to cause reduced
market liquidity, making markets even more volatile.
Under such market conditions, we will strengthen our global Asset Liability
Management (ALM) by enhancing our funding capabilities as well as expanding
our investment portfolio to steadily secure profits while retaining appropriate risk
controls. We will also apply our expertise gained from dealing to offer solutions
to the sophisticated and diversified needs of our clients.
USD / JPY, Nikkei Stock Average Index
(Yen)
150
130
110
90
70
’08
’09
USD / JPY (left axis)
’10
’11
’12
’13
’14
’15
’16
(CY)
Nikkei Stock Average (right axis)
(Yen)
22,000
18,000
14,000
10,000
6,000
Long-term government bond yields in Japan, the United States, and Germany
(%)
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
–0.5
’08
’09
United States
’10
’11
Germany
Japan
’12
’13
’14
’15
’16
(CY)
2016 Annual Report Treasury Unit (SMBC)
Providing market-oriented solutions
In the Treasury Unit, our global network pro-
vides robust hedging solutions to our clients
based on their needs and global market
conditions. We are continuously improving
the functionality of our electronic foreign
exchange execution platform, i-Deal, to
further enhance our clients’ experience. We
will remain committed to continually provid-
ing our clients with industry-leading services.
Market sensitive strategic portfolio rebalancing
By conducting various scenario analyses by
dealers around the globe, we strive to find
opportunities to optimize our risk-rewards.
We identify signs of market change to take
advantage of opportunities through dynamic
but well-calculated market operations.
Money
Foreign
exchange
Bonds
Identify market opportunities for profit-making
Equities
Derivatives
Sustainable ALM operation
By diversifying our investment portfolio and
enhancing our funding sources, we seek to
maximize earnings even under constraints
of ever strengthening financial regulations.
Since April 2016, we have established
new departments in both SMFG and SMBC
in order to enhance group-wide ALM opera-
tions. While applying appropriate balance
sheet controls in accordance with financial
regulations, we are increasing our funding
stability by issuing senior debt, including
TLAC bonds*1.
Increasing sources of stable funding
We will secure steady funding by catering
to a broad range of investor needs.
Issuance record in fiscal 2015
• Green bonds*2 ...................... First issuer among
Japanese megabanks
• Formosa bonds*3 .................. First issuer among
Japanese megabanks
• Interbank Renminbi CD ......... First issuer among
Japanese banks
• TLAC bonds*1
*1 TLAC (Total Loss Absorbing Capacity) bonds: Bonds issued by holding company of Global
Systemically Important Banks (G-SIBs), which covers losses if it defaults.
*2 Green bonds: Bonds whose proceeds are mainly used for environmentally friendly projects.
*3 Formosa bonds: Bonds issued in Taiwan but denominated in another currency other than
the New Taiwanese dollar.
29
2016 Annual Report BUSINESS STRATEGY
Sumitomo Mitsui Finance and Leasing
Yoshinori Kawamura
President and Representative Director,
Sumitomo Mitsui Finance and
Leasing Company, Limited
Fiscal 2015 performance
In fiscal 2015, leasing transactions at Sumitomo Mitsui Finance and Leasing
(SMFL) amounted to ¥1,994.8 billion and year-end consolidated operating assets
was ¥4,192.6 billion. Consolidated gross profit increased by ¥5.8 billion from fiscal
2014, to ¥142.8 billion, and consolidated net business profit increased by ¥0.1
billion, to ¥80.7 billion. In Japan, demand for capital expenditure was firm and led
to brisk business in rental and installment sales. Overseas, our aircraft leasing
business expanded, we also acquired majority ownership of a German sales
finance company as we pursued diversification in the sales finance business.
Business environment and strategy going forward
Outlook of the business environment has worsened due to weak recovery
momentum in the Japanese economy and continuing concerns of economic
slowdown overseas. Against this backdrop, SMFL acquired the General Electric
Group’s Leasing Business in Japan on April 1, 2016. We will aim to reinforce
our position as a leader in Japanese leasing by drawing on our respective
expertise and resources to realize synergies. We are seeking business in
growth areas including hydrogen and agriculture, and we will tighten risk
management especially in our overseas business. In aircraft leasing, we will
collaborate with SMFG group companies and the Sumitomo Corporation Group
to offer solutions to airlines and investors in Japan and overseas.
Capital expenditure devoted to leasing* and SMFL’s lease contracts
(Trillions of yen)
8.0
Average
annual growth
6.7%
Average
annual growth
11.9%
6.0
4.0
2.0
’14
’15
0
(FY)
Capital expenditure devoted to leasing* (right axis)
Impact of GE Japan GK
becoming a subsidiary
Approx. ¥520 billion addition*
’12
SMFL’s lease contracts (consolidated, left axis)
’13
* Source: Japan Leasing Association (fiscal 2015 statistics)
SMFL consolidated operating assets
(Trillions of yen)
(Trillions of yen)
1.3
70
1.1
0.9
0.7
～～
0
5
4
3
2
1
0
30
* Aggregate of SMFL consolidated operating assets as of March 31, 2016, and the operating assets of
GE Japan GK, which became a subsidiary on April 1, 2016.
’11
’12
’13
’14
’15
(FY)
2016 Annual Report Sumitomo Mitsui Finance and Leasing
Collaboration with GE Japan GK to realize synergies
SMFL and GE Japan GK will leverage their
strengths and expertise to realize synergies
in providing new value for an increased
number of clients.
Note: GE Japan GK is scheduled to change its name to SMFL
Capital Company, Limited, on September 5, 2016.
Involvement in growth sectors
SMFL is pursuing business in hydrogen.
We were responsible for the first mobile
hydrogen fuel station lease in Japan and
we are also involved in smart hydrogen
station leasing.
In agriculture, we have created the Agri
Assist Program for leasing to farmers in
support of their diversification into related
sixth sector industrialization, the introduction
of larger-scale farming, and the introduction
of cutting-edge technology.
Aircraft leasing
SMBC Aviation Capital ranks third globally for
the number of aircraft owned and managed.
The company is working alongside SMFL
and SMBC to harness the comprehensive
power of SMFG in meeting the diverse
needs of airlines and investors in Japan
and overseas.
• Diverse financial services
• IT-based marketing
• Capability to provide a
wide range of solutions
• Global network
• Cutting-edge, automated
credit review system
• Sophisticated consulting
capabilities
Involves in the hydrogen business
Creates a leasing program for farmers
Airlines
Structuring Japanese
operating lease
Aircraft operating lease
Debt finance
Sale of interest in
Japanese operating lease
Sale of aircraft
Sale of Debt finance
Investors
31
2016 Annual Report BUSINESS STRATEGY
SMBC Nikko Securities (Scheduled to merge with SMBC Friend Securities in 2018)
Yoshihiko Shimizu
President & CEO,
SMBC Nikko Securities Inc.
Fiscal 2015 performance
In fiscal 2015, consolidated gross profit declined by ¥31.7 billion from fiscal 2014,
to ¥318.0 billion, and consolidated net business profit declined by ¥39.6 billion, to
¥60.8 billion. Earnings were strong in the first quarter, when markets were buoyant.
However, markets started falling in August due to the impact from China’s slowing
economy and we experienced a downturn in sales of investment products, such
as investment trusts and bonds, and in our net trading income.
Business environment and strategy going forward
Uncertain market conditions have persisted in fiscal 2016 due to such factors as
concern over the global economic slowdown and the Bank of Japan’s negative
interest rate policy. However, we see current conditions as an opportunity to dem-
onstrate our true consulting abilities as we seek to provide optimal products and
solutions for clients.
In our retail operations, we have been conducting a strategic review of our
staff allocation since April 2016 and we have moved a large number of staff to
branches. In continuing our pursuit of retail banking-securities integration, we
will pay even closer attention to our customers’ views and provide high-quality
solutions. On the wholesale side, we expect negative interest rate conditions to
increase the importance of the bond market and we will therefore strengthen our
bond underwriting operations. We have also established the Investment Banking
Group in the United States based on the prospects for growth driven by our tie-up
with SMBC. We intend to strengthen our businesses in bonds and M&A as we
globally offer various solutions with SMFG group.
SMBC Nikko Securities is scheduled to merge with SMBC Friend Securities in
2018. We plan to leverage our respective strengths in realizing synergies and
increasing our competitiveness.
M&A involving Japanese companies
(Billions of U.S. dollars)
60
45
30
15
0
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
(FY)
’13
’14
’15
32
Domestic
Outbound
Inbound
Source: Thomson Reuters (Values are based on ranking dates and exclude share repurchasing and
real estate acquisition.)
2016 Annual Report SMBC Nikko Securities (Scheduled to merge with SMBC Friend Securities in 2018)
Strengthened inflow of client assets
We are working as a company to increase
client assets with the aim of achieving sus-
tained, steady growth in our assets under
management. In fiscal 2015, the sales unit’s
inflow of client assets increased by 34%
from fiscal 2014, to ¥1,161.0 billion.
League tables
In fiscal 2015 also, we were able to become
lead manager for several major equity and
bond issues. The strengthening of our
underwriting operations for IPOs resulted in
the No. 2 ranking for the number of IPOs
lead managed.
We rose to No. 3 in the M&A league table,
assisted by our joint position with Citigroup
Global Markets Japan as financial advisor
for the New Kansai International Airport.
Growth in overseas profit
Our four key overseas operations—in the
United Kingdom, the United States, Hong
Kong, and Singapore—in aggregate, are
sustaining steady profits. In fiscal 2015,
their total profit increased by 22% from
fiscal 2014, to ¥14.0 billion. Our ties with
SMBC were particularly beneficial for our
fixed income earnings in the United States.
Sales unit’s inflow of client assets
(Billions of yen)
Fiscal 2014 total
¥868.6 billion
Fiscal 2015 total
¥1,161.0 billion
400
300
200
100
0
–100
Fiscal 2013 total
¥387.4 billion
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
(FY)
’13
’14
’15
Fiscal
2013
Fiscal
2014
Fiscal
2015
Equity-related (book runner, underwriter, by value)*1
No. 3
No. 2
No. 4
Yen bonds (lead manager, underwriter, by value)*2
No. 5
No. 5
No. 5
IPO (lead manager, by number of IPOs)*3
No. 2
No. 3
No. 2
M&A (financial advisor, by deal value)*4
No. 3
No. 13
No. 3
*1 Involving Japanese companies, includes overseas offices
*2 Corporate bonds, FILP bonds, regional government bonds (lead manager), and samurai bonds
*3 Excludes REITs
*4 Announced deals involving Japanese firms, Group total
Source: Thomson Reuters
Overseas profit (Aggregate of four overseas operations)*
(Billions of yen)
15
10
5
0
14.0
11.5
6.8
1.5
’11
1.9
’12
’13
’14
’15
(FY)
* Aggregate of SMBC Nikko Capital Markets Limited, SMBC Nikko Securities America, Inc.,
SMBC Nikko Securities (Hong Kong) Limited, and SMBC Nikko Securities (Singapore) Pte. Ltd.
33
2016 Annual Report BUSINESS STRATEGY
Consumer finance / Credit card
Fiscal 2015 performance
Sumitomo Mitsui Card Company’s growth in payment volume exceeded the
market as the company captured opportunities in the expanding cashless market
and demand from inbound tourists in Japan. Cedyna Financial Corporation focused
on co-branded cards and also increased its consumer credit transactions. SMBC
Consumer Finance’s loan guarantee amount reached the ¥1 trillion mark as a result
of growth in card loans of partner banks. As a result, consolidated gross profit of
the three companies increased by ¥30.9 billion from fiscal 2014, to ¥607.1 billion
and consolidated net business profit increased by ¥8.6 billion to ¥221.0 billion.
Business environment and strategy going forward
The government and the private sector are united in providing infrastructure for
cashless payment ready for the Tokyo 2020 Olympic and Paralympic Games. At
the same time, the fusion of finance and information and communications tech-
nology (ICT) is accelerating. In this environment, Sumitomo Mitsui Card Company
will work on providing high-convenience payment services, seeking to further
strengthen its acquiring of merchants and contracting business for partners.
Cedyna Financial Corporation will draw on its combined strengths in credit
cards, consumer credit business, and financing solutions to continue building up
its comprehensive payment business.
As the decline in the unsecured card loan market levels out, SMBC Consumer
Finance will seek to increase card loans in proprietary channels and to promote
guarantee business using the channels of partner banks. The overall aim is to pro-
vide wide-ranging responses to customer needs and enhance the services it offers
on a steady and sustained basis.
Cashless payment (market size)
Consumer loans (market size)
(Trillions of yen)
(Trillions of yen)
(Trillions of yen)
6
5
4
3
2
1
12
10
8
6
4
2
’14
’15
0
(FYE)
’11
’13
’10
’12
Credit cards (left axis)
Electronic money (right axis)
Debit cards (right axis)
Prepaid cards (right axis)
Sources: Japan Consumer Credit Association, Bank
of Japan, Japan Debit Card Promotion
Association, and SMFG estimates
0
’10
’12
’11
’13
Consumer finance providers
Banks, credit unions
’14
’15
(FYE)
Credit card companies
Source: Yano Research Institute estimates
Ken Kubo
President & CEO,
Sumitomo Mitsui Card Company, Limited
Satoru Nakanishi
President & CEO,
Cedyna Financial Corporation
Ryoji Yukino
President & CEO,
SMBC Consumer Finance Co., Ltd.
34
60
50
40
30
20
10
0
2016 Annual Report Consumer finance / Credit card
Sumitomo Mitsui Card Company
Sumitomo Mitsui Card Company, a pioneer
in bringing “Visa” into Japan has been in
operation for more than 40 years. As a
leader in the credit card industry, the
company has been active in providing its
traditional credit card services with new
settlement services, such as smart phone
payment utilizing FinTech and other cutting-
edge technology.
Cedyna Financial Corporation
Cedyna Financial Corporation is a compre-
hensive payment financing company
offering a full range of payment methods to
meet customers’ diverse needs, including
credit cards for daily payments, installment
payment for high-value products and
services, and collection agency services
and factoring for recurring payments.
SMBC Consumer Finance
SMBC Consumer Finance provides small-
scale finance for consumers and loan
guarantee services to business partner
financial institutions. Leveraging the exper-
tise gained in Japan in extending credit,
managing debt, and marketing, the com-
pany is expanding its business, providing
unsecured / unguaranteed small loans to
local consumers in China and Thailand.
Credit card payment volume
(Trillions of yen)
12
11
10
9
8
7
0
’11
’12
’13
’14
’15
(FY)
Transaction volume
(Trillions of yen)
14
12
10
8
6
4
0
’11
’12*
’13
’14
’15
(FY)
* Includes growth resulting from the conversion of SMBC Finance Service to a consolidated subsidiary
Loan balance of SMBC Consumer Finance’s subsidiaries overseas
Promise Tianjin ¥2.4 billion
Opened March 2013
Promise Shenyang ¥3.0 billion
Opened May 2011
Promise Chengdu ¥3.5 billion
Opened December 2013
Promise Chongqing ¥1.5 billion
Opened September 2013
Promise Shenzhen ¥7.4 billion
Opened July 2010
Promise Shanghai ¥1.0 billion
Opened October 2014
Promise Wuhan ¥1.3 billion
Opened December 2013
Promise Hong Kong ¥35.2 billion
Opened July 1992
Promise Thailand ¥22.4 billion
Opened October 2005
Note: Loan values are as of March 31, 2016 (yen conversions from local currency).
35
2016 Annual Report BUSINESS STRATEGY
Services with Competitive Advantage,
New Businesses
Services with competitive advantage
SMFG is harnessing the combined strength of SMBC and
other Group companies to provide solutions to the varied
needs of its clients, such as fund raising, investment, M&A,
and risk-hedging activities.
Non-interest income by product (SMBC non-consolidated)
(Billions of yen)
120
100
80
60
40
20
0
’13
’14
’15
(FY)
Loan syndication related fees
Asset finance related fees
Structured finance related fees
Fees on sales of derivatives products
New endeavors in growth areas
The Growth Industry Cluster Department of SMBC provides
financial support for growing industries, thereby contributing
to the development and growth of our clients and the
Japanese economy at large.
Customer
base
Financial
expertise
Private-
public
sector ties
Growth
Industry
Cluster
Department
Internal-
external ties
SMFG
Growth sectors
Healthcare
New energy
Environment,
Emissions credits
Infrastructure,
Water, Value chain
Natural resources
Agriculture
Robotics
Fund for raising corporate value
SMBC, Mitsui & Co., Ltd., and the Development Bank of
Japan Inc. jointly established a private equity fund in October
2015. Named MSD Fund, it is aimed at resolving manage-
ment issues and raising corporate value for mid-sized
1. Syndicated loan league table (Japan)*1
Rank
Proceeds (¥ billion)
Market share
Number of deals
2
6,961.7
28%
621
Mandated Arrangers, April 2015 to March 2016
2. Project finance league table (Global)*2
Rank
Proceeds (US$ million)
Market share
Number of deals
2
12,832
4.6%
108
Mandated Arrangers, January 2015 to December 2016
3. M&A financial advisor league table (number of deals)*3
Rank
2
Number of deals
Transaction volume (¥ billion)
164
5,397.4
Announced deals involving Japanese companies, April 2015 to March 2016
*1,3 Sources: Thomson Reuters
*2 Project Finance International published by Thomson Reuters
In the “Robotics” sector, SMBC formed a business alliance
with Silicon Valley Robotics (SVR) in May 2015. SMBC
is also taking measures to address the aging society by
providing financial assistance for the provision of care
facilities via a healthcare REIT.
Business alliance with SVR
corporations and SMEs in Japan. Also, in November 2015,
SMBC invested in SPARX Group’s Mirai Creation fund* with
Toyota Motor.
* Mirai means “future” in Japanese and the fund’s investment aim is to support the spread of advanced technologies for the future generation. Core target fields for the fund
will include AI (artificial intelligence), robotics, and technologies to help realize a hydrogen-fueled society.
36
2016 Annual Report Transaction business overview
SMBC has the Transaction Business
Division, which crosses business units
and is working on providing new, high-
value-added services that foresee the
needs of clients in Japan and overseas,
without being caught up in traditional
business models. One such example is
the establishment of SMBC GMO Payment,
a joint venture with GMO Payment Gateway,
in November 2015.
Transaction business in Japan
To meet corporate client needs for payment
and cash management in Japan, SMBC
offers “PC Bank Web21” for domestic bank
transfers and balance inquiries, “SMBC
Densai Net,” and online overseas remit-
tance services. Constant addition of new
functions is leading to increasing numbers
of customers subscribing to these services.
Domestic-overseas integrated framework for promotion
in the Transaction Business Division
Domestic settlement
business
Proposal of solutions
related to domestic
settlement
Foreign exchange and
trade transactions
Advisory services for overseas
business development
Support for trade operations
Overseas transaction
business
Proposals for cash
management and
streamlining in
each country
Call centers for electronic banking services and
consultation services for foreign exchange
Global cash management services
Settlement finance programs
Cooperation
BPO* and other services in cooperation with Group companies
* BPO: Business Process Outsourcing
Number of “PC Bank Web21”
subscribers
Number of “SMBC Densai Net”
subscribers
(Thousands of subscribers)
(Thousands of subscribers)
210
200
190
180
170
0
50
40
30
20
10
0
’13
’14
’15
(FYE)
’13
’14
’15
(FYE)
Transaction business overseas
The number of subscribers to SMBC’s
online overseas banking services, such as
“SMAR&TS” and “E-Moneyger,” is increas-
ing in response to growing requirements for
the enhancement of cash management
and internal controls among overseas sub-
sidiaries of Japanese companies. These
services enable clients to create a global
cash-monitoring system and to streamline
settlement operations at the subsidiaries.
SMAR&TS
Treasury
Financial
management tool
SMAR&TS
Asia cash
management
service
E-Moneyger
Europe, Americas
cash management
service
Number of corporate subscribers
to online banking for
overseas operations
(Thousands of subscribers)
20
15
10
0
’13
’14
’15
(FYE)
37
2016 Annual Report BUSINESS STRATEGY
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Support capabilities and policy for mid-sized
corporations and SMEs
In April 2014, SMBC established its Area Main Offices to
more fully address the wholesale-retail integral needs of
mid-sized corporations and SME clients, including the
aspect of business succession. Area Main Offices enable
us to offer integrated corporate and personal consulting
and draw on SMFG company networks to provide specialist
services. In addition to providing business loans, SMFG
companies offer tailored support, including consultation
on overseas business development, business matching,
business succession, and internal company reforms, along-
side consultation on personal asset management, loans,
inheritance, and asset succession.
Mid-sized corporations and SMEs are a key support for
the Japanese economy and SMBC will maintain its endeav-
ors to meet their and their clients’ wide-ranging needs.
Support for new ventures, new business
development, and growth companies
SMBC offers support in accordance with clients’ stage
of growth; SMBC Venture Capital provides incubation invest-
ment, SMBC provides growth assessment financing through
the “Growth Potential Evaluation Loan,” and SMBC Nikko
Securities and SMBC Friend Securities provide support for
public share offerings. Taking account of the growing need
for alliances between venture businesses and large corpo-
rates, we host such events as the Open Innovation Meetup
for exchanging ideas and technology. Events have also
included the Mirai 2016 business pitch competition arranged
by the cross-industry Triple I consortium. At the same time,
we aim to assist in the creation of a venture creation ecosys-
tem in Japan by promoting ties with leading venture capital
providers, universities, and research institutes.
Operational support structure for mid-sized corporations and SMEs
SMBC
Mid-sized
corporations,
SMEs, and
retail customers
• Corporate
Business
Office
• Area Main
Office
• Branch, etc.
• New borrowing
• Management
consultation
• Management
support
Affiliation
• Departments
of the head
office
• External
organizations
Affiliation
• External experts /
professionals
38
2016 Annual Report Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Support for management improvements,
business regeneration, and business conversion
Along with its efforts to fulfill its intermediary function
smoothly, SMBC seeks to provide solutions to management
issues, putting itself in the position of the client to devise
optimum proposals based on the nature of the issues and
the client’s stage in life. Ample time is spent on the provision
of support, and in this respect we are making increasing use
of consultation. Examples include offering a full range of
loan products devised to meet funding needs and address
management issues. We also provide solutions in such areas
as business matching, overseas business development, and
business succession.
Our assistance in business operating improvements and
regeneration involves links with external experts / profession-
als*1 and external organizations*2 to provide support in
drawing up plans for improvement and advice in such areas
as cost cutting and asset sales.
For clients that have suffered damage in natural disasters,
we propose optimal solutions and effect help in rebuilding
lives and business.
*1 SMBC Consulting, certified tax accountants, certified public accountants, etc.
*2 Council supporting revitalization of SMEs, Regional Economy Vitalization
Corporation of Japan, etc.
Measures for finance facilitation
Involvement in regional stimulus
Change in the Japanese economy is leading to more diverse
roles for local government entities and regional financial
institutions and raising expectations for support for local
industrial development and overseas business development.
Local government entities and regional financial institutions
need to have extensive networks encompassing countries
overseas and to collect accurate and up-to-date information.
To serve such needs, SMFG is linking with local government
entities and regional financial institutions to provide services
that draw on its network in Japan and overseas.
Vitalization of local regions in Japan is a key theme for the
Japanese government. Related “regional comprehensive
strategy” plans drawn up by local government entities are
moving to their implementation stage. SMBC has entered
into cooperation agreements with local government and
other entities as part of its efforts to assist in local industrial
development, and in May 2016 it added an industrial devel-
opment cooperation agreement with the city of Kobe.
We will continue to work with local government entities
and regional financial institutions across Japan, drawing on
the SMBC network to contribute to local economies.
SMBC’s “Basic Policy for Finance Facilitation” underlies efforts to be diligent and thorough in the provision of funding
and consultation.
“Basic Policy for Finance Facilitation”
1. Conduct appropriate review of applications submitted
for a new loan or requests to modify loan conditions
2. Provide appropriate management consultation
and guidance for clients and appropriate support
for management improvements
3. Strive to improve the ability to assess the value
of a client’s business appropriately
4. Provide appropriate and thorough explanations to
clients in consultations and applications for new
loans or modification of loan conditions
5. Respond appropriately and adequately to client
inquiries regarding new loan and modification
consultations and applications and to consulting
requests or complaints
6. Liaise closely with other financial institutions
involved in applications for modifying loan
conditions or other applications
7. Respond appropriately in respect of business
manager guarantees in accordance with the
“Guidelines for Guarantees for Business Managers”
39
2016 Annual Report SPECIAL FEATURE
BTPN—“Do Good and Do Well”
In May 2013, SMBC acquired the initial stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional Tbk
(hereinafter, BTPN). In March 2014, SMBC carried out additional investment in BTPN and established
a platform for full-fledged cooperation between SMBC and BTPN. To highlight the concrete cooperation
efforts and the company's aim, this section provides an interview with Mr. Jerry Ng, BTPN’s President Director.
Snapshot of BTPN
Establishment
1958
Number of Employees
27,247
SMBC’s Investment
40%
Total Assets
JPY 713.1 billion
IDR 81,040 billion
Business Locations
1,317
PT Bank Tabungan Pensiunan Nasional Tbk
Jerry Ng
President Director
BTPN, which was established in 1958 to only serve retired
military personnel, now offers a wide range of financial
services with primary focus on the mass market. Listed on
the Indonesia Stock Exchange (IDX ticker: BTPN)
(As of December 31, 2015)
Q
Would you tell me about Indonesia’s market
situation? And the business strategy of BTPN?
Driven by its large and young population of more than
250 million people, Indonesia is poised for a sustainable
and quality growth over the next 10-15 years. In general, the
market can be divided into two large segments: the rising
middle-consuming class and the under-served mass market
segment. It is estimated that 60% of adults in Indonesia are
yet to have access to banking services, which in turn provides
a tremendous mass market banking opportunity. The rest of
the population then forms the middle-consuming class who
are gaining sophistication and becoming comfortable in the
new world of digital economy.
BTPN, which has been one of the leading banks focusing
on the mass market segments, will continue to do so by
building this mass market mobile banking platform called
BTPN Wow! This platform is designed by using the mobile
phone as a means to deliver financial services and products to
the mass market in a very cost-effective way. The reach to the
mass market customers is greatly enhanced by the Agent
Bank networks which BTPN started building since last year.
Meanwhile, to cater for the rising consumer class, BTPN
is building one of its kind digital banking platform.
We believe that the two platforms will provide BTPN with a
unique proposition in serving the two large segments of the
Indonesian population.
Q
Would you tell me about the vision of BTPN?
We have been known as one of the more innovative banks in
Indonesia. We believe that to stay ahead we should continue
to embrace next new technologies and launch innovative
business models and find relevant ways to serve our cus-
tomers. Over the years, we have pioneered and introduced
new ways to better serve and engage with our customers.
Just to name a few examples, (i) we introduced the use of
psychometric data to underwrite micro businesses which are
considered unbankable by most banks; (ii) we reconfigured
40
2016 Annual Report Pension business
Serves pensioners and pre-pensioners by offering loans
both for business and personal use
Micro / SME business
Offers business loans to micro traders and Small Medium
Enterprises (SME), mainly located in local traditional markets
and tier-1 and tier-2 cities
Syariah business
Provides financial services to lower income communities
in rural areas utilizing islamic financing scheme
and redesigned our branches serving pensioners to become
community centers, opening at 5:30 in the morning, and
even operating medical clinics in those branches as part
of the added value to our customers; and (iii) we launched
combined package of financial products and capacity build-
ing by providing various practical trainings to help our micro
and SME customers improve the ways they run their
businesses. The core of our business philosophy is to
grow together with our customers and their communities
– “Do Good and Do Well”.
In Indonesia, we may not be one of the largest banks, but
we would like to be known as a bank which remains relevant
and provides cutting edge solutions through technology and
added value services to the customer segments we serve.
Q
Would you describe your collaboration with SMBC?
Why is SMBC a strategic partner for BTPN?
SMBC is a large global bank with lots of strengths and
resources. Since SMBC became our major shareholder,
SMBC’s Collaboration with BTPN
Purpose of investment
• Considering market size, competitiveness, and potential
growth, SMBC aims to expand our businesses in emerging
countries and grow to become a globally active diversified
financial services group with Asia as our home market.
Indonesia is one of our target countries.
• By investing in BTPN and leveraging on SMBC’s Indonesian
platform, SMBC aims to provide full-fledged financial ser-
vices, from corporate transaction to retail banking business.
• Starting from long-term funding support and technical
support, SMBC will collaborate with BTPN to further
promote building a strong business platform in Indonesia
such as developing a branchless retail banking model.
we have benefited tangibly through the upgrade of our rating
to an AAA-rating*. I believe this reflects the level of confi-
dence of our rating agency has on having SMBC as a
strategic shareholder of BTPN.
We then received a sizable long-term structured funding
facility from SMBC, which enables BTPN to further diversify
our sources of funding. SMBC has been instrumental
in assisting BTPN as we move to become a foreign-
exchange bank.
We also embarked on strategic projects by jointly combin-
ing our resources to design new digital banking platforms for
the future.
Our vision is that at the right time we will expand into other
markets in the ASEAN region together with SMBC. I believe
that the combination of SMBC / SMFG's networks and
resources with BTPN's innovation and agility in business
building capabilities, there are clear opportunities to expand
into other markets with similar characteristics.
* Fitch ratings, Indonesian domestic ratings
41
2016 Annual Report SPECIAL FEATURE
PRESTIA—the New Brand Launch
SMBC Trust Bank Ltd. (hereinafter SMBC Trust) integrated the retail banking business of Citibank Japan
Ltd. (hereinafter Citibank Japan) on November 1, 2015. Since the integration, SMBC Trust has been
operating the retail banking business under the new brand, PRESTIA, to retain the distinctive consumer
business features developed by Citibank Japan and ensure clear differentiation from SMBC Trust’s
existing products and services.
From November 1, 2015,
PRESTIA, the bank that knows the world
At the time of the integration, PRESTIA’s share of individual foreign currency
deposits was approximately 20%*1, which gives testimony to PRESTIA’s
responsiveness to customers’ foreign currency asset needs.
*1 Estimation based on the market’s size of the deposits in foreign currencies as of September 30,
2015. Calculated using the balance of foreign currency deposits held by households from “Amounts
Outstanding of Deposits by Depositor (Domestically Licensed Banks)” by the Bank of Japan
Strength in Foreign
Currency Transactions
• Top-class level of foreign currency
balances in Japan
• Wide foreign currency product lineup
for customers interested in foreign
currency investments or those not
aware of their foreign currency needs
• Full range of settlement services
in foreign currencies to support
the lifestyle of customers with
global access
Unsurpassed
Consultation
• Consultation proposing asset
management plans in line with
customer needs and lifestyles,
providing swift analysis and a wide
variety of information
Multi-Channel
Deployment
• Branch network encompassing
Japan’s major cities
• Manned call centers accessible
from Japan and overseas 24 hours
a day, 365 days a year
• Convenient overseas remittances
and online banking for yen and
foreign currency transactions
and settlement
42
2016 Annual Report Exclusive Services Offered to Selected Customers
The PRESTIA GOLD and PRESTIA GOLD PREMIUM pro-
grams offer preferential fees in accordance with account
balances, asset management consultations with dedicated
consultants, and a variety of special services.
PRESTIA GOLD
• PRESTIA GOLD Executives to support customers in asset
management
• Preferential service fees
PRESTIA GOLD PREMIUM
• Relationship Managers to support customers in asset
management
• Free or discounted service fees
• Exclusive products for PRESTIA GOLD PREMIUM customers
(Mutual Funds, Bonds, and Loans)
Distinctive Service Lineup
Foreign currencies’ settlement services, such as cash
cards that can be used overseas and overseas remittance
Banking Card
• Local currency withdrawals from Yen Savings Accounts
available from over two million CDs and ATMs in more
than 200 countries and regions
PRESTIA Gaika Cash Card
• U.S. Dollar withdrawals from U.S. Dollar Savings Accounts
available from CDs and ATMs throughout the United States
Overseas Remittance
• Choice of channels: branches and mini branches,
PRESTIA Phone Banking / PRESTIA Online
Wide variety of foreign currency products (Deposits,
Mutual Funds, Insurance, and Intermediation of
financial products)
• Foreign Currency Deposits (10 major currencies)
• Cross Currency Transactions*2
• Structured Deposits with FX Option (Deposits can be made
in foreign currencies.)
• Mutual Funds and Insurance in foreign currencies
*2 Transactions in which customers convert one foreign currency into another,
for example, U.S. Dollar to Euro or Australian Dollar to British Pound
Market information from expert analysts
Information provided to assist customers in their asset
management and foreign exchange transactions includes
PRESTIA Insight, a publication containing views of financial
markets by experienced analysts, and PRESTIA Global
Research Monthly Digest, which describes SMBC Trust’s
outlook and economic and market trends.
Affiliate services
PRESTIA GOLD customers can directly contact PRESTIA
GOLD dedicated operators in Japan from as many as
39 different countries and regions without being charged
for the call. Citigold lounges at Citibank branches overseas
are also available for their use.
New affiliated credit cards were launched in February
2016, PRESTIA Visa GOLD CARD and PRESTIA Visa
PLATINUM CARD, as part of the business partnership
with Sumitomo Mitsui Card Company Ltd.
43
2016 Annual Report SPECIAL FEATURE
FinTech—Promoting Innovation with IT
FinTech, the fusion of finance and technology, is a new business model that is attracting great attention.
At SMFG, our efforts on this front are led by the IT Innovation Department, which in 2015 took over the
functions of the project team we formed in 2012.
Our new IT Innovation Department
In October 2015, holding company SMFG and SMBC
formed the IT Innovation Department to strengthen FinTech-
related efforts across the Group.
The project team formed in 2012 was designed to use
IT and the Internet for investigative research into new
services and their commercialization. Our new arrangement
is designed to accelerate the original project team’s work.
We position the department as the innovation hub for
activities across all Group companies.
The new department is based on a concept of open
innovation, with an emphasis on making active use of
external knowledge and pursuing new business models
through alliances with non-financial companies. Agile
development, another key concept, relates to speeding
up our planning and prototyping / testing cycles for new
financial services.
IT Innovation Department—Our innovation hub
Ties with companies and institutions outside Japan
SMBC and Sumitomo Mitsui Card Company spearhead
our efforts to study the latest trends and to find partners
by sending staff to Silicon Valley to network with leading-
edge start-ups and IT vendors and hence expand the
SMFG network.
As a means to cultivate ties with high-quality venture com-
panies in FinTech in particular, we have ties with Plug and
Play Tech Center, which is renowned for incubation, and we
make strategic investments in local venture capital funds.
Plug and Play Tech Center (Santa Clara, U.S.)
SMFG
IT Innovation Department
Active use of external knowledge
Pursuit of new business
models through alliances
with non-financial companies
Agile development concept
Open innovation culture
44
2016 Annual Report Ties with Japanese ventures
To create ties with venture businesses, we host such events
as the Open Innovation Meetup and the Mirai 2016 business
pitch competition arranged by the cross-industry Triple I
consortium. We draw on our resulting venture network in our
promotion of innovation.
Final screening at Mirai 2016
Examples of our activities
We are working with other companies in such areas as the introduction and testing of leading-edge services and
technologies. At the same time, we are seeking to promote design thinking with help from outside experts to create
ideas from our customers’ perspective.
Higher levels of convenience
We are collaborating on
biometric identification
with leading venture com-
panies. One example is a
project to test identifica-
tion using veins in the
palm with an ordinary
smartphone camera.
Palm authentication testing
Blockchain
We have commenced joint research on blockchain
technology with the National Institute of Informatics
and Kinki University. Reflecting this technology’s sig-
nificant influence on financial infrastructure, we are
also collaborating with expert companies in the field
on technology testing for financial services.
Machine learning and neuroscience
SMBC is testing IBM’s Watson in its contact centers.
Watson is able to respond to customer inquiries with
optimum answers, and we see it as a tool for raising the
quality of our response to customers.
We have embarked on a project with a major IT vendor
on neuroscience applications in financial services. We are
looking at the use of neuroscience to provide optimum
asset management assistance to customers.
Watson trial in a contact center
Design thinking
We have begun working with Tokyo
Institute of Technology on design thinking,
which is an approach for creating ideas
from our customers’ perspective. Regular
sessions are held to reflect on the image
we should aim for as a financial institution
and create new business ideas.
Design thinking session
Vision produced at a design thinking session
45
2016 Annual Report Corporate Infrastructure
48
50
Corporate Governance
Special Feature:
Outside Director Interview
52
SMFG Directors and
Corporate Auditors
54
58
60
61
62
64
Risk Management Initiatives
Compliance
Internal Audit System
Customer Satisfaction (CS) and
Quality Improvement
Human Resources
Corporate Social
Responsibility (CSR)
68
Financial Review
46
2016 Annual Report 47
2016 Annual Report CORPORATE INFRASTRUCTURE
Corporate Governance
Our basic position on corporate governance
We are working to improve the effectiveness of corporate
governance as we consider the strengthening and enhance-
ment of corporate governance to be one of our top priorities
in realizing “Our mission.” Further, SMFG has established its
“SMFG Corporate Governance Guideline” as its principles
and guidelines to be referred to for corporate governance.
Please follow the link below for the SMFG Corporate
Governance Guideline.
http://www.smfg.co.jp/english/aboutus/pdf/cg_guideline_e.pdf
SMFG’s corporate governance system
As a holding company with a board of corporate auditors,
SMFG has the following system in place.
Board of Directors
The Board of Directors makes key decisions on company
business execution and oversees the executive officers
responsible for execution as they carry out their duties.
The chairman of SMFG serves as the chairman of the Board
of Directors. The role of the chairman is clearly separated
from that of the president, who oversees the overall business
operations. The Board has 14 members, of whom five are
outside directors (as of June 30, 2016).
The Board has established four discretionary internal
committees: the Nominating Committee, the Compensation
Committee, the Auditing Committee, and the Risk Commit-
tee. Outside directors are appointed to all the committees
to promote objective deliberations outside the sphere of
business execution. The Nominating Committee, the
Compensation Committee, and the Auditing Committee
are chaired by outside directors for the purpose of further
strengthening the governance function.
Corporate auditors and Board of Corporate Auditors
SMFG has a corporate auditor system whereby independent
auditors audit directors’ performance in carrying out their
duties in accordance with the policies established by the
Board of Corporate Auditors, to which all the auditors belong.
Three of the six corporate auditors are outside auditors.
Management Committee
The Management Committee is set up under the Board to
serve as the top decision-making body. The 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.
Internal committee composition (all committees discretionary)
Nominating Committee
(1 inside director,
5 outside directors)
Compensation Committee
(3 inside directors,
5 outside directors)
Auditing Committee
(4 inside directors,
3 outside directors)
Risk Committee
(3 inside directors,
4 outside directors)
: Chairman
: Member
Yoshinori Yokoyama
Outside director
Kuniaki Nomura
Outside director
Arthur M. Mitchell
Outside director
Masaharu Kono
Outside director
Eriko Sakurai
Outside director
Masayuki Oku
Chairman of the Board
Koichi Miyata
President
Takeshi Kunibe
Kozo Ogino
Director
Director
Hirohide Yamaguchi*
Outside expert
* Chairman of the Advisory Board of Nikko Research Center, Inc., former Deputy Governor of the Bank of Japan
48
2016 Annual Report
Corporate Governance
SMBC’s corporate governance system
The corporate governance system of SMBC is almost the
same as holding company SMFG’s except that the Board of
Directors has no internal committees. Three of SMBC’s 17
directors are outside directors and three of SMBC’s six
corporate auditors are outside auditors. The oversight of
business operations as a whole, which is the role of the pres-
ident at SMFG, is the role of the SMBC president and CEO.
Conversion to a Company with Three Committees
To date, SMFG has established a solid corporate governance system as a holding company with a board of corporate
auditors. In order to further enhance this solid framework, SMFG decided to convert to a Company with Three Commit-
tees, subject to approval at the ordinary general meeting of shareholders scheduled for June 2017. This framework is
globally recognized and is aligned with international banking regulations and supervision.
Board of Directors
Business execution decisions +
Oversight of directors’ execution of duties
Board of
Corporate Auditors
Board of Directors
Focus on supervision of executive officers’ execution of duties
Internal committees (Discretionary)
Internal Committees
(Mandatory)
Nominating
Committee
(1 inside director,
5 outside directors)
Compensation
Committee
(3 inside directors,
5 outside directors)
Risk
Committee
(3 inside directors,
4 outside directors)
Auditing
Committee
(4 inside directors,
3 outside directors)
June
2017
Nomination
Committee
(Outside directors
in the majority)
Compensation
Committee
(Outside directors
in the majority)
(Discretionary)
Risk
Committee
Auditing
Committee
(Outside directors
in the majority)
Management Committee
(Inside directors + Executive officers)
Management Committee
Business execution decisions*
Link
Reporting line
(including
personnel
right of
consent)
Departments
Audit Department
Departments
Audit Department
* Excludes areas designated by laws and ordinances
as the jurisdiction of the Board of Directors
49
2016 Annual Report SPECIAL FEATURE
Outside Director Interview
We asked Mr. Arthur M. Mitchell, who became an outside director of SMFG in fiscal 2015, about
corporate governance at SMFG and issues going forward. (Interview date: May 2016)
Bio
1976 New York State Bar (current position)
2003 General Counsel of the Asian Development Bank
2007 Joined White & Case LLP
2008 Foreign Attorney in Japan registration
(current position)
White & Case LLP
Registered Foreign Attorney in Japan
(current position)
2015 SMFG Outside Director (current position)
Arthur M. Mitchell
Director, Sumitomo Mitsui Financial Group, Inc.
Registered attorney admitted in New York State
Registered Foreign Attorney in Japan
Q
How do you feel about corporate governance at SMFG after a year as
an outside director?
There have been significant changes in Japan’s corporate governance frame-
work; the Stewardship Code and the Corporate Governance Code have been
introduced and the Companies Act has been amended. However, the new
rules only provide principles. It is up to companies themselves to decide how
to respond and how to increase their corporate value over the medium to
long term.
I feel strongly that SMFG is making serious efforts to make corporate
governance better on a company-wide basis. In addition to increasing the
number of outside directors in fiscal 2015 and drawing up the SMFG
Corporate Governance Guideline, SMFG has created opportunities for
outside directors to have a dialogue with both external auditors and corporate
auditors, so that outside directors can gather information without their
independence being impacted. I feel that such dialogue is very meaningful.
Also, the Board of Directors’ meeting has an atmosphere that encourages
active discussion among directors. And when outside directors ask questions
“I feel strongly that
SMFG is making serious
efforts to make corporate
governance better on a
company-wide basis.”
50
2016 Annual Report
or make suggestions, the director in charge and people from related
departments are quick and diligent in responding. This is another factor
that shows how much the company intends to utilize outsiders’ perspectives
in its management.
SMFG announced its intention to convert to a Company with Three
Committees, subject to approval by the ordinary general meeting of share-
holders scheduled in June 2017. I think the role of outside directors will
become even more important when SMFG has legally sanctioned internal
committees where outside directors hold majority.
Q
What do you think is needed to increase SMFG’s corporate value?
And what role would you like to play in this?
I think it comes down to realizing its vision for the next decade which says,
“We will become a global financial group that, by earning the highest trust of
our customers, leads the growth of Japan and the Asian region.”
SMFG is seeking to become a truly Asia-centric institution, expanding its
network of offices in Asia, promoting ties with Asian banks, and strengthening
its business in Asia to become a leading financial group in the region. Amid
the general globalization of Japanese companies, I do not think the globaliza-
tion trend at SMFG will change and I therefore think it is necessary to push
ahead with further globalization in human resources and other areas of the
corporate infrastructure.
On the other hand, I do not think the importance of SMFG’s domestic busi-
ness will change. When I talk with people from outside of Japan, they often
tell me that they look to SMFG for contributions to the Japanese economy.
Finance is an economy’s lifeblood, and SMFG must fulfill its mission of keep-
ing the Japanese economy’s blood circulating to promote healthy growth. The
recent amendments of the Japanese Banking Act have relaxed the conditions
for financial groups investing in FinTech companies, and I think that the
fusion of IT and finance will make further advances. I also think adaptation
to such changes in business holds the key to SMFG’s future growth.
Based on this awareness, in my position as an independent outside direc-
tor I will draw on my experience as an attorney in Japan and overseas to point
out risks and make suggestions regarding new business opportunities to
SMFG’s management and contribute to increasing SMFG’s corporate value as
a global financial group.
“I think it comes down
to realizing its vision for
the next decade which says,
‘We will become a global
financial group that, by
earning the highest trust
of our customers, leads the
growth of Japan and the
Asian region.’”
51
2016 Annual Report CORPORATE INFRASTRUCTURE
SMFG Directors and Corporate Auditors (As of June 30, 2016)
Directors
Masayuki Oku
Chairman of the Board
Takeshi Kunibe
Director
President and CEO
(Representative Director) at SMBC
Koichi Miyata
President
(Representative Director)
Director at SMBC
Yujiro Ito
Director
(Representative Director)
Deputy President
(Representative Director) at SMBC
Kozo Ogino
Director
Senior Managing Director at SMBC
Jun Ohta
Director
Senior Managing Director at SMBC
Katsunori Tanizaki
Director
Senior Managing Director at SMBC
Koichi Noda
Director
Senior Managing Director at SMBC
Tetsuya Kubo
Director
Chairman of the Board
(Representative Director) at
SMBC Nikko Securities Inc.
Yoshinori Yokoyama*1
Director
52
2016 Annual Report SMFG Directors and Corporate Auditors (As of June 30, 2016)
Kuniaki Nomura*1
Director
Arthur M. Mitchell*1
Director
Masaharu Kohno*1
Director
Eriko Sakurai*1
Director
Corporate Auditors
Toshiyuki Teramoto
Corporate Auditor
Corporate Auditor at SMBC
Kazuhiko Nakao
Corporate Auditor
Toru Mikami
Corporate Auditor
Ikuo Uno*2
Corporate Auditor
Satoshi Itoh*2
Corporate Auditor
Rokuro Tsuruta*2
Corporate Auditor
*1 Messrs. and Ms. Yokoyama, Nomura, Mitchell, Kohno and Sakurai satisfy the requirements for an “outside director” under the Companies Act.
*2 Messrs. Uno, Itoh and Tsuruta satisfy the requirements for an “outside corporate auditor” under the Companies Act.
Please see page 100 for SMBC directors and corporate auditors.
53
2016 Annual Report CORPORATE INFRASTRUCTURE
Risk Management
Our basic position
Major change in the business environment for financial
institutions, including economic, financial, and regulatory
conditions, has increased the importance of promoting appro-
priate risk-taking practices at a diversified financial services
company like SMFG as we have developed our businesses
and pursue our management and financial targets. We need
to be accurate in our perception of the business environment
and risk and rigorous in our risk analysis and management.
Business and risk view is shared across the SMFG Group,
and we have an overarching Risk Appetite Framework (RAF)
for systematic management of risk. RAF guides us in con-
ducting business by clarifying the type and amount of risk
we should take to expand earnings.
Risk appetite
At SMFG, we have a Risk Appetite Statement that provides
a qualitative explanation of our approach to risk taking
and risk management for such categories as soundness,
profitability, and liquidity. We also have quantitative Risk
Appetite Measures that function as benchmarks for risks
that we are considering taking and for risk / return.
As an illustration, for the soundness category, our Risk
Appetite Statement has “maintain a sufficient level of capital
to support sustainable growth” as the overall policy. It also
includes specific policies for the fiscal year in question
based on our view of the environment and risk. The Risk
Appetite Measures are numerous and include the common
equity Tier 1 (CET1) ratio.
SMFG’s Risk Appetite Framework
Within the SMFG Group’s overall exercise of risk controls, we
seek to secure appropriate risk / return by clarifying the types
and levels of risk that we are willing to take on or prepared
to tolerate for profit growth (risk appetite).
Risk Appetite Framework (RAF) plays a key role in
SMFG’s realization of sustainable growth, and we position
RAF and business strategy as the two pivots of our
business management.
Our basic position and risk appetite specifics are set out
in an internal document for group-wide use.
Operation of Risk Appetite Framework
The process of setting risk appetite for each fiscal year
begins with discussions on the current and future business
environment and risks by the Management Committee and
the Board of Directors. Based on their shared view of risks,
they select Top Risks, that is to say the risks that may have
a material impact on SMFG. Risk appetite is then decided
on the basis of stress test results and other risk analysis
that illustrates impact if risks should be realized. Business
strategy and policies for the conduct of business are drawn
up on the basis of the risk appetite decisions.
Risk Appetite Framework Positioning
Risk Appetite Composition
Environment / Risk View
• Shared company risk
events and Top Risks
Risk Appetite
Framework
Business
Strategy
• Risk appetite establishment
and monitoring
• Medium-term
management plan
• Risk capital management
• Business plan
• Verification through
stress tests
Two pivots of our business management
Soundness
Risk Appetite Statement
Profitability
C
a
t
e
g
o
r
i
e
s
Liquidity
Credit
Market
Operational
Others*1
E
s
t
a
b
l
i
s
h
e
d
f
o
r
e
a
c
h
c
a
t
e
g
o
r
y
• Written description of risk appetite by
clarifying appropriate risk taking and
risk management
Risk Appetite Measures
• Quantitative Risk Appetite Measures that
function as benchmarks for risk taking
that is under consideration, risk tolerance,
and risk / return*2
Monitoring based on three risk management levels
set in accordance with the extent of deviation from
assumptions at the start of the fiscal year
*1 Items related to compliance, processing risk, system risk, and others
*2 Separately, measures are established for use in predicting change in Risk
Appetite Measures and understanding the current risk situation. Monitoring
is conducted based on these measures.
54
2016 Annual Report
Risk Management
Views of the environment and risks, including Top Risks,
are continuously updated in the course of the fiscal year’s
business and the risk appetite situation is monitored regu-
larly through the medium of Risk Appetite Measures and
other controls. The results are reported to the Management
Committee and the Board of Directors.
If risk appetite monitoring reveals notable deviation from
the measures set at the start of the fiscal year, consideration
is given to revising risk appetite and business strategy
as required.
Comprehensive risk management
Risk is managed systematically at SMFG. Thorough assess-
ments of the environment and risk, including Top Risks,
are carried out to ensure effective operation of RAF, and
there is a framework for risk analysis (stress tests) and risk
capital management.
Our basic position
At SMFG, we classify group-wide risk into credit risk, market
risk, liquidity risk, and operational risk, and we manage each
risk according to its particular characteristics.
Holding company SMFG provides guidance to Group com-
panies in identifying categories of risk they need to address
for their particular businesses. These risk categories are
continuously reviewed and new risks are added when they
arise due to changes in the operating environment.
Top Risks
We select the risks that may have a material impact on
business management, mainly from the potential risks
for the next 12 months, and label these Top Risks. The
selection of Top Risks involves a wide-range screening for
candidates, an evaluation of each risk’s potential impact
and probability of occurrence, and full discussion by the
Risk Committee (see page 57), the Management Committee,
and the Board of Directors.
Environment and risk views are shared across the Group
by means of this process, and we seek to refine our risk
management by continually checking on the status of our
responses to each Top Risk.
Cyber risk is one of our selections for Top Risk. Based
on the growing sophistication and variety of cyber-
attacks and the scale of their social impact in case they
cause information systems to crash, we have made
reinforcement for attacks a top management priority.
Risk Management Categories
Risk Management Framework
Categories
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.
Risk Capital-Based
Management
Market 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. (Categories include banking risk, trading risk, and strategic equity investment risk.)
Operational Risk
Operational risk is the possibility of losses arising from inadequate or failed internal
processes, people, and systems or from external events. (Categories include processing
risk and system risk.)
ALM / Funding Gap
Liquidity Risk
Liquidity risk is defined as uncertainty around the ability of the firm to meet debt obligations
without incurring unacceptably large losses. Examples of such risk include the possible
inability to meet current and future cash flow / collateral needs, both expected and unex-
pected. In such cases, the firm may be required to raise funds at less than favorable rates
or be unable to raise sufficient funds for settlement.
Management by Risk Type
Other Risks
(Settlement Risk
and Others)
—
55
2016 Annual Report Risk Management
Stress testing
Financial institutions’ business environment is constantly
changing and can sometimes impact heavily on operations.
At SMFG, we use stress testing for forward-looking risk man-
agement, seeking to analyze and comprehend the effect on
SMFG’s soundness if such risks as recession or market tur-
bulence should materialize.
In our stress tests, we use the previously explained Top
Risks as well as multiple scenarios produced in discussions
with experts and related business units and departments.
For business strategy, we use stress tests to assess risk-
taking capabilities at SMFG and verify the appropriateness of
strategies based on whether adequate soundness can be
maintained under stress.
Risk capital management
In managing the risk categories shared by the SMFG Group
as a whole, we apply a uniform standard, risk capital*1 based
on VaR (value at risk)*2. This measurement is applied to
credit, market, and operational risk, taking account of each
risk’s particular characteristics and individual Group com-
pany business characteristics, and used to set upper limits
within the scope of our resources (capital). Risk capital
is also used in optimizing capital allocation on a Group
consolidated basis.
*1 Risk capital: The amount of capital required to cover the theoretical maximum
potential loss arising from risks of business operations.
*2 VaR: The maximum loss expectation for a portfolio of financial assets for a
given probability.
Stress Testing Process
(1) Scenario design
Scenarios are designed based on the Corporate Risk Management Department’s
summation of Top Risks discussed by the Risk Committee, the Management
Committee, and the Board of Directors and the views of related departments on
such factors as future global trends.
Trend scenario
(economic
forecast)
Downside scenario
(within the bounds
of possibility)
Stress scenario
(once in 10 years)
Severe stress scenario
(once in 25 years)
(2) Scenario finalization
Scenarios are revised as necessary based on the outcome of discussions between
specialists and related departments.
(3) Calculation of impact
The scenario’s impact on each financial item is estimated and aggregated for analysis
of the impact on such factors as the common equity Tier 1 ratio.
(4) Confirmation by the
Management Committee
and the Board of Directors
The impact on the common equity Tier 1 ratio etc., (3), from the scenario set in (2)
is reported to the Management Committee and the Board of Directors for verification
of the appropriateness of business strategy.
56
2016 Annual Report SMFG’s risk management system
Risk management system
Reflecting the importance of risk management, top manage-
ment plays an active role in the process. The group-wide
basic policies for risk management are determined by the
Management Committee before being authorized by the
Board of Directors.
In line with SMFG’s group-wide basic policies for risk
management, the functions for managing major risks are
consolidated at the Corporate Risk Management Department,
and we seek to refine our risk management system by such
means as cross-the-board reviews for each risk category. In
addition, the Internal Audit Unit audits risk management to
verify whether the system is working properly.
Risk management systems are in place at the individual
Group companies for their particular businesses in
accordance with the basic policies. At SMBC, for example,
specific departments have been appointed for risks associ-
ated with settlement in addition to the overall handling of
such categories as credit and market risk. Each risk category
is managed in accordance with its particular characteristics.
Risk Committee
The Risk Committee is an internal committee of the Board
of Directors, composed of outside directors as well as inside
and outside experts.
The Risk Committee meets regularly to discuss a wide
range of risk management and compliance topics, including
Top Risks and RAF, from a specialist viewpoint. The results
are reported to the Management Committee and the Board
of Directors for reflection in SMFG Group operations.
SMFG’s Risk Management System
H
o
l
d
i
n
g
C
o
m
p
a
n
y
S
M
F
G
Board of Directors
Risk Committee
SMBC
Board of Directors
Management Committee
Corporate
Auditors, Board
of Corporate
Auditors
External Audit
Guidance in
drafting basic
policies
SMBC Trust
Bank
SMBC Nikko
Securities
Management
Committee
Credit Risk
Management
Committee
Market Risk
Management
Committee
Corporate
Auditors, Board
of Corporate
Auditors
External Audit
Designated Board Members
Internal Audit
Department
Sumitomo Mitsui
Finance and
Leasing
Designated
Board Members
Board Member in
Charge of Risk
Management Unit
Internal Audit
Department
Corporate Risk
Management
Department
Credit Risk
Market Risk
Liquidity Risk
Operational Risk
Comprehensive
risk
management
Corporate
Planning
Department
Corporate Risk
Management
Department
General Affairs
Department
Processing
Risk
IT Planning
Department
System Risk
SMBC Friend
Securities
Sumitomo
Mitsui Card
Cedyna
SMBC Consumer
Finance
Japan Research
Institute
Monitoring
Comprehensive
risk
management
Corporate
Planning
Department
Corporate Risk
Management
Department
R
i
s
k
M
a
n
a
g
e
m
e
n
t
U
n
i
t
Credit &
Investment
Planning
Department
Credit Risk
Corporate Risk
Management
Department
Market Risk
Liquidity Risk
Operational Risk
Operations Planning
Department
Processing
Risk
IT Planning
Department
System Risk
Other Departments
Other Risks
S
e
t
t
l
e
m
e
n
t
i
R
s
k
57
2016 Annual Report
CORPORATE INFRASTRUCTURE
Compliance
Compliance Systems at SMFG
Basic compliance policies
Management positions the strengthening of compliance as
a key issue in enabling SMFG to fulfill its public mission and
social responsibilities as a global financial group. We are
increasing our efforts to ensure that compliance policies are
followed properly as we aim to become a truly outstanding
global group.
Group management from the compliance
perspective
As a financial holding company, SMFG seeks to maintain
a compliance system that provides appropriate instructions,
guidance, and monitoring for Group company compliance
to maintain sound and proper business operations across
the Group as a whole.
Specifically, SMFG manages and monitors the self-
sustaining compliance functions of individual Group
companies through regular meetings attended by all Group
companies and meetings with individual companies.
Compliance Systems at SMFG
Reporting system for inappropriate accounting
and auditing activities
The SMFG Group Alarm Line is intended to promote self-
cleansing through early detection and rectification of actions
that may violate laws and regulations. All Group company
employees can use this internal means of reporting from
inside and outside their company.
The SMFG Accounting and Auditing Hotline is aimed at
strengthening the Group’s self-cleansing function by encour-
aging early detection and rectification of improper actions
relating to accounting, accounting internal controls, and
auditing at holding company SMFG and its consolidated
subsidiaries. The hotline can be used from inside or outside
the Group to report accounting and auditing irregularities.
For more about the SMFG Accounting and Auditing Hotline,
please see page 93.
Corporate Auditors /
Board of Corporate
Audit Dept.
Audit /
Monitoring
Group
Company
Audit
Report
Audit
Audit /
Monitoring
Holding Company SMFG
Board of Directors
Management Committee
Directions
Report
General Affairs Dept.
Compliance System Oversight
and Guidelines
Report
Departments and Offices
General Managers responsible for compliance
Compliance Officers to assist and monitor General Managers
Management
Report
Compliance Committee
Group Companies
SMBC, SMBC Trust Bank, Sumitomo Mitsui Finance and Leasing, SMBC Nikko Securities,
SMBC Friend Securities, Sumitomo Mitsui Card, Cedyna, SMBC Consumer Finance, and JRI
58
2016 Annual Report Compliance
Compliance Systems at SMBC
Strengthening of 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 consider-
ation 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
compliant with laws and regulations is one of the most
critical issues for management to deal with such as issues
related to the Banking Law, the Financial Instruments
and Exchange Act, compliance with any other related
ordinances, and the 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 conduct is in compliance with laws and regu-
lations and, secondly, an independent Internal Audit Unit
will conduct impartial audits of observance of the compli-
ance 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 Com-
pliance Unit will issue instructions to and monitor the
conduct of each department and office in SMBC and assist
such departments and offices to make appropriate judg-
ments regarding their observance of the compliance system.
SMBC commits to the following operations for the said
compliance structure to work effectively.
Preparation of the compliance manual
SMBC has prepared its Compliance Manual by stating its
objectives, guiding rules, and 60 rules of action in order to
assist management and staff in selecting optimal actions.
This manual has been approved by its Board of Directors.
plan for compliance-related activities for each fiscal year,
including amendments to the rules and regulations as well
as training, for the effective operation of the compliance
system for SMBC and its consolidated subsidiaries.
In fiscal 2016, our efforts to strengthen the compliance
system are focused on the five areas of money laundering
prevention and management of terrorism financing counter-
measures, bribery prevention, customer information
management, management of conflicts of interest, and
Banking Law management.
Appointment of compliance officers
In addition to appointing compliance officers to each branch
and department of the bank, “Area Compliance Officers,”
operating independently from areas of business promotion,
are appointed to the branches and offices of the Wholesale
Banking Unit and the Retail Banking Unit to directly super-
vise and manage compliance activities.
Set up of the Compliance Committee
The Compliance Committee, which consists of cross-depart-
mental 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 Compliance Committee meetings.
For the handling of any complaints received from and
conflicts with our clients, SMBC has executed agree-
ments, respectively, with the Japanese Bankers
Association, a designated dispute resolution agency
under the Banking Act; the Trust Companies Associa-
tion of Japan, a Designated Dispute Resolution
Organization under the Trust Business Act and Act on
Provision, etc. of Trust Business by Financial Institu-
tions; and the specified non-profit organization of
“Financial Instruments Mediation Assistance Center,”
one of the “Designated Dispute Resolution Agencies”
under the Financial Instruments and Exchange Act.
Development of a compliance program
The SMBC Board of Directors develops the detailed annual
For more about designated dispute resolution agencies and
organizations, please see page 93.
59
2016 Annual Report CORPORATE INFRASTRUCTURE
Internal Audit System
Outline of the group’s internal audit system
At SMFG, in addition to the Auditing Committee of the Board
of Directors, the Internal Auditing Committee is established
as part of the Management Committee, where the members
discuss important auditing matters reported by the relevant
departments. Under such a structure, the Audit Department
is established as an internal auditing function, which is
independent of business units.
The Audit Department conducts internal audits for each
unit and department to verify the soundness and effective-
ness of internal control systems, including compliance and
risk management. It is also responsible for the overall super-
vision of internal audit functions at Group companies, and it
verifies the appropriateness and effectiveness of their inter-
nal control systems by monitoring the performance of
internal audit activities and conducting group-wide audits on
common subjects. On the basis of its monitoring and group-
wide audit, the Audit Department provides recommendation
and guidance to the business units and departments as well
as to Group companies. Also, the department is working to
strengthen cooperation with corporate auditors and account-
ing auditors through frequent exchanges of information for
appropriate audit practices.
SMBC Group companies in order to verify compliance and
risk management systems. It also carries out “theme audit,”
which focuses on a particular business or specific risk
management issue to test cross-organizational conditions of
internal control. Each audit practice is not limited to simple
inspection of deficiency but points out issues and makes
suggestions for future improvement on the basis of root-
cause analysis.
Internal audit units are also established in other group com-
panies according to their respective business characteristics.
Enhancing the quality and efficiency
of internal audit
The SMFG Audit Department has adopted auditing methods
in accordance with the standards of the Institute of Internal
Auditors (IIA)*. The department conducts risk-based audits
and expands the same approach to group companies as
well. It seeks to enhance the expertise of internal auditors
in Group companies as it gathers up-to-date information
on internal audits and offers that information to Group
companies, organizes training programs, and promotes
the obtaining of international certification as an auditor.
Moreover, it is proactively working on a group-wide quality
SMBC has similar internal audit systems to those of SMFG,
assessment of internal audits based on the IIA standards.
where the Internal Audit Unit is established and the Internal
Auditing Committee is convened for discussions and report-
ing. The Internal Audit Unit conducts audits of operations
at both domestic and overseas head offices, branches, and
* The Institute of Internal Auditors, Inc. (IIA), was founded in 1941 in the United
States as an organization dedicated to helping raise the level of specialization
and the status of professionalism of internal auditing staff. Its main activity is to
hold examinations and approve licenses for Certified Internal Auditor (CIA),
which is an internationally recognized qualification in both theoretical and
practical knowledge for internal auditor.
Internal Audit System at SMFG and SMBC
Holding Company SMFG
SMBC
Shareholders’ Meeting
Board of Directors
Nominating
Committee
Compensation
Committee
Risk
Committee
Auditing
Committee
Group Strategy
Committee
Management
Committee
Internal Auditing
Committee
Corporate
Auditors / Board
of Corporate
Auditors
Office of
Corporate
Auditors
Shareholders’ Meeting
Board of Directors
Management
Committee
Internal Auditing
Committee
Business units
subject to auditing
Corporate
Auditors / Board
of Corporate
Auditors
Office of
Corporate
Auditors
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
60
2016 Annual Report CORPORATE INFRASTRUCTURE
Customer Satisfaction (CS)
and Quality Improvement
Our basic position
SMFG group companies are united in their efforts for
customer satisfaction and quality improvement in line with
“Our Mission” that states “We grow and prosper together
with our customers, by providing services of greater value
to them.”
Our system
SMFG has the Group CS Committee to promote cooperation
across the group and holds regular meetings where group
companies can exchange information on feedback from
customers and exchange ideas on measures for promoting
customer satisfaction. As such, the whole group is involved
in customer satisfaction and quality improvement.
Group CS Committee
SMFG
Group company
CS departments
Customer
Group CS Committee
Information
gathering
Analysis
Feedback
Improvement
activities
Fiduciary Duty Declaration
SMFG has made a policy declaration for customer
orientation in the asset management and asset
formation business.
For more about the Fiduciary Duty Declaration,
please see page 94.
Measures taken by SMBC
SMBC takes active steps to utilize customer feedback in
its operations.
Responding to customers’ opinions and requests
Customers’ opinions and requests are entered into the
“Voice of the Customers” (VOC) database and shared widely
across the bank. The data are analyzed by all departments
of the bank and channeled into enhancing our response to
customers through use in improving products and services
and in staff training.
The Quality Management Department is responsible for
developing plans, proposals, and systems for the improve-
ment of customer satisfaction and quality. In addition, this
department hosts meetings of the CS and Quality Improve-
ment Committee, which is chaired by the president, to
discuss appropriate cross-departmental measures for the
entire bank to enable us to provide services that enhance
customer satisfaction.
Clients always come first
SMBC sets forth detailed action principles under the “Clients
always come first” of the Compliance Manual, along with “Our
Mission” mentioned earlier, in order to enforce “Clients always
come first” (CCF) marketing attitude. Furthermore, the bank
raises awareness of the CCF attitude among all employees
through Group training seminars and study sessions con-
ducted at branches. During such training seminars and
study sessions, the bank specifically incorporates clients’
opinions and requests for the implementation of the CCF
attitude into daily business activities.
Measures to improve Customer Satisfaction (CS) and Quality of SMBC
Toll-free telephone service (domestic calls only), CS surveys and questionnaires
Head office
departments
Customers
Opinions
Response
Input
Voice of
the Customers
(VOC) Database
Analysis
Reports
Branches and
other offices
Guidance at the branch
Improvement of products and services
Management Principles / Compliance Manual
Training seminars and study sessions
Quality
Management
Dept.
Directives
CS and
Quality
Improvement
Committee
61
2016 Annual Report CORPORATE INFRASTRUCTURE
Human Resources
Human resources development that embodies our Five Values
Initiatives to promote our Five Values
To enable our Five Values to permeate group-wide, we have
SMFG joint training seminars where new hires across group
companies come together and a joint SMFG management
program for Group company managers to engage in discus-
sions about SMFG’s future.
Initiatives to foster a Team SMFG spirit
To foster a Team SMFG spirit, we arrange for interchanges
between employees of different Group companies and seek
to promote Group ties through human resources strategies,
such as joint activities for new hires.
SMFG joint program for new hires
Five Values
Values shared by our staff and directors in Japan and
overseas to guide us in our client-centric approach
• Customer First
• Proactive and Innovative
• Speed
• Quality
• Team SMBC / SMFG
SMFG joint company briefing
Initiatives to promote “Proactive & Innovative”
SMBC has set its sights on becoming a “Proactive & Innova-
tive head office” where high sensitivity to change in the
environment feeds into early response in effecting measures
and producing ideas.
In fiscal 2016, the expectations of
main office staff are being symbolized
as an “Aggressively Proactive and
Innovative head office,” creating a
platform for thinking with unprece-
dented freedom and working in a
spirit of positive challenge and tireless
enthusiasm. In tandem with this initia-
tive, SMFG is building an in-house
body of knowledge and increasing its
hiring and utilization of external personnel.
Poster for employees
Added value for customers from a workforce instilled with the Five Values
SMFG’s success in increasing its capability as a global financial group year by year is
the result not only of our wide-ranging products and services but also of growth in the
number of colleagues who provide us with “intelligence” we can utilize in resolving cus-
tomer problems based on the use of diverse information. The Five Values are the
summation of this “intelligence” expressed as an ethic and action plan.
As each one of us practices the Five Values, we believe we can provide added value
that exceeds our clients’ expectations by orchestrating “intelligence” through Group
company or cross-border collaboration.
Takeshi Kunibe
President and CEO,
Sumitomo Mitsui Banking Corporation
62
2016 Annual Report Human Resources
A business environment where diversity is a strength
Initiatives to promote female participation
We hold SMFG joint women’s career forums each year for
young female employees with the aim of giving them a clear
focus in their work at an early stage. The Group is also
united in its response to the
Act concerning Promotion
of Women's Career Activi-
ties, with each company
having set targets for its
female manager ratio.
SMFG joint women’s career forum
Message from an outside expert
As the female participation
situation at SMBC varies widely
from department to department,
SMBC has set challenges on an
individual department basis.
The SMBC President and
CEO is watching with close
interest, which has fostered a
positive spirit of competition
among departments.
SMBC has also commenced
group-wide initiatives and I am
looking to results from the
mutual stimulus they provide.
Outside member of
Diversity and Inclusion
Committee* at SMBC
Kimie Iwata
President, Japan
Institute for Women’s
Empowerment &
Diversity Management
* The Diversity and Inclusion Committee was formed in May 2014 to speed up
the promotion of diversity at SMBC as a whole. It is chaired by the SMBC
President and members include a deputy president, general managers, and
outside experts. The committee is promoting multiple initiatives to assist
women in their careers and reform working practices for all employees.
Reforms to working practices
To provide an environment for participation by employees
working limited hours, we have introduced awareness
training and telecommuting and we are seeking to rectify
long working hours and introduce flextime.
Promotion of globalization
At SMFG, we are working on staff development to support
the rapid globalization of our business. SMBC offers a variety
of global training programs in which staff from all over the
world participate, including a program jointly developed with
a world-leading business school. We are also promoting staff
exchanges between Japan and overseas to encourage
mutual understanding. By
creating an environment
where employees from
different backgrounds work
together and inspire each
other, we seek to provide
services of greater value
to our customers.
Global Leadership Program
Jobs for those with disabilities
SMBC Nikko Securities employs athletes with disabilities,
and it has set up Nikko MiRun, a company that provides
jobs for people with disabilities. In March 2016, its efforts
were recognized by the Ministry of the Environment as Good
Practice in accordance with the ministry’s Principles for
Financial Action for the 21st Century.
Promotion of the role of women
Reforms to the Personnel System
In July 2015, SMBC made changes
to its personnel system to provide
more career positions for women.
Under the revised system, careers
can be advanced in stages in accor-
dance with the individual’s growth,
thus providing a rewarding workplace
for long-term participation.
Before
No title
After
Career
advancement
in stages in
accordance
with growth
No title
Supervisor
10 years
after joining
the bank
Supervisor
Deputy
Supervisor
Leader
New
Number and Ratio of Female Managers
20.0
(Target)
(People)
1,000
15.7
743
12.2
567
750
500
250
0
’14
’15
Number of female managers (left axis)
Ratio of female managers (right axis)
Note: Figures are for SMBC.
(%)
20
15
10
5
0
(FY)
’20
63
2016 Annual Report CORPORATE INFRASTRUCTURE
Corporate Social Responsibility (CSR)
Aiming to contribute to the sustained
development of society as a whole
Society today is confronting numerous and wide-ranging
issues, including global warming, rapid population growth,
growth in poverty, and low birthrates and aging populations in
developed countries. As a global financial group, at SMFG
we regard it as our social responsibility to remind ourselves
of our role and play our part in addressing such issues.
Basic CSR policies
SMFG has a CSR definition and CSR “business ethics” to
make the position of CSR clear and promote CSR effectively.
Please follow the link to read about our CSR “business ethics.”
http://www.smfg.co.jp/english/responsibility/smfgcsr/csr.html
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 customers; shareholders and the market;
the environment and society; and employees.
Priority issues (Materiality) that SMFG should address
SMFG has designated “Environment,” “Next Generation,” and “Community” as its three priority issues (Materiality) for the
medium to long term.
Environment
Toward a sustainable world
that all can share
Next Generation
Toward a vibrant society that
balances maturity and growth
Where we want to be ten years from now
A financial services group that takes the lead
in tackling global environmental issues
Issues we should address
• Promotion of environmental management
integrated with business
• Reducing environmental impact
• Managing environmental risks
• Promotion of environmental businesses
• Environment-related social contribution
activities
Where we want to be ten years from now
A financial services group that helps create
a society where the next generation can also
play an active part vigorously
Issues we should address
• Support for next generation asset
inheritance and business succession
• Contributing as a financial institution
to emerging countries
• Contribution to raising the level of financial
literacy
• Global HR development
• Work-life balance and workplace with
diversity
Community
Toward a healthy and
distinctive community in which
everyone can participate
Where we want to be ten years from now
A financial services group that contributes to
the creation and further development of safe
communities, which are the bedrock of
Japanese society as a whole
Issues we should address
• Reconstruction for the Great East Japan
Earthquake
• Contribute to achieving and developing
safe and secure communities
• Community-based activities led by officers
and employees
• Efforts to solve social issues by collaborat-
ing with NGOs and NPOs
Endorsement of initiatives in Japan and overseas
As a global corporate citizen, SMFG is fully aware of the
social influence of financial institutions, and it endorses the
following initiatives in Japan and overseas (action guidelines
and principles for corporate activities).
Please follow the link to read about initiatives endorsed
by SMFG.
http://www.smfg.co.jp/english/responsibility/smfgcsr/structure.
html
64
2016 Annual Report
Corporate Social Responsibility (CSR)
Environment
Our basic position
SMFG recognizes the environment as one of its most impor-
tant management issues. We are implementing initiatives to
harmonize environmental preservation with corporate activi-
ties based on our Group Environmental Policy.
SMBC East Tower’s CO2 emissions to be approximately 35%
lower than an average office building.
SMFG organized an “SMFG Clean-Up Day” in which
approximately 1,400 employees and their families partici-
pated in four locations.
Managing environmental risk
SMBC’s Credit Policy, which sets out universal and basic
philosophies, guidelines, and rules for credit operations,
makes explicit reference to environmental risk in credit
assessment.
In addition, in its environmental and risk assessment,
SMBC follows the Equator Principles, which provide private-
sector financial institutions a framework for environmental
and social risk in financing large-scale development projects.
Equator Principles
Promoting environmental businesses
SMFG positions environmental businesses as a means to
preserve and improve the global environment through its
core business operations. SMFG’s commitment extends
from the global environment to individual countries’
economic development. Examples include the SMBC
Environmental Assessment Loan / Private Placement Bond
to assist clients in promoting their environmental manage-
ment, support for environmental infrastructure improvement
projects in emerging countries, and support for renewable
energy projects in emerging countries. Additionally, in 2015
SMBC became the first private-sector Japanese bank to
issue green bonds.
Please follow the link to read about our Group
Environmental Policy.
http://www.smfg.co.jp/english/responsibility/environment/
index.html
Environmental Management System (EMS) based
on ISO 14001 certification
In 1998, SMBC became the first Japanese bank to obtain
ISO 14001* certification. This certification is now held by
holding company SMFG and eight major Group companies.
* International standard for environmental management systems
Three pillars of the Group’s activities
The three pillars of our environmental action plan are:
“Reduction of impacts on environment,” “Management of
environmental risks,” and “Promotion of environmental busi-
nesses.” We have set environmental objectives for each
environmental activity and follow the procedures of Plan, Do,
Check, and Act (PDCA) in conducting such activities.
Reducing environmental impact
SMFG sets objectives for reducing electricity and other
energy consumption each year and seeks to be proactive in
reaching its goals.
The SMBC East Tower, which opened in summer 2015 in
Tokyo’s Marunouchi district,
pays heed to nature conser-
vation and utilization; the
installation and use of highly
efficient systems; the reduc-
tion of adverse effects on the
environment; and the cre-
ation and maintenance of a
sustainable building. As a
result of the utilization of
diverse energy-saving tech-
nologies, we expect the
SMBC East Tower
65
2016 Annual Report
Corporate Social Responsibility
Next Generation
Our basic position
SMFG draws on its financial functions to the full in the
development of industries and personnel that will support
the next generation. It is also engaged in the improvement of
financial literacy and the development of markets that sup-
port healthy economic growth in emerging countries. We
seek to make use of our financial functions and financial
knowledge to assist in the creation of a vibrant society
where the next generation can flourish.
Improvements to financial literacy
SMFG Group companies each provide financial and
economic education in accordance with their category of
business. SMBC and SMBC Nikko Securities accept visits to
their branches by students from elementary to high school.
SMBC Consumer Finance organizes financial and economic
seminars for college students and those who have entered
the workforce.
SMBC is the publisher of What Does a Bank Do?, a book
for elementary school students, and JUNIOR SAFE, a chil-
dren’s magazine about the environment. Its activities also
include the co-sponsorship of the KidZania work experience
theme park and support for the Finance Park economic
educational program for middle school students.
Global human resources development
The SMBC Foundation for International Cooperation pro-
vides scholarships every year to 7 or 8 students coming from
Asia to attend graduate schools in Japan. The objectives of
the scholarships are the development of human resources
that may contribute to the economic development of emerg-
ing countries and international exchange. The foundation
also provides subsidies to research institutes and research-
ers that undertake projects contributing to economic
development in emerging countries.
The 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 in Harlem, New York City, and
participation in school beautification programs by volunteers
from SMBC. The foundation also matches donations from
employees.
Natsuyasumi Kodomo Ginko Tankentai workplace experience for elementary
school students organized by SMBC
Event for foreign students in Japan
66
2016 Annual Report Community
Our basic position
In addition to the social contribution of its daily business,
SMFG strives to be a good corporate citizen and fulfill its
social responsibilities by undertaking a wide variety of activi-
ties to help society prosper.
Support for areas affected by natural disasters
As of March 2016, more than 890 SMFG executives,
employees, and members of their families had participated
in voluntary activities in areas affected by the Great East
Japan Earthquake.
The Group has donated approximately ¥80 million for the
Kumamoto Earthquake, which occurred in April 2016, and
executives and employees are also volunteering of their own
accord. SMBC has housing loans with special rates and a
special corporate fund for clients affected by the earthquake.
SMBC has also organized a special summer schedule for job
applicant screening for students affected by the earthquake
in addition to its usual selection process.
Social event at post-quake housing in Ishinomaki
Resolution of social issues in conjunction with
NGOs and NPOs
Approximately 10,000 executives and employees participate
in SMBC’s voluntary scheme for deductions from salary for
donations to charitable organizations. In fiscal 2015, dona-
tions were made to 30 organizations working on the
resolution of social issues in Japan and overseas. Many
executives and employees of other Group companies are
also enrolled in volunteer funds that contribute to welfare
and environmental activities.
SMFG arranges volunteer activities for staff in collabora-
tion with organizations engaged in social problem solving,
primarily recipients of volunteer funds. In fiscal 2015,
approximately 2,600 executives, employees, and members
of their families participated.
Volunteering with NPOs
Initiatives to assist the elderly and people with
cognitive impairment and disabilities
As of March 2016, SMFG had trained approximately 9,100
staff to assist people with cognitive impairment. SMBC has
training programs, such as Universal Manner, for the assis-
tance of the elderly and people with disabilities.
Initiatives targeted at social issues in Asia
In March 2015, SMBC and PT Bank Sumitomo Mitsui Indo-
nesia signed a memorandum of understanding with the
Indonesian major Djarum Group’s Djarum Foundation for the
promotion of CSR activities in Indonesia. In the sphere of edu-
cation, equipment has been donated to vocational schools.
In July 2015, SMBC became the first Japanese company
to sign a memorandum of understanding with the Japan
Committee for UNICEF. The agreement concerns a training
program for elementary and middle school teachers in
Myanmar that gives SMBC the opportunity to contribute to
development in Myanmar over the next three years.
Marine vocational school in Indonesia
67
2016 Annual Report CORPORATE INFRASTRUCTURE
Financial Review
Operating Results
Income Summary (SMFG consolidated)
Year ended March 31
2015 (A)
2016 (B)
Consolidated gross profit
2,980.4
2,904.0
G eneral and administrative
expenses
E quity in gains (losses)
of affiliates
1,659.3
1,724.8
10.6
36.2
(Billions of yen)
Increase
(decrease)
(B) – (A)
76.4
65.5
25.6
Consolidated net business profit
1,310.5
1,142.9
167.5
Total credit cost
Gains (losses) on stocks
Others
Ordinary profit
P rofit attributable to owners
of parent
7.8
66.7
48.2
1,321.2
753.6
102.8
69.0
123.9
985.3
646.7
95.0
+2.3
75.7
335.9
106.9
(Reference) Income Summary (SMBC non-consolidated) (Billions of yen)
Year ended March 31
2015 (A)
2016 (B)
Gross banking profit
1,634.3
1,534.3
Expenses*1
Banking profit*2
Credit cost
Gains (losses) on stocks
Others
Ordinary profit
Net income
791.2
843.1
80.1
52.6
19.8
956.0
643.0
805.5
728.8
3.2
35.3
19.4
747.9
609.2
*1 Excluding non-recurring losses
*2 Before provision for general reserve for possible loan losses
Increase
(decrease)
(B) – (A)
100.0
14.3
114.3
76.9
17.3
+0.4
208.1
33.8
Consolidated gross profit / Consolidated net
business profit / Profit attributable to owners
of parent (SMFG Consolidated)
(Trillions of yen)
4
3
2
1
0
2.79
2.59
2.90
2.98
2.90
1.01
0.52
1.17
1.24
1.31
0.79
0.84
0.75
1.14
0.65
’11
’12
’13
’14
’15
(FY)
Consolidated gross profit
Profit attributable to owners of parent
Consolidated net business profit
68
Consolidated net business profit
Despite an increase in revenue from credit card operations
at Sumitomo Mitsui Card Company, consolidated gross profit
decreased by ¥76.4 billion year-on-year to ¥2,904.0 billion.
The primary reasons for the decrease were the fall in net
interest income at SMBC due to decreases in interest on
loans and discounts, interest and dividends on securities,
and an increase in interest on deposits. Sluggish growth in
sales of foreign bonds and investment trusts at SMBC Nikko
Securities was also a critical factor behind the said decrease.
General and administrative expenses increased by ¥65.5
billion year-on-year to ¥1,724.8 billion mainly due to ongoing
investments by SMBC and other subsidiaries to enhance
top-line growth. Equity in gains (losses) of affiliates
decreased by ¥25.6 billion year-on-year to loss of ¥36.2
billion primarily due to a goodwill impairment loss of invest-
ments in PT Bank Tabungan Pensiunan Nasional Tbk
(BTPN) resulting from a decline in its share price, offsetting
contribution of earnings of The Bank of East Asia, which had
become an equity method affiliate in March 2015.
As a result, consolidated net business profit decreased by
¥167.5 billion year-on-year to ¥1,142.9 billion.
Credit cost
Total credit cost increased by ¥95.0 billion year-on-year to
¥102.8 billion. This increase was mainly due to a decrease
in gains on reversal of reserve for possible loan losses recog-
nized and for other reasons by SMBC.
Gains (losses) on stocks
Gains (losses) on stocks increased by ¥2.3 billion year-on-
year to ¥69.0 billion.
Ordinary profit
Ordinary profit decreased by ¥335.9 billion year-on-year
to ¥985.3 billion. This decrease was mainly due to the
provisions for losses on interest repayments and for
other reasons.
Profit attributable to owners of parent
Profit attributable to owners of parent decreased by ¥106.9
billion year-on-year to ¥646.7 billion, after adjustments of
ordinary profit for extraordinary gains and losses and
income taxes.
2016 Annual Report Financial Review
Financial Position
Consolidated Balance Sheet (SMFG consolidated)
(Billions of yen)
Increase
(decrease)
(B) – (A)
March 31
Assets
2015 (A)
2016 (B)
183,442.6
186,585.8
+3,143.3
Loans and bills discounted
73,068.2
75,066.1
+1,997.8
Securities
29,633.7
25,264.4
4,369.2
Liabilities
172,746.3
176,138.2
+3,391.9
Deposits
101,047.9
110,668.8
+9,620.9
N egotiable certificates
of deposit
13,825.9
14,250.4
+424.5
Net assets
10,696.3
10,447.7
248.6
NPLs based on the Financial Reconstruction Act
(SMFG consolidated)
March 31
2015 (A)
2016 (B)
(Billions of yen)
Increase
(decrease)
(B) – (A)
NPLs based on the Financial
Reconstruction Act (A)
1,174.8
992.7
182.0
Normal assets
83,475.6
85,579.4
+2,103.8
Total (B)
84,650.3
86,572.2
+1,921.8
NPL ratio (A/B)
1.39%
1.15%
0.24%
Unrealized Gains (Losses) on Other Securities
(SMFG consolidated)
2015
2016
(Billions of yen)
Increase
(decrease)
Consolidated
balance sheet
amount
March 31
Net
unrealized
gains
(losses)
(A)
Consolidated
balance sheet
amount
Net
unrealized
gains
(losses)
(B)
Net unrealized
gains (losses)
(B) – (A)
Stocks
4,066.0
2,054.3
3,511.9 1,573.0
481.3
Bonds
13,699.6
50.0
10,893.1
109.2
+59.2
Others
8,497.9
500.6
8,728.5
225.3
275.3
Total
26,263.4
2,605.0
23,133.4 1,907.5
697.5
Note: 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.
Loans and bills discounted
Loans and bills discounted increased by ¥1,997.8 billion
year-on-year to ¥75,066.1 billion. This increase was mainly
due to increases in domestic corporate loans and overseas
loans, primarily in the Americas, by SMBC.
Deposits
Deposits increased by ¥9,620.9 billion year-on-year to
¥110,668.8 billion. This increase was mainly due to
increases in both individual and corporate deposits in
Japan and to an increase in overseas deposits resulting
from business expansion overseas. Negotiable certificates
of deposit increased by ¥424.5 billion year-on-year to
¥14,250.4 billion.
NPLs based on the Financial Reconstruction Act
NPLs based on the Financial Reconstruction Act decreased
by ¥182.0 billion year-on-year to ¥992.7 billion. As a result,
NPL ratio decreased by 0.24 percentage points year-on-year
to 1.15%.
Securities
Securities decreased by ¥4,369.2 billion year-on-year to
¥25,264.4 billion. Net unrealized gains on other securities
decreased by ¥697.5 billion year-on-year to ¥1,907.5 billion.
Consolidated Balance Sheet (SMFG consolidated)
(Trillions of yen)
Consolidated total assets
183.4
Consolidated total assets
186.6
Cash and
due from
banks
39.7
Loans
and bills
discounted
73.1
Securities
29.6
Others
41.0
Deposits
101.0
13.8
Others
57.9
Negotiable
certificates
of deposit
Cash and
due from
banks
42.8
Loans
and bills
discounted
75.1
Securities
25.3
Others
43.5
Deposits
110.7
14.3
Others
51.2
Negotiable
certificates
of deposit
10.7
Net assets
10.4
Net assets
March 31, 2015
March 31, 2016
69
2016 Annual Report Financial Review
Capital
Consolidated capital ratio (international standard)
(SMFG consolidated)
March 31
2015 (A)
2016 (B)
(Billions of yen)
Increase
(decrease)
(B) – (A)
Capital
Common equity Tier 1 capital increased by ¥320.0 billion
year-on-year to ¥7,796.5 billion, and total capital increased
by ¥270.0 billion year-on-year to ¥11,235.9 billion, due to
an increase in profit attributable to owners of parent.
Common equity Tier 1 capital
7,476.5
7,796.5
+320.0
Additional Tier 1 capital
1,052.1
1,235.2
+183.1
Tier 1 capital
Tier 2 capital
8,528.6
9,031.7
+503.1
2,437.3
2,204.3
233.0
Total capital
10,965.9
11,235.9
+270.0
Risk weighted assets
66,136.8
66,011.6
125.2
Common equity Tier 1 capital ratio
11.30%
11.81%
+0.51%
Tier 1 capital ratio
12.89%
13.68%
+0.79%
Total capital ratio
16.58%
17.02%
+0.44%
Basel III fully-loaded basis
(Based on the definition as of March 31, 2019)
Common equity Tier 1 capital
7,917.7
7,901.0
167
Common equity Tier 1 capital ratio
12.0%
11.9%
0.1%
(Excludes net unrealized gains
(losses) on other securities)
9.0%
9.9%
+0.9%
Risk weighted assets
Risk weighted assets decreased by ¥125.2 billion year-on-
year to ¥66,011.6 billion. The decrease was mainly due to an
influence of yen appreciation, despite assets investments in
the Americas and Europe by the International Banking Unit.
Capital ratio
The common equity Tier 1 ratio increased by 0.51 percent-
age points year-on-year to 11.81%, and the total capital
ratio increased by 0.44 percentage points year-on-year
to 17.02%.
Calculated on a Basel III fully-loaded basis (based on
the definition as of March 31, 2019), the common equity
Tier 1 ratio decreased by 0.1 percentage points year-on-year
to 11.9%
Common equity Tier 1 ratio
(Fully-loaded basis, SMFG consolidated)
(Trillions of yen)
10
7.5
5
2.5
0
12.0
11.9
(%)
12
10.3
6.37
0.95
0.76
8.6
5.37
7.92
7.90
1.79
1.35
’12
’13
’14
’15
(FYE)
9
6
3
0
Common equity Tier 1 capital
of which, net unrealized gains (losses) on other securities) (left axis)
(
Common equity Tier 1 ratio (right axis)
70
2016 Annual Report Dividend
Our basic policy is to achieve a sustainable increase in share-
holder value and raise dividend per share in a stable manner
by realizing higher profitability and growth through growth
investments with the focus on efficiency of our capital, while
enhancing retained earnings to maintain financial soundness.
In line with this policy, SMFG decides the ordinary dividend
per share on common stock was ¥150 in fiscal 2015, a year-
on-year increase of ¥10.
Ordinary dividend per share
(Yen)
(%)
200
150
100
50
0
Commemorative
dividend
120
10
120
21.3*
20.3
100
26.8
150
32.7
140
26.2
’11
’12
’13
’14
’15
(FY)
60
45
30
15
0
Dividend per share (left axis)
Dividend payout ratio (right axis)
* Dividend payout ratio including commemorative dividend (¥10 per share)
71
2016 Annual Report Websites
SMFG
Home Page
IR Information
Corporate Social Responsibility
http://www.smfg.co.jp/ (Japanese)
http://www.smfg.co.jp/english/ (English)
http://www.smfg.co.jp/investor/ (Japanese)
http://www.smfg.co.jp/english/investor/ (English)
http://www.smfg.co.jp/responsibility/ (Japanese)
http://www.smfg.co.jp/english/responsibility/ (English)
SMBC
Global Site
About SMBC
http://www.smbc.co.jp/global/
http://www.smbc.co.jp/aboutus/english/
72
2016 Annual Report Appendix I
CONTENTS
Group Companies ............................................ 74
Corporate Data ................................................. 99
Risk Management ............................................. 79
Sumitomo Mitsui Financial Group, Inc.
SMFG Accounting and Auditing Hotline/
Designated Dispute Resolution Agencies ........ 93
Board of Directors, Corporate Auditors
and Executive Officers .................................. 99
SMFG Fiduciary Duty Declaration ..................... 94
SMFG Organization ...................................... 99
Employees ......................................................... 95
Sumitomo Mitsui Banking Corporation
Main Work-Life Balance Support System .......... 98
Board of Directors, Corporate Auditors
and Executive Officers ................................ 100
SMBC Organization .................................... 102
Principal Subsidiaries and Affiliates ................ 104
Principal Domestic Subsidiaries ................. 104
Principal Overseas Subsidiaries ................. 105
Principal Affiliates ........................................ 106
International Directory .................................... 107
73
2016 Annual Report Group Companies (as of March 31, 2016)
www.smfg.co.jp/english/
The companies of the Sumitomo Mitsui Financial Group (SMFG)
primarily conduct commercial banking through the following finan-
cial services: leasing, securities, consumer finance, system
development and data processing.
Business Mission
• We grow and prosper together with our customers,
by providing services of greater value to them.
• We aim to maximize our shareholders’ value through
the continuous growth of our business.
• We create a work environment that encourages and
rewards diligent and highly-motivated employees.
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)
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
Credit Ratings (as of June 30, 2016)
Moody’s
Standard & Poor’s
Fitch Ratings
R&I
JCR
Long-term Short-term
P–1
A–1
F1
a–1+
J–1+
A1
A
A
AA–
AA
Financial Information (Consolidated basis, years ended March 31)
2016
Billions of yen
2014
2015
2013
For the Year:
Ordinary income ..... ¥ 3,059.0 ¥ 3,199.4 ¥ 3,105.9 ¥ 2,810.6
928.7
Ordinary profit .......
734.5
Net income .............
At Year-End:
Net assets............... ¥ 9,446.1 ¥ 10,036.0 ¥ 8,640.7 ¥ 8,257.0
143,203.1
Total assets ............ 180,408.6
1,298.7
785.6
1,198.9
736.9
930.3
680.1
155,824.1
177,559.1
Company Name: Sumitomo Mitsui Banking Corporation
Business Profile: Commercial 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: 28,002
Number of branches and other business locations:
In Japan:
2,080*
Branches:
506
(Including 46 specialized deposit account branches)
469
Sub-branches:
2
Banking agencies:
24
Offices handling non-banking business:
1,079
Automated service centers:
38
17
17
4
* The number of domestic branches excludes ATMs located
at retail convenience stores. The number of overseas
branches excludes branches to be closing and locally-
incorporated companies in overseas.
Branches:
Sub-branches:
Representative offices:
Overseas:
Sumitomo Mitsui Banking Corporation
(“SMBC”) was established in April 2001
through the merger of two leading banks of
The Sakura Bank, Limited and The Sumitomo
Bank, Limited. Sumitomo Mitsui Financial
Group, Inc. was established in December
2002 as a bank holding company through
the share transfer, and SMBC became a
wholly owned subsidiary of SMFG. In March
2003, SMBC merged with The Wakashio
Bank, Ltd.
SMBC’s competitive advantages include
its solid and extensive client base, the expe-
ditious implementation of strategies, and also
the service providing capability of its pre-
dominant Group companies. SMBC, as a
core member of SMFG, integrally work with
other Group companies to provide highly
sophisticated and comprehensive financial
services to clients.
74
2016 Annual Report
www.smbctb.co.jp/en
Company Name: SMBC Trust Bank Ltd.
Business Profile: Commercial banking and
Trust Banking
Establishment: February 25, 1986
Head Office: 1-3-1, Nishi-Shimbashi,
Minato-ku, Tokyo
President & CEO: Hidetoshi Furukawa
Number of Employees: 2,041
Number of branches: In Japan: 36
(Including Internet Branch and Sub-Branches)
Financial Information (Years ended March 31)
For the Year:
Ordinary income .......................
Ordinary profit (loss) .................
Net income (loss) ......................
At Year-End:
Total assets ..............................
Billions of yen
2015
2016
2014
¥ 20.5
(9.5)
(10.8)
¥ 7.3
(1.1)
(1.3)
¥ 5.6
(0.9)
(0.9)
¥2,517.2
¥224.2
¥187.4
Company Name: Sumitomo Mitsui Finance and
Leasing Company, Limited
Business Profile: Leasing
Establishment: February 4, 1963
Head Office:
Tokyo Head Office: 3-2, Marunouchi 1-chome,
Chiyoda-ku, Tokyo, Japan
Osaka Head Office: 3-10-19, Minami-Semba,
Chuo-ku, Osaka
President & CEO: Yoshinori Kawamura
Number of Employees: 2,481
www.smfl.co.jp/english/
Credit Ratings (as of June 30, 2016)
R&I
JCR
Long-term Short-term
a–1
J–1+
A+
AA–
Financial Information (Consolidated basis, years ended March 31)
2016
Billions of yen
2014
2015
2013
For the Year:
Leasing transaction
volume .................... ¥1,994.8
1,147.8
Operating revenue ....
79.6
Operating profit ........
¥1,865.8
1,152.0
84.8
¥1,767.0
1,037.2
75.6
¥1,335.4
992.2
57.6
SMBC Trust Bank was founded in February
1986. As well as our corporate trust opera-
tions, we have worked to develop personalized
retail banking and asset management opera-
tions that utilize trust systems and functions.
SMBC Trust Bank became part of the
Sumitomo Mitsui Financial Group in October
2013. We are now making a fresh start fol-
lowing the integration of the retail banking
operations of Citibank Japan Ltd. under the
new PRESTIA brand in November 2015.
SMBC Trust Bank service will be offered to
a customer by combining our high-level
expertise and experience in trust services,
built up through our track record in this area,
with the extensive information capabilities
and solid organizational skills of the
Sumitomo Mitsui Financial Group.
Sumitomo Mitsui Finance and Leasing
(“SMFL”) is a leading Japanese leasing com-
pany with an extensive history going back to
its origination of the leasing business in 1968.
SMFL provides financial solutions and ser-
vices appropriate to diversifying needs of
clients by taking advantage of its abundant
experiences and past performance results
accumulated over the years.
SMFL proactively works on the areas with
high social needs such as environment/
energy, medical/nursing care, leasing, or sale
of secondhand machines, while appropri-
ately responding to the globalization of
capital expenditures and sales activities in
overseas.
SMFL develops along with its clients by
being swift to provide them with diverse
products and services that address their
management issues.
75
2016 Annual Report Company Name: SMBC Nikko Securities Inc.
Business Profile: Securities
Establishment: June 15, 2009
Head Office: 3-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
President & CEO: Yoshihiko Shimizu
(Appointed on April 1, 2016)
Number of Employees: 8,363
www.smbcnikko.co.jp/en
Credit Ratings (as of June 30, 2016)
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)
2016
Billions of yen
2014
2015
2013
For the Year:
Operating revenue ...
Operating income ...
¥297.9
46.9
¥332.6
89.1
¥333.4
96.6
¥280.5
72.7
www.smbc-friend.co.jp
(Japanese only)
Company Name: SMBC Friend Securities Co., Ltd.
Business Profile: Securities
Establishment: March 2, 1948
Head Office: 7-12, Nihonbashi Kabuto-cho,
Chuo-ku, Tokyo
President & CEO: Koichi Danno
Number of Employees: 1,890
Financial Information (Years ended March 31)
For the Year:
Operating revenue ...
Operating profit ......
2016
¥43.0
4.1
Billions of yen
2014
2015
¥50.0
9.8
¥57.7
15.0
2013
¥59.6
18.0
SMBC Nikko Securities Inc. (formerly Nikko
Cordial Securities Inc.), is approaching its
centenary in 2018. During its almost 100
years in business, it has built strong relation-
ships founded on trust with individual and
corporate clients. Since bringing its long
experience and solid customer base into the
SMFG Group in October 2009, the company
has pursued banking-securities collaboration
with SMBC in its role as core Group member,
seeking to leverage on collective strengths to
provide financial services of the highest qual-
ity. ‘Share the Future’ is the brand slogan as
SMBC Nikko Securities strives to be a leading
Japanese full-line securities company capa-
ble of offering high quality financial products
and services globally.
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
consulting services.
SMBC Friend Securities will continue to
develop consistently toward its goal of
becoming “the securities company especially
appreciated by clients,” offering high-quality
products and services accommodating the
needs of its clients and building trust for
its clients.
76
2016 Annual Report 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
business operations, the company aims to
actively contribute to the realization of com-
fortable and affluent consumer lifestyles and
make further dramatic advances as a leading
brand in its industry sector.
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 knowl-
edge. As a member of SMFG, it strives to
become “the number one credit card busi-
ness entity in Japan” by closely working with
Sumitomo Mitsui Card.
Cedyna strives to become SMFG’s com-
prehensive payment finance company in the
consumer finance business by integrating
the credit card, consumer credit and financ-
ing solution core businesses, and providing
individual clients with secure and convenient
payment methods means for making
payments.
Company Name: Sumitomo Mitsui Card
Company, Limited
Business Profile: Credit card
Establishment: December 26, 1967
Head Office:
Tokyo Head Office: 1-2-20, Kaigan,
Minato-ku, Tokyo
Osaka Head Office: 4-5-15, Imab ashi,
www.smbc-card.com
(Japanese only)
Credit Ratings (as of June 30, 2016)
R&I
JCR
Long-term Short-term
a–1+
J–1+
AA–
AA–
Chuo-ku, Osaka
Financial Information (Years ended March 31)
President & CEO: Ken Kubo
Number of Employees: 2,440
2016
Billions of yen
2014
2015
2013
For the Year:
Revenue from credit
card operations ........ ¥11,360.6 ¥10,091.0
198.4
Operating revenue ......
Operating profit ..........
41.9
At Year-End:
Number of cardholders
(in thousands) ...........
210.1
40.5
23,490
24,239
¥9,131.5
191.4
43.6
¥8,194.6
185.6
44.7
22,994
22,400
www.cedyna.co.jp/english/
Company Name: Cedyna Financial Corporation
Business Profile: Credit card and installment
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: Satoru Nakanishi
Number of Employees: 3,283
Financial Information (Years ended March 31)
For the Year:
Operating revenue ......
Operating profit ..........
At Year-End:
Number of cardholders
(in thousands) ...........
2016
Billions of yen
2014
2015
2013
¥149.9
0.4
¥149.8
1.0
¥160.0
10.7
¥164.0
13.4
17,020
17,633
18,412
19,480
77
2016 Annual Report www.smbc-cf.com/english/
Company Name: SMBC Consumer Finance Co., Ltd.
Business Profile: Consumer lending
Establishment: March 20, 1962
Head Office: 4-12-15, Ginza, Chuo-ku, Tokyo
President & CEO: Ryoji Yukino
Number of Employees: 2,240
Cooperation:
SHOCHIKU Co., Ltd.,
Kabuki-za Co., Ltd.
Credit Ratings (as of June 30, 2016)
R&I
JCR
Long-term Short-term
A
A–
—
—
Financial Information (Years ended March 31)
2016
Billions of yen
2014
2015
For the Year:
Operating revenue ....
Operating profit (loss) ...
¥178.3
(72.3)
¥168.6
3.7
¥164.7
15.9
2013
¥164.6
42.3
Since its establishment in 1962, with the
original goal of striving to be the best in offer-
ing innovative financial ser vices for
consumers, Promise Co., Ltd., currently
known as SMBC Consumer Finance Co.,
Ltd., has developed convenient loan prod-
ucts for individuals to accommodate to the
changing times and has created an appropri-
ate system for offering loan consultation
services and executing loan agreements.
SMBC Consumer Finance strives to
become the kind of global consumer finance
company which “would be able to earn the
utmost trust of clients” by consistently and
sincerely working with clients as an expert in
the consumer finance business.
The Japan Research Institute, Limited (JRI) is
a comprehensive information services com-
pany with information systems, consulting,
and think-tank functions. In addition to pro-
viding IT-based strategic data systems
planning and development and outsourcing
services, JRI offers consultation in areas
such as management strategy and admin
reforms. It also engages in activities ranging
from economic research and analysis on
Japan and other countries and policy recom-
mendation to business incubation.
Company Name: The Japan Research Institute,
Limited
Business Profile: System development, data
processing, management
consulting and economic
research
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: Masahiro Fuchizaki
Number of Employees: 2,349
www.jri.co.jp/english/
Financial Information (Years ended March 31)
2016
Billions of yen
2014
2015
For the Year:
Operating revenue .... ¥125.0
2.2
Operating profit ........
¥111.1
1.7
¥106.0
1.7
2013
¥96.2
1.8
78
2016 Annual Report Risk Management
Basic Approach
As risks in the financial services increase in diversity and complexity,
Risk Management System
Reflecting the importance of risk management, top management
risk management—identifying, measuring, and controlling risk—has
plays an active role in the process. The “Principal Policy on Group
never been more important in the management of a financial hold-
Risk Management” is determined by the Management Committee
ing company.
before being authorized by the Board. In addition, the Board has
SMFG has established the basic principles of group-wide
a risk committee that meets regularly to review and discuss a wide
risk management in the “Policies on Comprehensive Risk
range of topics related to risk management and compliance issues
Management.” In the policies, we identify the location and the type
in the aim of continuously raising the level of risk governance at
of risk to be managed in accordance with strategic goals and busi-
SMFG (see page 57).
ness structures. We have set forth the fundamental principles for
comprehensive risk management as shown in the Table below and
manage each risk appropriately according to its characteristics. We
share the principles internally to foster a sound risk culture.
Implementation of Basel Capital Accord
The Basel III regulatory framework consists of capital, leverage, and
liquidity ratios designed to maintain sound operating standards for
In addition, SMFG has established the “Principal Policy on
internationally active banks. SMFG calculates its ratios in accordance
Group Risk Management” which sets forth the specific operational
with the standards for Japanese banks.Risk assets subject to the
policies for appropriately conducting risk management in line with
Basel Capital Accord totaled ¥66,011.6 billion as of March 31, 2016,
the basic principles across all companies. The Principal Policy is
down ¥125.2 billion from March 31, 2015. The main factors behind
reviewed regularly and as necessary (see page 57).
■ Fundamental Principles on Comprehensive Risk
Management (Excerpt major principles)
Basic Principles
Description
Risk management
on a consolidated basis
Risk management
based on quantification
Various risks taken at the SMFG and
the Group companies to be managed
on a consolidated basis according to
the business and importance in con-
formity with the relevant laws and reg-
ulations.
The risks subject to control to be
quantitatively managed according to
the relevant risk characteristics after
specifying the scope of quantification.
Ensuring consistency
with the business strategy
Risk management to be consistent
with the business strategy.
System for check
and balance
Measures for emergencies
and critical situations
The risk management framework to
be developed to ensure effective
check and balance function for busi-
ness operations.
Necessary measures to be developed
by assuming situations, scenarios etc.
as to materialization of risk which
would have a significant impact on the
business and financial management
of SMFG
Verification of the
actual situation
The actual risk management process
to be verified by the Internal Audit Unit.
Comprehensive Risk Management
Based on the Principal Policy, SMFG takes a comprehensive and
systematic approach to risk management, with risk analysis by
stress testing and risk capital management following ascertainment
of environment and risk view, including top risks (see page 55).
the decrease in risk-weighted assets were a decrease in the balance of
equity and fund investment (credit risk), a decrease in trading positions
(market risk), and a revision in the methodology for risk quantification
of tangible asset damages from earthquakes (operational risk).
Capital ratio and other regulations are currently under review by
the Basel Committee on Banking Supervision (BCBS). SMFG plans
to respond appropriately to revisions after conducting comprehen-
sive impact analysis.
As of March 31, 2016, SMFG was designated a Global System-
atically Important Bank (G-SIB) by the Financial Stability Board (FSB)
and SMFG is subject to the phase in of the add-on to the minimum
capital ratio requirement (for the current bucket, 1.0%).
■ Risk-Weighted Assets as of March 31, 2016
Credit risk
Market risk
Operational risk
Total
(Trillions of yen)
March 31,
2015
March 31,
2016
Increase
(decrease)
61.3
2.0
2.8
66.1
61.2
1.5
3.3
66.0
(0.1)
(0.5)
+0.5
(0.1)
■ Risk Assets at Individual Departments
(Trillions of yen)
Sumitomo Mitsui
Financial Group
Credit risk
Market risk
Operational risk
61.2
1.5
3.3
Wholesale
Credit risk
Retail
Credit risk
International
Credit risk
Other
Credit risk
15.9
15.6
7.2
7.0
18.1
17.1
24.9
21.5
Note: Other includes Treasury Unit, Investment Banking Unit and Group companies.
79
2016 Annual Report
Credit Risk
1. Basic Approach to Credit Risk Management
(1) Definition of Credit Risk
Credit risk is the possibility of a loss arising from a credit event, such
as deterioration in the financial condition of a borrower, that causes
an asset (including off-balance sheet transactions) to lose value or
become worthless.
Overseas credits also include an element of country risk, which
is closely related to credit risk. This is the risk of loss caused by
changes in foreign exchange, or political or economic situations.
(2) Fundamental Principles for Credit Risk Management
All Group companies follow the fundamental principles established
by SMFG to assess and manage credit risk on a group-wide basis
and further raise the level of accuracy and comprehensiveness of
group-wide credit risk management. Each Group company must
comprehensively manage credit risk according to the nature of its
business, and assess and manage credit risk of individual loans and
credit portfolios quantitatively and using consistent standards.
Credit risk is the most significant risk to which SMFG is
exposed. Without effective credit risk management, the impact of
■ SMBC’s Credit Risk Management System
the corresponding losses on operations can be overwhelming.
The purpose of credit risk management is to keep credit risk
exposure to a permissible level relative to capital, to maintain the
soundness of group-wide assets, and to ensure returns commen-
surate with risk. This leads to a loan portfolio that achieves high
returns on capital and assets.
(3) Credit Policy
SMFG’s Group credit policy comprises clearly stated universal and
basic operating concepts, policies, and standards for credit opera-
tions, in accordance with our business mission and rules of conduct.
SMFG is promoting the understanding of and strict adherence to
its Group credit policy among all its managers and employees. By
fostering a culture of appropriate levels of risk-taking, and by provid-
ing still high-value-added financial services, SMFG aims to enhance
shareholder value and play a key contributory role in the community.
2. Credit Risk Management System
At SMBC, the Credit & Investment Planning Department within
the Risk Management Unit is responsible for the comprehensive
management of credit risk. This department drafts and administers
credit policies, the internal rating system, credit authority guidelines,
Shareholders’ Meeting
Board of Directors
Management Committee
Corporate Auditors/ Board of Corporate Auditors
Office of Corporate Auditors
Internal Audit Unit
Designated Board Members
Internal Audit Dept.
(cid:127)Audits credit risk management
(cid:127)Audits credit risk evaluation management
Credit Review Dept. (cid:127)Audits asset audit management system
Risk Management Unit
Designated Board Members
Corporate Risk
Management Dept.
(cid:127)Supervises risk management
(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)Plans and proposes credit policies for
particular risk assets
Credit Portfolio
Management Dept. (cid:127)Undertakes active portfolio management
Retail Banking Unit
Officer in charge
Deputy head
Wholesale Banking Unit
Officer in charge
Deputy head
Business Units
International Banking Unit
Officer in charge
Deputy head
Division head
Division head
Division head
Credit Dept.
Credit Dept.
I & II
Corporate Credit Dept.
Credit Administration
Dept.
Credit Management
Dept.
Credit Dept.,
Asia Pacific Div.
Credit Dept.,
Americas Div.
Credit Dept.,
Europe Div.
Individuals and SMEs
Small and
Medium-Sized Enterprises
Large Domestic
Corporations
Structured Finance
Credit Dept.
Structured Finance
(Investment Banking Unit,
Japan)
Management of
problem loans
(prepare and implement
plans to dispose or
restructure, sell off)
Deputy head in charge
Corporate
Research Dept.
(cid:127)Industry trend research
(cid:127)Credit assessment of major industry players, clients under
observation and clients whose credit rating is to be revised, etc.
Overseas Banks
International Dept.
Credit Management
Credit Dept., East Asia
International Banking Unit
Non-Japanese companies
(Japan and East Asia)
Overseas Corporations
(Americas)
Overseas Corporations
(Europe)
Non-Japanese
companies
(Asia and Asia Pacific
excluding clients of the
International Banking Unit)
Global Aircraft
Credit Dept.
Aircraft related
(Overseas)
80
2016 Annual Report
and credit application guidelines, and manages non-performing
companies, individuals for business purposes (domestic only), sover-
loans (NPLs) and other aspects of credit portfolio management. The
eigns, public-sector entities, and financial institutions are assigned an
department also cooperates with the Corporate Risk Management
“obligor grade,” which indicates the borrower’s creditworthiness, and/
Department in quantifying credit risk (risk capital and risk-weighted
or “facility grade,” which indicates the collectibility of assets taking
assets) and controls the bank’s entire credit risk. Further, the Credit
into account transaction conditions such as guarantee/collateral, and
Portfolio Management Department within the Credit & Investment
tenor. An obligor grade is determined by first assigning a financial
Planning Department has been strengthening its active portfolio
grade using a financial strength grading model and data obtained
management function for stable credit portfolios mainly through
from the obligor’s financial statements. The financial grade is then
credit derivatives and the sales of loans.
adjusted taking into account the actual state of the obligor’s balance
The Credit Departments within each business unit conduct
sheet and qualitative factors to derive the obligor grade. In the event
credit risk management, along with the branches, for loans handled
that the borrower is domiciled overseas, internal ratings for credit are
by their units and manage their units’ portfolios. The credit approval
made after taking into consideration country rank, which represents
authority is determined based on the credit amount and internal
an assessment of the credit quality of each country, based on its polit-
grades, while credit departments focus on the analysis and manage-
ical and economic situation, as well as its current account balance
ment of customers and transactions with relatively high credit risk.
and external debt. Self-assessment is the obligor grading process
The Credit Administration Department is responsible for han-
for assigning lower grades, and the borrower categories used in self-
dling NPLs of borrowers classified as potentially bankrupt or lower,
assessment are consistent with the obligor grade categories.
and draws up plans for their workouts, including write-offs. It works
Obligor grades and facility grades are reviewed once a year, and,
to efficiently reduce the amount of NPLs through Group company
whenever necessary, such as when there are changes in the credit
SMBC Servicer Co., Ltd., which engages in related services, and by
situation.
such means as the sell-off of claims.
There are also grading systems for loans to individuals, and proj-
Through industrial and sector-specific surveys, and studies of
ect finance and other structured finance tailored according to the risk
individual companies, the Corporate Research Department works to
characteristics of these types of assets.
form an accurate idea of the circumstances of borrower
companies and quickly identify those with potentially
troubled credit positions as well as promising growth
companies.
The Internal Audit Unit, operating independently
of the business units, audits asset quality, accuracy of
■SMBC’s Obligor Grading System
Obligor Grade
Domestic
(C&I), etc.
Overseas
(C&I), etc.
Definition
Borrower
Category
Financial Reconstruction
Act Based Disclosure
Category
(Domestic)
gradings and self-assessment, and state of credit risk
J1
G1
Very high certainty of debt repayment
management, and reports the results directly to the Board
of Directors and the Management Committee.
J2
G2
High certainty of debt repayment
SMBC has established the Credit Risk Committee,
as a consultative body, to round out its oversight
system for undertaking flexible and efficient control of
credit risk, and ensuring the overall 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 indi-
vidual loans as well as the credit portfolio as a whole,
we first acknowledge that every loan entails credit risks,
assess the credit risk posed by each borrower and loan
J3
G3
Satisfactory certainty of debt repayment
J4
G4
Debt repayment is likely but this could change in cases of
significant changes in economic trends or business
environment
J5
G5
No problem with debt repayment over the short term, but not
satisfactory over the mid to long term and the situation could
change in cases of significant changes in economic trends or
business environment
J6
G6
Currently no problem with debt repayment, but there are
unstable business and financial factors that could lead to debt
repayment problems
Normal
Borrowers
Normal Assets
J7
G7
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrowers
Requiring Caution
J7R
G7R
(Of which Substandard Borrowers)
Substandard Borrowers
Substandard Loans
using an internal rating system, and quantify that risk for
J8
G8
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly
likely to go bankrupt
control purposes.
(a) Internal Rating System
There is an internal rating system for each asset con-
trol category set according to portfolio characteristics.
For example, credits to commercial and industrial (C&I)
J9
G9
Though not yet legally or formally bankrupt, has serious
business difficulties and rehabilitation is unlikely; thus,
effectively bankrupt
J10
G10
Legally or formally bankrupt
Potentially
Bankrupt
Borrowers
Effectively
Bankrupt
Borrowers
Bankrupt
Borrowers
Doubtful Assets
Bankrupt and
Quasi-Bankrupt
Assets
81
2016 Annual Report
The Credit & Investment Planning Department centrally manages
quantitative measures, when combined with qualitative analyses of
the internal rating systems, and properly designs, operates, supervises,
industrial trends, the enterprise’s R&D capabilities, the competitive-
and validates the grading models. It validates the grading models
ness of its products or services, and its management caliber, result in
(including statistical validation) of main assets following the procedures
a comprehensive credit assessment. The loan application is analyzed
manual once a year, to ensure their effectiveness and suitability.
in terms of the intended utilization of the funds and the repayment
(b) Quantification of Credit Risk
schedule. Thus, SMBC is able to arrive at an accurate and fair credit
Credit risk quantification refers to the process of estimating the degree
decision based on an objective examination of all relevant factors.
of credit risk of a portfolio or individual loan taking into account not
Increasing the understandability to customers of loan conditions
just the obligor’s Probability of Default (PD), but also the concentration
and approval standards for specific borrowing purposes and loan
of risk in a specific customer or industry and the loss impact of fluc-
categories is a part of SMBC’s ongoing review of lending practices,
tuations in the value of collateral, such as real estate and securities.
which includes the revision of loan contract forms with the chief aim
Specifically, first, the PD by grade, Loss Given Default (LGD),
of clarifying lending conditions utilizing financial covenants.
credit quality correlation among obligors, and other parameter values
SMBC is also making steady progress in streamlining its credit
are estimated using historical data of obligors and facilities stored in
assessment process. To respond proactively and promptly to cus-
a database to calculate the credit risk. Then, based on these param-
tomers’ funding needs—particularly those of SMEs—we employ a
eters, we run a simulation of simultaneous default using the Monte
standardized credit risk assessment process for SMEs that uses a
Carlo method to calculate our maximum loss exposure to the esti-
credit-scoring model. With this process, we are building a regime for
mated amount of the maximum losses that may be incurred. Based
efficiently marketing our Business Select Loan and other SME loans.
on these quantitative results, we allocate risk capital.
In the field of housing loans for individuals, we employ a credit
Risk quantification is also executed for purposes such as to
assessment model based on credit data amassed and analyzed
determine the portfolio’s risk concentration, or to simulate economic
by SMBC over many years. This model enables our loan officers to
movements (stress tests), and the results are used for making
efficiently make rational decisions on housing loan applications, and
optimal decisions across the whole range of business operations,
to reply to the customers without delay. It also facilitates the effective
including formulating business plans and providing a standard
management of credit risk, as well as the flexible setting of interest rates.
against which individual credit applications are assessed.
We also provide loans to individuals who rent out properties
(2) Framework for Managing Individual Loans
(a) Credit Assessment
such as apartments. The loan applications are subjected to a precise
credit risk assessment process utilizing a risk assessment model
At SMBC, credit assessment of corporate loans involves a variety
that factors in the projected revenue from the rental business. The
of financial analyses, including cash flow, to predict an enterprise’s
process is also used to provide advice to such customers on how to
capability of loan repayment and its growth prospects. These
revise their business plans.
■SMBC’s Credit Monitoring System
Obligor Information
Processing
Registration
of Financial
Statements/
Creation and
Revision of
Corporate
Card
Flow of Obligor Grading/Grading Outlook/Credit Policies/Action Plans/Facility Grading Assignment
Non-
consolidated
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
(cid:127)Positive
(cid:127)Flat
(cid:127)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
82
2016 Annual Report
(b) Credit Monitoring System
criteria based on the Financial Inspection Manual of the Financial
At SMBC, in addition to analyzing loans at the application stage,
Services Agency and the Practical Guideline published by the
the Credit Monitoring System is utilized to reassess obligor grades
Japanese Institute of Certified Public Accountants. Self-assessment
and review self-assessment and credit policies so that problems
is the latter stage of the obligor grading process for determining the
can be detected at an early stage, and quick and effective action
borrower’s ability to fulfill debt obligations, and the obligor grade
can be taken. The system includes periodic monitoring carried out
criteria are consistent with the categories used in self-assessment.
each time an obligor enterprise discloses financial results, as well
At the same time, self-assessment is a preparatory task for
as continuous monitoring performed each time credit conditions
ensuring SMBC’s asset quality and calculating the appropriate level
change, as indicated in the diagram on page 82.
of write-offs and provisions. Each asset is assessed individually for
(3) Framework for Credit Portfolio Management
In addition to managing individual loans, SMBC applies the follow-
ing basic policies to the management of the entire credit portfolio to
maintain and improve its soundness and profitability over the mid to
long term.
(a) Risk-Taking within the Scope of Capital
To keep credit risk exposure to a permissible level relative to capital,
SMBC sets a credit risk capital limit for internal control purposes.
Under this limit, sub-limits are set for each business unit. Regular
monitoring is conducted to make sure that these limits are being fol-
lowed, thus ensuring appropriate overall management of credit risk.
(b) Controlling Concentration Risk
its security and collectibility. Depending on the borrower’s current
situation, the borrower is assigned to one of five categories: Normal
Borrowers, Borrowers Requiring Caution, Potentially Bankrupt
Borrowers, Effectively Bankrupt Borrowers, and Bankrupt
Borrowers. Based on the borrower’s category, claims on the bor-
rower are classified into Classification I, II, III, and IV assets according
to their default and impairment risk levels, taking into account such
factors as collateral and guarantees. As part of our efforts to bolster
risk management throughout the Group, our consolidated subsidiar-
ies carry out self-assessment in substantially the same manner.
Borrower Categories, Defined
As the equity capital of the bank may be materially impaired in the
event that the credit concentration risk becomes apparent, SMBC
Normal Borrowers
Borrowers with good earnings performances and no
significant financial problems
implements measures to manage credit towards an industrial sector
Borrowers Requiring Caution
Borrowers identified for close monitoring
with excessive risk concentration, introduces large exposure limit lines
Potentially Bankrupt Borrowers
and conducts intensive loan review for obligors with large exposure.
To manage country risk, SMBC also has credit limit guidelines
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
based on each country’s creditworthiness.
Bankrupt Borrowers
Borrowers that have been legally or formally declared bankrupt
(c) Researching Borrowers More Rigorously and Balancing Risk
and Returns
Asset Classifications, Defined
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
Classification I
Classification II
returns that are commensurate with the credit risk involved, and
Classification III
makes every effort to reduce credit and capital costs as well as
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
general and administrative expenses.
Classification IV
Assets assessed as uncollectible or worthless
(d) Prevention and Reduction of Non-Performing Loans
(b) Asset Write-Offs and Provisions
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.
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
(4) Self-Assessment, Asset Write-Offs and Provisions,
possible loan losses.
and Disclosure of Problem Assets
(a) Self-Assessment
SMBC’s write-off and provision criteria for each self-assessment
borrower category are shown in the next page. As part of our over-
SMBC conducts rigorous self-assessment of asset quality using
all measures to strengthen risk management throughout the Group,
83
2016 Annual Report
all consolidated subsidiaries use substantially the same standards
are referred to as “problem assets”). Problem assets are classified
as SMBC for write-offs and provisions.
based on the borrower categories assigned during self-assessment.
Self-Assessment
Borrower Categories
Standards for Write-Offs and
Provisions
Normal Borrowers
Borrowers Requiring Caution
Potentially Bankrupt Borrowers
Effectively Bankrupt/ Bankrupt
Borrowers
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.
General reserve
Notes
Specific reserve
Provisions made in accordance with general inherent default
risk of loans, unrelated to specific individual loans or other
claims
Provisions made for claims that have been found uncollectible
in part or in total (individually evaluated claims)
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.
(c) Disclosure of Problem Assets
Problem assets are loans and other claims of which recovery of either
principal or interest appears doubtful, and are disclosed in accor-
dance with the Banking Act (in which they are referred to as “risk-
monitored loans”) and the Financial Reconstruction Act (where they
For detailed information on results of self-assessments, asset write-
offs and provisions, and disclosure of problem assets at March 31,
2016, please refer to page 263.
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 defined as the uncertainty around the ability of
the firm to meet debt obligations without incurring unacceptably
large losses. Examples of such risk include the possible inability to
meet current and future cash flow/collateral needs, both expected
and unexpected. In such cases, the firm may be required to raise
funds at less than favorable rates or be unable to raise sufficient
funds for settlement.
(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 group-wide 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
84
2016 Annual Report
Management Committee. Additionally, at SMBC, the Corporate Risk
Department not only monitors the current risk situations, but also
Management Department, which is the planning department of the
reports regularly to the Management Committee and the Board
Risk Management Unit, an independent of the business units that
of Directors. Furthermore, SMBC’s ALM Committee meets on a
directly handle market transactions, manages market and liquidity
monthly basis to examine reports on the state of observance of
risks in an integrated manner. The Corporate Risk Management
SMBC’s limits on market and liquidity risks, and to review and dis-
■ SMBC’s Market Risk and Liquidity Risk Management
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
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
Managing Depts.
methods for recognizing the dates for maturity of demand depos-
Other market-
related
operations
Market
operations
(Treasury Unit)
Market
operations
(International
Banking Unit)
Market
operations
(Group companies)
Front Office
Front/Middle/Back Offices
its (current accounts and ordinary deposit accounts that can be
withdrawn at any time) and the method for estimating the time of
cancellation prior to maturity of time deposits and consumer loans
differ substantially. At SMBC, the maturity of demand deposits
that are expected to be left with the bank for a prolonged period is
regarded to be five years (2.5 years on average). The cancellation
prior to maturity of time deposits and consumer loans is estimated
based on historical data.
■ VaR for Trading Activities
SMFG (consolidated)
Interest rates
Foreign exchange
Equities, commodities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2016
11.0
8.1
1.1
2.5
September 30, 2015
15.6
13.0
1.1
2.3
10.4
1.3
14.9
1.8
fiscal 2015
Maximum
22.5
16.5
3.7
7.9
21.4
6.2
Minimum
9.6
7.0
0.3
1.6
8.6
0.8
Average
14.2
10.6
1.4
3.2
13.3
2.4
(Billions of yen)
March 31, 2015
14.5
7.2
1.3
6.9
13.8
1.7
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)].
85
2016 Annual Report
(a) Market Risks
a. Trading activities
(b) Market Risk Volume Calculation Model
a. Presuppositions and limits of model
Trading activities are market operations which gain profits by taking
In SMBC’s internal VaR model, various market fluctuation scenarios
advantage of fluctuations of market prices in the short-term or price
are drawn up on the basis of past data, and the historical simulation
differences among markets. At SMFG, we assess and manage the
method is used to run profit-and-loss movement simulations that
market risk of trading activities on a daily basis, by utilizing VaR and
enable us to forecast probable maximum losses. The appropriate-
other tools.
ness of the model is later verified through back-testing.
The table on the previous page shows the VaR results of the
However, as back-testing cannot take into account major
Group’s trading activities during fiscal 2015. Because of the nature
market fluctuations that have not actually occurred historically, we
of trading, the VaR fluctuated sharply during fiscal 2015, in line with
supplement this method with the use of stress testing.
changes in our investment positions.
b. Banking activities
This internal model employed by SMBC undergoes regular
auditing by an independent auditing firm to ensure that it operates
Banking activities are market operations which gain profits by con-
appropriately.
trolling interest rates and term period for assets (loans, bonds, etc.)
b. Validity verification process
and liabilities (deposits, etc.). At SMFG, in the same way as in the
i Outline of validity verification
case of trading activities, we assess and manage the market risk of
SMBC uses back-testing as a method for verification of the valid-
banking activities on a daily basis, utilizing VaR and other tools.
ity of the internal model. VaR figures calculated by the internal
The following table shows the VaR results of the Group’s bank-
model are compared with actual portfolio profit-and-loss figures
ing activities during fiscal 2015. The VaR of the Group decreased
on a given day, to compute an appropriate VaR level and confirm
on March 31, 2016 compared with on March 31, 2015 primarily
the adequacy of risk capital management.
reflecting an decreased position in equities.
ii Back-testing results
The results of back-testing on SMBC’s trading book conducted in
fiscal 2015 are shown below. A data point under the diagonal line
indicates a loss exceeding VaR for that day. Five such data points
were observed and SMBC is accordingly making conservative
amendments to VaR values.
■ VaR for Banking Activities
SMFG (consolidated)
Interest rates
Equities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2016
34.0
18.7
27.5
September 30, 2015
40.4
21.1
28.9
33.6
29.0
39.5
35.2
fiscal 2015
Maximum
48.9
26.9
34.6
48.0
43.4
Minimum
23.5
14.1
17.5
23.1
19.3
Average
38.7
20.8
28.7
37.8
33.9
(Billions of yen)
March 31, 2015
39.0
18.0
31.1
37.8
34.9
Notes: 1. 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)].
2. The above category of “Equities” does not include stocks held for long-term strategic purposes.
■Back-Testing Results (Trading Book)
SMFG (consolidated)
SMBC (consolidated)
SMBC (non-consolidated)
Actual Profit or Loss (¥ billion)
2.0
4.0
6.0
8.0
VaR (¥ billion)
8.0
6.0
4.0
2.0
0
–2.0
–4.0
–6.0
0
Actual Profit or Loss (¥ billion)
2.0
4.0
6.0
8.0
VaR (¥ billion)
8.0
6.0
4.0
2.0
0
–2.0
–4.0
–6.0
0
8.0
6.0
4.0
2.0
0
–2.0
–4.0
–6.0
0
86
Actual Profit or Loss (¥ billion)
2.0
4.0
6.0
8.0
VaR (¥ billion)
2016 Annual Report
iii Reasons for losses exceeding the VaR
(CET1) ratio of 14% over approximately five years from September
In all cases, these were the result of significant fluctuations on the
2015, when the level was 28%.
foreign exchange and interest rate and stock markets.
c. Indicators substitute for the back-testing method
SMFG employs, as a method substitute for the back-testing
method, the VaR wherein presumption for the model such as obser-
vation period changes.
d. Changes in model from previous fiscal year
The model in use remains unchanged from that employed in the
previous fiscal year.
(c) Stress Testing
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 financial mar-
kets (stress testing). SMBC conducts stress tests regularly, assuming
various scenarios, and has measures in place for irregular 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.
Decline in economic value as of March 31, 2016 was around
2% of total capital, substantially below the 20% criterion.
(e) Management of Stocks Held for Strategic Purposes
SMBC establishes risk allowance limits on stocks held for strategic
purposes and monitors the observance of these limits in order to
control stock price fluctuation risk appropriately. More specifically,
VaR (1 year holding period) computed from profit and loss simula-
tions based on historical market fluctuation data and aggregated
fluctuation in market price from the beginning of the fiscal year are
subject to the risk capital limit management and monitored on a
daily basis.
To diminish the impact of stock price movement on capital,
SMBC has drawn up plans for reducing equity holdings. In accor-
dance with these plans, which were announced in November 2015,
SMBC is seeking to reduce its holdings*1 to a common equity Tier 1
■ Decline in Economic Value Based on Outlier Framework
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2015 March 31, 2016 March 31, 2015 March 31, 2016
(Billions of yen)
Total
Impact of Yen
interest rates
Impact of U.S. dollar
interest rates
Impact of Euro
interest rates
132.6
21.2
57.4
25.5
215.0
48.0
109.7
40.1
117.9
193.4
17.3
52.6
24.5
43.9
99.6
38.7
Percentage of total capital
1.3%
2.1%
1.2%
2.0%
Note: “Decline in economic value” is the decline of present value after interest rate
shocks (1st and 99th percentile of observed interest rate changes using a
1-year holding period and 5 years of observations).
*1: Holdings refers to Group holdings of stocks listed in Japan.
*2: Based on full implementation under the Basel III framework
(2) Liquidity Risk Management
At SMBC, liquidity risk is regarded as one of the major risks. SMBC’s
liquidity risk management is based on a framework consisting of
“setting upper limits for funding gaps,” “maintaining supplementary
liquidity,” and “establishing contingency plans.”
A funding gap is defined as the maturity mismatch between
source of funds and use of funds, and shows forthcoming funding
requirements. SMBC manages this funding gap properly by set-
ting limits on the size of the gap and limiting reliance on short-term
funding. These limits are set in place on both a bank-wide basis
and individual branch basis, and take into account funding status,
cash management planning, economic environments, and individual
currency characteristics and other factors. Additionally, funding gap
limits are set for individual currencies if necessary. SMBC monitors
the funding gap on a daily basis.
Further, stress tests are regularly carried out by simulating
the impact triggered, for example, by deposit outflows or dif-
ficulties in money market funding, in order to appraise and man-
age the amount of funding required when liquidity risk is realized.
Additionally, supplementary liquidity is maintained by holding assets,
such as U.S. government bonds, which can be immediately con-
verted to cash, or establishing borrowing facilities to be used as
supplementary funding sources in an emergency, in order to raise
the required funds smoothly even during market disruption.
Furthermore, contingency plans are developed to respond to
the liquidity risk when being realized, by creating detailed action
plans such as lowering the upper limit for the funding gap, depend-
ing on the existing situation (i.e. normal, concerned, or critical) and
the respective circumstances.
■ Composition, by Industry, of Listed Equity Portfolio
(%)
25
20
15
10
5
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(March 31, 2016)
SMBC Portfolio
TOPIX
Nikkei Average
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87
2016 Annual Report
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
conduct of operational risk management across the entire Group.
Under these regulations, SMFG and SMBC have been working to
enhance the operational risk management framework across the
whole Group by establishing an effective system for identification,
assessment, controlling, and monitoring of material operational risks
and a system for executing contingency and business continuity
plans. Based on the framework of Basel Capital Accord, SMFG has
been continuously pursuing sophisticated quantification of opera-
tional risks and advanced group-wide management.
■SMBC’s Operational Risk Management System
2. Operational Risk Management System
SMFG has designed and implemented an operational risk manage-
ment framework for group-wide basic policies for risk management.
At SMBC, the Management Committee makes decisions on
important matters such as basic policies for operational risk man-
agement, and these decisions are authorized by the SMBC’s Board
of Directors. In addition, SMBC has established the system to com-
prehensively manage operational risks by setting up the Corporate
Risk Management Department to oversee overall management of
operational risks together with other departments responsible for
processing risks and system risks.
As a brief overview, this system operates by collecting and
analyzing internal loss data occurred at each department or branch
as well as comprehensively specifying scenarios involving opera-
tional risks based on the operational procedures of each branch on
regular-basis and estimating the loss amount and frequency of the
occurrence of such losses based on each scenario. Risk severities
are quantified for each scenario and for those scenarios having high
severities the risk mitigation plan will be developed by the relevant
department and the status on the progress of such risk mitiga-
tion plan will be followed up by the Corporate Risk Management
Department. Furthermore, operational risks are quantified, and
quantitatively managed by utilizing the collected internal loss data
and scenarios.
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
Reporting
Internal loss data
Head Office departments
Retail Banking
Wholesale Banking
International Banking
Treasury
Investment Banking
88
2016 Annual Report
These occurrences of internal loss data, severity of scenarios
and status on risk mitigation are regularly reported to the director in
(2) External Loss Data
External loss data are defined as “the information for events which
charge of the Corporate Risk Management Department. In addition,
other banks, etc. incur losses due to operational risks.”
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.
3. Operational Risk Management Methodology
As previously defined, operational risks cover a wide-range of
cases, including the risks of losses due to errors in operation,
system failures, and natural disasters. Also, operational risk events
can occur virtually anywhere and everywhere. Thus, it is essential
to check whether material operational risks have been overlooked,
monitor the overall status of risks, and manage/control them. To this
end, it is necessary to be able to quantify risks using a measure-
ment methodology that can be applied to all types of operational
risks, and to comprehensively and comparatively capture the status
of and changes in potential operational risks of business processes.
Also, from the viewpoint of internal control, the measurement meth-
odology used to create a risk mitigation plan must be such that the
implementation of the plan quantitatively reduces operational risks.
At the end of March 2008, SMFG and SMBC adopted the
Advanced Measurement Approach (AMA) set forth by Basel Capital
Accord for calculation of operational risk equivalent amount. The
approach has been utilized for the management of operational risks
since then.
The basic framework for quantifying operational risks consists
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
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
by 8%) is calculated. In addition, external loss data and BEICFs
along with internal loss data are used for verifying the assessment
of scenarios to increase objectivity, accuracy and completeness.
SMFG, including the Group companies to which the AMA is
applied, collect the four elements.
This is outlined as follows.
(3) Business Environment and Internal Control Factors
(BEICFs)
BEICFs are defined as “factors affecting operational risks which are
associated with conditions of business environment and internal
control of SMFG.”
(4) Scenario Analysis
Scenario analysis is defined as a “methodology which identi-
fies assumed cases involving any material operational risks and
describe them in terms of risk scenario, and estimate the frequency
and severity of risk scenarios.” SMFG’s principal business opera-
tions are applicable for this methodology.
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
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
and loss severity based on the internal loss data and scenario
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. Regarding
the Consumer finance of a certain subsidiary, expected losses are
excluded in calculating the operational risk equivalent amount of the
repayment of excess interest.
Operational risk equivalent amount in respect of the “tangible
asset damages” that occurred by earthquakes are measured using
■ Basic Framework of Operational Risk Measurement
Internal Loss Data
External Loss Data
Verifi-
cation
Scenario Data
Data
input
Calculation of
Operational Risk
Equivalent Amount
Using Quantification
Model
(1) Internal Loss Data
Internal loss data are defined as “the information for events which
BEICFs
SMFG incur losses due to operational risks.”
Risk Mitigation Initiatives
89
2016 Annual Report
the probability data of earthquake occurrence in each part of
Japan and the distribution of loss amount by those earthquake
4. Processing Risk Management
Processing risk is the possibility of losses arising from negligent
occurrences.
processing by employees, accidents, or unauthorized activities.
The measurement units are SMFG consolidated basis, SMBC
SMFG recognizes that all operations entail processing risk.
consolidated basis and SMBC non-consolidated basis. The opera-
We are, therefore, working to raise the level of sophistication of
tional risk equivalent amount based on AMA is calculated as the
our management of processing risk across the whole Group by
simple aggregate of the amount of the seven event types set forth
ensuring that each branch conducts its own regular investigations
by the Basel Capital Accord and of the “tangible asset damages”
of processing risk; minimizing losses in the event of processing
by earthquakes. However, in the case of SMFG consolidated basis,
errors or negligence by drafting exhaustive contingency plans; and
the risk of losses on repayment of excess interest is added on. The
carrying out thorough quantification of the risk under management.
measurement accuracy is ensured by implementing the regularly
In the administrative regulations of SMBC, in line with SMFG’s
conducted verifications of the quantification models pre- and
group-wide basic policies for risk management, the basic admin-
post-measurement.
istrative regulations are defined as “comprehending the risks and
Meanwhile, as for the operational risk equivalent amount of
costs of administration and transaction processing, and managing
other Group companies not applicable for AMA and in preparation
them accordingly,” and “seeking to raise the quality of administration
to become applicable for AMA, it is calculated according to the
to deliver high-quality service to customers.” Adding new policies or
Basic Indicator Approach (BIA), and the operational risk equivalent
making major revisions to existing ones for processing risk manage-
amount for SMFG consolidated basis and SMBC consolidated
ment requires the approval of both the Management Committee and
basis are calculated by consolidating such amount calculated
the Board of Directors.
based on BIA with the operational risk equivalent amount calculated
In the administrative regulations, SMBC has also defined spe-
based on AMA.
(6) Risk Mitigation Initiatives
To mitigate risks using the quantitative results of the AMA, SMFG
cific rules for processing risk management. The rules allocate pro-
cessing risk management tasks among six types of departments:
operations planning departments, compliance departments, opera-
and SMBC implement risk mitigation measures for high severity
tions departments, transaction execution departments (primarily
scenarios. Furthermore, the risk assets calculated by quantification
front-office departments, branches, and branch service offices),
are allocated to each business unit of SMBC and other Group com-
internal audit departments, and the customer support departments.
panies for increasing awareness of operational risks internally in the
In addition, there is a specialized group within the Operations
Group companies, improving the effectiveness of their operational
Planning Department to strengthen administrative procedures
risk management and mitigating operational risks of the entire Group.
throughout the Group.
■Measurement Using the Quantification Model
Distribution of Loss Frequency
0.20
0.15
0.10
0.05
0
0
5
10
15
Number of incidents/year
20
Sampling of the
number of losses
from the distribution
(e.g., 5 incidents)
25
30
0.30
0.25
0.20
0.15
0.10
0.05
0
0
Distribution of Loss Severity
2
4
6
8
10
Loss per incident
Sampling of the amounts
of losses corresponding
to the above number of
losses from the distribution
of losses (e.g., 50, 100, 80,
150, 70)
Repeat (e.g., 1 million times)
Calculate aggregated
annual loss amount
(e.g., 450)
Total
(
f
r
e
q
u
e
n
c
y
)
(
f
r
e
q
u
e
n
c
y
)
P
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a
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f
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c
u
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r
e
n
c
e
90
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
0
P
r
o
b
a
b
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i
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f
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c
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c
e
x conversion factor
99.0%
2016 Annual Report
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 Corporate Risk Management Department is in
overall charge of settlement risk, while settlement risk included
within the various other risk categories is managed by the respec-
tive 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.
5. System Risk Management
System risk is the risk of loss arising from the failure, malfunction, or
unauthorized use of information systems.
SMFG recognizes that the IT revolution makes reliable infor-
mation systems essential for the effective implementation of man-
agement strategy. We strive to minimize system risk by drafting
regulations and specific management standards, including a secu-
rity policy. We also have contingency plans targeted at minimizing
losses in the event of a system failure. This risk management sys-
tem is designed to ensure 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). Systems
trouble at financial institutions has the potential to impact heavily
on society as system risk diversifies owing to advances in IT and
financial institutions expand their fields of business. We have numer-
ous measures in place for system breakdown prevention, including
constant maintenance to ensure stable and uninterrupted operation,
duplication of the various system categories and infrastructure,
and a disaster-prevention system consisting of computer centers
in eastern and western Japan. To maintain the confidentiality of
customer data and prevent leaks of information, sensitive informa-
tion is encrypted, unauthorized external access is blocked, and all
possible measures are taken to secure data. We also have contin-
gency plans and hold training sessions as necessary to ensure full
preparedness in the event of an emergency. To maintain security,
we will continue to revise countermeasures as new technologies
and usage formats emerge.
Taking into account the growing sophistication and diversification
of cyberattacks globally, the increasing social impact from damage
inflicted by such attacks, and the risk to our reputation and credit
standing, we deploy governance and technologies for identification,
protection, and detection and we are continuously tightening this
cyber security management in preparedness for attacks.
91
2016 Annual Report
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.).
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.
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.
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.
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.
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.
PD
Abbreviation for Probability of Default
Probability of becoming default by obligor during one year.
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 appetite
Types and levels of risk that SMFG is willing to take on or tolerate to
drive earnings growth.
Risk appetite framework
A framework in which SMFG’s risk appetite is clarified and appropriately
applied to its business operation.
Risk capital
The amount of capital required to cover the theoretical maximum
potential loss arising from operational risk. It differs from the minimum
regulatory capital requirements, and it is being used in the risk manage-
ment 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%.
Sound risk culture
Business culture in which SMFG seeks to achieve the appropriate bal-
ance between risk and return after determining the degree of risk that is
acceptable.
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
The maximum loss expectation for a portfolio of financial assets for a
given probability.
92
2016 Annual Report SMFG Accounting and Auditing Hotline/
Designated Dispute Resolution Agencies
SMFG Accounting and Auditing Hotline
Designated Dispute Resolution Agencies
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 Counselors 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.
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 03-6206-3988
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
Fax:
(Japan) 03-3669-9833
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm
93
2016 Annual Report SMFG Fiduciary Duty Declaration
Based on the Customer First management principle, SMFG Group companies* make the following undertakings as best partner to clients in
asset management and formation.
1. Develop a range of products that is closely aligned with client requirements
• Develop products that are based on accurate perception of clients’ needs and meet high global
standards, and assemble a range of products from a wide selection of investment management
and insurance companies that takes account of economic conditions and market trends and meets
client requirements.
• Work toward ensuring appropriate product development and selection.
2. Increase the information provided and its understandability
• Increase the information the company provides to clients on product characteristics, risks, commissions,
and economic conditions and market trends.
• Provide product information in ways that are easy to understand and follow up closely with clients
after sales.
• Create a fee structure that is easy to understand from a client’s viewpoint.
3. Develop a client-oriented sales approach
• Use training and other means to make sure the customer orientation that is one of the management
principles permeates throughout the company and reflect this in the performance evaluation structure
and other aspects of sales.
• After careful inquiry into client requirements, seek to obtain client understanding of appropriate products
based on the clients’ knowledge, investment experience, financial asset situation, and objectives.
• Respond as a group to client needs, including introductions to SMFG Group companies if necessary.
4. Work constantly toward providing the highest levels of service to clients
• Structure business so that customer views are reflected in improvements to service.
• Seek to increase convenience by expanding access channels.
• In addition to investment products, offer services and products that are appropriate to the clients’
stage in life.
• Use training and other means to build a professional team, deploy new technologies, and review
internal company arrangements based on the PDCA (Plan, Do, Check, and Act) procedures.
SMFG Group companies will deploy these efforts in contributing to Japan’s shift from saving to investment.
*
The SMFG Group companies that are parties to this declaration are Sumitomo Mitsui Banking Corporation, SMBC Trust Bank Ltd., SMBC Nikko Securities Inc.,
SMBC Friend Securities Co., Ltd., The Minato Bank, Ltd., and Kansai Urban Banking Corporation.
94
2016 Annual Report Employees
ώ SMBC
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)**
*
2014
23,926
12,493
52.22%
11,433
47.78%
37 yrs 1 mos.
40 yrs 3 mos.
33 yrs 8 mos.
14 yrs 0 mos.
16 yrs 7 mos.
11 yrs 2 mos.
2015
2016
25,963
13,087
50.41%
12,876
49.59%
37 yrs 6 mos.
41 yrs 1 mos.
33 yrs 11 mos.
13 yrs 3 mos.
16 yrs 0 mos.
10 yrs 7 mos.
26,950
13,196
48.96%
13,754
51.04%
37 yrs 4 mos.
40 yrs 11 mos.
33 yrs 10 mos.
13 yrs 2 mos.
15 yrs 11 mos.
10 yrs 6 mos.
480
567
743
2.10%
2.07%
2.14%
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 March 1 of respective years
2016
April 1
Number of new hires
893
Number of newly employed female graduates***
225
Ratio of newly employed females to total new employees 35.4% 32.5% 25.2%
*** Including Sogoshoku staff and Sogoshoku (retail course) employees. Excluding
2015
787
256
2014
652
231
Business Career employees.
Fiscal
Number of employees taking parental leave
Number of career hires
2013
1,127
2014
1,513
2015
2,188
<30>
26
<85> <466>
88
153
ώ Sumitomo Mitsui Finance and Leasing
2015
March 31
Number of employees*
2014
1,606
1,019
63.45%
587
36.55%
39 yrs 8 mos.
41 yrs 11 mos.
35 yrs 10 mos.
14 yrs 9 mos.
16 yrs 9 mos.
11 yrs 2 mos.
1,618
1,034
63.91%
584
36.09%
40 yrs 5 mos.
42 yrs 5 mos.
36 yrs 10 mos.
15 yrs 2 mos.
17 yrs 0 mos.
11 yrs 11 mos.
2016
1,677
1,069
63.74%
608
36.26%
40 yrs 9 mos.
42 yrs 9 mos.
37 yrs 4 mos.
15 yrs 4 mos.
17 yrs 3 mos.
12 yrs 0 mos.
24
29
41
2.14%
2.22%
2.18%
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)**
*
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).
** As of March 1 of respective years
April 1
Number of new hires
43
Number of newly employed female graduates
16
Ratio of newly employed females to total new employees 25.0% 26.8% 37.2%
41
11
24
6
2016
2014
2015
Fiscal
Number of employees taking parental leave
2013
51
<0>
2014
58
<0>
2015
68
<0>
ώ SMBC Nikko Securities
March 31
Number of employees*
2014
ώ SMBC Trust Bank
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
*
2016
1,786
719
40.26%
1,067
59.74%
41 yrs 1 mos.
42 yrs 5 mos.
40 yrs 2 mos.
9 yrs 2 mos.
9 yrs 6 mos.
8 yrs 11 mos.
89
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)**
*
7,764
4,939
63.61%
2,825
36.39%
39 yrs 9 mos.
40 yrs 9 mos.
37 yrs 11 mos.
12 yrs 9 mos.
12 yrs 11 mos.
12 yrs 6 mos.
2015
2016
8,188
5,166
63.09%
3,022
36.91%
39 yrs 7 mos.
40 yrs 8 mos.
37 yrs 10 mos.
12 yrs 9 mos.
13 yrs 0 mos.
12 yrs 5 mos.
8,522
5,347
62.74%
3,175
37.26%
39 yrs 7 mos.
40 yrs 7 mos.
37 yrs 9 mos.
12 yrs 11 mos.
13 yrs 1 mos.
12 yrs 7 mos.
75
114
139
2.00%
1.94%
2.24%
The number of full-time employees, including employees seconded to other
companies and organizations. The number excludes employees seconded from
other companies and organizations, directors, employees on short-term contracts,
part-time employees, and employees of temporary employment agencies.
April 1
Number of new hires
Number of newly employed female graduates***
Ratio of newly employed females to total new employees
Fiscal
Number of employees taking parental leave
2016
2015
24
13
54.2%
106
Number of career hires
Note: Numbers are shown from fiscal 2015 as there were changes due to the
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.
** As of March 1 of respective years
April 1
Number of new hires***
593
Number of newly employed female graduates
270
Ratio of newly employed females to total new employees 43.4% 46.2% 45.5%
*** Professional employees (Classes I–II), FA, and specialists
516
224
617
285
2016
2014
2015
<1>
60
Fiscal
Number of employees taking parental leave
2013
287
<3>
2014
289
<12>
2015
316
<15>
integration of Citibank Japan’s retail banking business in November 2015.
95
2016 Annual Report ώ SMBC Friend Securities
March 31
Number of employees*
2014
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
2015
2016
1,855
1,316
70.94%
539
29.06%
38 yrs 11 mos.
41 yrs 1 mos.
33 yrs 8 mos.
15 yrs 3 mos.
17 yrs 1 mos.
10 yrs 6 mos.
1,862
1,321
70.95%
541
29.05%
37 yrs 10 mos.
39 yrs 10 mos.
32 yrs 11 mos.
14 yrs 11 mos.
15 yrs 11 mos.
9 yrs 8 mos.
1,769
1,261
71.28%
508
28.72%
38 yrs 10 mos.
40 yrs 5 mos.
33 yrs 9 mos.
14 yrs 8 mos.
16 yrs 4 mos.
10 yrs 6 mos.
*
Male
Female
The number of full-time employees, including employees seconded to other
companies and organizations. The following list of employees is deducted from
the total number of employees: executive officers, employees on short-term
contracts, part-time employees, employees of temporary employment agencies,
and national staff at overseas branches.
April 1
Number of new hires
239
Number of newly employed female graduates**
116
Ratio of newly employed females to total new employees 38.8% 39.4% 48.5%
** Both non-area specified and area specified staff
180
71
245
95
2016
2014
2015
Fiscal
Number of employees taking parental leave
2013
21
<0>
2014
28
<0>
2015
48
<6>
ώ Sumitomo Mitsui Card
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions**
Ratio of employees with
disabilities (% of total)***
*
2014
2,367
1,176
49.68%
1,191
50.32%
38 yrs 1 mos.
40 yrs 11 mos.
35 yrs 4 mos.
12 yrs 8 mos.
13 yrs 7 mos.
11 yrs 10 mos.
2015
2,402
1,190
49.54%
1,212
50.46%
39 yrs 1 mos.
41 yrs 9 mos.
36 yrs 5 mos.
13 yrs 4 mos.
14 yrs 0 mos.
12 yrs 7 mos.
2016
2,447
1,210
49.45%
1,237
50.55%
39 yrs 5 mos.
41 yrs 11 mos.
36 yrs 11 mos.
13 yrs 8 mos.
14 yrs 4 mos.
13 yrs 1 mos.
26
26
30
2.30%
2.24%
2.30%
The number of full-time employees. This excludes directors, consultants, advisors,
part-time employees, affiliated companies (including employees seconded from
other companies and organizations), and national staff at overseas branches.
** Total of senior staff and group managers (including credit officers)
*** Computed based on single month of March
2016
April 1
Number of new hires
78
Number of newly employed female graduates
45
Ratio of newly employed females to total new employees 54.2% 54.2% 57.7%
2015
72
39
2014
59
32
Fiscal
Number of employees taking parental leave
Number of career hires
2013
65
<9>
16
2014
71
<13>
24
2015
88
<14>
147
ώ Cedyna
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service**
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)***
*
2014
3,192
1,967
61.62%
1,225
38.38%
41 yrs 2 mos.
43 yrs 4 mos.
37 yrs 6 mos.
17 yrs 5 mos.
19 yrs 5 mos.
14 yrs 2 mos.
2015
3,213
1,962
61.06%
1,251
38.94%
41 yrs 7 mos.
43 yrs 9 mos.
38 yrs 0 mos.
17 yrs 9 mos.
19 yrs 10 mos.
14 yrs 6 mos.
2016
3,258
1,966
60.34%
1,292
39.66%
41 yrs 9 mos.
44 yrs 0 mos.
38 yrs 4 mos.
18 yrs 0 mos.
20 yrs 1 mos.
14 yrs 9 mos.
29
38
48
1.81%
2.06%
2.10%
Excluding employees seconded from other companies, employees on short-
term contracts and part-time employees.
** Retroactive revisions have been made to previous fiscal years due to change
in calculation methodology.
*** As of March 1 of respective years
2016
April 1
Number of new hires
114
Number of newly employed female graduates
68
Ratio of newly employed females to total new employees 65.2% 62.1% 59.6%
2015
87
54
2014
69
45
Fiscal
Number of employees taking parental leave****
Number of career hires
**** Including employees on short-term childcare leave. Retroactive revisions have
been made to previous fiscal years due to change in calculation methodology.
2014
94
<1>
24
2015
89
<2>
35
2013
89
<4>
27
ώ SMBC Consumer Finance
2014
March 31
Number of employees*
2,531
1,426
56.34%
1,105
43.66%
38 yrs 2 mos.
39 yrs 11 mos.
36 yrs 2 mos.
11 yrs 4 mos.
14 yrs 1 mos.
7 yrs 8 mos.
2015
2,582
1,445
55.96%
1,137
44.04%
38 yrs 5 mos.
40 yrs 3 mos.
36 yrs 5 mos.
11 yrs 7 mos.
14 yrs 6 mos.
7 yrs 11 mos.
2016
2,682
1,485
55.37%
1,197
44.63%
38 yrs 11 mos.
40 yrs 10 mos.
36 yrs 8 mos.
12 yrs 0 mos.
14 yrs 11 mos.
8 yrs 3 mos.
39
49
76
1.86%
2.09%
2.12%
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)**
*
The number of full-time employees on a non-consolidated basis, 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, national staff at overseas branches, executive
officers, part-time employees, and employees of temporary employment agencies.
** As of March 1 of respective years
2016
April 1
Number of new hires
55
Number of newly employed female graduates
31
Ratio of newly employed females to total new employees 65.0% 61.2% 56.4%
2015
49
30
2014
40
26
96
Fiscal
Number of employees taking parental leave***
Number of career hires
*** Including employees who retired during the fiscal year
2013
68
<1>
5
2014
66
<1>
3
2015
81
<1>
8
2016 Annual Report ώ Japan Research Institute
March 31
Number of employees*
2014
ώ Kansai Urban Banking
March 31
Number of employees*
2014
2,247
1,705
75.88%
542
24.12%
40 yrs 3 mos.
41 yrs 0 mos.
38 yrs 1 mos.
11 yrs 3 mos.
11 yrs 7 mos.
10 yrs 0 mos.
2015
2016
2,288
1,722
75.26%
566
24.74%
40 yrs 6 mos.
41 yrs 2 mos.
38 yrs 7 mos.
11 yrs 5 mos.
11 yrs 10 mos.
10 yrs 4 mos.
2,397
1,796
74.93%
601
25.07%
40 yrs 6 mos.
41 yrs 1 mos.
38 yrs 10 mos.
11 yrs 5 mos.
11 yrs 9 mos.
10 yrs 6 mos.
1.98%
2.00%
2.14%
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Ratio of employees with
disabilities (% of total)**
*
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 March 31 of respective years
2016
April 1
Number of new hires
118
Number of newly employed female graduates***
41
Ratio of newly employed females to total new employees 25.0% 26.7% 34.7%
*** Including only Sogoshoku employees. Ippanshoku employees are excluded.
2014
68
17
2015
86
23
Fiscal
Number of employees taking parental leave
2013
35
<7>
2014
49
<12>
2015
53
<10>
2,567
1,701
66.26%
866
33.74%
40 yrs 2 mos.
43 yrs 3 mos.
34 yrs 3 mos.
16 yrs 11 mos.
19 yrs 5 mos.
11 yrs 9 mos.
2015
2016
2,513
1,628
64.78%
885
35.22%
40 yrs 0 mos.
42 yrs 11 mos.
34 yrs 8 mos.
16 yrs 8 mos.
19 yrs 2 mos.
12 yrs 2 mos.
2,546
1,603
62.96%
943
37.04%
39 yrs 10 mos.
42 yrs 10 mos.
34 yrs 9 mos.
16 yrs 6 mos.
19 yrs 5 mos.
12 yrs 2 mos.
138
150
164
1.68%
1.85%
2.22%
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions**
Ratio of employees with
disabilities (% of total)***
*
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, and employees of temporary employment
agencies.
** As of March 31; however, it is applicable only to those employees with deputy
positions or any other positions higher than deputy position
*** As of March 1 of respective years
2016
April 1
Number of new hires
194
Number of newly employed female graduates
119
Ratio of newly employed females to total new employees 59.3% 62.1% 61.3%
2015
169
105
2014
118
70
2014
2015
2016
Fiscal
Number of employees taking parental leave
2013
91
<0>
2014
99
<1>
2015
101
<0>
1,928
1,215
63.02%
713
36.98%
40 yrs 11 mos.
44 yrs 1 mos.
35 yrs 7 mos.
16 yrs 7 mos.
19 yrs 8 mos.
11 yrs 3 mos.
1,949
1,211
62.13%
738
37.87%
40 yrs 11 mos.
43 yrs 11 mos.
36 yrs 0 mos.
16 yrs 7 mos.
19 yrs 8 mos.
11 yrs 5 mos.
1,960
1,180
60.20%
780
39.80%
40 yrs 11 mos.
44 yrs 0 mos.
36 yrs 4 mos.
16 yrs 6 mos.
19 yrs 9 mos.
11 yrs 6 mos.
*
The combined employment ratio for persons with disabilities for the above
11 companies was 2.11% as of March 2016.
ώ THE MINATO BANK
March 31
Number of employees*
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
Male
Female
Number of women in
managerial positions**
*
91
97
109
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.
** As of March 31. Number of employees from supervisor level upwards.
2016
April 1
Number of new hires
130
Number of newly employed female graduates
71
Ratio of newly employed females to total new employees 46.6% 57.7% 54.6%
2015
111
64
2014
88
41
2015
Fiscal
Number of employees taking parental leave***
108
<15>
*** Retroactive revisions have been made to previous fiscal years due to change in
2014
84
<0>
2013
69
<0>
calculation methodology.
97
2016 Annual Report Main Work-Life Balance Support System
(Employee Support Program)
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 child; 20 days for two or
more children)
SMBC
1 year or maximum of
18 months in case of
inability to place in
daycare center
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
SMBC Trust Bank
Restrictions on
overtime
Until March 31 of the
6th grade
Exemption from
late-night work
Until March 31 of the
6th grade
Until the entry into
elementary school
Until the entry into
elementary school
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
Until 3 years of age
Employees can set working
hours at a minimum 6 hours
per day and a minimum 60%
of the standard working hours
per week
Sumitomo Mitsui
Finance and
Leasing
1 year or maximum of
18 months in case of
inability to place in
daycare center
Until 3 years of age
SMBC Nikko
Securities
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
*May be extended as needed
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or
more children)
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 the entry into
elementary school
Until the entry into
elementary school
Until March 31 of the
6th grade
Until March 31 of the
6th grade
SMBC Friend
Securities
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)
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)
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
Until March 31 of the
3rd grade
Until March 31 of the
3rd grade
Until March 31 of the
3rd grade
Until 3 years of age
Until March 31 of the 6th
grade (5 days per annum per
child; 10 days for two or more
children)
Until March 31 of the 3rd
grade (Employees can choose
to work 5, 6, or 7 hours a day).
Cedyna
Until the entry into
elementary school
Until the entry into
elementary school
1 year or maximum of
18 months in case of
inability to place in
daycare center
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Until March 31 of the 3rd
grade Employees can reduce
daily working hours to a
minimum of 6 hours (and a
maximum of 8 hours), by
taking off 30-minute blocks
Until the entry into
elementary school
Until the entry into
elementary school
SMBC Consumer
Finance
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
Until March 31 of the 6th
grade (5 days per annum per
child; 10 days for two or more
children)
THE MINATO BANK
18 months or maximum
of 2 years in case of
inability to place in
daycare center
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Kansai Urban
Banking
Until March 31 of the
6th grade
Until March 31 of the
6th grade
Until the entry into
elementary school
Until the entry into
elementary school
Employees may select either of
shorter working hours for each
day of the week (employees
may select to work for either 6,
6.5 or 7 hours per day), or
working 4 days per week; both
cases are applicable until
March 31 of the 6th grade
Employees may select either
of shorter working hours for
each day of the week
(employees may select to work
for 6 or 7 hours per day), or
fewer working days per week;
both cases are applicable until
March 31 of the 1st grade
Other principal systems
• Short-term childcare leave
• Work relocations
• Childcare subsidies
• Leave for nursing care
• Shorter working hours allowed for nursing care
• System for rehiring former employees
• Flextime System
• Flexibility in working hours
• Flexibility in the work place
• Nursing time
• Paternity leave (3 days)
• Half-day paid leave
• Nursing Leave
• Shorter working hours allowed for nursing care
• Nursing care leave
• Babysitter services provided
• Work relocations
• System for rehiring former employees
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed for nursing care
• Short-term childcare leave
• Discounted rates for contracted daycare service
• Nursing care leave
• Special days off for nursing care
• Shorter working hours allowed for nursing care
• Short-term leave for nursing care
• Staggered working hours (working in shifts)
• Rehiring former employees
• Leave for nursing care
• Shorter working hours allowed for nursing care
• System for rehiring former employees
• Work relocations
• Childcare subsidies
• Nursing care leave, days off for nursing care
• Shorter working hours for nursing care
• Rehiring former employees
• Special leave (for spouse’s childbirth)
• Maternity leave and work
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed for nursing care
• System for rehiring former employees
• Maternity leave (for men)
• Personnel system being employed under the
regional system of no possibility of transfers
with movings
• Rehiring retirees
• 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
• Childcare leave (2 days)
• School-visiting day (2 days a year)
• Rehiring of former employees who quit for
childcare or care-giving reasons
• Husband’s maternity leave (3 days)
• Childcare subsidies
• Nursing care leave
• Shorter working hours (for nursing care, etc.)
• Time off and shorter working hours
• Days off for nursing care
• Special leave (for spouse’s childbirth)
• Paid leave for initial 15 days of childcare
• 10 days paid childcare leave
• Maternity leave (for assisting spouse)
• Nursing care leave
• Shorter working hours allowed for nursing care
• Childcare allowance
• Rehiring former employees
• Support for early return to work after childcare
leave
• Paid leave for initial 5 days of childcare
• Rehiring former employees
• Nursing care leave
• Shorter working hours for nursing care
• Provision of home helpers
• Counseling service on childcare
• Paternity and special childcare leave (5 days)
98
2016 Annual Report Corporate Data
Sumitomo Mitsui Financial Group, Inc.
Eriko Sakurai(1)
Director
(1) Messrs. and Ms. Yokoyama, Nomura, Mitchell, Kohno and Sakurai satisfy the
requirements for an “outside director” under the Companies Act.
CORPORATE AUDITORS
Toshiyuki Teramoto
Corporate Auditor
Kazuhiko Nakao
Corporate Auditor
Toru Mikami
Corporate Auditor
Ikuo Uno(2)
Corporate Auditor
Satoshi Itoh(2)
Corporate Auditor
Rokuro Tsuruta(2)
Corporate Auditor
(2) Messrs. Uno, Itoh and Tsuruta satisfy the requirements for an “outside corporate
■ Board of Directors, Corporate Auditors and Executive Officers (as of June 30, 2016)
BOARD OF DIRECTORS
Masayuki Oku
Chairman of the Board
Koichi Miyata
President
Takeshi Kunibe
Director
Yujiro Ito
Director General Affairs Dept., Human Resources Dept.
Kozo Ogino
Director Audit Dept.
Jun Ohta
Director
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Subsidiaries & Affiliates Dept.,
IT Innovation Dept., Transaction Business Planning Dept.
Data Management Dept.
Katsunori Tanizaki
Director
IT Planning Dept., Data Management Dept.
IT Innovation Dept.
Koichi Noda
Director Corporate Risk Management Dept.
Tetsuya Kubo
Director
Yoshinori Yokoyama(1)
Director
Kuniaki Nomura(1)
Director
Arthur M. Mitchell(1)
Director
Masaharu Kohno(1)
Director
auditor” under the Companies Act.
EXECUTIVE OFFICERS
Nobuaki Kurumatani
Deputy President Securities Business Dept.
Yasuyuki Kawasaki
Senior Managing Director Global Business Planning Dept.
Yukihiko Onishi
Senior Managing Director
Consumer Business Planning Dept.,
Consumer Finance & Transaction Business Dept.
Toshikazu Yaku
Managing Director
General Affairs Dept.
Olympic and Paralympic Dept.
Haruyuki Nagata
Managing Director Financial Accounting Dept.
■ SMFG Organization (as of June 30, 2016)
Shareholders’
Meeting
Board of Directors
Auditing Committee
Risk Committee
Compensation Committee
Nominating Committee
Group Strategy
Committee
Management
Committee
Corporate Auditors/
Board of Corporate
Auditors
Office of Corporate Auditors
Public Relations Dept.
Corporate Planning Dept.
Investor Relations Dept.
Group CSR Dept.
Olympic and Paralympic Dept.
Financial Accounting Dept.
Equity Portfolio Management Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
General Affairs Dept.
Group Cost Control Dept.
Corporate Risk Management Dept.
Risk Management Information Dept.
Subsidiaries & Affiliates Dept.
Securities Business Dept.
IT Innovation Dept.
Data Management Dept.
Transaction Business Planning Dept.
Consumer Finance & Transaction Business Dept.
Consumer Business Planning Dept.
Global Business Planning Dept.
Audit Dept.
99
2016 Annual Report Sumitomo Mitsui Banking Corporation
■ Board of Directors, Corporate Auditors and Executive Officers (as of June 30, 2016)
BOARD OF DIRECTORS
Chairman of the Board
Teisuke Kitayama
President and CEO
Takeshi Kunibe*
Director
Koichi Miyata
Vice Chairman of the Board
Shuichi Kageyama
Located at Osaka
Deputy Presidents
Yujiro Ito*
Human Resources Dept., Human Resources Development Dept., Quality
Management Dept., General Affairs Dept., Legal Dept., Administrative
Services Dept.
Seiichiro Takahashi*
Head of Treasury Unit
Nobuaki Kurumatani*
Head of Investment Banking Unit
Securities Business Dept.
Masaki Tachibana*
Co-Head of Wholesale Banking Unit (Planning Dept., Wholesale Banking
Unit, Strategic Corporate Business Dept., Public & Financial Institutions
Banking Dept., Wholesale Banking Unit)
Head of Corporate Banking Division
Senior Managing Directors
Kozo Ogino*
Internal Audit Dept., Credit Review Dept.
Human Resources Dept., Human Resources Development Dept.
Jun Ohta*
Public Relations Dept., Corporate Planning Dept., Financial Accounting
Dept., Subsidiaries & Affiliates Dept., IT Innovation Dept.
Transaction Business Division.
Data Management Dept.
Yasuyuki Kawasaki*
Co-Head of International Banking Unit (Planning Dept., International
Banking Unit, Emerging Markets Business Division, Asia Pacific, East Asia)
Katsunori Tanizaki*
IT Planning Dept., Data Management Dept., Operations Planning Dept.,
Operations Support Dept., Inter-Market Settlement Dept.
IT Innovation Dept.
Yukihiko Onishi*
Head of Retail Banking Unit
Koichi Noda*
Risk Management Unit (Corporate Risk Management Dept.,
Credit & Investment Planning Dept.)
Directors
Shigeru Iwamoto(1)
Masayuki Matsumoto(1)
Yuko Nakahira(1)
* Executive Officers
(1) Messrs. and Ms. Iwamoto, Matsumoto and Nakahira satisfy the requirements
for an “outside director” under the Companies Act.
CORPORATE AUDITORS
Corporate Auditors
Mitsuru Ono
Yuichi Shimane
100
Hiroshi Takahashi(2)
Katsuyoshi Shinbo(2)
Masaaki Oka(2)
Toshiyuki Teramoto
(2) Messrs. Takahashi, Shinbo and Oka satisfy the requirements for an “outside
corporate auditor” under the Companies Act.
EXECUTIVE OFFICERS
Senior Managing Directors
Atsuhiko Inoue
Deputy Head of Wholesale Banking Unit
(Credit Administration Dept., Corporate Credit Dept.)
Corporate Research Dept.
Deputy Head of Investment Banking Unit (Trust Services Dept.)
Manabu Narita
Head of Corporate Advisory Division
Deputy Head of Wholesale banking Unit (Strategic Corporate Business Dept.)
Private Advisory Division
Global Advisory Dept.
Fumiaki Kurahara
Co-Head of Wholesale Banking Unit
Head of Global Corporate Banking Division
Makoto Takashima
Co-Head of International Banking Unit
(Europe, Middle East and Africa, Americas)
Managing Directors
Hitoshi Ishii
Deputy Head of Wholesale Banking Unit (in charge of East Japan)
Gotaro Michihiro
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, V, VII and VIII)
Shosuke Mori
Head of The Asia Pacific Division and Emerging Markets Business Division
Masahiko Oshima
Head of Europe, Middle East and Africa Division
CEO of Sumitomo Mitsui Banking Corporation Europe Limited
Naoki Ono
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. IV, VI, IX and XI)
Kimio Matsuura
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Toshikazu Yaku
General Affairs Dept., Legal Dept., Administrative Services Dept.,
Quality Management Dept.
Olympic and Paralympic Dept.
Ryohei Kaneko
Deputy Head of Retail Banking Unit (in charge of East Japan)
Hisanori Kokuga
Deputy Head of International Banking Unit, Wholesale Banking Unit
(in charge of East Asia)
Head of East Asia Division
Global Advisory Dept.
Chairman of Sumitomo Mitsui Banking Corporation (China) Limited
Atsushi Oku
Deputy Head of Retail Banking Unit (in charge of West Japan)
Naoki Tamura
Public Relations Dept., Corporate Planning Dept.,
Subsidiaries & Affiliates Dept.
Toshihiro Isshiki
General Manager, Operations Planning Dept.
Haruyuki Nagata
Financial Accounting Dept.
2016 Annual Report Ryuji Nishisaki
Deputy Head of Emerging Markets Business Division
Akihiro Fukutome
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Hiroshi Munemasa
Deputy Head of Treasury Unit
Toshikazu Takeichi
Head of Kobe Middle Market Banking Division
Keiji Kakumoto
Osaka Corporate Banking Division
(Osaka Corporate Banking Depts. I, II and III)
Kenichi Hosomi
General Manager, Planning Dept., International Banking Unit
Hitoshi Minami
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, III, X and XII)
Nobuyuki Kawabata
Head of The Americas Division
Toru Sawada
General Manager, General Affairs Dept.
Toru Nakashima
General Manager, Corporate Planning Dept.
CHOW Ying Hoong
Deputy Head of Emerging Markets Business Division and
The Asia Pacific Division
Directors
Takashi Inagaki
Deputy Head of Wholesale Banking Unit (Credit Dept. I, Wholesale
Banking Unit)
Deputy Head of Retail Banking Unit (Credit Dept., Retail Banking Unit)
Atsushi Takada
Head of Higashinihon Daiichi Middle Market Banking Division
Akio Koizumi
Head of Shibuya Middle Market Banking Division and Yokohama Middle
Market Banking Division
Eiji Omori
Head of Higashinihon Daini Middle Market Banking Division
Noburu Kato
Deputy Head of Investment Banking Unit
Toshiyuki Tatsuta
President of Sumitomo Mitsui Banking Corporation (China) Limited
Tetsuro Imaeda
(Director without portfolio)
Kengo Nakagawa
Head of Osaka Daiichi Middle Market Banking Division and Chushikoku
Middle Market Banking Division
Teiko Kudo
Unit Leader, Growth Industry Cluster Dept.
William Karl
General Manager, Real Estate Finance Dept., Americas Division
Stanislas Roger
Deputy Head of Europe, Middle East and Africa Division and
Co-General Manager, Global Aviation and Maritime Finance Department
Kiyoshi Kageyama
Deputy Head of Wholesale Banking Unit (Credit Dept. II, Wholesale
Banking Unit)
Deputy Head of Retail Banking Unit (Credit Dept., Retail Banking Unit)
Yozo Takigawa
Deputy Head of International Banking Unit (Credit Depts., Americas
Division, Europe, Middle East and Africa Division and Asia Pacific Division,
Credit Management Dept., International Banking Unit)
Ryo Suzuki
Deputy Head of The Americas Division and General Manager, Finance
Strategy Dept., Americas Division
Toshiaki Nakai
General Manager, Credit & Investment Planning Dept.
Takashi Arima
Head of Kyoto Hokuriku Middle Market Banking Division and
General Manager, Kyoto Corporate Business Office-I
Iwao Kawaharada
Head of Kyushu Middle Market Banking Division and General Manager,
Fukuoka Corporate Business Office
Fumiharu Kozuka
General Manager, Corporate Credit Dept.
Hiroyoshi Korosue
Country Head of Thailand and General Manager, Bangkok Branch
Masaaki Sasai
General Manager, Structured Finance Dept.
Eiichi Sekiguchi
General Manager, Planning Dept., Wholesale Banking Unit
Reiji Domoto
General Manager, Osaka Corporate Banking Dept. l
Yusuke Hirako
General Manager, Tokyo Corporate Banking Dept. VII
Narumitsu Yoshioka
General Manager, Seoul Branch and Global Korea Corporate Banking
Department
Rie Asayama
General Manager, Quality Management Dept.
Akira Ueda
General Manager, Tokyo Corporate Banking Dept. IV
Muneo Kanamaru
General Manager, Human Resources Dept.
Masamichi Koike
General Manager, International Treasury Dept.
Hideo Goto
General Manager, Planning Dept., Investment Banking Unit
Toshihiro Sato
General Manager, Planning Dept., Treasury Unit
Rajeev Kannan
General Manager, Investment Banking Dept., Asia
Isaac Deutsch
General Manager, Specialized Finance Dept., Americas Division
John Ferreira
Deputy Head of The Asia Pacific Division
Etsunori Sakai
Head of Shinjuku Middle Market Banking Division and Saitama Ikebukuro
Middle Market Banking Division
Hiroyuki Miyajima
General Manager, Tokyo Corporate Banking Dept. V
Masataka Asagami
Head of Tokyo Toshin Middle Market Banking Division and Tokyo Higashi
Middle Market Banking Division
Shoji Masuda
General Manager, IT Planning Dept.
Yukiko Yoritaka
General Manager, Training Institute, Human Resources Dept.
Hiroshi Irie
General Manager, Singapore Branch
Takaki Ono
General Manager, Shinjuku Corporate Business Office-I
Kotaro Hagiwara
General Manager, Subsidiaries & Affiliates Dept.
Yoshihiro Hyakutome
General Manager, Emerging Markets Business Division
Takeshi Mikami
General Manager, Financial Accounting Dept.
Takashi Yamashita
General Manager, Planning Dept., Retail Banking Unit
Antony Yates
Chairman of SMBC Capital Markets, Inc.
and President of SMBC Nikko Capital Markets Limited
101
2016 Annual Report Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
CSR Dept.
Olympic and Paralympic Dept.
Financial Accounting Dept.
Equity Portfolio Management Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Training Institute
Counseling Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
Human Resources Development Dept.
Quality Management Dept.
Customer Relations Dept.
Securities Business Dept.
IT Innovation Dept.
Data Management Dept.
Retail
Banking Unit
Wholesale
Banking Unit
Risk Management Unit
Corporate Risk Management Dept.
Risk Management Information Dept.
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
International
Banking Unit
Compliance Unit
General Affairs Dept.
Financial Crime Prevention Dept.
AML Planning Dept.
Legal Dept.
Corporate Services Unit
Administrative Services Dept.
Secretariat
Corporate Real Estate Management Dept.
Operations Planning Dept.
Operations Support Dept.
Inter-Market Settlement Dept.
Treasury Unit
Investment
Banking Unit
SMBC Organization
(as of June 30, 2016)
Shareholders’
Meeting
Board of
Directors
Management
Committee
Corporate Auditors/
Corporate Auditors/
Board of Corporate Auditors
Board of Corporate Auditors
Office of Corporate Auditors
102
Planning Dept., Retail Banking Unit
Retail Compliance Dept.
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Retail Human Resources Dept.
Business Promotion Dept., Retail Banking Unit
Small and Medium Enterprises Planning Dept.
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Retail Marketing Dept., Retail Banking Unit
IT Strategy Dept.
Area Support Dept.
Loan Business Dept.
Consumer Finance & Transaction
Business Dept., Retail Banking Unit.
Credit Dept., Retail Banking Unit
Strategic Corporate Business Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Public & Financial Institutions Banking Dept.,
Wholesale Banking Unit
Real Estate Finance Dept.*1
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept. I, Wholesale Banking Unit
Credit Dept. II, Wholesale Banking Unit
Credit Administration Dept.
Planning Dept., East Asia Division
Greater China Dept.
Planning Dept., International Banking Unit
IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Planning Dept., Americas Division
Information Control Dept., Americas Division
Credit Dept., Americas Division
Risk Management Dept., Americas Division
Compliance Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
Legal and Compliance Dept., Europe,
Middle East and Africa Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
Risk Management Dept., Middle East and Africa Division
Planning Dept., Asia Pacific Division
Legal and Compliance Dept., Asia Pacific Division
Asia Pacific Training Dept.
Credit Dept., Asia Pacific Division
Risk Management Dept., Asia Pacific Division
Emerging Markets Business Division
Corporate Solutions Dept., Asia*3
Credit Management Dept., International Banking Unit
Credit Dept., East Asia, International Banking Unit
Environment Analysis Dept., International Banking Unit
Planning Dept., Treasury Unit
ALM Planning Dept.
Treasury Dept.
International Treasury Dept.
Trading Dept.
Treasury Marketing Dept.
Treasury Dept., Asia Pacific Division
Planning Dept., Investment Banking Unit
Structured Finance Dept.
Shipping Finance Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.*1
M&A Advisory Services Dept.
Merchant Banking Dept.
Financial Products Dept.
Securities Direct Sales Dept.
Distribution Dept.
Financial Solution Dept.
Growth Industry Cluster Dept.*2
Trust Services Dept.
Trust Business Operations Dept.
Investment Banking Dept., Asia
Corporate Solutions Dept., Asia *3
Small and Medium Enterprises Banking Division
Area Main Office
Branch
*5
Corporate Banking Division
Middle Market Banking Division
*4
*6
Global Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
East Asia Division
Americas Division
Europe, Middle East and Africa Division
Asia Pacific Division
Consumer Loan Promotion Office
Loan Promotion Office
Loan Support Office
Business Support Office
Private Banking Dept.
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Global Transaction Office*7
E-Transaction Business Center*7
Business Promotion Office
Corporate Business Office
Financial Development Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office*7
E-Transaction Business Center*7
Corporate Banking Dept.
Branches/Representative Offices in East Asia
Global FIG Dept.
Institutional Client Dept., Asia
Global Client Business Dept.
Global Corporate Investment Dept.
Global Trade Finance Dept.
Global Supply Chain Finance Dept.
Global Aviation and Maritime Finance Dept.
Departments of Americas Division
Departments of Europe,
Middle East and Africa Division
Branches/Representative Offices
in Asia Pacific Division
Global Transaction Office*7
E-Transaction Business Center*7
*1 Belongs to both Investment Banking Unit and Wholesale Banking Unit.
*2 Belongs to both Investment Banking Unit and Corporate Advisory Division.
*3 Belongs to both International Banking Unit and Investment Banking Unit
*4 (cid:127) Corporate Advisory Division
(cid:127) Advisory Dept. I
(cid:127) Advisory Dept. II
(cid:127) Advisory Dept. III
(cid:127) Corporate Research Dept.
(cid:127) Growth Industry Cluster Dept.*2
*5 (cid:127) Private Advisory Division
(cid:127) Private Advisory Business Dept.
(cid:127) Testamentary Trust Dept.
(cid:127) Private Banking Planning Dept.
(cid:127) Corporate Employees Business Dept.
(cid:127) Defined Contribution Dept.
*6 (cid:127) Transaction Business Division
(cid:127) Transaction Business Planning Dept.
(cid:127) Asset Finance Dept.
(cid:127) Transaction Banking Dept.
(cid:127) Global Transaction Banking Dept.
(cid:127) Global Advisory Dept.
(cid:127) Global Business Promotion Dept.
(cid:127) Global Transaction Support Dept.
(cid:127) Foreign Exchange Insourcing Business Dept.
*7 (cid:127) Belongs to Retail Banking Unit, Wholesale Banking Unit and International Banking Unit.
Branch Service Office
Head/Main Service Office
Public Institutions Operations Office
Souzoku-office Sub-Branch
2016 Annual Report
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
CSR Dept.
Olympic and Paralympic Dept.
Financial Accounting Dept.
Equity Portfolio Management Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Training Institute
Counseling Dept.
Diversity and Inclusion Dept.
Global Human Resources Dept.
Human Resources Development Dept.
Quality Management Dept.
Customer Relations Dept.
Securities Business Dept.
IT Innovation Dept.
Data Management Dept.
Retail
Banking Unit
Wholesale
Banking Unit
Risk Management Unit
Corporate Risk Management Dept.
Risk Management Information Dept.
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
International
Banking Unit
Compliance Unit
General Affairs Dept.
Financial Crime Prevention Dept.
AML Planning Dept.
Legal Dept.
Corporate Services Unit
Administrative Services Dept.
Secretariat
Corporate Real Estate Management Dept.
Operations Planning Dept.
Operations Support Dept.
Inter-Market Settlement Dept.
Treasury Unit
Investment
Banking Unit
Planning Dept., Retail Banking Unit
Retail Compliance Dept.
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Retail Human Resources Dept.
Business Promotion Dept., Retail Banking Unit
Small and Medium Enterprises Planning Dept.
Financial Consulting Dept., Retail Banking Unit
Area Support Dept.
Retail Marketing Dept., Retail Banking Unit
IT Strategy Dept.
Area Support Dept.
Loan Business Dept.
Consumer Finance & Transaction
Business Dept., Retail Banking Unit.
Credit Dept., Retail Banking Unit
Strategic Corporate Business Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Public & Financial Institutions Banking Dept.,
Wholesale Banking Unit
Real Estate Finance Dept.*1
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept. I, Wholesale Banking Unit
Credit Dept. II, Wholesale Banking Unit
Credit Administration Dept.
Planning Dept., East Asia Division
Greater China Dept.
Planning Dept., International Banking Unit
IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Planning Dept., Americas Division
Information Control Dept., Americas Division
Credit Dept., Americas Division
Risk Management Dept., Americas Division
Compliance Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
Legal and Compliance Dept., Europe,
Middle East and Africa Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
Risk Management Dept., Middle East and Africa Division
Planning Dept., Asia Pacific Division
Legal and Compliance Dept., Asia Pacific Division
Asia Pacific Training Dept.
Credit Dept., Asia Pacific Division
Risk Management Dept., Asia Pacific Division
Emerging Markets Business Division
Corporate Solutions Dept., Asia*3
Credit Management Dept., International Banking Unit
Credit Dept., East Asia, International Banking Unit
Environment Analysis Dept., International Banking Unit
Planning Dept., Treasury Unit
ALM Planning Dept.
Treasury Dept.
International Treasury Dept.
Trading Dept.
Treasury Marketing Dept.
Treasury Dept., Asia Pacific Division
Planning Dept., Investment Banking Unit
Structured Finance Dept.
Shipping Finance Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.*1
M&A Advisory Services Dept.
Merchant Banking Dept.
Financial Products Dept.
Securities Direct Sales Dept.
Distribution Dept.
Financial Solution Dept.
Growth Industry Cluster Dept.*2
Trust Services Dept.
Trust Business Operations Dept.
Investment Banking Dept., Asia
Corporate Solutions Dept., Asia *3
Small and Medium Enterprises Banking Division
Area Main Office
*5
Corporate Banking Division
Middle Market Banking Division
*4
*6
Global Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Branch
Consumer Loan Promotion Office
Loan Promotion Office
Loan Support Office
Business Support Office
Private Banking Dept.
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Global Transaction Office*7
E-Transaction Business Center*7
Business Promotion Office
Corporate Business Office
Financial Development Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office*7
E-Transaction Business Center*7
Corporate Banking Dept.
East Asia Division
Branches/Representative Offices in East Asia
Americas Division
Europe, Middle East and Africa Division
Asia Pacific Division
Global FIG Dept.
Institutional Client Dept., Asia
Global Client Business Dept.
Global Corporate Investment Dept.
Global Trade Finance Dept.
Global Supply Chain Finance Dept.
Global Aviation and Maritime Finance Dept.
Departments of Americas Division
Departments of Europe,
Middle East and Africa Division
Branches/Representative Offices
in Asia Pacific Division
Global Transaction Office*7
E-Transaction Business Center*7
*1 Belongs to both Investment Banking Unit and Wholesale Banking Unit.
*2 Belongs to both Investment Banking Unit and Corporate Advisory Division.
*3 Belongs to both International Banking Unit and Investment Banking Unit
*4 (cid:127) Corporate Advisory Division
(cid:127) Advisory Dept. I
(cid:127) Advisory Dept. II
(cid:127) Advisory Dept. III
(cid:127) Corporate Research Dept.
(cid:127) Growth Industry Cluster Dept.*2
*5 (cid:127) Private Advisory Division
(cid:127) Private Advisory Business Dept.
(cid:127) Testamentary Trust Dept.
(cid:127) Private Banking Planning Dept.
(cid:127) Corporate Employees Business Dept.
(cid:127) Defined Contribution Dept.
*6 (cid:127) Transaction Business Division
(cid:127) Transaction Business Planning Dept.
(cid:127) Asset Finance Dept.
(cid:127) Transaction Banking Dept.
(cid:127) Global Transaction Banking Dept.
(cid:127) Global Advisory Dept.
(cid:127) Global Business Promotion Dept.
(cid:127) Global Transaction Support Dept.
(cid:127) Foreign Exchange Insourcing Business Dept.
*7 (cid:127) Belongs to Retail Banking Unit, Wholesale Banking Unit and International Banking Unit.
Branch Service Office
Head/Main Service Office
Public Institutions Operations Office
Souzoku-office Sub-Branch
103
Shareholders’
Meeting
Board of
Directors
Management
Committee
Corporate Auditors/
Corporate Auditors/
Board of Corporate Auditors
Board of Corporate Auditors
Office of Corporate Auditors
2016 Annual Report
Principal Subsidiaries and Affiliates (as of March 31, 2016)
All companies shown hereunder are consolidated subsidiaries or affiliates of Sumitomo Mitsui Financial Group, Inc.
Those printed in green ink are consolidated subsidiaries or affiliates of Sumitomo Mitsui Banking Corporation.
■ Principal Domestic Subsidiaries
Note: Figures in parentheses ( ) in the voting rights columns indicate voting rights held indirectly via subsidiaries and affiliates.
Company Name
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
Sumitomo Mitsui Banking Corporation
1,770,996
100
27,550
0
(100)
15,000
60
(100)
100
(65.99)
(100)
100
100
—
100
—
100
—
—
—
—
—
Jun. 6, 1996
Commercial banking
Feb. 25, 1986
Trust service and commercial banking
Feb. 4, 1963
Leasing
Jun. 15, 2009
Securities
Mar. 2, 1948
Securities
Dec. 26, 1967
Credit card services
Sep. 11, 1950
Credit card services, Installment
Mar. 20, 1962
Consumer loans
Nov. 1, 2002
System engineering, data processing,
management consulting, and economic research
(46.43) 45.09 (1.33)
Sep. 6, 1949
Commercial banking
(60.15)
49.36 (0.35)
Jul. 1, 1922
Commercial banking
(100)
0
(99.99)
Jul. 14, 1976
Credit guarantee
100
(100)
(51)
(100)
(100)
—
100
41
—
—
Oct. 1, 2008
Business management
Feb. 23, 1983
Credit card services
Sep. 17, 1993
Automotive financing
Dec. 5, 1972
Collecting agent and factoring
May 17, 2000
Consumer lending
(50.21)
28.52 (4.01)
Mar. 29, 1969
System engineering and data processing
(100)
(100)
(80)
(40)
—
100
80
Oct. 16, 1990
System engineering and data processing
Apr. 1, 2004
Data processing service and e-trading consulting
Nov, 2, 2015
Settlement agent
0
(40)
Sep. 22, 2005
Venture capital
(100)
50
(1.63)
May 1, 1981
Management consulting and seminar
organizer
(69.71)
69.71
Sep. 21, 2000
Defined contribution plan administrator
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Apr. 1, 2004
Management support services
Mar. 11, 1999
Servicer
Apr. 16, 2009
Electronic monetary claims recording
Mar. 8, 2010
Investments for corporate revitalization and other
related investments
Jul. 15, 1982
Banking clerical work
May 27, 1998
Seminar organizer
Apr. 15, 2002
Banking clerical work
Oct. 16, 1995
Banking clerical work
Jan. 31, 1996
Banking clerical work
Mar. 15, 1990
Banking clerical work
Sep. 28, 1983
Banking clerical work
Sep. 24, 1976
Banking clerical work
Feb. 3, 2003
Banking clerical work
Feb. 1, 1984
Banking clerical work
10,000
27,270
34,000
82,843
140,737
10,000
27,484
47,039
187,720
49,859
7,438
7,700
71,705
20,000
2,054
450
10
312
500
1,100
1,600
100,010
1,000
500
100
90
10
10
100
30
30
20
70
10
30
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
SMBC Trust Bank Ltd.
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.
The Japan Research Institute, Limited
THE MINATO BANK, LTD.
Kansai Urban Banking Corporation
SMBC Guarantee Co., Ltd.
SMFG Card & Credit, Inc.
SAKURA CARD CO., LTD.
SMM Auto Finance, Inc.
SMBC Finance Service Co., Ltd.
Mobit Co., Ltd.
SAKURA KCS Corporation
JAIS, Limited
Financial Link Co., Ltd.
SMBC GMO PAYMENT, Inc.
SMBC Venture Capital Co., Ltd.
SMBC Consulting Co., Ltd.
Japan Pension Navigator Co., Ltd.
SMBC Loan Business Planning Co., Ltd.
SMBC Servicer Co., Ltd.
SMBC Electronic Monetary Claims
Recording Co., Ltd.
SMBC Principal Finance Co., Ltd.
SMBC Staff Service Co., Ltd.
SMBC Learning Support Co., Ltd.
SMBC PERSONNEL SUPPORT CO., LTD.
SMBC Center Service Co., Ltd.
SMBC Delivery Service Co., Ltd.
SMBC Green Service Co., Ltd.
SMBC International Business Co., Ltd.
SMBC Loan Business Service Co., Ltd.
SMBC Loan Administration and Operations
Service Co., Ltd.
SMBC Property Research Service Co., Ltd.
104
2016 Annual Report ■ Principal Overseas Subsidiaries
Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
Sumitomo Mitsui Banking Corporation
Europe Limited
Sumitomo Mitsui Banking Corporation
(China) Limited
Manufacturers Bank
Sumitomo Mitsui Banking Corporation
of Canada
Banco Sumitomo Mitsui
Brasileiro S.A.
JSC Sumitomo Mitsui Rus Bank
U.K.
China
U.S.A.
Canada
Brazil
Russia
PT Bank Sumitomo Mitsui Indonesia
Indonesia
US$3,200 million
CNY10.0 billion
US$80.786 million
C$344 million
R$667.806 million
RUB6.4 billion
Rp2,873.9 billion
Sumitomo Mitsui Banking Corporation
Malaysia Berhad
Malaysia
MYR1,575 million
SMBC Leasing and Finance, Inc.
SMBC Aviation Capital Limited
SMBC Rail Services LLC
SMBC Nikko Securities America, Inc.
U.S.A.
Ireland
U.S.A.
U.S.A.
SMBC Nikko Capital Markets Limited
U.K.
SMBC Capital Markets, Inc.
SMBC Financial Services, Inc.
U.S.A.
U.S.A.
SMBC Cayman LC Limited*
Cayman Islands
US$4,350
US$187 million
US$40.911 million
US$388
US$1,139 million
US$100
US$300
US$500
SMBC MVI SPC
Cayman Islands
US$195 million
SMBC DIP Limited
SFVI Limited
SMBC, S.A.P.I. DE C.V.,
SOFOM, E.N.R.
SMBC International Finance N.V.
Cayman Islands
US$8 million
British Virgin Islands
US$3,000
Mexico
Curaçao
MXN360 million
US$200,000
SMFG Preferred Capital USD 1 Limited
Cayman Islands
US$649.491 million
SMFG Preferred Capital GBP 1 Limited
Cayman Islands
SMFG Preferred Capital JPY 1 Limited
Cayman Islands
SMFG Preferred Capital USD 3 Limited
Cayman Islands
SMFG Preferred Capital GBP 2 Limited
Cayman Islands
SMFG Preferred Capital JPY 2 Limited
Cayman Islands
SMFG Preferred Capital JPY 3 Limited
Cayman Islands
£73.676 million
¥135,000 million
US$1,350 million
£250 million
¥286,000 million
¥268,400 million
SMBC Preferred Capital USD 1 Limited
Cayman Islands
US$662.647 million
SMBC Preferred Capital GBP 1 Limited
Cayman Islands
SMBC Preferred Capital JPY 1 Limited
Cayman Islands
£78.121 million
¥137,000 million
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
Mar. 5, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
Jun. 26, 1962
Commercial banking
Apr. 1, 2001
Commercial banking
Oct. 6, 1958
Commercial banking
(100)
99
(1)
May 8, 2009
Commercial banking
(98.47)
98.47
Aug. 22, 1989
Commercial banking
(100)
100
Dec. 22, 2010
Commercial banking
(100)
94.89
(3.81)
Nov. 9, 1990
Leasing, investments
(90)
(100)
30
Aug. 14, 1997
Leasing
0
(100)
May 11, 2011
Leasing
(100)
77.65 (22.35)
Aug. 8, 1990
Securities, investments
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
100
100
(100)
(100)
(100)
85
90
(15)
(10)
Mar. 13, 1990
Derivatives and investments,
securities services
Dec. 4, 1986
Derivatives and investments
100
100
100
100
100
100
100
—
—
—
—
—
—
—
100
100
100
Aug. 8, 1990
Feb. 7, 2003
Sep. 9, 2004
Mar. 16, 2005
Investments,
investment advisor
Credit guarantee,
bond investment
Loans, buying/
selling of monetary claims
Loans, buying/
selling of monetary claims
Jul. 30, 1997
Investments
Sep. 18, 2014
Money lending business
Jun. 25, 1990
Finance
Nov. 28, 2006
Finance
Nov. 28, 2006
Finance
Jan. 11, 2008
Finance
Jul. 8, 2008
Finance
Oct. 25, 2007
Finance
Nov. 3, 2008
Finance
Aug. 12, 2009
Finance
Nov. 28, 2006
Finance
Nov. 28, 2006
Finance
Jan. 11, 2008
Finance
* SMBC Cayman LC Limited, like other subsidiaries of SMBC, is a separate corporate entity with its own separate creditors and the claims of such creditors are prior
to the claims of SMBC, as the direct or indirect holder of the equity in such subsidiary.
105
2016 Annual Report Company Name
Country
Issued Capital
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
SMBC Preferred Capital USD 3 Limited
Cayman Islands
SMBC Preferred Capital GBP 2 Limited
Cayman Islands
SMBC Preferred Capital JPY 2 Limited
Cayman Islands
Sumitomo Mitsui Finance Dublin Limited Ireland
Sakura Finance Asia Limited
Hong Kong
SMBC Capital India Private Limited
SMBC Leasing Investment LLC
SMBC Capital Partners LLC
SMBC Derivative Products Limited
India
U.S.A.
U.S.A.
U.K.
US$1,358 million
£251.5 million
¥293,600 million
US$18 million
US$65.5 million
Rs400 million
US$490.5 million
US$10,000
US$200 million
0
0
0
0
0
0
0
0
0
(100)
(100)
(100)
(100)
(100)
100
100
100
100
100
Jul. 8, 2008
Finance
Oct. 25, 2007
Finance
Nov. 19, 2008
Finance
Sep. 19, 1989
Finance
Oct. 17, 1977
Investments
(100)
99.99
(0.00)
Apr. 3, 2008
Advisory services
(100)
(100)
(100)
0
0
(100)
Apr. 7, 2003
Investments in leasing
100
Dec. 18, 2003
Holding and trading securities
(100)
Apr. 18, 1995
Derivatives and investments
■ Principal Affiliates
Company Name
Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
The Japan Net Bank, Limited
PT Bank Tabungan Pensiunan Nasional Tbk
PT Oto Multiartha
PT Summit Oto Finance
37,250
Rp116,805 million
Rp928,707 million
Rp 2,442,060 million
Vietnam Export Import Commercial Joint Stock Bank
VND12,526.947 billion
ACLEDA Bank Plc.
The Bank of East Asia, Limited
Sumitomo Mitsui Auto Service Company, Limited
POCKET CARD CO., LTD.
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
US$ 266 million
HKD33,815 million
6,950
14,374
5,000
600
0
0
0
0
0
0
0
0
0
0
(50)
(49)
(41.16)
(40.45)
(35.10)
(35.10)
(15.07)
(18.25)
(18.10)
33.99
41.16
40.45
35.10
35.10
15.07
18.25
18.10
—
Sep. 19, 2000
Commercial banking
Feb. 5, 1958
Commercial banking
Mar. 28, 1994
Automotive financing
Sep. 20, 1990 Motorcycle financing
May 24, 1989
Commercial banking
Dec. 1, 2003
Commercial banking
Nov. 14, 1918
Commercial banking
Feb. 21, 1981
Leasing
(35.54)
35.54
May 25, 1982
Credit card services
—
49
—
40
24
40
Jul. 3, 2006
Nov. 29, 1972
System engineering and data
processing
System engineering and data
processing
Apr. 1, 1999
Investment advisory and investment
trust management
Dec. 1, 2002
Investment advisory and investment
trust management
Apr. 24, 2012
Investment management
Feb. 1, 2010
Investments, fund management
Daiwa SB Investments Ltd.
2,000
43.96
Sumitomo Mitsui Asset Management
Company, Limited
2,000
China Post & Capital Fund Management Co., Ltd.
CNY300 million
Daiwa Securities SMBC Principal
Investments Co., Ltd.
100
0
0
0
(40)
(24)
(40)
106
2016 Annual Report International Directory (as of June 30, 2016)
Asia and Oceania
SMBC Branches and
Representative Offices
Hong Kong Branch
7th & 8th Floor, One International
Finance Centre, 1 Harbour View
Street, Central, Hong Kong
Special Administrative Region,
The People’s Republic of China
Tel: 852-2206-2000
Taipei Branch
3F, Walsin Lihwa Xinyi Building,
No. 1 Songzhi Road, Xinyi District,
Taipei 110, Taiwan
Tel: 886 (2) 2720-8100
Seoul Branch
12F, Mirae Asset CENTER1 Bldg.
West Tower, 26, Eulji-ro 5-gil,
Jung-gu Seoul, 04539,
The Republic of Korea
Tel: 82 (2) 6364-7000
Singapore Branch
3 Temasek Avenue #06-01,
Centennial Tower, Singapore
039190, Republic of Singapore
Tel: 65-6882-0001
Sydney Branch
Level 35, The Chifley Tower,
2 Chifley Square, Sydney, NSW
2000, Australia
Tel: 61 (2) 9376-1800
Perth Branch
Level 19, Exchange Tower,
2 The Esplanade, Perth,
Western Australia 6000, Australia
Tel: 61 (8) 9492-4900
New Delhi Branch
13th Floor, Hindustan Times House,
18-20, Kasturba Gandhi Marg,
New Delhi 110001, India
Tel: 91 (11) 4768-9111
Bangkok Branch
8th-10th Floor, Q.House Lumpini
Building, 1 South Sathorn Road,
Tungmahamek, Sathorn, Bangkok
10120, Thailand
Tel: 66 (2) 353-8000
Chonburi Branch
Harbor Office 14th Floor, 4/222
Moo. 10 Sukhumvit Road,
Tungsukla, Sriracha, Chonburi
20230, Thailand
Tel: 66 (38) 400-700
Ho Chi Minh City Branch
15th Floor, Times Square Building,
22-36 Nguyen Hue Street, District 1,
Ho Chi Minh City, Vietnam
Tel: 84 (8) 3520-2525
Hanoi Branch
Unit 1201, 12th Floor, Lotte Center
Hanoi, 54 Lieu Giai Street, Cong Vi
Ward, Ba Dinh District, Hanoi,
Vietnam
Tel: 84 (4) 3946-1100
Manila Branch
21st Floor, Tower One & Exchange
Plaza, Ayala Triangle, Ayala Avenue,
Makati City, The Philippines 1226
Tel: 63 (2) 8807100
Yangon Branch
Level #5 Strand Square, No.53
Strand Road, Pabedan Township,
Yangon, Myanmar
Tel: 95 (1) 2307380
Labuan Branch
Level 12 (B&C), Main Office
Tower, Financial Park Labuan,
Jalan Merdeka, 87000 Labuan,
Federal Territory, Malaysia
Tel: 60 (87) 410955
Labuan Branch
Kuala Lumpur Office
Suite 22-03, Level 22, Integra Tower,
The Intermark, 348, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2176-1700
Ulaanbaatar Representative Office
Unit 1011, 10F, Central Tower,
2 Chinggis Square, 8th Khoroo,
Sukhbaatar District, Ulaanbaatar,
14200, Mongolia
Tel: 976-7011-8950
Phnom Penh Representative Office
Phnom Penh Tower (13 Floor)
No.445, Preah Monivong Blvd
corner with Street 232, Sangkat
Boeung Pralit, Khan 7 Makara,
Phnom Penh, Cambodia
Tel: 855 (23) 964-080
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Sumitomo Mitsui Banking
Corporation (China) Limited
Head Office (Shanghai)
11F, Shanghai World Financial Center,
100 Century Avenue, Pudong New
Area, Shanghai 200120,
The People’s Republic of China
Tel: 86 (21) 3860-9000
Sumitomo Mitsui Banking
Corporation (China) Limited
Guangzhou Branch
12F, International Finance Place,
No.8 Huaxia Road, Tianhe District,
Guangzhou 510623,
The People’s Republic of China
Tel: 86 (20) 3819-1888
Sumitomo Mitsui Banking
Corporation (China) Limited
Hangzhou Branch
5F, Offices At Kerry Centre,
385 Yan An Road, Xia Cheng District,
Hangzhou, Zhejiang Province,
The People's Republic of China*
Tel: 86 (571) 2889-1111
Sumitomo Mitsui Banking
Corporation (China) Limited
Chongqing Branch
Unit 2, 34F, Tower1, River
International, 22 Nanbin Road,
Nan’an District, Chongqing 400060,
The People’s Republic of China
Tel: 86 (23) 8812-5300
Sumitomo Mitsui Banking
Corporation (China) Limited
Shenzhen Branch
23/F, Tower Two, Kerry Plaza,
1 Zhongxinsi Road, Futian District,
Shenzhen 518048,
The People’s Republic of China
Tel: 86 (755) 2383-0980
Sumitomo Mitsui Banking
Corporation (China) Limited
Shenyang Branch
1606, 1 Building, Forum 66, No.1
Qingnian Street, Shenhe District,
Shenyang, Liaoning Province,
The People's Republic of China
Tel: 86 (24) 3128-7000
* SMBCCN Hangzhou Branch was relocated on July 11, 2016.
107
2016 Annual Report Sumitomo Mitsui Banking
Corporation (China) Limited
Suzhou Branch
12F, SND International Commerce
Tower, No.28 Shishan Road, Suzhou
New District, Suzhou, Jiangsu 215011,
The People’s Republic of China
Tel: 86 (512) 6606-6500
Sumitomo Mitsui Banking
Corporation (China) Limited
Dalian Branch
Senmao Building 4F-A, 147
Zhongshan Road, Xigang District,
Dalian, The People's Republic of
China
Tel: 86 (411) 3905-8500
Sumitomo Mitsui Banking
Corporation (China) Limited
Tianjin Branch
12F, The Exchange Tower 2,
189 Nanjing Road, Heping District,
Tianjin 300051, The People’s
Republic of China
Tel: 86 (22) 2330-6677
Sumitomo Mitsui Banking
Corporation (China) Limited
Beijing Branch
Unit1601,16F, North Tower,
Beijing Kerry Centre, No.1, Guang
Hua Road, Chao Yang District,
Beijing 100020, The People’s
Republic of China
Tel: 86 (10) 5920-4500
Sumitomo Mitsui Banking
Corporation (China) Limited
Kunshan Sub-Branch
Room 2001-2005, Taiwan Business
Association International Plaza,
No. 399 Qianjin East Road,
Kunshan, Jiangsu 215300,
The People’s Republic of China
Tel: 86 (512) 3687-0588
Sumitomo Mitsui Banking
Corporation (China) Limited
Shanghai Pilot Free Trade Zone
Sub-Branch
1F 7, 8 Building, No. 88, Ma Ji Road,
China (Shanghai) Pilot Free Trade
Zone, Shanghai 200131,
The People’s Republic of China
Tel: 86 (21) 2067-0200
Sumitomo Mitsui Banking
Corporation (China) Limited
Shanghai Puxi Sub-Branch
1, 12, 13, 12F, Maxdo Center,
8 Xingyi Road, Changning District,
Shanghai, The People’s Republic
of China
Tel: 86 (21) 2219-8000
Sumitomo Mitsui Banking
Corporation (China) Limited
Changshu Sub-Branch
8F, Science Innovation Building
(Kechuang Building), No.333
Dongnan Road, Changshu
Southeast Economic Development
Zone of Jiangsu, Changshu,
Jiangsu, The People’s Republic
of China
Tel: 86 (512) 5235-5553
Sumitomo Mitsui Banking
Corporation (China) Limited
Suzhou Industrial Park Sub-Branch
16F, International Building, No.2,
Suzhou Avenue West, Suzhou
Industrial Park, Jiangsu 215021,
The People’s Republic of China
Tel: 86 (512) 6288-5018
Sumitomo Mitsui Banking
Corporation (China) Limited
Tianjin Binhai Sub-Branch
8F, E2B, Binhai Financial Street,
No.20, Guangchang East Road,
TEDA, Tianjin 300457,
The People’s Republic of China
Tel: 86 (22) 6622-6677
PT Bank Sumitomo Mitsui Indonesia
Summitmas II, 10th Floor, JI.
Jend. Sudirman Kav. 61-62,
Jakarta 12190, Indonesia
Tel: 62 (21) 522-7011
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Suite 22-03, Level 22, Integra Tower,
The Intermark, 348, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2176-1500
SMBC Capital Markets (Asia)
Limited
7th Floor, One International
Finance Centre, 1 Harbour View
Street, Central, Hong Kong
Special Administrative Region,
The People’s Republic of China
Tel: 852-2532-8500
SMBC Nikko Capital Markets
Limited (Sydney Office)
Level 35, The Chifley Tower, 2
Chifley Square, Sydney, NSW 2000,
Australia
Tel: 61 (2) 9376-1895
SBCS Co., Limited
16th Floor, Q.House Lumpini
Building, 1 South Sathorn Road,
Tungmahamek, Sathorn,
Bangkok 10120, Thailand
Tel: 66 (2) 677-7270~5
PT. SBCS Indonesia
Summitmas II, 19th Floor, Jl. Jend.
Sudirman Kav. 61-62, Jakarta
12190, Indonesia
Tel: 62 (21) 252-3711
BSL Leasing Co., Ltd.
19th Floor, Sathorn City Tower,
175 South Sathorn Road,
Thungmahamek, Sathorn,
Bangkok, 10120, Thailand
Tel: 66 (2) 670-4700
SMBC SSC Sdn. Bhd.
Level 21, Integra Tower,
The Intermark, 348, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2176-1600
SMBC Metro Investment
Corporation
20th Floor, Rufino Pacific Tower,
6784 Ayala Avenue, Makati City,
Metro Manila, The Philippines
Tel: 63 (2) 811-0845
The Bank of East Asia, Limited
10 Des Voeux Road, Central,
Hong Kong
Tel: 852-3608-3608
Vietnam Export Import
Commercial Joint Stock Bank
8th Floor, Vincom Center Building,
72 Le Thanh Ton Street, Ben Nghe
Ward, District 1, Ho Chi Minh City,
Vietnam
Tel: 84 (8) 3821-0056
PT Bank Tabungan Pensiunan
Nasional Tbk
Menara BTPN, CBD Mega Kuningan
Jl. Dr. Ide Anak Agung Gde Agung,
Kav 5.5-5.6 Jakarta 12950, Indonesia
Tel: 62 (21) 300-26200
108
2016 Annual Report PT Oto Multiartha
Summitmas II, 18th floor, Jl. Jend.
Sudirman Kav. 61-62, Jakarta
12190, Indonesia
Tel: 62 (21) 522-6410
PT Summit Oto Finance
Summitmas II, 8th floor, Jl. Jend.
Sudirman Kav. 61-62, Jakarta
12190, Indonesia
Tel: 62 (21) 252-2788
ACLEDA Bank Plc.
#61, Preah Monivong Blvd.,
Sangkat Srah Chork, Khan Daun
Penh, Phnom Penh,
Kingdom of Cambodia
Tel: 855 (23) 998-777
The Japan Research Institute
(Shanghai) Solution Co., Ltd.
Unit 141, 18F, Hang Seng Bank
Tower, 1000 Lujiazui Ring Road,
Pudong New Area,
Shanghai, 200120,
The People’s Republic of China
Tel: 86 (21) 6841-2788
The Japan Research Institute
(Shanghai) Consulting Co., Ltd.
Unit 41, 18F, Hang Seng Bank
Tower, 1000 Lujiazui Ring Road,
Pudong New Area,
Shanghai, 200120,
The People’s Republic of China
Tel: 86 (21) 6841-1288
The Japan Research Institute
(Shanghai) Consulting Co., Ltd.
Beijing Branch
Unit 906, 9F, Kerry Centre,
1 Guanghua Street, Chaoyang Area,
Beijing 100020, The People’s
Republic of China
Tel: 86 (10) 8529-8141
Sumitomo Mitsui Finance and
Leasing (Singapore) Pte. Ltd.
152 Beach Road,
21-05 Gateway East,
Singapore 189721
Tel: 65-6224-2955
Sumitomo Mitsui Finance and
Leasing (Hong Kong) Ltd.
Unit 4206-8,42/F, Sunlight Tower,
248 Queen’s Road East, Wanchai,
Hong Kong
Tel: 852-2523-4155
SMFL Leasing (Thailand) Co., Ltd.
30th Floor, Q. House
Lumpini Building,
1 South Sathorn Road,
Tungmahamek, Sathorn,
Bangkok 10120, Thailand
Tel: 66 (2) 677-7400
Sumitomo Mitsui Finance and
Leasing (China) Co., Ltd.
Unit 2302, TaiKoo Hui Tower 1,
385 Tianhe Road, Tianhe District,
Guangzhou, The People’s Republic
of China
Tel: 86 (20) 8755-0021
Shanghai Sumitomo Mitsui General
Finance and Leasing Co., Ltd.
18th Floor, Shanghai Times Square,
93 Middle Huaihai Road,
Huangpu District, Shanghai,
The People’s Republic of China
Tel: 86 (21) 5396-5522
Shanghai Sumitomo Mitsui
Finance and Leasing Co., Ltd.
Room 723, 7/F, No. 6 Ji Long Rd,
China (Shanghai) Pilot Free Trade
Zone, Shanghai 200131,
The People’s Republic of China
Tel: 86 (21) 5065-6052
Sumitomo Mitsui Finance and
Leasing (China) Co., Ltd.
Beijing Branch
Unit 3001-3007, 30F, North Tower,
Beijing Kerry Centre, 1 Guanghua
Road, Chaoyang District, Beijing,
The People's Republic of China
Tel: 86 (10) 8529-7887
Shanghai Sumitomo Mitsui General
Finance and Leasing Co., Ltd.
Chengdu Branch
Room 1305, YanLord Landmark,
No.1, Section 2, Renmin South
Road, Chengdu, The People's
Republic of China
Tel: 86 (28) 8691-7181
SMFL Leasing (Malaysia) Sdn. Bhd.
Letter Box No.58, 11th Floor,
UBN Tower, 10, Jalan P. Ramlee,
50250 Kuala Lumpur, Malaysia
Tel: 60 (3) 2026-2619
PT. SMFL Leasing Indonesia
Summitmas II, 12th Floor,
Jl. Jend. Sudirman Kav. 61-62
Jakarta Selatan 12190, Indonesia
Tel: 62 (21) 520-2083
Sumitomo Mitsui Auto Leasing &
Service (Thailand) Co., Ltd.
161, Nantawan Building, 17th Floor,
Rajdamri Road, Lumpinee,
Pathumwan, Bangkok 10330,
Thailand
Tel: 66-2252-9511
Summit Auto Lease Australia Pty
Ltd.
Unit 7, 38-46 South Street
Rydalmere, NSW 2116 Australia
Tel: 61 (2) 9638-7833
SMAS Auto Leasing India Private
Limited
Office No. 406, 4th Floor,
Worldmark-2, Asset area no.8,
Aerocity Hospitality District,
New Delhi-110037, India
Tel: 91 (11) 4828-8300
PROMISE (HONG KONG) CO., LTD.
14th Floor, Luk Kwok Centre, 72
Gloucester Road, Wanchai, Hong
Kong Special Administrative Region,
The People’s Republic of China
Tel: 852 (3199) 1000
Liang Jing Co., Ltd.
8FI, No.6, Sec 3, Min Chuan E. Rd.,
Taipei, Taiwan 10477, R.O.C.
Tel: 886 (2) 2515-1598
PROMISE (THAILAND) CO., LTD.
12th, 15th, 22nd Floor, Capital
Tower, All Seasons Place, 87/1
Wireless Road, Lumpini,
Phatumwan, Bangkok 10330,
Thailand
Tel: 66 (2) 655-8574
PROMISE (SHENZHEN) CO., LTD.
1001, 10/F, Tower A, Kingkey 100
Building, No. 5016 Shennan East
Road, Luohu District, Shenzhen
518000, The People’s Republic
of China
Tel: 86 (755) 2396-6200
PROMISE (SHENYANG) CO., LTD.
5F, No.1 Yuebin Street, Shenhe
District, Shenyang,
Liaoning Province 110013,
The People’s Republic of China
Tel: 86 (24) 2250-6200
109
2016 Annual Report Promise Consulting Service
(Shenzhen) Co., Ltd.
1003, 10/F, Tower A, Kingkey 100
Building, No. 5016 Shennan East
Road, Luohu District, Shenzhen
518000, The People’s Republic
of China
Tel: 86 (755) 3698-5100
PROMISE (TIANJIN) CO., LTD.
Room H-I-K 17th Floor, TEDA
Building No. 256, Jie-Fang Nan
Road, Hexi District, Tianjin 300042,
The People’s Republic of China
Tel: 86 (22) 5877-8700
PROMISE (CHONGQING) CO., LTD.
38F, Xinhua International Mansion,
No.27, Minquan Road, Yuzhong
District, Chongqing, 400010,
The People’s Republic of China
Tel: 86 (23) 6037-5200
PROMISE (CHENGDU) CO., LTD.
Level 18, Minyoun Financial Plaza,
No.35 Zidong Section Dongda
Street, Jinjiang District, Chengdu,
610061, The People’s Republic
of China
Tel: 86 (28) 6528-5000
PROMISE (WUHAN) CO., LTD.
14F, Block A, Pingan International
Financial Building, 216 Gongzheng
Road, Wuchang, Wuhan, Hubei,
430000, The People’s Republic
of China
Tel: 86 (27) 8711-6300
PROMISE (SHANGHAI) CO., LTD.
Room 03-10, Floor 14, China
Insurance Building No.166, East
Lujiazui Road, Pudong New Area,
Shanghai 200120, The People’s
Republic of China
Tel: 86 (21) 2066-6262
PROMISE ASSET MANAGEMENT
(TAIWAN) CO., LTD.
8F No.6, Sec 3, Min Chuan E. Rd.,
Taipei, Taiwan 10477, R.O.C.
Tel: 886 (2) 2515-6369
SMCC Consulting (Shanghai) Co.,
Ltd.
Room 5135, 51F Raffles City Centre,
268 Xi Zang Middle Road, Huang
Pu District, Shanghai 200001,
The People’s Republic of China
Tel: 86 (21) 2312-7632
110
The Americas
SMBC Branches and
Representative Offices
New York Branch
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-4000
Cayman Branch
P.O. Box 694, Edward Street,
George Town, Grand Cayman,
Cayman Islands
Los Angeles Branch
601 South Figueroa Street,
Suite 1800, Los Angeles,
CA 90017, U.S.A.
Tel: 1 (213) 452-7800
San Francisco Branch
555 California Street, Suite 3350,
San Francisco, CA 94104, U.S.A.
Tel: 1 (415) 616-3000
Houston Representative Office
Two Allen Center, 1200 Smith Street,
Suite 1140, Houston, Texas
77002, U.S.A.
Tel: 1 (713) 277-3500
Mexico City Representative Office
Torre Altiva Boulevard Manuel
Avila Camacho 138 Piso 2, Loc. B
Lomas de Chapultepec, 11000
Mexico, D.F., Mexico
Tel: 52 (55) 2623-0200
Bogota Representative Office
Carrera 9 #113-52, Oficina 808,
Bogotá D.C., Colombia
Tel: 57 (1) 619-7200
Lima Representative Office
Avenida Canaval y Moreyra 380,
Oficina 702, San Isidro, Lima 27,
Peru
Tel: 51 (1) 200-3600
Santiago Representative Office
Av. El Golf 82, Of. 1001, Las
Condes, Santiago, Chile
Tel: 56 (2) 2896-8440
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Manufacturers Bank
515 South Figueroa Street,
Los Angeles, CA 90071, U.S.A.
Tel: 1 (213) 489-6200
Sumitomo Mitsui Banking
Corporation of Canada
Ernst & Young Tower, Toronto
Dominion Centre, Suite 1400,
P.O. Box 172, 222 Bay Street,
Toronto, Ontario M5K
1H6, Canada
Tel: 1 (416) 368-4766
Banco Sumitomo Mitsui Brasileiro
S.A.
Avenida Paulista, 37-11 e 12
andar Sao Paulo-SP-CEP 01311-
902, Brazil
Tel: 55 (11) 3178-8000
Banco Sumitomo Mitsui Brasileiro
S. A. Cayman Branch
11 Dr. Roy’s Drive, George Town,
Grand Cayman, Cayman Islands
SMBC Capital Markets, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5100
SMBC Leasing and Finance, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5200
SMBC Rail Services LLC
300 S. Riverside Plaza, Suite 1925,
Chicago, IL 60606, U.S.A.
Tel: 1 (312) 559-4800
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Torre Altiva Boulevard Manuel Avila
Camacho 138 Piso 2, Loc. B Lomas
de Chapultepec, 11000 Mexico,
D.F., Mexico
Tel: 52 (55) 2623-1373
SMBC Nikko Securities America,
Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5300
2016 Annual Report JRI America, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-4200
Sumitomo Mitsui Finance and
Leasing Company, Limited
New York Branch
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-4844
Europe, Middle-East
and Africa
SMBC Branches and
Representative Offices
Düsseldorf Branch
Prinzenallee 7, 40549 Düsseldorf,
Germany
Tel: 49 (211) 36190
Frankfurt Branch
Opernturm, 16th Floor,
Bockenheimer Landstrasse 2-4,
60306, Frankfurt am Main, Germany
Tel: 49 (69) 667748-245
Brussels Branch
Neo Building, Rue Montoyer 51,
Box 6, 1000 Brussels, Belgium
Tel: 32 (2) 551-5000
Dubai Branch
Building One, 5th Floor, Gate
Precinct, Dubai International
Financial Centre, PO Box 506559
Dubai, United Arab Emirates
Tel: 971 (4) 428-8000
Abu Dhabi Representative Office
Office No.801, Makeen Tower,
Al Zahiyah, Abu Dhabi,
United Arab Emirates
Tel: 971 (2) 495-4000
Istanbul Representative Office
Metrocity Is Merkezi, Kirgulu Sokak
No:4 Kat:7/A D Blok, Esentepe
Mahallesi, Sisli 34394, Istanbul,
Republic of Turkey
Tel: 90 (212) 371-5900
Doha QFC Office
Office 1901, 19th Floor, Qatar
Financial Centre Tower,
Diplomatic Area-West bay, Doha,
Qatar, P.O.Box 23769
Tel: 974-4496-7572
Bahrain Representative Office
No.406 & 407 (Entrance 3, 4th
Floor) Manama Centre,
Government Road, Manama,
State of Bahrain
Tel: 973-17223211
Johannesburg Representative
Office
Building Four, First Floor,
Commerce Square,
39 Rivonia Road, Sandhurst,
Sandton 2196, South Africa
Tel: 27 (11) 219-5300
Cairo Representative Office
23rd Floor, Nile City Towers,
North Tower, 2005C, Cornish El Nile,
Ramlet Boulak, Cairo, Egypt
Tel: 20 (2) 2461-9566
Tehran Representative Office
First Floor, No. 17, Haghani
Expressway (north side),
Between Modarres & Africa,
Tehran 1518858136,
Islamic Republic of Iran
Tel: 98 (21) 8888-4301/4302
SMBC Principal Subsidiaries/
Affiliates
SMFG Network
Sumitomo Mitsui Banking
Corporation Europe Limited
Head Office
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7786-1000
Sumitomo Mitsui Banking
Corporation Europe Limited
Amsterdam Branch
World Trade Center, Tower D, Level
12, Strawinskylaan 1733, 1077 XX
Amsterdam, The Netherlands
Tel: 31 (20) 718-3888
Sumitomo Mitsui Banking
Corporation Europe Limited
Dublin Branch
IFSC House, IFSC, Dublin 1, Ireland
Tel: 353 (1) 859-9300
Sumitomo Mitsui Banking
Corporation Europe Limited
Paris Branch
1/3/5 rue Paul Cézanne, 75008,
Paris, France
Tel: 33 (1) 44 (90) 48-00
Sumitomo Mitsui Banking
Corporation Europe Limited
Prague Branch
International Business Centre,
Pobrezni 3 186 00 Prague 8,
Czech Republic
Tel: 420 (295) 565-800
Sumitomo Mitsui Banking
Corporation Europe Limited
Madrid Branch
Calle Pedro Teixeira 8, Edificio Iberia
Mart I, planta 4a., 28020 Madrid,
Spain
Tel: 34 (91) 312-7300
Sumitomo Mitsui Banking
Corporation Europe Limited
Milan Branch
Via della Spiga 30/ Via Senato 25,
20121 Milan, Italy
Tel: 39 (02) 7636-1700
JSC Sumitomo Mitsui Rus Bank
Presnenskaya naberezhnaya,
house 10, block C, Moscow,
123317 Russian Federation
Tel: 7 (495) 287-8200
SMBC Nikko Capital Markets
Limited
One New Change, London EC4M
9AF, U.K.
Tel: 44 (20) 3527-7000
SMBC Derivative Products Limited
One New Change, London
EC4M 9AF, U.K.
Tel: 44 (20) 3527-7000
Sumitomo Mitsui Finance Dublin
Limited
La Touche House, I.F.S.C.,
Custom House Docks, Dublin 1,
Ireland
Tel: 353 (1) 670-0066
JRI Europe, Limited
99 Queen Victoria Street, London
EC4V 4EH, U.K.
Tel: 44 (20) 7406-2700
SMBC Aviation Capital Limited
IFSC House, IFSC, Dublin 1, Ireland
Tel: 353 (1) 859-9000
111
2016 Annual Report *SMBCE:Sumitomo Mitsui Banking Corporation Europe Limited
Overseas service network (as of June 30, 2016)
Total: 72
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Also showing principal overseas subsidiaries
SMBCE* Dublin Branch
Sumitomo Mitsui Finance Dublin Limited
SMBC Aviation Capital Limited
SMBCE* Amsterdam
Branch
Brussels Branch
JSC Sumitomo Mitsui Rus Bank
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Nikko Capital
Markets Limited
SMBCE* Paris Branch
Frankfurt Branch
SMBCE* Prague Branch
Düsseldorf Branch
SMBCE* Milan Branch
Ulaanbaatar Representative Office
SMBCE* Madrid Branch
Istanbul Representative Office
Shenyang Branch
SMBC Rail Services LLC
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
Dubai Branch
Doha QFC Office
Abu Dhabi Representative Office
New Delhi Branch
Johannesburg Representative Office
Perth Branch
Sydney Branch
SMBC Nikko Capital Markets Limited (Sydney Office)
GLOBAL NETWORK
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Head Office (Shanghai)
Kunshan Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Guangzhou Branch
Shanghai Pilot Free Trade Zone Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Hangzhou Branch
Shanghai Puxi Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Chongqing Branch
Changshu Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenzhen Branch
Suzhou Industrial Park Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenyang Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Suzhou Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Dalian Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Tianjin Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
Beijing Branch
Tianjin Binhai Sub-Branch
■ PT Bank Sumitomo Mitsui Indonesia
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ Hong Kong Branch
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sydney Branch
■ Perth Branch
■ New Delhi Branch
■ Bangkok Branch
■ Chonburi Branch
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Labuan Branch
■ Labuan Branch Kuala Lumpur Office
■ Ulaanbaatar Representative Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ SMBC Nikko Capital Markets Limited (Sydney Office)
■ SBCS Co., Limited
■ PT. SBCS Indonesia
■ SMBC SSC Sdn. Bhd.
■ SMBC Metro Investment Corporation
■ The Bank of East Asia, Limited
■ Vietnam Export Import Commercial Joint Stock Bank
■ PT Bank Tabungan Pensiunan Nasional Tbk
■ ACLEDA Bank Plc.
112
Los Angeles Branch
San Francisco Branch
Beijing Branch
Manufacturers Bank
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Houston Representative Office
Sumitomo Mitsui Banking Corporation of Canada
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing Branch
Seoul
Branch
Kunshan Sub-Branch
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Trade Zone Sub-Branch
Hangzhou
Branch
Hanoi Branch
Guangzhou
Branch
Taipei Branch
Shenzhen Branch
The Bank of East Asia, Limited
Hong Kong Branch
SMBC Capital Markets (Asia) Limited
SMBC Metro Investment Corp.
Manila Branch
Yangon Branch
Bangkok Branch
SBCS Co., Limited
Chonburi Branch
ACLEDA Bank Plc.
Phnom Penh Representative Office
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Labuan Branch
Kuala Lumpur Office
SMBC SSC Sdn. Bhd.
Ho Chi Minh City Branch
Vietnam Export Import
Commercial Joint Stock Bank
Labuan Branch
Singapore Branch
PT Bank Sumitomo Mitsui Indonesia
PT. SBCS Indonesia
PT Bank Tabungan Pensiunan Nasional Tbk
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
Europe, Middle East and Africa
■ Sumitomo Mitsui Banking Corporation
■ Dubai Branch
Banco Sumitomo Mitsui Brasileiro S.A.
Cayman Branch
Cayman Branch
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Bogota Representative Office
Lima Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
The Americas
■ New York Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Cayman Branch
■ Houston Representative Office
■ Mexico City Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ Manufacturers Bank
■ Sumitomo Mitsui Banking Corporation
of Canada
■ Banco Sumitomo Mitsui Brasileiro S.A.
■ Banco Sumitomo Mitsui Brasileiro S.A.
Cayman Branch
■ SMBC Capital Markets, Inc.
■ SMBC Nikko Securities America, Inc.
■ SMBC Leasing and Finance, Inc.
■ SMBC Rail Services LLC
■ SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Europe Limited Head Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited Amsterdam Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Dublin Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Paris Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Prague Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Madrid Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Milan Branch
■ Düsseldorf Branch
■ Frankfurt Branch
■ Brussels Branch
■ Abu Dhabi Representative Office
■ Istanbul Representative Office
■ Doha QFC Office
■ Bahrain Representative Office
■ Johannesburg Representative Office
■ Cairo Representative Office
■ Tehran Representative Office
■ JSC Sumitomo Mitsui Rus Bank
■ SMBC Nikko Capital Markets Limited
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
2016 Annual Report *SMBCE:Sumitomo Mitsui Banking Corporation Europe Limited
SMBCE* Dublin Branch
Sumitomo Mitsui Finance Dublin Limited
SMBC Aviation Capital Limited
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Nikko Capital
Markets Limited
SMBCE* Paris Branch
SMBCE* Amsterdam
Branch
Brussels Branch
Frankfurt Branch
SMBCE* Prague Branch
Düsseldorf Branch
SMBCE* Milan Branch
JSC Sumitomo Mitsui Rus Bank
SMBCE* Madrid Branch
Istanbul Representative Office
Ulaanbaatar Representative Office
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
Dubai Branch
Doha QFC Office
Abu Dhabi Representative Office
Johannesburg Representative Office
Perth Branch
Sydney Branch
SMBC Nikko Capital Markets Limited (Sydney Office)
GLOBAL NETWORK
Asia and Oceania
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Head Office (Shanghai)
Kunshan Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Pilot Free Trade Zone Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Bangkok Branch
■ Chonburi Branch
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Labuan Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ PT Bank Sumitomo Mitsui Indonesia
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
Shanghai Puxi Sub-Branch
Changshu Sub-Branch
Suzhou Industrial Park Sub-Branch
Tianjin Binhai Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Hong Kong Branch
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sydney Branch
■ Perth Branch
■ New Delhi Branch
Guangzhou Branch
Hangzhou Branch
Chongqing Branch
Shenzhen Branch
Shenyang Branch
Suzhou Branch
Dalian Branch
Tianjin Branch
Beijing Branch
■ Labuan Branch Kuala Lumpur Office
■ Ulaanbaatar Representative Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ SMBC Nikko Capital Markets Limited (Sydney Office)
■ SBCS Co., Limited
■ PT. SBCS Indonesia
■ SMBC SSC Sdn. Bhd.
■ SMBC Metro Investment Corporation
■ The Bank of East Asia, Limited
■ Vietnam Export Import Commercial Joint Stock Bank
■ PT Bank Tabungan Pensiunan Nasional Tbk
■ ACLEDA Bank Plc.
Overseas service network (as of June 30, 2016)
Total: 72
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Shenyang Branch
SMBC Rail Services LLC
Beijing Branch
Manufacturers Bank
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
Sumitomo Mitsui Banking Corporation of Canada
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Houston Representative Office
New Delhi Branch
Yangon Branch
Bangkok Branch
SBCS Co., Limited
Chonburi Branch
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing Branch
Seoul
Branch
Kunshan Sub-Branch
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Trade Zone Sub-Branch
Hangzhou
Branch
Guangzhou
Branch
Taipei Branch
Hanoi Branch
Shenzhen Branch
The Bank of East Asia, Limited
Hong Kong Branch
SMBC Capital Markets (Asia) Limited
SMBC Metro Investment Corp.
Manila Branch
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Labuan Branch
Kuala Lumpur Office
SMBC SSC Sdn. Bhd.
Phnom Penh Representative Office
ACLEDA Bank Plc.
Ho Chi Minh City Branch
Vietnam Export Import
Commercial Joint Stock Bank
Labuan Branch
Singapore Branch
PT Bank Sumitomo Mitsui Indonesia
PT. SBCS Indonesia
PT Bank Tabungan Pensiunan Nasional Tbk
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
The Americas
Europe, Middle East and Africa
■ New York Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Cayman Branch
■ Houston Representative Office
■ Mexico City Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ Manufacturers Bank
■ Sumitomo Mitsui Banking Corporation
of Canada
■ Banco Sumitomo Mitsui Brasileiro S.A.
■ Banco Sumitomo Mitsui Brasileiro S.A.
Cayman Branch
■ SMBC Capital Markets, Inc.
■ SMBC Nikko Securities America, Inc.
■ SMBC Leasing and Finance, Inc.
■ SMBC Rail Services LLC
■ SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
■ Sumitomo Mitsui Banking Corporation
Europe Limited Head Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited Amsterdam Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Dublin Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Paris Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Prague Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Madrid Branch
■ Sumitomo Mitsui Banking Corporation
Europe Limited Milan Branch
■ Düsseldorf Branch
■ Frankfurt Branch
■ Brussels Branch
Cayman Branch
Banco Sumitomo Mitsui Brasileiro S.A.
Cayman Branch
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Bogota Representative Office
Lima Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
■ Dubai Branch
■ Abu Dhabi Representative Office
■ Istanbul Representative Office
■ Doha QFC Office
■ Bahrain Representative Office
■ Johannesburg Representative Office
■ Cairo Representative Office
■ Tehran Representative Office
■ JSC Sumitomo Mitsui Rus Bank
■ SMBC Nikko Capital Markets Limited
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
113
2016 Annual Report 114
2016 Annual Report Appendix II
CONTENTS
Financial Data
SMFG
Financial Highlights
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of
Comprehensive Income
Consolidated Statements of
Changes in Net Assets
Consolidated Statements of Cash Flows
116
117
119
121
122
125
Notes to Consolidated Financial Statements 127
Independent Auditor’s Report
SMBC
Supplemental Information
SMFG
Income Analysis (Consolidated)
Assets and Liabilities (Consolidated)
Capital (Non-consolidated)
193
194
200
203
206
SMBC
Financial Highlights
Income Analysis (Consolidated)
Assets and Liabilities (Consolidated)
Income Analysis (Non-consolidated)
Deposits (Non-consolidated)
Loans (Non-consolidated)
Securities (Non-consolidated)
Ratios (Non-consolidated)
Capital (Non-consolidated)
Others (Non-consolidated)
247
248
251
253
257
259
264
266
268
269
Trust Assets and Liabilities (Non-consolidated) 271
Basel III Information
Basel III Information
SMFG
SMBC
Capital Ratio Information (Consolidated)
209
Capital Ratio Information (Consolidated)
272
Leverage Ratio Information (Consolidated) 243
Leverage Ratio Information (Consolidated) 279
Liquidity Risk Information (Consolidated)
244
Liquidity Risk Information (Consolidated)
280
Indicators for assessing Global Systemically
Important Banks (G-SIBs)
246
Capital Ratio Information (Non-consolidated) 282
Liquidity Risk Information (Non-consolidated) 290
Compensation
SMFG
SMBC
Compensation (Consolidated)
294
Compensation
297
006_0800801372808.indd 115
115
2016/08/10 10:39:06
2016 Annual Report Financial Highlights
Sumitomo Mitsui Financial Group (Consolidated)
Year ended March 31
For the Year:
2016
2015
Ordinary income ����������������������������������������������������������� ¥ 4,772,100
Ordinary profit ��������������������������������������������������������������
985,284
Profit attributable to owners of parent �������������������������
646,687
Comprehensive income �����������������������������������������������
178,328
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 10,447,669
Total assets ������������������������������������������������������������������
186,585,842
Capital ratio ������������������������������������������������������������������
/
Total capital ratio (International Standard) �������������������
Tier 1 capital ratio (International Standard) ������������������
Common equity Tier 1 capital ratio
17.02%
13.68%
(International Standard) ���������������������������������������������
Number of employees ��������������������������������������������������
11.81%
73,652
¥ 4,851,202
1,321,156
753,610
2,063,510
¥ 10,696,271
183,442,585
/
16�58%
12�89%
11�30%
68,739
Millions of yen
2014
¥ 4,641,880
1,432,332
835,357
1,303,295
¥ 9,005,019
161,534,387
/
15�51%
12�19%
10�63%
66,475
2013
2012
¥ 4,326,424
1,073,745
794,059
1,458,107
¥ 3,945,282
935,571
518,536
665,232
¥ 8,443,218
148,696,800
/
¥ 7,254,976
143,040,672
16�93%
14�71%
10�93%
9�38%
64,635
/
/
/
64,225
Note: “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.
116
010_0800801372808.indd 116
2016/08/10 10:40:38
SMFG2016 Annual Report Consolidated Balance Sheets
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
March 31
Assets:
Cash and due from 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 ����������������������������������������������
Assets for rent ���������������������������������������������������
Buildings ������������������������������������������������������������
Land ������������������������������������������������������������������
Lease assets �����������������������������������������������������
Construction in progress �����������������������������������
Other tangible fixed assets �������������������������������
Intangible fixed assets ��������������������������������������������
Software ������������������������������������������������������������
Goodwill ������������������������������������������������������������
Lease assets �����������������������������������������������������
Other intangible fixed assets �����������������������������
Net defined benefit asset ���������������������������������������
Deferred tax assets ������������������������������������������������
Customers’ liabilities for acceptances and
guarantees ������������������������������������������������������������
Reserve for possible loan losses ����������������������������
Total assets �������������������������������������������������������������
Millions of yen
2015
2016
*8
*8
*8
*8
*1, *2, *8, *15
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*8
*8, *10, *11, *12
¥ 39,748,979
1,326,965
746,431
6,477,063
4,286,592
7,483,681
7,087
29,633,667
73,068,240
1,907,667
1,909,143
6,156,091
2,770,853
1,790,787
313,381
469,167
8,368
76,413
112,735
819,560
359,216
351,966
307
108,070
376,255
127,841
*8
*8
*8
*8
*1, *2, *8, *15
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*8
*8, *10, *11, *12
¥ 42,789,236
1,291,365
494,949
7,972,918
4,350,012
8,063,281
5,163
25,264,445
75,066,080
1,577,167
1,987,034
6,702,774
2,919,424
1,884,778
386,222
489,144
7,558
27,188
124,531
878,265
408,272
339,185
268
130,538
203,274
125,832
Millions of
U�S� dollars
2016
$ 379,943
11,467
4,395
70,795
38,626
71,597
46
224,334
666,543
14,004
17,644
59,517
25,923
16,736
3,429
4,343
67
241
1,106
7,798
3,625
3,012
2
1,159
1,805
1,117
7,267,713
(671,248)
¥183,442,585
7,519,635
(625,019)
¥186,585,842
66,770
(5,550)
$1,656,774
010_0800801372808.indd 117
117
2016/08/10 10:40:38
SMFG2016 Annual Report Consolidated Balance Sheets
(Continued)
March 31
Liabilities and net assets:
Liabilities:
Deposits ����������������������������������������������������������������
Negotiable certificates of deposit ��������������������������
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 ������������������������������
Net defined benefit liability ������������������������������������
Reserve for executive retirement benefits ��������������
Reserve for point service program �������������������������
Reserve for reimbursement of deposits �����������������
Reserve for losses on interest repayment ��������������
Reserves 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 (losses) on other
securities ������������������������������������������������������������
Net deferred gains (losses) on hedges �������������������
Land revaluation excess �����������������������������������������
Foreign currency translation adjustments ��������������
Accumulated remeasurements of defined
benefit plans ���������������������������������������������������������
Total accumulated other comprehensive
income ������������������������������������������������������������������
Stock acquisition rights �����������������������������������������
Non-controlling interests ����������������������������������������
Total net assets ������������������������������������������������������
Total liabilities and net assets ���������������������������������
Millions of yen
2015
2016
Millions of
U�S� dollars
2016
*8
*8
*8
*8
*8
*8, *13
*14
*8
*10
*8
*10
¥101,047,918
13,825,898
5,873,123
991,860
7,833,219
3,351,459
5,664,688
9,778,095
1,110,822
1,370,800
6,222,918
718,133
6,728,951
73,359
3,344
38,096
2,128
19,050
20,870
166,793
1,124
601,393
34,550
7,267,713
172,746,314
2,337,895
757,329
4,098,425
(175,261)
7,018,389
1,791,049
(30,180)
39,014
156,309
47,667
2,003,859
2,284
1,671,738
10,696,271
¥183,442,585
*8
*8
*8
*8
*8, *13
*14
*8
*10
*8
*10
¥110,668,828
14,250,434
1,220,455
1,761,822
$ 982,675
126,536
10,837
15,644
5,309,003
3,017,404
6,112,667
8,571,227
1,083,450
1,271,300
7,006,357
944,542
6,632,027
68,476
2,446
48,570
2,202
19,706
16,979
228,741
1,498
348,190
32,203
7,519,635
176,138,173
2,337,895
757,306
4,534,472
(175,381)
7,454,294
1,347,689
55,130
39,416
87,042
(69,811)
47,141
26,793
54,277
76,108
9,620
11,288
62,212
8,387
58,889
608
22
431
20
175
151
2,031
13
3,092
286
66,770
1,564,004
20,759
6,724
40,263
(1,557)
66,190
11,967
490
350
773
(620)
1,459,467
2,884
1,531,022
10,447,669
¥186,585,842
12,959
26
13,595
92,769
$1,656,774
118
010_0800801372808.indd 118
2016/08/10 10:40:38
SMFG2016 Annual Report
Consolidated Statements of Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Ordinary income ��������������������������������������������������������������������������������������
Interest income �����������������������������������������������������������������������������������
Interest on loans and discounts ����������������������������������������������������
Interest and dividends on securities ���������������������������������������������
Interest on call loans and bills bought ������������������������������������������
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 ���������������������������������������������������������������������
Lease-related income ��������������������������������������������������������������������
Installment-related income ������������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Other income ��������������������������������������������������������������������������������������
Gains on reversal of reserve for possible loan losses �������������������
Recoveries of written-off claims ����������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Ordinary expenses ����������������������������������������������������������������������������������
Interest expenses �������������������������������������������������������������������������������
Interest on deposits ����������������������������������������������������������������������
Interest on negotiable certificates of deposit ��������������������������������
Interest on call money and bills sold ���������������������������������������������
Interest on payables under repurchase agreements ���������������������
Interest on payables under securities lending transactions ����������
Interest on commercial paper �������������������������������������������������������
Interest on borrowed money ���������������������������������������������������������
Interest on short-term bonds ��������������������������������������������������������
Interest on bonds �������������������������������������������������������������������������
Other interest expenses ����������������������������������������������������������������
Fees and commissions payments ������������������������������������������������������
Trading losses ������������������������������������������������������������������������������������
Other operating expenses ������������������������������������������������������������������
Lease-related expenses ����������������������������������������������������������������
Installment-related expenses ��������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
General and administrative expenses ������������������������������������������������
Other expenses ����������������������������������������������������������������������������������
Provision for reserve for possible loan losses �������������������������������
Other ���������������������������������������������������������������������������������������������
Ordinary profit �����������������������������������������������������������������������������������������
*1
*2
*3
Millions of yen
2015
2016
Millions of
U�S� dollars
2016
¥4,851,202
1,891,932
1,312,629
336,345
19,599
9,640
7,826
43,147
62,097
100,645
2,890
1,126,285
252,976
1,359,109
189,261
692,151
477,695
218,008
61,158
15,979
140,870
3,530,046
386,753
126,371
43,904
4,201
4,921
5,036
8,047
34,814
1,393
110,461
47,602
129,609
57,856
1,078,570
89,310
650,913
338,346
1,659,341
217,914
—
217,914
1,321,156
*1
*2
*3
¥4,772,100
1,868,313
1,326,402
303,132
20,457
10,100
10,747
37,537
59,366
100,567
3,681
1,134,463
225,481
1,342,665
197,699
743,815
401,150
197,494
—
19,735
177,759
3,786,815
445,385
140,633
49,319
5,360
8,077
6,726
10,415
39,825
1,400
129,295
54,331
130,625
—
1,094,630
91,017
698,904
304,708
1,724,836
391,338
34,842
356,495
985,284
$42,373
16,590
11,778
2,692
182
90
95
333
527
893
33
10,073
2,002
11,922
1,755
6,605
3,562
1,754
—
175
1,578
33,625
3,955
1,249
438
48
72
60
92
354
12
1,148
482
1,160
—
9,720
808
6,206
2,706
15,316
3,475
309
3,165
8,749
010_0800801372808.indd 119
119
2016/08/10 10:40:38
SMFG2016 Annual Report Consolidated Statements of Income
(Continued)
Year ended March 31
Extraordinary gains ����������������������������������������������������������������������������������
Gains on disposal of fixed assets ������������������������������������������������������
Gains on negative goodwill ����������������������������������������������������������������
Reversal of reserve for eventual future operating losses from
financial instruments transactions ����������������������������������������������������
Other extraordinary gains �������������������������������������������������������������������
Extraordinary losses ��������������������������������������������������������������������������������
Losses on disposal of fixed assets ����������������������������������������������������
Losses on impairment of fixed assets ������������������������������������������������
Provision for reserve for eventual future operating losses from
financial instruments transactions ����������������������������������������������������
Income before income taxes �������������������������������������������������������������������
Income taxes-current ������������������������������������������������������������������������������
Income taxes-deferred ����������������������������������������������������������������������������
Income taxes �������������������������������������������������������������������������������������������
Profit ��������������������������������������������������������������������������������������������������������
Profit attributable to non-controlling interests �����������������������������������������
Profit attributable to owners of parent ����������������������������������������������������
*4
Millions of yen
2015
¥
538
538
—
—
—
12,316
6,853
5,109
353
1,309,377
325,341
116,020
441,362
868,015
114,405
¥ 753,610
*4
2016
¥
3,911
3,714
138
0
58
9,026
4,289
4,362
374
980,170
244,223
(19,175)
225,047
755,123
108,435
¥ 646,687
Millions of
U�S� dollars
2016
$
35
33
1
0
1
80
38
39
3
8,703
2,169
(170)
1,998
6,705
963
$ 5,742
120
010_0800801372808.indd 120
2016/08/10 10:40:38
SMFG2016 Annual Report Consolidated Statements of Comprehensive Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Millions of yen
2015
2016
Millions of
U�S� dollars
2016
*1
Profit ��������������������������������������������������������������������������������������������������������
Other comprehensive income (losses) ����������������������������������������������������
Net unrealized gains (losses) on other securities �������������������������������
Net deferred gains (losses) on hedges �����������������������������������������������
Land revaluation excess ���������������������������������������������������������������������
Foreign currency translation adjustments ������������������������������������������
Remeasurements of defined benefit plans �����������������������������������������
Share of other comprehensive income of affiliates ����������������������������
Total comprehensive income �������������������������������������������������������������������
Comprehensive income attributable to owners of parent ������������������
Comprehensive income attributable to non-controlling interests ������
¥ 868,015
1,195,494
864,496
29,458
3,604
175,840
122,552
(458)
2,063,510
1,879,838
183,672
*1
¥ 755,123
(576,794)
(444,981)
82,552
1,705
(92,121)
(121,933)
(2,016)
178,328
103,599
74,728
$ 6,705
(5,122)
(3,951)
733
15
(818)
(1,083)
(18)
1,583
920
664
010_0800801372808.indd 121
121
2016/08/10 10:40:39
SMFG2016 Annual Report Consolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31, 2015
Balance at the beginning of the fiscal year ��������������������� ¥2,337,895
Capital
stock
Cumulative effects of changes in accounting policies ���
Restated balance ������������������������������������������������������������
Changes in the fiscal year
2,337,895
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Millions of yen
Stockholders’ equity
Retained
earnings
¥3,480,085
35,459
3,515,544
Capital
surplus
¥758,349
758,349
2
(1,021)
(170,908)
753,610
38
5
(165)
(20)
321
Treasury
stock
Total
¥(175,115) ¥6,401,215
35,459
6,436,674
(175,115)
(161)
15
(170,908)
753,610
(161)
17
(1,021)
38
5
(165)
(20)
321
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
—
Balance at the end of the fiscal year ������������������������������� ¥2,337,895
(1,019)
¥757,329
582,880
¥4,098,425
(146)
581,715
¥(175,261) ¥7,018,389
Year ended March 31, 2015
Balance at the beginning of the fiscal year ��������������������� ¥ 949,508
Net unrealized
gains (losses)
on other
securities
Millions of yen
Accumulated other comprehensive income
Net deferred
gains (losses)
on hedges
¥(60,946)
Land
revaluation
excess
¥35,749
Foreign
currency
translation
adjustments
¥ 27,239
Accumulated
remeasurements
of defined
benefit plans
Total
¥ (73,579) ¥ 877,971
949,508
(60,946)
35,749
27,239
(73,579)
877,971
Cumulative effects of changes in accounting policies ���
Restated balance ������������������������������������������������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
841,541
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
841,541
Balance at the end of the fiscal year ������������������������������� ¥1,791,049
30,766
30,766
¥(30,180)
3,265
3,265
¥39,014
129,070
129,070
¥156,309
121,246
121,246
¥ 47,667
1,125,888
1,125,888
¥2,003,859
Year ended March 31, 2015
Balance at the beginning of the fiscal year ���������������������
Cumulative effects of changes in accounting policies ���
Restated balance ������������������������������������������������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Stock
acquisition
rights
¥1,791
1,791
Millions of yen
Non-
controlling
interests
Total
net assets
¥1,724,041 ¥ 9,005,019
35,027
9,040,047
(431)
1,723,610
(170,908)
753,610
(161)
17
(1,021)
38
5
(165)
(20)
321
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
492
492
¥2,284
(51,872)
(51,872)
1,074,509
1,656,224
¥1,671,738 ¥10,696,271
122
010_0800801372808.indd 122
2016/08/10 10:40:39
SMFG2016 Annual Report Consolidated Statements of Changes in Net Assets
Year ended March 31, 2016
Balance at the beginning of the fiscal year ��������������������� ¥2,337,895
Changes in the fiscal year
Capital
stock
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Millions of yen
Stockholders’ equity
Retained
earnings
¥4,098,425
Capital
surplus
¥757,329
Treasury
stock
Total
¥(175,261) ¥7,018,389
(17)
(5)
(211,921)
646,687
(211,921)
646,687
(191)
54
(191)
71
50
3
(16)
(51)
1,295
(5)
50
3
(16)
(51)
1,295
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
—
Balance at the end of the fiscal year ������������������������������� ¥2,337,895
(23)
¥757,306
436,047
¥4,534,472
(119)
435,904
¥(175,381) ¥7,454,294
Millions of yen
Accumulated other comprehensive income
Net deferred
gains (losses)
on hedges
¥(30,180)
Land
revaluation
excess
¥39,014
Foreign
currency
translation
adjustments
¥156,309
Accumulated
remeasurements
of defined
benefit plans
¥ 47,667
Total
¥2,003,859
Year ended March 31, 2016
Balance at the beginning of the fiscal year ��������������������� ¥1,791,049
Changes in the fiscal year
Net unrealized
gains (losses)
on other
securities
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
equity in the fiscal year ���������������������������������������������
(443,359)
Net changes in the fiscal year �����������������������������������������
(443,359)
Balance at the end of the fiscal year ������������������������������� ¥1,347,689
85,310
85,310
¥ 55,130
401
401
¥39,416
(69,266)
(69,266)
¥ 87,042
(117,478)
(117,478)
(544,392)
(544,392)
¥ (69,811) ¥1,459,467
Year ended March 31, 2016
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of yen
Non-
controlling
interests
Total
net assets
¥2,284
¥1,671,738 ¥10,696,271
(211,921)
646,687
(191)
54
(5)
50
3
(16)
(51)
1,295
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
600
600
¥2,884
(140,715)
(140,715)
(684,507)
(248,602)
¥1,531,022 ¥10,447,669
010_0800801372808.indd 123
123
2016/08/10 10:40:39
SMFG2016 Annual Report Millions of U�S� dollars
Stockholders’ equity
Retained
earnings
Capital
surplus
$6,725
$36,392
Capital
stock
$20,759
Treasury
stock
$(1,556)
Total
$62,319
(0)
(0)
(1,882)
5,742
0
0
(0)
(0)
11
(2)
1
(1,882)
5,742
(2)
0
(0)
0
0
(0)
(0)
11
—
$20,759
(0)
$6,724
3,872
$40,263
(1)
$(1,557)
3,871
$66,190
Millions of U�S� dollars
Accumulated other comprehensive income
Net unrealized
gains (losses)
on other
securities
$15,903
Net deferred
gains (losses)
on hedges
Land
revaluation
excess
$(268)
$346
Foreign
currency
translation
adjustments
$1,388
Accumulated
remeasurements
of defined
benefit plans
$ 423
Total
$17,793
Consolidated Statements of Changes in Net Assets
Year ended March 31, 2016
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
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 �������������������������������
Year ended March 31, 2016
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
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 �������������������������������
(3,937)
(3,937)
$11,967
758
758
$ 490
4
4
$350
(615)
(615)
$ 773
(1,043)
(1,043)
$ (620)
(4,834)
(4,834)
$12,959
Year ended March 31, 2016
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Changes in shareholders’ interest due to transaction
with non-controlling interests �����������������������������������
Increase due to increase in subsidiaries ��������������������
Increase due to decrease in subsidiaries �������������������
Decrease due to increase in subsidiaries �������������������
Decrease due to decrease in subsidiaries �����������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of U�S� dollars
Non-
controlling
interests
$14,844
$20
Total
net assets
$94,977
(1,882)
5,742
(2)
0
(0)
0
0
(0)
(0)
11
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
5
5
$26
(1,249)
(1,249)
$13,595
(6,078)
(2,207)
$92,769
124
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SMFG2016 Annual Report Consolidated Statements of Cash Flows
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Cash flows from operating activities:
Income before income taxes ��������������������������������������������������������������
Depreciation ���������������������������������������������������������������������������������������
Losses on impairment of fixed assets ������������������������������������������������
Amortization of goodwill ���������������������������������������������������������������������
Gains on negative goodwill ����������������������������������������������������������������
Gains on step acquisitions �����������������������������������������������������������������
Equity in losses of affiliates ����������������������������������������������������������������
Net change in reserve for possible loan losses ����������������������������������
Net change in reserve for employee bonuses ������������������������������������
Net change in reserve for executive bonuses ������������������������������������
Net change in net defined benefit asset and liability �������������������������
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 gains 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 (used in) operating activities ��������������������������������
Millions of yen
2015
2016
Millions of
U�S� dollars
2016
¥ 1,309,377
222,195
5,109
26,521
—
—
10,600
(81,146)
2,722
(1,576)
(47,765)
130
(1,305)
6,012
(23,388)
(1,891,932)
386,753
(115,802)
(0)
(717,621)
6,315
(423,811)
797,462
(4,500,362)
6,639,769
71,330
2,656,388
117,475
(857,503)
(2,696,803)
922,181
924,066
2,502,245
(105,639)
624,705
(59,744)
225,600
1,038,047
18,803
1,903,720
(375,300)
87,971
8,605,805
(365,578)
8,240,226
¥ 980,170
238,348
4,362
27,670
(138)
(58)
36,196
(48,022)
(5,077)
(946)
(23,434)
68
656
(4,138)
61,947
(1,868,313)
445,385
(126,398)
(0)
445,713
575
(579,837)
448,508
(2,223,331)
7,646,207
442,445
(1,119,170)
849,019
157,822
(1,495,854)
(3,838,358)
(346,866)
(2,524,215)
314,707
(22,636)
(41,649)
(99,500)
420,778
226,408
1,875,947
(438,246)
(649,079)
(832,332)
(294,976)
(1,127,308)
$ 8,703
2,116
39
246
(1)
(1)
321
(426)
(45)
(8)
(208)
1
6
(37)
550
(16,590)
3,955
(1,122)
(0)
3,958
5
(5,149)
3,982
(19,742)
67,894
3,929
(9,938)
7,539
1,401
(13,282)
(34,082)
(3,080)
(22,414)
2,794
(201)
(370)
(884)
3,736
2,010
16,657
(3,891)
(5,763)
(7,391)
(2,619)
(10,010)
010_0800801372808.indd 125
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SMFG2016 Annual Report
Consolidated Statements of Cash Flows
(Continued)
Year ended March 31
Cash flows from investing activities:
Purchases of securities ����������������������������������������������������������������������
Proceeds from sale of securities ��������������������������������������������������������
Proceeds from redemption 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 resulting from their merger �������
Proceeds from acquisition of business ����������������������������������������������
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 �����������������������
Redemption of subordinated borrowings ������������������������������������������
Proceeds from issuance of subordinated bonds and bonds with
stock acquisition rights ��������������������������������������������������������������������
326,350
Repayment of subordinated bonds and bonds with stock
acquisition rights ������������������������������������������������������������������������������
Dividends paid������������������������������������������������������������������������������������
Repayments to non-controlling stockholders ������������������������������������
Dividends paid to non-controlling stockholders ��������������������������������
Purchases of treasury stock ���������������������������������������������������������������
Proceeds from disposal of treasury stock ������������������������������������������
Purchase of stocks of subsidiaries not resulting in change in scope
of consolidation ��������������������������������������������������������������������������������
Proceeds from sale of stocks of subsidiaries not resulting in change
in scope of consolidation �����������������������������������������������������������������
Net cash used in financing activities �������������������������������������������������������
Effect of exchange rate changes on cash and cash equivalents ������������
Net change in cash and cash equivalents �����������������������������������������������
Cash and cash equivalents at the beginning of the fiscal year ���������������
Increase in cash and cash equivalents resulting from inclusion of
(288,158)
(170,917)
(124,500)
(79,752)
(161)
17
(1,951)
1,473
(302,589)
177,706
6,658,153
26,993,164
Millions of yen
2015
2016
¥(36,624,383)
27,845,192
7,854,257
(0)
3,523
(578,968)
188,309
(145,090)
28
—
—
¥(27,007,243)
22,537,031
7,992,771
(1)
1,925
(529,264)
147,995
(158,779)
223
(860)
2,251,106
*2
Millions of
U�S� dollars
2016
$(239,809)
200,116
70,971
(0)
17
(4,700)
1,314
(1,410)
2
(8)
19,989
(58)
(652)
(6)
—
(1,457,188)
40,011
(5,000)
6,698
5,240,950
18,000
(39,696)
577,142
(182,617)
(211,952)
(142,000)
(74,891)
(191)
54
(6)
162
(55,995)
(99,579)
3,958,066
33,598,680
59
46,537
160
(352)
5,125
(1,622)
(1,882)
(1,261)
(665)
(2)
0
(0)
1
(497)
(884)
35,145
298,337
subsidiaries in consolidation �����������������������������������������������������������������
—
59
1
Decrease in cash and cash equivalents resulting from exclusion of
subsidiaries from consolidation �������������������������������������������������������������
Cash and cash equivalents at the end of the fiscal year �������������������������
*1
(52,637)
¥ 33,598,680
—
¥ 37,556,806
*1
—
$ 333,483
126
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SMFG2016 Annual Report
Notes to Consolidated Financial Statements
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
(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 outstanding 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 generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements from International
Financial Reporting Standards (“IFRS”).
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 principles and standards as required under U.S. GAAP or IFRS, in which case
a certain limited number of items are adjusted based on their materiality.
These consolidated financial statements are translated from the consolidated financial statements contained in the annual securities report
filed under the Financial Instrument and Exchange Act of Japan (“FIEA based financial statements”) except for the addition of the non-
consolidated financial statements and US dollar figures.
Amounts less than 1 million yen have been rounded down. 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
prevailing exchange rate at March 31, 2016 which was ¥112.62 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.
010_0800801372808.indd 127
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SMFG2016 Annual Report As of and for the years ended March 31, 2015 and 2016
(Significant accounting policies for preparing consolidated financial statements)
1. Scope of consolidation
(1) Consolidated subsidiaries
The number of consolidated subsidiaries at March 31, 2016 is 341.
Principal companies:
Sumitomo Mitsui Banking Corporation (“SMBC”)
SMBC Trust Bank Ltd. (“SMBC Trust”)
Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”)
SMBC Nikko Securities Inc. (“SMBC Nikko”)
SMBC Friend Securities Co., Ltd. (“SMBC Friend”)
Sumitomo Mitsui Card Company, Limited (“SMCC”)
Cedyna Financial Corporation (“Cedyna”)
SMBC Consumer Finance Co., Ltd. (“SMBCCF”)
The Japan Research Institute, Limited
THE MINATO BANK, LTD. (“MINATO”)
Kansai Urban Banking Corporation (“KUBC”)
Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Banking Corporation (China) Limited
SMBC Guarantee Co., Ltd.
SMBC Capital Markets, Inc.
Changes in the consolidated subsidiaries in the fiscal year ended March 31, 2016 are as follows:
54 companies were newly included in the scope of consolidation as a result of the establishment and for other reasons.
30 companies were excluded from the scope of consolidation because of liquidation and for other reasons.
(2) Unconsolidated subsidiaries
Principal company:
SBCS Co., Ltd.
180 unconsolidated subsidiaries are operators of silent partnerships for lease transactions 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 Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial Statements.
Other unconsolidated subsidiaries are also excluded from the scope of consolidation because their total amounts in terms of total
assets, ordinary income, net income and retained earnings are immaterial, as such, they do not hinder a rational judgment of SMFG’s
financial position and results of operations when excluded from the scope of consolidation.
2. Application of the equity method
(1) Unconsolidated subsidiaries accounted for by the equity method
The number of unconsolidated subsidiaries accounted for by the equity method at March 31, 2016 is 5.
Principal company:
SBCS Co., Ltd.
(2) Affiliates accounted for by the equity method 54 companies
Principal companies:
PT Bank Tabungan Pensiunan Nasional Tbk.
Sumitomo Mitsui Auto Service Company, Limited
Daiwa SB Investments Ltd.
Changes in the equity method affiliates in the fiscal year ended March 31, 2016 are as follows:
ACLEDA Bank Plc. and other 9 companies newly became equity method affiliates due to the acquisition of stocks and for other
reasons.
1 company was excluded from the scope of equity method because of liquidation.
128
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(3) Unconsolidated subsidiaries that are not accounted for by the equity method
180 unconsolidated subsidiaries that are not accounted for by the equity method are operators of silent partnerships for lease transactions
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 Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial
Statements.
(4) Affiliates that are not accounted for by the equity method
Principal company:
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.
Daiwa SB Investments (USA) Ltd.
3. The balance sheet dates of consolidated subsidiaries
(1) The balance sheet dates of the consolidated subsidiaries at March 31, 2016 are as follows:
1
1
6
3
6
144
14
6
160
April 30 .................................
May 31...................................
June 30 ..................................
October 31 .............................
November 30 .........................
December 31 ..........................
January 31 .............................
February 29 ............................
March 31 ...............................
(2) The subsidiaries with balance sheets dated April 30, May 31, June 30 and November 30 are consolidated using the financial statements
as of March 31. 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 the financial statements as of their respective balance sheet dates.
Appropriate adjustments were made to material transactions during the periods between their respective balance sheet dates and the
consolidated closing date.
4. Accounting policies
(1) Standards for recognition and measurement of 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 sheets on a trade date basis. Profits and losses on trading-purpose transactions are recognized on a
trade date basis, and recorded as “Trading income” and “Trading losses.”
Securities and monetary claims purchased for trading purposes are stated at the fiscal year-end 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.
(2) Standards for recognition and measurement of securities
1) 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). Other securities which
are extremely difficult to determine fair value are carried at cost using the moving-average method.
Net unrealized gains (losses) on other securities, net of income taxes, are included in “Net assets,” after deducting the amount
that is reflected in the fiscal year’s earnings by applying fair value hedge accounting.
2) Securities included in “Money held in trust” are carried in the same method as in (1) and (2) 1) above.
(3) Standards for recognition and measurement of derivative transactions
Derivative transactions, excluding those classified as trading derivatives, are carried at fair value.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (4) Depreciation
1) 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:
Others:
Other consolidated subsidiaries depreciate tangible fixed assets primarily using the straight-line method over the estimated useful
7 to 50 years
2 to 20 years
2)
lives of the respective assets.
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).
3) Assets for rent
Assets for rent are depreciated using the straight-line method, assuming that lease terms are, in principle, their depreciation period
and the salvage is estimated disposal value when the lease period expires.
4) 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 zero.
(5) 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 assessment of the borrowers, 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 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 historical 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 uncollectible based on assessment of
each claim.
For collateralized or guaranteed claims on bankrupt borrowers 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 for the years ended March 31, 2015 and 2016 were ¥363,585 million and ¥301,983 million,
respectively.
(6) 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 fiscal year.
(7) 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 fiscal year.
(8) 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 our internal regulations.
(9) 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.
130
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (10) 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.
(11) 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.
(12) Reserve under the special laws
The reserve under the special laws is a reserve for contingent liabilities and provided for compensation for losses from securities related
transactions or derivative transactions, pursuant to Article 46-5 of the Financial Instruments and Exchange Act.
(13) Employee retirement benefits
In calculating the projected benefit obligation, mainly the benefit formula basis is used to calculate the expected benefit attributable to
the respective fiscal year.
Unrecognized prior service cost is amortized on a straight-line basis, primarily over 9 years within the employees’ average remaining
service period at incurrence.
Unrecognized net actuarial gain (loss) is amortized on a straight-line basis, primarily over 9 years within the employees’ average
remaining service period, commencing from the next fiscal year of incurrence.
(14) 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 rate 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 rate prevailing at their respective balance sheet dates.
(15) Lease transactions
1) Recognition of income on finance leases
Interest income is allocated to each period.
2) 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.
3) Recognition of income and expenses on installment sales
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.
(16) Hedge accounting
1) 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” (JICPA Industry Audit Committee Report No. 24, February 13, 2002) 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 classifying the hedged
items (such as deposits and loans) and the hedging instruments (such as interest rate swaps) by their maturity. As for the portfolio
hedges to fix cash flows, SMBC assesses the effectiveness of such hedges by verifying the correlation between the hedged items and
the hedging instruments.
As for the individual hedges, SMBC also assesses the effectiveness of such individual hedges.
2) 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, July 29, 2002) to currency swap and
foreign exchange swap transactions 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 sufficient on-balance (actual) or off-balance (forward)
liability exposure exists to cover the cost of the hedged securities denominated in the same foreign currencies.
3) Hedging against share price fluctuations
SMBC applies fair value hedge accounting to individual hedges offsetting the price fluctuation of the shares that are classified under
Other securities, and accordingly evaluates the effectiveness of such individual hedges.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 4) 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 non-arbitrary and 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, fair value hedge accounting or the special treatment
for interest rate swaps.
(17) Amortization of goodwill
Goodwill is amortized using the straight-line method over a period in which its benefit is expected to be realized, not to exceed 20
years. Immaterial goodwill is charged or credited to income directly when incurred.
(18) Scope of “Cash and cash equivalents” on consolidated statements of cash flows
For the purposes of presenting the consolidated statements of cash flows, “Cash and cash equivalents” are cash on hand, non-interest
earning deposits with banks and deposits with the Bank of Japan.
(19) Consumption taxes
National and local consumption taxes of SMFG and its consolidated domestic subsidiaries are accounted for using the tax-excluded
method.
(Unapplied Accounting Standard and Others)
“Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26 issued on March 28, 2016)
(1) Outline
The Guidance supersedes the guidance on recoverability of deferred tax assets stipulated in “Auditing Treatment for Judgment of
Recoverability of Deferred Assets” (JICPA Industry Committee Report No. 66).
(2) Date of application
SMFG intends to apply the Guidance from the fiscal years beginning on April 1, 2016.
(3) Effects of Application of the Guidance
The effects of application of the Guidance are currently being examined.
(Changes in presentation)
In accordance with the provision set forth in Paragraph 39 of the “Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22, issued on September 13, 2013) and other relevant provisions, changes are made to the presentation of “Net income” and
other relevant items, and “Minority interests” is changed to “Non-controlling interests” from the fiscal year ended March 31, 2016. Figures for
the fiscal year ended March 31, 2015 in the consolidated financial statements reflect these changes.
(Additional information)
Effect of a change in the corporate income tax rule
In accordance with the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15, 2016) and the “Act to Amend the Local Taxation
Act, etc.” (Act No. 13, 2016) promulgated on March 29, 2016, the corporate income tax rate will be lowered from fiscal years beginning on or
after April 1, 2016. Additionally, beginning from fiscal years starting on or after April 1, 2016, the use of tax loss carryforwards will be limited
to the equivalent of 60% of taxable income before deducting tax loss carryforwards, and beginning from fiscal years starting on or after April 1,
2017, the use of tax loss carryforwards will be limited to the equivalent of 55% of taxable income before deducting tax loss carryforwards.
As a result of these changes, profit attributable to owners of parent decreased by ¥12,094 million and total accumulated other comprehensive
income increased by ¥30,164 million.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to consolidated balance sheets)
*1 Japanese stocks and investments in unconsolidated subsidiaries and affiliates
Japanese stocks and investments in unconsolidated subsidiaries and affiliates at March 31, 2015 and 2016 were as follows:
March 31
Japanese stocks .................................................................................................................
Investments ......................................................................................................................
2015
¥583,382
336
2016
¥609,830
592
Millions of yen
Japanese stocks of jointly controlled entities were as follows:
March 31
Japanese stocks of jointly controlled entities .....................................................................
2015
¥100,102
2016
¥104,779
Millions of yen
*2 Unsecured loaned securities for which borrowers have the right to sell or pledge
The amount of unsecured loaned securities for which borrowers have the right to sell or pledge at March 31, 2015 and 2016 were as follows:
March 31, 2015
Japanese government bonds and other securities in
Millions of yen March 31, 2016
Millions of yen
Japanese government bonds in “Securities” ...............
¥900
“Securities” ..........................................................
¥1,540
As for the unsecured borrowed securities, securities under resale agreements and securities borrowed with cash collateral with rights to sell or
pledge without restrictions, those securities pledged and those securities held without being disposed at March 31, 2015 and 2016 were as follows:
March 31
Securities pledged .............................................................................................................
Securities held without being disposed .............................................................................
2015
¥3,181,553
3,087,292
2016
¥5,245,608
3,152,831
Millions of yen
*3 Bankrupt loans and non-accrual loans
Bankrupt loans and non-accrual loans at March 31, 2015 and 2016 were as follows:
March 31
Bankrupt loans .................................................................................................................
Non-accrual loans .............................................................................................................
2015
¥ 35,861
774,058
2016
¥ 44,748
594,077
Millions of yen
“Bankrupt loans” are loans, after write-off, to legally bankrupt borrowers as defined in Article 96-1-3 and 96-1-4 of “Order for
Enforcement of the Corporation Tax Act” (Cabinet Order No. 97 of 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.
“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.
*4 Past due loans (3 months or more)
Past due loans (3 months or more) at March 31, 2015 and 2016 were as follows:
March 31
Past due loans (3 months or more) ....................................................................................
2015
¥13,714
2016
¥19,845
Millions of yen
“Past due loans (3 months or more)” are loans on which the principal or interest payment is past due for 3 months or more, excluding
“Bankrupt loans” and “Non-accrual loans.”
*5 Restructured loans
Restructured loans at March 31, 2015 and 2016 were as follows:
March 31
Restructured loans ............................................................................................................
2015
¥278,622
2016
¥266,698
Millions of yen
“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).”
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
*6 Risk-monitored loans
The total amount of bankrupt loans, non-accrual loans, past due loans (3 months or more) and restructured loans at March 31 , 2015 and
2016 were as follows:
March 31
Risk-monitored loans .......................................................................................................
2015
¥1,102,256
2016
¥925,370
Millions of yen
The amounts of loans presented in Notes *3 to *6 above are the amounts before deduction of reserve for possible loan losses.
*7 Bills discounted
Bills discounted are accounted for as financial transactions in accordance with the “Treatment for Accounting and Auditing of Application
of Accounting Standard for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 24, February 13,
2002). SMBC and its banking subsidiaries have rights to sell or pledge bank acceptance bought, commercial bills discounted, documentary
bills and foreign exchanges bought without restrictions, etc. The total face value at March 31, 2015 and 2016 were as follows:
March 31
Bills discounted ................................................................................................................
2015
¥950,790
2016
¥820,990
Millions of yen
*8 Assets pledged as collateral
Assets pledged as collateral at March 31, 2015 and 2016 consisted of the following:
March 31, 2015
Assets pledged as collateral:
Millions of yen March 31, 2016
Millions of yen
Assets pledged as collateral:
Cash and due from banks ......................................... ¥
61,093
Call loans and bills bought ..................................
478,457
Monetary claims bought ......................................
75,556
1,712,885
Trading assets ......................................................
Securities ............................................................. 10,445,190
Loans and bills discounted ...................................
2,803,237
3,163
Lease receivables and investment assets ................
9,969
Tangible fixed assets ............................................
Other assets (installment account receivable,
etc.) ...................................................................
172
Cash and due from banks ......................................... ¥ 75,954
433,224
Call loans and bills bought ..................................
Monetary claims bought ......................................
49,961
2,531,750
Trading assets ......................................................
5,560,230
Securities .............................................................
2,609,736
Loans and bills discounted ...................................
2,467
Lease receivables and investment assets ................
9,557
Tangible fixed assets ............................................
Other assets (installment account receivable,
etc.) ...................................................................
135
Liabilities corresponding to assets pledged as collateral:
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 .................................
33,800
1,095,000
406,212
4,121,603
480,464
6,099,726
35,952
207,009
Deposits ..............................................................
Payables under repurchase agreements .................
Payables under securities lending transactions .....
Trading liabilities ................................................
Borrowed money .................................................
Other liabilities ...................................................
Acceptances and guarantees .................................
39,403
448,908
3,307,827
430,159
4,922,927
28,710
194,035
In addition to the assets presented above, the following assets were pledged as collateral for cash settlements, and substitution for
margins of futures transactions and certain other purposes at March 31, 2015 and 2016:
March 31, 2015
Cash and due from banks .......................................... ¥ 13,580
2,271
Trading assets ...........................................................
6,067,851
Securities ..................................................................
Millions of yen March 31, 2016
Millions of yen
Cash and due from banks .......................................... ¥ 12,731
13,026
Trading assets ...........................................................
6,284,022
Securities ..................................................................
134
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
Other assets include collateral money deposited for financial instruments, surety deposits, margin of futures markets and other margins.
The amounts for such assets were as follows:
March 31, 2015
Collateral money deposited for financial instruments ....
Surety deposits .........................................................
Margins of futures markets .......................................
Other margins ..........................................................
Millions of yen March 31, 2016
Collateral money deposited for financial instruments ....
¥410,317
Surety deposits .........................................................
119,525
63,433 Margins of futures markets .......................................
Other margins ..........................................................
27,819
Millions of yen
¥873,964
114,976
47,015
35,058
*9 Commitment line contracts on overdrafts and loans
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, 2015 and 2016 were as follows:
March 31
The amounts of unused commitments ..............................................................................
The amounts of unused commitments whose original contract terms are within 1 year or
unconditionally cancelable at any time............................................................................
Millions of yen
2015
¥53,473,427
2016
¥57,798,996
40,386,315
42,315,486
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.
*10 Land revaluation excess
SMBC and other consolidated subsidiaries revalued 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 excess,” and SMFG’s share of the net unrealized gains, net of deferred taxes, are reported as “Land revaluation excess” in
“Net assets.”
Certain affiliates also revalued its own land for business activities in accordance with the Act. SMFG’s share of 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
Other consolidated subsidiaries and affiliates: 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 effective
March 31, 1998).
Other consolidated subsidiaries and affiliates: Fair values were determined based on the values stipulated in Article 2-3 and 2-5 of
“Order for Enforcement of Act on Revaluation of Land” (Cabinet Order No. 119 effective March 31, 1998).
*11 Accumulated depreciation on tangible fixed assets
Accumulated depreciation on tangible fixed assets at March 31, 2015 and 2016 were as follows:
March 31
Accumulated depreciation ................................................................................................
2015
¥944,545
2016
¥977,479
Millions of yen
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements *12 Deferred gain on tangible fixed assets deductible for tax purposes
Deferred gain on tangible fixed assets deductible for tax purposes at March 31, 2015 and 2016 were as follows:
March 31
Deferred gain on tangible fixed assets deductible for tax purposes .....................................
[The consolidated fiscal year concerned] .......................................................................
2015
¥62,704
[145]
2016
¥62,665
[—]
Millions of yen
*13 Subordinated borrowings
The balance of subordinated borrowings with the special clause specifying that the repayment order of the borrowing subordinate to other
borrowings included in “Borrowed money” at March 31, 2015 and 2016 were as follows:
March 31
Subordinated borrowings ..................................................................................................
2015
¥317,461
2016
¥295,199
Millions of yen
*14 Subordinated bonds
The balance of subordinated bonds included in “Bonds” at March 31, 2015 and 2016 were as follows:
March 31
Subordinated bonds ..........................................................................................................
2015
¥1,777,502
2016
¥2,142,286
Millions of yen
*15 Guaranteed amount to privately-placed bonds
The amount guaranteed by SMBC and its banking subsidiaries to privately-placed bonds (stipulated by Article 2-3 of the Financial
Instruments and Exchange Act) in “Securities” at March 31, 2015 and 2016 were as follows:
March 31
Guaranteed amount to privately-placed bonds ..................................................................
2015
¥2,030,463
2016
¥2,004,096
Millions of yen
136
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to consolidated statements of income)
*1 Other income
“Other” in “Other income” for the fiscal years ended March 31, 2015 and 2016 included the following:
Year ended March 31, 2015
Gains on sales of stocks .............................................
Millions of yen Year ended March 31, 2016
¥83,503
Gains on sales of stocks .............................................
Millions of yen
¥100,302
*2 General and administrative expenses
“General and administrative expenses” for the fiscal years ended March 31, 2015 and 2016 included the following:
Year ended March 31, 2015
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen Year ended March 31, 2016
¥610,998
171
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen
¥626,149
207
*3 Other expenses
“Other expenses” for the fiscal years ended March 31, 2015 and 2016 included the following:
Year ended March 31, 2015
Provision for reserve for losses on interest
repayment ..............................................................
Write-off of loans......................................................
Millions of yen Year ended March 31, 2016
Millions of yen
Provision for reserve for losses on interest
¥64,836
repayment ..............................................................
76,997 Write-off of loans......................................................
Equity in losses of affiliates .......................................
¥140,264
74,180
36,196
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
*4 Losses on impairment of fixed assets
The differences between the recoverable amounts and the book value of the following asset is recognized as “Losses on impairment of fixed
assets,” and included in “Extraordinary losses” for the fiscal year ended March 31, 2015 and 2016.
Year ended March 31, 2015
Area
Purpose of use
Type
Tokyo metropolitan area ...............................Branches (3 items)
Land and buildings, etc.
Idle assets (36 items)
Other (1 item)
Kinki area ....................................................Branches (4 items)
Land and buildings, etc.
Corporate assets (2 items)
Idle assets (29 items)
Other ...........................................................Corporate asset (1 item)
Land and buildings, etc.
Idle assets (11 items)
Year ended March 31, 2016
Area
Purpose of use
Type
Tokyo metropolitan area ...............................Branches (3 items)
Land and buildings, etc.
Idle assets (26 items)
Other (1 item)
Kinki area ....................................................Branches (14 items)
Land and buildings, etc.
Corporate asset (1 item)
Idle assets (24 items)
Other ...........................................................Branches (1 item)
Land and buildings, etc.
Idle assets (11items)
Others (4 items)
Millions of yen
Impairment loss
¥ 77
3,019
0
137
12
1,802
0
59
Millions of yen
Impairment loss
¥ 45
2,265
0
649
349
628
6
416
0
At SMBC, a branch, which continuously manages and determines its income and expenses, is the smallest unit of asset group for
recognition and measurement of impairment loss of fixed assets. Assets such as corporate headquarters facilities, training facilities, data and
system centers, and health and recreational facilities which do not produce cash flows that can be attributed to individual assets are treated
as corporate assets. As for idle assets, impairment loss is measured individually. At SMFG and other consolidated subsidiaries, a branch or
other group is the smallest asset grouping unit as well.
The carrying amounts of idle assets at SMBC are reduced to their recoverable amounts, and the decreased amounts are included in
“Extraordinary losses” as “Losses on impairment of fixed assets,” if there are indicators that the invested amounts may not be recoverable.
And the carrying amounts of branches, corporate assets and idle assets at other consolidated subsidiaries are reduced in the same method as
at SMBC.
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.
138
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to consolidated statements of comprehensive income)
*1 Reclassification adjustment and tax effect of other comprehensive income
Year ended March 31
Net unrealized gains (losses) on other securities:
Millions of yen
2015
2016
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Net unrealized gains (losses) on other securities ......................................................
¥1,403,111
(215,162)
1,187,948
(323,451)
864,496
Net deferred gains (losses) on hedges:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Adjustment on the cost of the assets ............................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Net deferred gains (losses) on hedges ......................................................................
Land revaluation excess:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Land revaluation excess ...........................................................................................
Foreign currency translation adjustments:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Foreign currency translation adjustments ...............................................................
Remeasurements of defined benefit plans:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Remeasurements of defined benefit plans ................................................................
Share of other comprehensive income of affiliates:
26,574
23,028
0
49,603
(20,144)
29,458
—
—
—
3,604
3,604
178,283
(2,443)
175,840
—
175,840
163,011
22,633
185,645
(63,093)
122,552
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Share of other comprehensive income of affiliates ....................................................
Total other comprehensive income .....................................................................
952
(1,410)
(458)
—
(458)
¥1,195,494
¥(467,311)
(201,084)
(668,396)
223,414
(444,981)
88,104
31,934
—
120,038
(37,486)
82,552
—
—
—
1,705
1,705
(84,007)
(8,114)
(92,121)
—
(92,121)
(206,195)
31,776
(174,418)
52,485
(121,933)
(659)
(1,357)
(2,016)
—
(2,016)
¥(576,794)
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to consolidated statements of changes in net assets)
Fiscal year ended March 31, 2015
1. Type and number of shares issued and treasury stock
Year ended March 31, 2015
Shares issued
At the beginning
of the fiscal year
Increase
Decrease
At the end
of the fiscal year
Notes
Number of shares
Common stock ....................................
Total ...............................................
1,414,055,625
1,414,055,625
Treasury stock
Common stock ....................................
Total ...............................................
46,781,669
46,781,669
—
—
37,310
37,310
—
—
1,414,055,625
1,414,055,625
4,778
4,778
46,814,201
46,814,201
1,2
Notes: 1. Increase of 37,310 shares in the number of treasury common stock was due to purchases of fractional shares.
2. Decrease of 4,778 shares in the number of treasury common stock was due to sales of fractional shares and exercise of stock options.
2. Information on stock acquisition rights
Year ended March 31, 2015
SMFG
Consolidated subsidiaries ......
Total ................................
Details of stock
acquisition rights
Stock acquisition
rights as stock
options
—
3. Information on dividends
(1) Dividends paid in the fiscal year
Type of
shares
At the beginning
of the fiscal year
Increase Decrease
At the end of the
fiscal year
Number of shares
Millions of yen
At the end of the
fiscal year
Notes
—
—
—
—
—
—
¥2,085
198
¥2,284
Date of resolution
Ordinary general meeting of shareholders
held on June 27, 2014 ................................ Common stock
Meeting of the Board of Directors held on
November 13, 2014 ................................... Common stock
Type of shares
(2) Dividends to be paid in the next fiscal year
Date of resolution
Ordinary general meeting of shareholders
held on June 26, 2015 ................................ Common stock
Type of shares
Fiscal year ended March 31, 2016
1. Type and number of shares issued and treasury stock
Millions of yen, except per share amount
Cash
dividends
Cash
dividends
per share
Record date
Effective date
¥91,656
¥65 March 31, 2014
June 27, 2014
84,604
60
September 30, 2014 December 3, 2014
Millions of yen, except per share amount
Cash
dividends
¥112,804
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥80 March 31, 2015
June 26, 2015
Year ended March 31, 2016
Shares issued
At the beginning
of the fiscal year
Increase
Decrease
At the end
of the fiscal year
Notes
Number of shares
Common stock ....................................
Total ...............................................
1,414,055,625
1,414,055,625
Treasury stock
Common stock ....................................
Total ...............................................
46,814,201
46,814,201
—
—
39,113
39,113
—
—
1,414,055,625
1,414,055,625
22,432
22,432
46,830,882
46,830,882
1,2
Notes: 1. Increase of 39,113 shares in the number of treasury common stock was due to purchases of fractional shares.
2. Decrease of 22,432 shares in the number of treasury common stock was due to sales of fractional shares and exercise of stock options.
140
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
2. Information on stock acquisition rights
Year ended March 31, 2016
SMFG
Consolidated subsidiaries ......
Total ................................
Details of stock
acquisition rights
Stock acquisition
rights as stock
options
—
3. Information on dividends
(1) Dividends paid in the fiscal year
Type of
shares
At the beginning
of the fiscal year
Increase Decrease
At the end of the
fiscal year
Number of shares
Millions of yen
At the end of the
fiscal year
Notes
—
—
—
—
—
—
¥2,635
249
¥2,884
Date of resolution
Ordinary General Meeting of Shareholders
held on June 26, 2015 ................................ Common stock
Meeting of the Board of Directors held on
November 12, 2015 ................................... Common stock
Type of shares
(2) Dividends to be paid in the next fiscal year
Millions of yen, except per share amount
Cash
dividends
Cash
dividends
per share
Record date
Effective date
¥112,804
¥80 March 31, 2015
June 26, 2015
105,753
75
September 30, 2015 December 3, 2015
Date of resolution
Ordinary general meeting of shareholders
held on June 29, 2016 ................................ Common stock
Type of shares
Millions of yen, except per share amount
Cash
dividends
¥105,753
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥75 March 31, 2016
June 29, 2016
(Notes to consolidated statements of cash flows)
*1 The relation between the amounts of accounts listed on the consolidated financial statements and “Cash and cash equivalents”
Year ended March 31
Cash and due from banks ..................................................................................................
Interest earning deposits with banks (excluding the deposit with the Bank of Japan) ........
Cash and cash equivalents .................................................................................................
2015
¥39,748,979
(6,150,298)
¥33,598,680
2016
¥42,789,236
(5,232,430)
¥37,556,806
Millions of yen
*2 The major components of increased assets and liabilities by succession
The major components of increased assets and liabilities due to the integration of the retail banking business of Citibank Japan Ltd. by
SMBC Trust and the relation between the acquisition cost of the acquired business and net gains from acquisition of business were as
follow;
Year ended March 31, 2016
Assets ...............................................................................................................................
Cash and due from banks .............................................................................................
Liabilities .........................................................................................................................
Deposits ......................................................................................................................
Goodwill ..........................................................................................................................
Acquisition cost ................................................................................................................
Cash and cash equivalents included in acquired asset ........................................................
Proceeds from acquisition of business ...............................................................................
Millions of yen
¥ 2,407,085
2,296,106
(2,376,561)
(2,361,907)
14,476
45,000
(2,296,106)
¥ 2,251,106
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to lease transactions)
1. Finance leases
(1) Lessee side
1) Lease assets
(a) Tangible fixed assets
Tangible fixed assets mainly consisted of branches and equipment.
(b) Intangible fixed assets
Intangible fixed assets are software.
2) Depreciation method of lease assets
Depreciation method of lease assets is reported in 4. Accounting policies (4) Depreciation.
(2) Lessor side
1) Breakdown of lease investment assets
March 31
Lease receivables ......................................................................................................
Residual value .........................................................................................................
Unearned interest income ........................................................................................
Total ........................................................................................................................
Millions of yen
2015
¥1,187,853
107,078
(167,407)
¥1,127,525
2016
¥1,239,009
120,223
(215,850)
¥1,143,383
2) The scheduled collections of lease payments receivable related to lease receivables and investment assets are as follows:
2015
2016
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 ............................................
Lease payments receivable
related to lease receivables
¥295,756
205,864
127,113
82,174
47,544
135,539
¥893,993
Lease payments receivable
related to investment
assets
¥ 337,777
258,682
194,449
138,694
99,092
159,157
¥1,187,853
Lease payments receivable
related to lease receivables
¥297,221
209,762
149,792
91,901
65,764
145,560
¥960,003
Lease payments receivable
related to investment
assets
¥ 320,674
253,931
198,762
143,147
93,905
228,588
¥1,239,009
3) 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 “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” for the fiscal years ended March 31, 2015 and 2016 were
¥2,347 million and ¥1,759 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
(1) Lessee side
Future minimum lease payments on operating leases which were not cancelable were as follows:
March 31
Due within 1 year .........................................................................................................
Due after 1 year ............................................................................................................
Total .............................................................................................................................
2015
¥ 44,637
239,659
¥284,296
2016
¥ 42,254
213,401
¥255,656
Millions of yen
(2) Lessor side
Future minimum lease payments on operating leases which were not cancelable were as follows:
March 31
Due within 1 year .........................................................................................................
Due after 1 year ............................................................................................................
Total .............................................................................................................................
2015
¥ 165,897
1,027,007
¥1,192,904
2016
¥ 186,113
1,218,850
¥1,404,963
Future lease payments receivable on operating leases which were not cancelable at March 31, 2015 and 2016 amounting to ¥0
million and ¥0 million, respectively, on the lessor side were pledged as collateral for borrowings.
Millions of yen
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to financial instruments)
1. Status of financial instruments
(1) Policies on financial instruments
SMFG Group conducts banking and other financial services such as leasing, securities, consumer finance, system development and
information processing. Its banking business includes deposit taking, lending, securities trading and investment, remittance and
transfer, 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 Group 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 Dept. and the International Treasury Dept. of the Treasury
Unit, while derivative transactions for trading purposes are undertaken by the Trading Dept. of the Treasury Unit (in Asia and Oceania
regions, the Asia and Oceania Treasury Dept. is responsible for derivative transactions for both ALM and trading purposes).
(2) Details of financial instruments and associated risks
1) Financial assets
The main financial assets held by SMFG Group 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 nonperformance 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 “(3) Risk management framework for financial instruments” below.
2) Financial liabilities
Financial liabilities of SMFG Group 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 “(3) Risk management framework for financial instruments”
below.
3) Derivative transactions
Derivatives handled by SMFG Group include foreign exchange futures; futures, forwards, swaps and options related to interest rates,
currencies, equities, bonds and commodities; 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 “(3) Risk management framework for financial instruments” below.
Hedge accounting is applied to derivative transactions executed for ALM purposes, as necessary. Hedging instruments, hedged
items, hedging policy and hedging method to assess the effectiveness of the hedge are described in “(Notes to significant accounting
policies for preparing consolidated financial statements), 4. Accounting policies, (16) Hedge accounting.”
(3) Risk management framework for financial instruments
The fundamental matters on risk management for the entire Group are set forth in “Regulations on Risk Management.” SMFG’s
Management Committee establishes the basic risk management policy for the entire Group, based on the Regulations, which is then
approved by the Board of Directors. SMFG Group has a risk management system based on the basic policy. The Corporate Risk
Management Dept., which, together with the Corporate Planning Dept., controls risk management across SMFG Group by monitors
the development and implementation of SMFG Group’s risk management system, and gives appropriate guidance as needed. Under this
framework, SMFG comprehensively and systematically manages risks on a Group basis.
1) Management of credit risk
SMFG has established fundamental principles on credit risk management to thoroughly manage the credit risk of the entire Group.
Each group company conducts integrated management of credit risk according to its operational characteristics, and the credit risk
inherent in the entire portfolio as well as the risk in individual credits are managed quantitatively and continuously.
(a) Credit risk management system
At SMBC, SMFG’s major consolidated subsidiary, basic policies on credit risk management and other significant matters require
the resolution of Management Committee and the approval of Board of Directors.
The Credit & Investment Planning Dept. of the Risk Management Unit is responsible for the comprehensive management of
credit risk. This department 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. calculating risk capital and risk-weighted
assets) in cooperation with the Corporate Risk Management Dept. The department also monitors risk situations and regularly
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements reports to the Management Committee and the Board of Directors.
Moreover, the Credit Portfolio Management Dept. within the Credit & Investment Planning Dept. works to stabilize SMBC’s
overall credit portfolio through selling credit derivatives and loan claims.
The Credit Departments of Wholesale Banking Unit, Retail Banking Unit and other business units play a central role in
credit screening and managing their units’ credit portfolios. In the Wholesale Banking Unit, the Credit Administration Dept. is
responsible for formulating and implementing measures to reduce SMBC’s exposures mainly to borrowers classified as potentially
bankrupt or lower. Each business unit establishes its credit limits based on the baseline amounts for each borrower’s grading
category. Borrowers or loans perceived to have high credit risk undergo intensive evaluation and administration by the unit’s
Credit Department. The Corporate Research Dept. analyzes industries as well as investigates individual borrowers’ business
situations to detect early signs of problems.
Moreover, the Credit Risk Management Committee, a consultative body straddling the business units, rounds out SMBC’s
oversight system for undertaking flexible and efficient control of credit risk and ensuring the overall soundness of the bank’s loan
operations.
In addition to these, the Internal Audit Unit, operating independently of the business units, audits asset quality, grading
accuracy, self-assessment, and appropriateness of the credit risk management system, and reports the results directly to the Board
of Directors and the Management Committee.
(b) 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
screening 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 keep credit risk exposure to a permissible level relative to capital, SMBC sets “credit risk capital limit” for internal control
purposes. Under these limits, separate guidelines are issued for each business unit and marketing unit. SMBC regularly
monitors compliance with these guidelines.
• Controlling concentration of risk
Because concentration of credit risk in an industry or corporate group has the potential to impair a bank’s capital significantly,
SMBC implements measures to prevent excessive concentration of loan in a single industry and to control large exposure to
individual borrowers by setting maximum loan amounts and conducting loan reviews thoroughly. To manage country risk,
SMBC also has credit limit guidelines based on each country’s creditworthiness.
• Greater understanding of actual corporate conditions 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
For non-performing loans and potential non-performing loans, SMBC carries out loan reviews to clarify credit 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.
In regards to financial instruments such as investments in certain funds, securitized products and credit derivatives that
indirectly retain risks related to assets such as corporate bonds and loan claims (underlying assets), such instruments entail
market and liquidity risks in addition to credit risk, since such instruments are traded on the market. Credit risk management
for these instruments involving detailed analysis and evaluation 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 to appropriately manage risks of incurring losses.
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 two
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.
2) Management of market and liquidity risks
SMFG manages market and liquidity risks across the entire Group 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.
(a) Market and liquidity risk management systems
At SMBC, important matters such as basic policies for managing market and liquidity risks and risk management framework are
determined by the Management Committee and then approved by the Board of Directors.
The aforementioned Corporate Risk Management Dept., which is independent of the business units that directly handle
business transactions and 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.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements Furthermore, its cross-departmental “ALM Committee” reports on the state of observance of SMBC’s market and liquidity risk
capital limits, and deliberates on administration of ALM policies. It 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, its Internal Audit Unit, which is independent of other departments, periodically performs comprehensive internal
audits to verify that the risk management framework is properly functioning and reports the audit results to the Management
Committee, the Board of Directors and other concerned committees and departments.
(b) 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 that may be incurred to
a specific financial instrument for a given probability) within the market risk capital limit, which is set taking into account
stockholders’ equity and other factors 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 fluctuations scenarios based on historical data) to measure VaR. Regarding banking
activities (activities for generating profit through management of interest rates, terms, and other aspects of such as loans and
bonds in assets, deposits in liabilities) and trading activities (activities 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 1 day with a probability of 1% based on 4 years of historical observation. With regard to the
holding of shares (such as listed shares) for the purpose of strategic investment, SMBC calculates the maximum loss that may
occur as a result of market fluctuations in 1 year with a probability of 1% based on 10 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, 2016, total VaR of SMBC and its major consolidated subsidiaries was ¥34.0 billion for the banking activities,
¥11.0 billion for the trading activities and ¥1,387.6 billion for the holding of shares (such as listed shares) for the purpose of
strategic investment.
However, it should be noted that these figures are statistical figures that change according to changes in assumptions and
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, establishing
contingency plans, and maintaining a system of highly liquid supplementary funding sources. A funding gap is the amount of
funds needed in the future to cover duration mismatch between required investments and funding resources. SMBC tries to
avoid excessive reliance on short-term funds by managing funding gap limits and has established a contingency plan covering
emergency action plans such as reducing funding gap limits. In addition, to ensure smooth fulfillment of transactions in face
of market turmoil, it holds assets such as U.S. treasuries that can be sold immediately and emergency committed lines as
supplemental liquidity.
Moreover, to manage the liquidity risk of marketable instruments, derivative transactions, etc., SMBC has trading limits
for each business office classified by currency, instrument, transaction period, etc. As for financial futures, etc., risks are
managed by restricting positions to within a certain percentage of open interest in the entire market.
(4) 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, on reasonably
calculated prices. These prices have been calculated using certain assumptions, and may differ if calculated based on different
assumptions.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 2. Fair value of financial instruments
(1) “Consolidated balance sheet amount”, “Fair value” and “Net unrealized gains (losses)” of financial instruments as of March 31, 2015 and
2016 are as follows:
The amounts shown in the following tables do not include financial instruments (see (3) below) whose fair values are extremely
difficult to determine, such as unlisted stocks classified as Other securities, and stocks of subsidiaries and affiliates.
March 31, 2015
1) Cash and due from 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
Bonds 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
¥ 39,739,777
1,326,280
746,431
6,477,063
4,282,392
3,235,701
7,087
3,397,151
25,031,810
73,068,240
(461,747)
72,606,492
1,903,702
1,899,760
¥160,653,651
¥101,047,918
13,825,898
5,873,123
991,860
7,833,219
3,351,459
2,193,399
9,778,095
1,110,822
1,370,800
6,222,918
718,133
¥154,317,650
Millions of yen
Fair value
¥ 39,746,763
1,327,080
747,509
6,477,657
4,293,764
3,235,701
7,087
3,417,732
25,031,810
74,598,557
1,907,769
1,974,558
¥162,765,990
¥101,053,137
13,829,279
5,873,118
991,860
7,833,219
3,351,431
2,193,399
9,828,014
1,110,822
1,370,799
6,437,691
718,133
¥154,590,909
Hedge accounting not applied ..............................................
Hedge accounting applied ....................................................
Total ..........................................................................................
¥ 593,008
[861,906]
[268,898]
¥
¥ 593,008
[861,906]
[268,898]
¥
Net unrealized
gains (losses)
¥ 6,986
800
1,077
593
11,371
—
—
20,580
—
1,992,064
4,066
74,798
¥2,112,338
¥ 5,219
3,381
(5)
—
—
(27)
—
49,918
—
(0)
214,772
—
¥ 273,259
¥
¥
—
—
—
*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,”
“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, with a net debt presented in square brackets.
146
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
March 31, 2016
1) Cash and due from banks *1 .......................................................
2) Call loans and bills bought *1 ....................................................
3) Receivables under resale agreements ..........................................
4) Receivables under securities borrowing transactions *1 ..............
5) Monetary claims bought *1 ........................................................
6) Trading assets
Securities classified as trading purposes .................................
7) Money held in trust ...................................................................
8) Securities
Bonds 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
¥ 42,776,432
1,290,196
494,949
7,972,679
4,345,143
3,634,054
5,163
2,267,598
21,980,120
75,066,080
(415,728)
74,650,351
1,574,079
1,977,899
¥162,968,668
¥110,668,828
14,250,434
1,220,455
1,761,822
5,309,003
3,017,404
2,197,673
8,571,227
1,083,450
1,271,300
7,006,357
944,542
¥157,302,500
Millions of yen
Fair value
¥ 42,783,707
1,291,525
494,867
7,973,016
4,354,958
3,634,054
5,163
2,284,166
21,980,120
76,996,975
1,576,439
2,081,232
¥165,456,227
¥110,672,780
14,258,203
1,220,455
1,761,822
5,309,003
3,017,372
2,197,673
8,635,608
1,083,450
1,271,295
7,258,216
944,542
¥157,630,423
Hedge accounting not applied ..............................................
Hedge accounting applied ....................................................
Total ..........................................................................................
¥ 492,569
[207,696]
¥ 284,872
¥ 492,569
[207,696]
¥ 284,872
Net unrealized
gains (losses)
¥ 7,274
1,329
(82)
337
9,814
—
—
16,568
—
2,346,623
2,359
103,333
¥2,487,558
¥ 3,951
7,769
(0)
—
—
(32)
—
64,380
—
(4)
251,858
—
¥ 327,923
¥
¥
—
—
—
*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,”
“Call loans and bills bought,” “Receivables under securities borrowing transactions,” “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 in “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.
(2) Fair value calculation methodology for financial instruments
Assets
1) Cash and due from banks, 2) Call loans and bills bought, 3) Receivables under resale agreements, 4) Receivables under securities
borrowing transactions, 9) Loans and bills discounted, 10) Foreign exchanges and 11) Lease receivables and investment assets:
Of these transactions, for dues from banks without maturity and overdrafts with no specified repayment dates, the book values are used
as fair value as they are considered to approximate their fair value.
For short-term transactions with remaining maturity not exceeding 6 months, in principle, the book values are used as fair value as
they are considered to approximate their fair value.
The fair value of those with a remaining maturity of more than 6 months is, in principle, the present value of future cash flows
(calculated by discounting estimated future cash flows, taking into account factors such as the borrower’s internal rating and pledged
collateral, using a rate comprising of a risk-free interest rate and an adjustment). Certain consolidated subsidiaries of SMFG calculate
the present value by discounting the estimated future cash flows computed based on the contractual interest rate, using a rate
comprising a risk-free rate and a credit risk premium.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
Regarding claims on bankrupt borrowers, effectively bankrupt borrowers and potentially bankrupt borrowers, expected losses on
such claims are calculated based on either the expected recoverable amount from disposal of collateral or guarantees, or the present
value of expected future cash flows. Since the claims’ balance sheet amounts minus the expected amount of loan losses approximate
their fair values, such amounts are considered to be their fair values.
5) Monetary claims bought:
The fair values of monetary claims bought, such as subordinated trust beneficiary interests related to securitized housing loans, are
based on the assessed value of underlying housing loans securitized through the trust scheme 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 trading purposes are, in principle, based on their market price at the end 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 as of the end of the fiscal year.
In light of the “Practical Solution on Measurement of Fair Value for Financial Assets” (ASBJ Practical Issue Task Force No. 25), the
fair values of floating rate 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 taking into account the borrower’s internal rating and pledged collateral by a rate comprising a risk-free interest rate
and an adjustment. However, the fair values of bonds, such as private placement bonds issued by bankrupt borrowers, effectively
bankrupt borrowers and potentially bankrupt borrowers are based on the bond’s book value after the deduction of the expected amount
of a loss on the bond computed by using the same method applied to the estimation of a loan loss. Meanwhile, the fair values of
publicly offered investment trusts are calculated based on the published net asset value (NAV) per share, while those of private
placement investment trusts are calculated based on the NAV published by securities firms and other financial institutions.
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. The fair values of short-term
transactions with remaining maturity not exceeding 6 months are also based on their book values, as their book values are regarded to
approximate their market values. The fair values of transactions with a remaining maturity of more than 6 months are, in principle,
based on the present value of estimated future cash flows calculated using the rate applied to the same type of deposits that are newly
accepted until the end of the remaining maturity.
3) Call money and bills sold, 4) Payables under repurchase agreements, 5) Payables under securities lending transactions, 6)
Commercial paper, 8) Borrowed money, 10) Short-term bonds and 11) Bonds:
The fair values of short-term transactions with remaining maturity not exceeding 6 months are based on their book values, as their
book values are considered to approximate their fair values. For transactions with a remaining maturity of more than 6 months, their
fair values are, in principle, based on the present value of estimated future cash flows calculated using the refinancing rate applied to
the same type of instruments for the remaining maturity. 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 as of
the end 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.
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 prices calculated based on the present value of the future
cash flows, option valuation models, etc. The fair values of commodity derivatives transactions are based on their prices calculated
based on the derivative instrument’s components, including price and contract term.
148
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (3) Consolidated balance sheet amount of financial instruments whose fair values are extremely difficult to determine are as follows:
March 31
Monetary claims bought:
Millions of yen
2015
2016
Monetary claims bought without market prices *1 ...................................................
¥ 2,537
¥ 2,460
Securities:
Unlisted stocks, etc. *2 *4 ........................................................................................
Investments in partnership, etc. *3 *4 ......................................................................
Total .............................................................................................................................
361,541
259,445
¥623,523
157,382
248,921
¥408,764
*1 They are beneficiary claims on loan trusts (a) that behave more like equity than debt, (b) that do not have market prices, and (c) for which it is difficult to rationally estimate
their 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 SMFG records
net changes in their balance sheets and statements of income.
*4 Unlisted stocks and investments in partnership totaling ¥12,762 million and ¥7,618 million were written-off in the fiscal year ended March 31, 2015 and 2016,
respectively.
(4) Redemption schedule of monetary claims and securities with maturities
Millions of yen
March 31, 2015
Deposits with banks ...................................................
Call loans and bills bought .........................................
Receivables under resale agreements ...........................
Receivables under securities borrowing transactions ...
Monetary claims bought*1 ..........................................
Securities*1 ................................................................
Bonds classified as held-to-maturity.......................
Japanese government bonds ..............................
Japanese local government bonds ......................
Japanese corporate bonds ..................................
Other ...............................................................
Other securities with maturity...............................
Japanese government bonds ..............................
Japanese local government bonds ......................
Japanese corporate bonds ..................................
Other ...............................................................
Loans and bills discounted*1 *2 ...................................
Foreign exchanges*1 ...................................................
Lease receivables and investment assets*1 ....................
Total ...........................................................................
Within 1 year
¥38,506,416
1,272,265
674,341
6,427,273
3,378,992
5,656,240
1,392,417
1,300,000
51,347
41,070
—
4,263,823
1,715,975
28,278
452,917
2,066,652
16,197,047
1,883,491
547,109
¥74,543,178
After 1 year
through 5 years
¥ 46,508
51,242
72,090
49,790
597,974
14,446,962
2,001,567
1,980,000
16,356
5,210
—
12,445,395
8,893,500
21,904
1,584,554
1,945,436
30,706,918
21,463
1,005,281
¥46,998,231
After 5 years
through 10 years
¥ 20,911
3,456
—
—
48,832
2,311,100
—
—
—
—
—
2,311,100
369,500
1,224
503,625
1,436,750
10,754,197
—
156,851
¥13,295,349
After 10 years
¥ 1,241
—
—
—
221,903
758,126
—
—
—
—
—
758,126
—
35
31,767
726,322
9,205,773
—
50,521
¥10,237,565
*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 Monetary claims bought: ¥21 million, Securities: ¥44,760 million, Loans and bills
discounted: ¥756,824 million, Foreign exchanges: ¥2,712 million and Lease receivables and investment assets: ¥19,460 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥5,445,535 million at March 31, 2015.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
March 31, 2016
Deposits with banks ...................................................
Call loans and bills bought .........................................
Receivables under resale agreements ...........................
Receivables under securities borrowing transactions ...
Monetary claims bought*1 ..........................................
Securities*1 ................................................................
Bonds classified as held-to-maturity.......................
Japanese government bonds ..............................
Japanese local government bonds ......................
Japanese corporate bonds ..................................
Other ...............................................................
Other securities with maturity...............................
Japanese government bonds ..............................
Japanese local government bonds ......................
Japanese corporate bonds ..................................
Other ...............................................................
Loans and bills discounted*1 *2 ...................................
Foreign exchanges*1 ...................................................
Lease receivables and investment assets*1 ....................
Total ...........................................................................
Within 1 year
¥41,764,849
1,235,295
427,377
7,961,878
3,349,198
5,125,770
1,093,340
1,080,000
13,340
—
—
4,032,430
1,548,400
12,838
476,283
1,994,907
16,340,462
1,572,622
531,712
¥78,309,168
Millions of yen
After 1 year
through 5 years
¥ 33,628
50,706
67,572
11,040
678,150
10,864,943
1,172,636
1,160,000
7,426
5,210
—
9,692,306
6,172,500
14,197
1,558,803
1,946,805
31,637,487
2,557
1,039,875
¥44,385,961
After 5 years
through 10 years
¥ 24,213
5,363
—
—
43,207
2,047,674
—
—
—
—
—
2,047,674
11,000
3,855
555,748
1,477,070
11,694,402
—
155,118
¥13,969,979
After 10 years
¥ 1,329
—
—
—
235,211
1,712,001
—
—
—
—
—
1,712,001
239,400
33
96,278
1,376,289
9,085,329
—
102,003
¥11,135,875
*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 Monetary claims bought: ¥0 million, Securities: ¥33,496 million, Loans and bills
discounted: ¥608,928 million, Foreign exchanges: ¥1,987 million, Lease receivables and investment assets: ¥18,510 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥5,697,958 million at March 31, 2016.
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
March 31, 2015
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
¥ 95,917,733
13,518,726
5,873,123
991,860
7,833,219
3,351,459
7,158,084
1,110,822
1,370,800
1,023,264
718,133
¥138,867,230
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥4,284,380
304,980
—
—
—
—
1,306,961
—
—
2,742,910
—
¥8,639,233
After 5 years
through 10 years
¥ 497,816
2,170
—
—
—
—
824,115
—
—
2,034,764
—
¥3,358,866
After 10 years
¥ 347,987
20
—
—
—
—
488,932
—
—
426,306
—
¥1,263,246
150
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
March 31, 2016
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
¥105,655,087
13,740,528
1,219,196
1,761,822
5,309,003
3,017,404
5,790,740
1,083,450
1,271,300
985,979
944,542
¥140,779,055
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥4,098,017
506,777
1,259
—
—
—
1,292,699
—
—
3,213,584
—
¥9,112,338
After 5 years
through 10 years
¥ 468,420
3,125
—
—
—
—
1,018,602
—
—
2,094,283
—
¥3,584,431
After 10 years
¥ 447,303
1
—
—
—
—
469,186
—
—
716,106
—
¥1,632,598
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to securities)
The amounts shown in the following tables include trading securities and short-term bonds classified as “Trading assets,” negotiable certificates
of deposit classified as “Cash and due from banks,” and beneficiary claims on loan trust classified as “Monetary claims bought,” in addition to
“Securities” stated in the consolidated balance sheets.
1. Securities classified as trading purposes
March 31
Valuation gains (losses) included in the earnings for the fiscal year ......................................
Millions of yen
2015
¥72,389
2016
¥(32,241)
2. Bonds classified as held-to-maturity
March 31, 2015
Bonds with unrealized gains:
Japanese government bonds .......................
Japanese local government bonds ...............
Japanese corporate bonds ...........................
Other ........................................................
Subtotal .....................................................
Japanese government bonds .......................
Japanese local government bonds ...............
Japanese corporate bonds ...........................
Other ........................................................
Subtotal .....................................................
Total .............................................................................................................
Bonds with unrealized losses:
March 31, 2016
Bonds with unrealized gains:
Japanese government bonds .......................
Japanese local government bonds ...............
Japanese corporate bonds ...........................
Other ........................................................
Subtotal .....................................................
Japanese government bonds .......................
Japanese local government bonds ...............
Japanese corporate bonds ...........................
Other ........................................................
Subtotal .....................................................
Total .............................................................................................................
Bonds with unrealized losses:
Consolidated balance
sheet amount
¥3,283,044
67,843
46,263
—
3,397,151
—
—
—
—
—
¥3,397,151
Consolidated balance
sheet amount
¥2,241,546
16,460
5,202
—
2,263,208
—
4,389
—
—
4,389
¥2,267,598
Millions of yen
Fair value
¥3,303,228
68,065
46,438
—
3,417,732
—
—
—
—
—
¥3,417,732
Millions of yen
Fair value
¥2,258,065
16,485
5,230
—
2,279,780
—
4,385
—
—
4,385
¥2,284,166
Net unrealized
gains (losses)
¥20,183
221
175
—
20,580
—
—
—
—
—
¥20,580
Net unrealized
gains (losses)
¥16,518
25
27
—
16,572
—
(3)
—
—
(3)
¥16,568
152
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
3. Other securities
March 31, 2015
Other securities with
unrealized gains:
Stocks ........................................................
Bonds ........................................................
Japanese government bonds ..................
Japanese local government bonds ..........
Japanese corporate bonds ......................
Other ........................................................
Subtotal .....................................................
Stocks ........................................................
Bonds ........................................................
Japanese government bonds ..................
Japanese local government bonds ..........
Japanese corporate bonds ......................
Other ........................................................
Subtotal .....................................................
Total ..............................................................................................
Other securities with
unrealized losses:
Consolidated
balance sheet amount
¥ 3,726,432
11,259,951
8,953,781
49,123
2,257,045
6,024,855
21,011,239
119,767
2,439,610
2,053,225
3,026
383,358
2,069,284
4,628,662
¥25,639,901
Millions of yen
Acquisition cost
¥ 1,653,065
11,199,114
8,935,132
48,842
2,215,139
5,505,092
18,357,271
138,826
2,450,418
2,058,905
3,039
388,473
2,088,398
4,677,644
¥23,034,915
Net unrealized
gains (losses)
¥2,073,367
60,837
18,649
281
41,905
519,762
2,653,967
(19,059)
(10,808)
(5,680)
(12)
(5,114)
(19,113)
(48,981)
¥2,604,985
Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥29,870 million for the fiscal year ended March 31, 2015 that are recognized in the
earnings by applying fair value hedge accounting.
2. Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:
March 31, 2015
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥219,799
403,724
¥623,523
These amounts are not included in “3. Other securities” since there are no market prices and it is extremely difficult to determine their fair values.
March 31, 2016
Other securities with
unrealized gains:
Stocks ........................................................
Bonds ........................................................
Japanese government bonds ..................
Japanese local government bonds .............
Japanese corporate bonds ......................
Other ........................................................
Subtotal .....................................................
Stocks ........................................................
Bonds ........................................................
Japanese government bonds ..................
Japanese local government bonds .............
Japanese corporate bonds ......................
Other ........................................................
Subtotal .....................................................
Total ..............................................................................................
Other securities with
unrealized losses:
Consolidated
balance sheet amount
¥ 3,103,065
9,870,848
7,380,250
26,353
2,464,245
5,318,399
18,292,314
277,214
1,022,241
724,800
4,867
292,573
3,132,891
4,432,347
¥22,724,662
Millions of yen
Acquisition cost
¥ 1,480,085
9,759,438
7,317,408
26,195
2,415,834
5,027,532
16,267,055
327,194
1,024,465
725,202
4,885
294,377
3,198,433
4,550,093
¥20,817,149
Net unrealized
gains (losses)
¥1,622,980
111,410
62,842
157
48,411
290,867
2,025,258
(49,979)
(2,223)
(402)
(17)
(1,803)
(65,542)
(117,745)
¥1,907,512
Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥871 million for the fiscal year ended March 31, 2016 that are recognized in the earnings
by applying fair value hedge accounting.
2. Consolidated balance sheet amounts of other securities whose fair values are extremely difficult to determine are as follows:
March 31, 2016
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥131,602
277,161
¥408,764
These amounts are not included in “3. Other securities” since there are no market prices and it is extremely difficult to determine their fair values.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 4. Held-to-maturity bonds sold during the fiscal year
Fiscal year ended March 31, 2015
There are no corresponding transactions.
Fiscal year ended March 31, 2016
There are no corresponding transactions.
5. Other securities sold during the fiscal year
Year ended March 31, 2015
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Year ended March 31, 2016
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Sales amount
¥ 113,544
13,407,655
13,142,974
63,699
200,981
14,275,561
¥27,796,760
Sales amount
¥ 161,735
12,304,977
12,079,605
61,407
163,963
10,175,242
¥22,641,955
Millions of yen
Gains on sales
Losses on sales
¥ 45,455
9,406
8,939
37
429
98,168
¥153,030
¥ (1,890)
(5,699)
(5,593)
(94)
(11)
(16,739)
¥(24,329)
Millions of yen
Gains on sales
Losses on sales
¥ 42,097
25,883
25,531
23
329
117,516
¥185,497
¥ (2,784)
(1,520)
(237)
(98)
(1,185)
(28,467)
¥(32,773)
6. Change of classification of securities
Fiscal year ended March 31, 2015
There are no significant corresponding transactions to be disclosed.
Fiscal year ended March 31, 2016
There are no significant corresponding transactions to be disclosed.
7. Write-down of securities
Bonds classified as held-to-maturity and other securities (excluding securities whose fair values are extremely difficult to determine) are
considered as impaired if the fair value decreases materially below the acquisition cost and such decline is not considered as recoverable. The fair
value is recognized as the consolidated balance sheet amount and the amount of write-down is accounted for as valuation loss for the fiscal year.
Valuation losses for the fiscal years ended March 31, 2015 and 2016 were ¥5,992 million and ¥4,838 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:
Fair value is lower than acquisition cost.
Issuers requiring caution:
Normal issuers:
Fair value is 30% or lower than acquisition cost.
Fair value is 50% or lower than acquisition cost.
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.
154
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to money held in trust)
1. Money held in trust classified as trading purposes
Fiscal year ended March 31, 2015
There are no corresponding transactions.
Fiscal year ended March 31, 2016
There are no corresponding transactions.
2. Money held in trust classified as held-to-maturity
Fiscal year ended March 31, 2015
There are no corresponding transactions.
Fiscal year ended March 31, 2016
There are no corresponding transactions.
3. Other money held in trust
March 31, 2015
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥7,087
March 31, 2016
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥5,163
Millions of yen
Acquisition cost
¥7,087
Millions of yen
Acquisition cost
¥5,163
Net unrealized
gains (losses)
—
Net unrealized
gains (losses)
—
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to net unrealized gains (losses) on other securities and other money held in trust)
The breakdown of “Net unrealized gains (losses) on other securities” reported on the consolidated balance sheets is as shown below:
March 31, 2015
Net unrealized gains (losses) ..........................................................................................................................................
Other securities ........................................................................................................................................................
Other money held in trust ........................................................................................................................................
(−) Deferred tax liabilities .............................................................................................................................................
Net unrealized gains (losses) on other securities (before following adjustments) .............................................................
(−) Non-controlling interests .........................................................................................................................................
(+) SMFG’s interest in net unrealized gains (losses) on valuation of other securities held by equity method affiliates ......
Net unrealized gains (losses) on other securities .............................................................................................................
Millions of yen
¥2,575,489
2,575,489
—
727,559
1,847,929
59,441
2,560
¥1,791,049
Notes:
1. Net unrealized gains of ¥29,870 million for the fiscal year ended March 31, 2015 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 (losses) on other securities include foreign currency translation adjustments on foreign currency denominated securities whose fair value is extremely
difficult to determine.
March 31, 2016
Net unrealized gains (losses) ..........................................................................................................................................
Other securities ........................................................................................................................................................
Other money held in trust ........................................................................................................................................
(−) Deferred tax liabilities .............................................................................................................................................
Net unrealized gains (losses) on other securities (before following adjustments) .............................................................
(−) Non-controlling interests .........................................................................................................................................
(+) SMFG’s interest in net unrealized gains (losses) on valuation of other securities held by equity method affiliates ......
Net unrealized gains (losses) on other securities .............................................................................................................
Millions of yen
¥1,907,093
1,907,093
—
504,144
1,402,948
57,075
1,817
¥1,347,689
Notes: 1. Net unrealized gains of ¥871 million for the fiscal year ended March 31, 2016 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 (losses) on other securities include foreign currency translation adjustments on foreign currency denominated securities whose fair value is extremely
difficult to determine.
156
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to 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 notional amount, fair value, valuation gains (losses) and fair
value calculation methodologies by type of derivative 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.
(1) Interest rate derivatives
March 31, 2015
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 72,417,655
70,808,254
¥ 27,182,460
25,824,043
¥ (63,824)
58,948
¥ (63,824)
58,948
Interest rate options:
Sold ............................................................................
Bought .......................................................................
345,874
36,305,940
36,168
16,041,662
(110)
6,990
(110)
6,990
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 ..............
6,869,797
6,747,669
449,422,723
211,594,325
209,580,904
28,142,407
35,565
377,473
374,591,082
176,500,223
175,966,222
22,028,051
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
3,595,666
2,131,049
2,228,852
1,590,233
Caps:
Sold ............................................................................
Bought .......................................................................
21,514,098
7,165,728
16,330,540
5,603,385
Floors:
Sold ............................................................................
Bought .......................................................................
594,392
98,034
Other:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,004,262
3,924,935
/
417,517
98,034
885,363
3,249,593
/
606
(604)
124,036
6,138,890
(6,018,957)
(2,593)
19,802
(12,738)
(18,189)
(4,231)
(533)
2,659
606
(604)
124,036
6,138,890
(6,018,957)
(2,593)
19,802
(12,738)
(18,189)
(4,231)
(533)
2,659
(6,496)
9,944
¥ 116,260
(6,496)
9,944
¥ 116,260
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 an exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of
OTC transactions is calculated using discounted present value and option pricing models.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
March 31, 2016
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 63,471,276
57,572,037
¥ 7,435,505
4,357,650
¥ (79,505)
75,639
¥ (79,505)
75,639
Interest rate options:
Sold ............................................................................
Bought .......................................................................
44,716
33,993,010
24,106
14,119,537
(8)
6,597
(8)
6,597
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 ..............
7,874,784
7,963,487
396,761,415
183,975,452
180,604,918
32,005,448
148,664
220,176
332,313,682
154,668,295
151,380,739
26,092,014
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
4,681,782
3,416,990
2,792,669
2,680,830
Caps:
Sold ............................................................................
Bought .......................................................................
27,745,929
8,098,947
20,292,051
6,390,955
Floors:
Sold ............................................................................
Bought .......................................................................
623,291
275,954
Other:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,412,146
5,480,980
/
431,693
274,754
1,128,576
4,930,203
/
(1,288)
1,352
176,265
6,357,881
(6,206,980)
14,589
(7,029)
(22,676)
(13,737)
(6,724)
(596)
4,193
(1,288)
1,352
176,265
6,357,881
(6,206,980)
14,589
(7,029)
(22,676)
(13,737)
(6,724)
(596)
4,193
(433)
484
¥ 132,532
(433)
484
¥ 132,532
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 an exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of
OTC transactions is calculated using discounted present value and option pricing models.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(2) Currency derivatives
March 31, 2015
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 80,931
497
¥ —
—
¥ 180
0
¥ 180
0
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
308,906
451,270
62,599,180
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
2,723,327
2,395,875
/
27,035,522
20,122,147
694,080
10,572
304,563
443,519
5,225,986
1,495,074
1,248,848
/
(559)
(397)
(141,028)
(181,167)
121,468
¥ 492,576
(559)
(397)
(141,028)
(181,167)
121,468
¥(190,931)
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 price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC
transactions is calculated using discounted present value, option pricing models and other methodologies.
March 31, 2016
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 658
32
¥ —
—
¥ 17
0
¥ 17
0
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
33,811,276
24,295,023
387,527
15,992
621,538
785,064
56,831,766
2,692,132
2,558,291
/
576,940
735,396
7,266,262
1,560,230
1,381,862
/
(5,697)
5,823
7,441
(5,697)
5,823
7,441
(138,718)
112,318
¥ 368,712
(138,718)
112,318
¥ (2,822)
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 price on the Tokyo Financial Exchange or other relevant exchanges. Fair value of OTC
transactions is calculated using discounted present value, option pricing models and other methodologies.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(3) Equity derivatives
March 31, 2015
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥995,977
278,331
Equity price index options:
Sold ............................................................................
Bought .......................................................................
169,645
153,942
Over-the-counter
Equity options:
Sold ............................................................................
Bought .......................................................................
Equity index forward contracts:
Sold ............................................................................
Bought .......................................................................
Equity price index swaps:
Receivable equity index/payable short-term floating
rate ...........................................................................
Receivable short-term floating rate/payable equity
index ........................................................................
Total ................................................................................
225,859
233,896
16,717
33,481
31,690
59,675
/
¥ —
—
68,750
59,715
218,338
218,338
—
499
31,225
58,570
/
¥(11,341)
6,718
(16,412)
11,545
(23,558)
24,976
126
500
¥(11,341)
6,718
(16,412)
11,545
(23,558)
24,976
126
500
(1,262)
(1,262)
1,942
¥ (6,764)
1,942
¥ (6,764)
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 price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions
is calculated using discounted present value and option pricing models.
March 31, 2016
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥739,284
350,541
Equity price index options:
Sold ............................................................................
Bought .......................................................................
211,201
146,407
Over-the-counter
Equity options:
Sold ............................................................................
Bought .......................................................................
Equity index forward contracts:
Sold ............................................................................
Bought .......................................................................
Equity price index swaps:
Receivable equity index/payable short-term floating
rate ...........................................................................
Receivable short-term floating rate/payable equity
index ........................................................................
Total ................................................................................
225,296
220,558
4,236
7,722
¥ —
23,912
118,394
67,456
207,647
209,864
—
400
¥ (4,371)
804
(19,465)
8,512
(20,896)
20,609
152
333
¥ (4,371)
804
(19,465)
8,512
(20,896)
20,609
152
333
65,728
51,288
(12,612)
(12,612)
136,471
/
113,501
/
21,211
¥ (5,723)
21,211
¥ (5,723)
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 price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions
is calculated using discounted present value and option pricing models.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(4) Bond derivatives
March 31, 2015
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥3,261,725
2,668,201
¥ —
—
¥(23,171)
15,828
¥(23,171)
15,828
Bond futures options:
Sold ............................................................................
Bought .......................................................................
38,448
39,048
—
—
(40)
107
(40)
107
Over-the-counter
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
39,607
174,030
/
—
134,394
/
(123)
655
¥ (6,743)
(123)
655
¥ (6,743)
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 price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions
is calculated using option pricing models.
March 31, 2016
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥2,881,937
2,533,396
¥ —
—
¥(11,472)
10,038
¥(11,472)
10,038
Bond futures options:
Sold ............................................................................
Bought .......................................................................
158,794
31,426
—
—
(362)
26
(362)
26
Over-the-counter
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
455,731
382,507
/
—
119,292
/
(11)
737
¥ (1,043)
(11)
737
¥ (1,043)
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 price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions
is calculated using option pricing models.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(5) Commodity derivatives
March 31, 2015
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 14,001
15,703
¥ —
—
¥ 1,546
(2,183)
¥ 1,546
(2,183)
Over-the-counter
Commodity swaps:
Receivable fixed price/payable floating price ...............
Receivable floating price/payable fixed price ...............
Receivable floating price/payable floating price ...........
Commodity options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
111,581
87,933
3,922
15,529
9,095
/
72,095
62,634
3,384
13,787
7,946
/
7,608
(5,971)
(132)
(506)
(108)
¥ 253
7,608
(5,971)
(132)
(506)
(108)
¥ 253
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 price on the New York Mercantile Exchange or other relevant exchanges. Fair value of
OTC transactions is calculated based on factors such as price of the relevant commodity and contract term.
3. Underlying assets of commodity derivatives are fuels and metals.
March 31, 2016
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 7,458
7,841
¥ —
—
¥ 377
(590)
¥ 377
(590)
Over-the-counter
Commodity swaps:
Receivable fixed price/payable floating price ...............
Receivable floating price/payable fixed price ...............
Receivable floating price/payable floating price ...........
Commodity options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
82,658
80,511
3,141
19,191
15,141
/
54,945
52,227
3,061
16,972
13,044
/
21,539
(19,680)
299
(967)
(1)
¥ 975
21,539
(19,680)
299
(967)
(1)
¥ 975
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 price on the New York Mercantile Exchange or other relevant exchanges. Fair value of
OTC transactions is calculated based on factors such as price of the relevant commodity and contract term.
3. Underlying assets of commodity derivatives are fuels and metals.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(6) Credit derivative transactions
March 31, 2015
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥491,723
652,486
/
¥397,171
520,233
/
¥ 6,882
(9,456)
¥(2,574)
¥ 6,882
(9,456)
¥(2,574)
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.
March 31, 2016
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥583,300
765,485
/
¥482,110
611,156
/
¥ 3,336
(6,221)
¥(2,885)
¥ 3,336
(6,221)
¥(2,885)
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.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
2. Derivative transactions to which the hedge accounting method is applied
The following tables set forth the contract amount or the amount equivalent to the notional amount, fair value and fair value calculation
methodologies by type of derivative and hedge accounting method 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.
(1) Interest rate derivatives
March 31, 2015
Hedge accounting
method
Deferral hedge
method
Principal items
hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securities,
deposits and negotiable
certificates of deposit
Type of derivative
Interest futures:
Sold .....................................................
Bought ................................................
Interest rate swaps:
Receivable fixed rate/payable floating
rate ....................................................
Receivable floating rate/payable fixed
rate ....................................................
Receivable floating rate/payable floating
rate ....................................................
Interest rate swaptions:
Sold .....................................................
Bought ................................................
Caps:
Sold .....................................................
Bought ................................................
Recognition of gain or
loss on the hedged items
Special treatment for
interest rate swaps
Interest rate swaps:
Loans and bills discounted
Receivable floating rate/payable fixed
rate ....................................................
Interest rate swaps:
Receivable floating rate/payable fixed
rate ....................................................
Receivable floating rate/payable floating
rate ....................................................
Total ..........................................................
Loans and bills discounted;
borrowed money, corporate
bonds
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥ 9,431,618
1,300,300
¥ 6,067,453
—
¥ (5,029)
(41)
31,042,631
26,461,484
718,262
16,875,562
15,294,056
(666,588)
3,604
12,344
—
65,156
65,156
—
12,344
—
61,248
61,248
4
89
—
135
(135)
148,693
91,040
728
167,412
149,076
(Note 3)
3,000
/
1,000
/
¥ 47,425
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, February 13, 2002).
2. Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. 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 transactions that are subject to
the hedge. Therefore such fair value is included in the fair value of the relevant transaction subject to the hedge in the “(Notes to financial instruments) 2. Fair
value of financial instruments.”
164
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
March 31, 2016
Hedge accounting
method
Deferral hedge
method
Principal items
hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securities,
deposits and negotiable
certificates of deposit
Type of derivative
Interest futures:
Sold .....................................................
Bought ................................................
Interest rate swaps:
Receivable fixed rate/payable floating
rate ....................................................
Receivable floating rate/payable fixed
rate ....................................................
Receivable floating rate/payable floating
rate ....................................................
Interest rate swaptions:
Sold .....................................................
Bought ................................................
Caps:
Sold .....................................................
Bought ................................................
Recognition of gain or
loss on the hedged items
Special treatment for
interest rate swaps
Interest rate swaps:
Loans and bills discounted
Receivable floating rate/payable fixed
rate ....................................................
Interest rate swaps:
Receivable floating rate/payable fixed
rate ....................................................
Receivable floating rate/payable floating
rate ....................................................
Total ..........................................................
Loans and bills discounted;
borrowed money, corporate
bonds
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥ 469,759
466,100
¥ 20,000
—
¥ (853)
176
30,806,710
27,874,743
873,379
17,287,315
15,999,299
(746,964)
—
—
75,230
—
61,472
61,472
75,230
—
50,267
50,267
—
4,382
—
5
(5)
121,347
118,381
(4,850)
446,074
430,758
(Note 3)
1,000
/
—
/
¥ 125,268
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, February 13, 2002).
2. Fair value of transactions listed on exchange is calculated using the closing price on the Tokyo Financial Exchange or other relevant exchanges. 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 transactions that are subject to
the hedge. Therefore such fair value is included in the fair value of the relevant transaction subject to the hedge in the “(Notes to financial instruments) 2. Fair
value of financial instruments.”
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(2) Currency derivatives
March 31, 2015
Hedge accounting
method
Deferral hedge
method
Type of derivative
Principal items hedged
Currency swaps ................................ Foreign currency denominated loans and
Total
¥6,727,385
Over 1 year
¥4,770,873
Fair value
¥(911,989)
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign currency exchange, etc.
8,980
—
(36)
Millions of yen
Contract amount
Recognition of gain or
loss on the hedged items
Allocation method
Currency swaps ................................ Loans and bills discounted, foreign
Forward foreign exchange ................
Currency swaps ................................ Borrowed money
Total ................................................
exchange
100,155
813,122
39,455
/
84,886
16,526
36,397
/
16,193
(173)
(Note 3)
¥(896,005)
Notes: 1. SMFG 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, July 29, 2002).
2. Fair value is calculated using discounted present value.
3. Forward foreign exchange amounts treated by the allocation method are treated with other securities or other transactions that are subject to the hedge. Therefore
such fair value is included in the fair value of the relevant transaction subject to the hedge in the “(Notes to financial instruments) 2. Fair value of financial
instruments.”
March 31, 2016
Hedge accounting
method
Deferral hedge
method
Type of derivative
Principal items hedged
Currency swaps ................................ Foreign currency denominated loans and
bills discounted, other securities deposits,
foreign currency exchange, etc.
Forward foreign exchange ................
Millions of yen
Contract amount
Total
¥9,600,108
Over 1 year
¥4,735,539
Fair value
¥(364,414)
8,052
—
158
Recognition of gain or
loss on the hedged items
Allocation method
Currency swaps ................................ Loans and bills discounted, foreign
Forward foreign exchange ................
Currency swaps ................................ Borrowed money
Total ................................................
exchange
90,378
494,141
46,415
/
69,277
—
44,900
/
22,037
8,939
(Note 3)
¥(333,280)
Notes: 1. SMFG 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, July 29, 2002).
2. Fair value is calculated using discounted present value.
3. Forward foreign exchange amounts treated by the allocation method are treated with other securities or other transactions that are subject to the hedge. Therefore
such fair value is included in the fair value of the relevant transaction subject to the hedge in the “(Notes to financial instruments) 2. Fair value of financial
instruments.”
166
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(3) Equity derivatives
March 31, 2015
Hedge accounting
method
Recognition of gain or
loss on the hedged items
Principal items
hedged
Other securities
Type of derivative
Equity price index futures:
Sold .............................................................
Bought ........................................................
Equity price index swaps:
Receivable equity index/payable floating
rate ..........................................................
Receivable floating rate/payable equity
index .......................................................
Total ..............................................................
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥118,375
—
¥ —
—
¥ 1,687
—
—
65,978
/
—
8,769
/
—
(15,013)
¥(13,326)
Note:
Fair value of transactions listed on exchange is calculated using the closing price on the Osaka Exchange or other relevant exchanges. Fair value of OTC transactions is
calculated using discounted present value.
March 31, 2016
Hedge accounting
method
Recognition of gain or
loss on the hedged items
Principal items
hedged
Other securities
Type of derivative
Equity price index swaps:
Receivable equity index/payable floating
rate ..........................................................
Receivable floating rate/payable equity
index .......................................................
Total ..............................................................
Note: Fair value of OTC transactions is calculated using discounted present value.
Millions of yen
Contract amount
Total
Over 1 year
Fair value
—
9,929
/
—
—
/
—
315
¥315
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to employee retirement benefits)
1. Outline of employee retirement benefits
SMFG’s consolidated subsidiaries have funded and unfunded contributory defined benefit pension plans and defined-contribution pension plans
for benefit payments to their employees.
Funded contributory defined benefit pension plans mainly consist of contributory funded defined benefit pension plans and lump-sum
severance indemnity plans which set up employee retirement benefit trusts.
Unfunded contributory defined benefit pension plans are lump-sum severance indemnity plans which do not use such trust scheme.
Some consolidated subsidiaries adopt the simplified method in calculating the projected benefit obligation. Additional benefits may also be
granted when employees retire.
2. Contributory defined benefit pension plan
(1) Reconciliation of beginning and ending balances of projected benefit obligation
Millions of yen
Year ended March 31
Beginning balance of projected benefit obligation .........................................................
Cumulative effects of changes in accounting policies ..................................................
Restated balance ...........................................................................................................
Service cost ................................................................................................................
Interest cost on projected benefit obligation ...............................................................
Unrecognized net actuarial gain or loss incurred ........................................................
Payments of retirement benefits .................................................................................
Unrecognized prior service cost ..................................................................................
Net change as a result of business combinations ........................................................
Other .........................................................................................................................
Ending balance of projected benefit obligation ..............................................................
2015
¥1,089,286
(52,699)
1,036,587
31,681
13,913
50,926
(50,266)
60
—
206
¥1,083,109
(2) Reconciliation of beginning and ending balances of plan assets
Millions of yen
Year ended March 31
Beginning balance of plan assets ...................................................................................
Expected return on plan assets .................................................................................
Unrecognized net actuarial gain or loss incurred ......................................................
Contributions by the employer ................................................................................
Payments of retirement benefits ...............................................................................
Net change as a result of business combinations......................................................
Other ......................................................................................................................
Ending balance of plan assets ........................................................................................
2015
¥1,163,834
34,677
213,991
48,937
(40,973)
—
801
¥1,421,268
2016
¥1,083,109
—
1,083,109
34,653
11,735
114,691
(51,724)
(31)
13,477
(3,438)
¥1,202,471
2016
¥1,421,268
39,543
(91,563)
45,233
(66,589)
12,281
(2,998)
¥1,357,175
(3) Reconciliation of the projected benefit obligation and plan assets to net defined benefit asset and net defined benefit liability reported on
the consolidated balance sheets
March 31
Funded projected benefit obligation ..............................................................................
Plan assets ....................................................................................................................
Unfunded projected benefit obligation ..........................................................................
Net amount of asset and liability reported on the consolidated balance sheet ................
Millions of yen
2015
¥(1,049,307)
1,421,268
371,961
(33,802)
¥ 338,159
Millions of yen
March 31
Net defined benefit asset ...............................................................................................
Net defined benefit liability ..........................................................................................
Net amount of asset and liability reported on the consolidated balance sheet ................
2015
¥376,255
(38,096)
¥338,159
2016
¥(1,166,606)
1,357,175
190,568
(35,864)
¥ 154,704
2016
¥203,274
(48,570)
¥154,704
168
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (4) Pension expenses
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) ...........................
Pension expenses ..........................................................................................................
Note: Pension expenses of consolidated subsidiaries which adopt the simplified method are included in “Service cost.”
Millions of yen
2015
2016
¥ 31,681
13,913
(34,677)
22,763
(129)
6,850
¥ 40,402
¥ 34,653
11,735
(39,543)
31,956
(179)
4,672
¥ 43,294
(5) Remeasurements of defined benefit plans
The breakdown of “Remeasurements of defined benefit plans” (before deducting tax effect) is as shown below:
Year ended March 31
Prior service cost ...........................................................................................................
Net actuarial gain or loss ..............................................................................................
Total .............................................................................................................................
2015
¥ 190
(185,835)
¥(185,645)
2016
¥ 148
174,270
¥174,418
Millions of yen
(6) Accumulated remeasurements of defined benefit plans
The breakdown of “Accumulated remeasurements of defined benefit plans” (before deducting tax effect) is as shown below:
March 31
Unrecognized prior service cost ....................................................................................
Unrecognized net actuarial gain or loss .........................................................................
Total .............................................................................................................................
2015
¥ (956)
(69,637)
¥(70,594)
2016
¥ (808)
104,633
¥103,824
Millions of yen
(7) Plan assets
1) Major asset classes of plan assets
The proportion of major asset classes to the total plan assets is as follows:
March 31
Stocks ......................................................................................................................
Bonds ......................................................................................................................
Other ......................................................................................................................
Total ........................................................................................................................
2015
2016
62.8%
21.5%
15.7%
100.0%
61.3%
27.3%
11.4%
100.0%
Note: The retirement benefit trusts set up for employee pension plans and lump-sum severance indemnity plans account for 37.9% and 34.0% of the total plan assets at
March 31, 2015 and 2016, respectively.
2) Method for setting the long-term expected rate of return on plan assets
The long-term expected rate of return on plan assets is determined based on the current and expected allocation of plan assets and
the current and expected long-term rates of return on various asset classes of plan assets.
(8) Actuarial assumptions
The principal assumptions used in determining benefit obligation and pension expenses are as follows:
1) Discount rate
Year ended March 31, 2015
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Year ended March 31, 2016
Percentages
0.4% to 1.6% Domestic consolidated subsidiaries ........................
3.1% to 12.0% Overseas consolidated subsidiaries .........................
Percentages
(0.1)% to 1.5%
3.3% to 12.8%
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 2) Long-term expected rate of return on plan assets
Year ended March 31, 2015
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Percentages
Year ended March 31, 2016
0% to 6.1% Domestic consolidated subsidiaries ........................
3.1% to 12.0% Overseas consolidated subsidiaries .........................
Percentages
0% to 4.3%
3.5% to 12.8%
3. Defined contribution plan
Fiscal year ended March 31, 2015
The amount required to be contributed by the consolidated subsidiaries is ¥6,770 million.
Fiscal year ended March 31, 2016
The amount required to be contributed by the consolidated subsidiaries is ¥7,060 million.
170
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to stock options)
1. Amount of stock options expenses
Stock options expenses which were accounted for as general and administrative expenses for the fiscal years ended March 31, 2015 and 2016
are as follows:
Year ended March 31
General and administrative expenses ...................................................................................
Millions of yen
2015
¥510
2016
¥652
2. Amount of profit by non-exercise of stock acquisition rights
Profit by non-exercise of stock acquisition rights which were accounted for as other income for the fiscal years ended March 31, 2015 and
2016 are as follows:
Year ended March 31
Other income .....................................................................................................................
Millions of yen
2015
¥14
2016
¥6
3. Outline of stock options and changes
(1) SMFG
1) Outline of stock options
Date of resolution
Title and number of
grantees ...........................
Number of
stock options* .................
July 28, 2010
July 29, 2011
July 30, 2012
July 29, 2013
Directors of SMFG 8
Corporate auditors of SMFG 3
Executive officers of SMFG 2
Directors, corporate auditors and
executive officers of SMBC 69
Directors of SMFG 9
Corporate auditors of SMFG 3
Executive officers of SMFG 2
Directors, corporate auditors and
executive officers of SMBC 71
Directors of SMFG 9
Corporate auditors of SMFG 3
Executive officers of SMFG 2
Directors, corporate auditors and
executive officers of SMBC 71
Directors of SMFG 9
Corporate auditors of SMFG 3
Executive officers of SMFG 3
Directors, corporate auditors and
executive officers of SMBC 67
Common shares
102,600
August 13, 2010
Grant date .........................
Condition for vesting ......... 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.
From 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
Requisite service period .....
Exercise period ..................
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.
From 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
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.
From 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
Common shares
115,700
August 14, 2013
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.
From June 27, 2013 to the
closing of the ordinary general
meeting of shareholders of
SMFG for the fiscal year ended
March 31, 2014
August 14, 2013 to
August 13, 2043
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
Date of resolution
Title and number of
grantees ...........................
Number of
stock options* .................
July 30, 2014
July 31, 2015
Directors of SMFG 10
Corporate auditors of SMFG 3
Executive officers of SMFG 2
Directors, corporate auditors and
executive officers of SMBC 67
Directors of SMFG 8
Corporate auditors of SMFG 3
Executive officers of SMFG 4
Directors, corporate auditors and
executive officers of SMBC 68
Common shares
121,900
August 15, 2014
Grant date .........................
Condition for vesting ......... 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.
From June 27, 2014 to the
closing of the ordinary general
meeting of shareholders of
SMFG for the fiscal year ended
March 31, 2015
August 15, 2014 to
August 14, 2044
Exercise period ..................
Requisite service period .....
Common shares
132,400
August 18, 2015
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.
From June 26, 2015 to the
closing of the ordinary general
meeting of shareholders of
SMFG for the fiscal year ended
March 31, 2016
August 18, 2015 to
August 17, 2045
* Number of stock options has been converted and stated as number of shares.
2) Stock options granted and changes
(a) 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 ........................
Number of stock options
July 28, 2010 July 29, 2011 July 30, 2012 July 29, 2013 July 30, 2014 July 31, 2015
38,400
—
—
9,400
29,000
58,800
9,400
7,600
—
60,600
151,300
—
—
20,100
131,200
110,500
20,100
2,200
—
128,400
232,500
—
—
86,200
146,300
44,600
86,200
9,000
—
121,800
111,600
—
—
22,100
89,500
3,700
22,100
900
—
24,900
121,600
—
800
11,100
109,700
200
11,100
700
—
10,600
—
132,400
—
—
132,400
—
—
—
—
—
Note: Number of stock options has been converted and stated as number of shares.
(b) Price information
Date of resolution
Exercise price ..........................
Average exercise price .............
Fair value at the grant date .....
172
Yen
July 28, 2010 July 29, 2011 July 30, 2012 July 29, 2013 July 30, 2014 July 31, 2015
¥ 1
—
4,904
¥ 1
5,263
2,042
¥ 1
3,604
3,661
¥ 1
3,605
4,159
¥ 1
3,418
1,872
¥ 1
3,726
2,215
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
3) Valuation technique used for valuating fair value of stock options
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 ......................................................................
July 31, 2015
27.38%
4 years
¥150 per share
0.05%
*1. Calculated based on the actual stock prices during 4 years from August 19, 2011 to August 18, 2015.
*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 directors of SMFG and SMBC.
*3. Expected dividends are based on the expected dividends on common stock for the fiscal year ended March 31, 2016 of the date of grant.
*4. Japanese government bond yield corresponding to the average expected life.
4) Method of estimating the 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) Consolidated subsidiary, KUBC
1) 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 ............................
June 29, 2005
Directors and
employees
183
Common shares
46,400
July 29, 2005
N.A.
N.A.
June 30, 2007
to June 29, 2015
June 29, 2006
Directors
9
Common shares
16,200
July 31, 2006
N.A.
N.A.
June 30, 2008
to June 29, 2016
June 29, 2006
Officers not doubling
as directors 14
Employees 46
Common shares
11,500
July 31, 2006
N.A.
N.A.
June 30, 2008
to June 29, 2016
June 28, 2007
Directors
10
Common shares
17,400
July 31, 2007
N.A.
N.A.
June 29, 2009
to June 28, 2017
Date of resolution
Title and number of grantees ....... Officers not doubling
June 28, 2007
Number of stock options* ...........
Grant date ...................................
Condition for vesting ...................
Requisite service period ...............
Exercise period ............................
as directors 14
Employees 48
Common shares
11,200
July 31, 2007
N.A.
N.A.
June 29, 2009
to June 28, 2017
June 27, 2008
Directors 9
Officers not doubling
as directors 16
Employees 45
Common shares
28,900
July 31, 2008
N.A.
N.A.
June 28, 2010
to June 27, 2018
June 26, 2009
Directors 11
Officers not doubling
as directors 14
Employees 57
Common shares
35,000
July 31, 2009
N.A.
N.A.
June 27, 2011
to June 26, 2019
* Number of stock options has been converted and stated as the number of shares in consideration of the reverse stock split to combine 10 common shares as one share,
performed on October 1, 2014.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 2) Stock options granted and changes
(a) 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 ..........................
22,600
—
—
22,600
—
June 29,
2005
June 29,
2006
Number of stock options
June 28,
2007
June 28,
2007
June 29,
2006
—
—
—
—
—
—
—
—
—
—
6,200
—
—
—
6,200
—
—
—
—
—
5,700
—
—
1,700
4,000
—
—
—
—
—
7,800
—
—
—
7,800
—
—
—
—
—
7,000
—
—
1,900
5,100
June 27,
2008
June 26,
2009
—
—
—
—
—
22,700
—
—
2,700
20,000
—
—
—
—
—
31,900
—
—
3,100
28,800
Note: Number of stock options has been converted and stated as the number of shares in consideration of the reverse stock split to combine 10 common shares as one
share, performed on October 1, 2014.
(b) Price information
Date of resolution
Exercise price ............................
Average exercise price ...............
Fair value at the grant date ......
June 29,
2005
¥3,130
—
—
June 29,
2006
¥4,900
—
1,380
June 29,
2006
¥4,900
—
1,380
Yen
June 28,
2007
¥4,610
—
960
June 28,
2007
¥4,610
—
960
June 27,
2008
¥3,020
—
370
June 26,
2009
¥1,930
—
510
3) Method of estimating the 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.
(3) Consolidated subsidiary, MINATO
1) Outline of stock options
Date of resolution
Title and number of
grantees ...........................
Number of
stock options* .................
June 28, 2012
June 27, 2013
June 27, 2014
June 26, 2015
Directors 7
Officers 12
Directors 7
Officers 12
Directors 7
Officers 16
Directors 7
Officers 17
Common shares
368,000
July 20, 2012
Grant date .........................
Condition for vesting ......... 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
Exercise period ..................
Requisite service period .....
Common shares
334,000
July 19, 2013
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 27, 2013 to the closing
of the ordinary general
meeting of shareholders of
MINATO for the fiscal year
ended March 31, 2014.
July 20, 2013 to
July 19, 2043
Common shares
320,000
July 18, 2014
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 27, 2014 to the closing
of the ordinary general
meeting of shareholders of
MINATO for the fiscal year
ended March 31, 2015
July 19, 2014 to
July 18, 2044
Common shares
200,000
July 17, 2015
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 26, 2015 to the closing
of the ordinary general
meeting of shareholders of
MINATO for the fiscal year
ended March 31, 2016.
July 18, 2015 to
July 17, 2045
* Number of stock options has been converted and stated as number of shares.
174
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
2) Stock options granted and changes
(a) Number of stock options
Date of resolution
Before vested
Previous fiscal year-end ............................
Granted ...................................................
Forfeited ..................................................
Vested .....................................................
Outstanding ............................................
After vested
Previous fiscal year-end ............................
Vested .....................................................
Exercised .................................................
Forfeited ..................................................
Exercisable ..............................................
June 28, 2012
June 27, 2013
June 27, 2014
June 26, 2015
Number of stock options
202,000
—
—
71,000
131,000
143,000
71,000
—
—
214,000
223,000
—
—
81,000
142,000
105,000
81,000
—
—
186,000
262,000
—
6,000
70,000
186,000
46,000
70,000
—
—
116,000
—
200,000
5,000
19,000
176,000
—
19,000
—
—
19,000
Note: Number of stock options has been converted and stated as number of shares.
(b) Price information
Date of resolution
Exercise price ................................................
Average exercise price ...................................
Fair value at the grant date ...........................
June 28, 2012
¥ 1
—
132
June 27, 2013
¥ 1
—
166
June 27, 2014
¥ 1
—
181
June 26, 2015
¥ 1
—
309
3) Valuation technique used for valuating fair value of stock options
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 .......................................................................
June 26, 2015
24.38%
2 years
¥5 per share
0.005%
*1 Calculated based on the actual stock prices during 2 years from July 18, 2013 to July 17, 2015.
*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
directors of MINATO.
*3 Expected dividends are based on the actual dividends on common stock for the fiscal year ended March 31, 2015.
*4 Japanese government bond yield corresponding to the average expected life.
4) Method of estimating the 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.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to deferred tax assets and liabilities)
1. Significant components of deferred tax assets and liabilities
March 31, 2015
Deferred tax assets:
Millions of yen March 31, 2016
Deferred tax assets:
Millions of yen
Net operating loss carryforwards ............................ ¥ 320,680
Reserve for possible loan losses and write-off of
290,628
loans ....................................................................
113,876
Write-off of securities ............................................
35,174
Net defined benefit liability ...................................
14,082
Deferred losses on hedges.......................................
Other ....................................................................
248,581
Subtotal ................................................................. 1,023,023
(568,997)
Valuation allowance ...............................................
Total deferred tax assets ..............................................
454,026
Deferred tax liabilities:
Net operating loss carryforwards ............................ ¥ 319,801
Reserve for possible loan losses and write-off of
246,676
loans ....................................................................
115,451
Write-off of securities ............................................
33,116
Net defined benefit liability ...................................
32,331
Remeasurements of defined benefit plans ...............
Other ....................................................................
261,905
Subtotal ................................................................. 1,009,283
(517,459)
Valuation allowance ...............................................
Total deferred tax assets ..............................................
491,823
Deferred tax liabilities:
(731,045)
Net unrealized gains on other securities .................
Gains on securities contributed to employee
(33,593)
retirement benefits trust ......................................
(30,151)
Remeasurements of defined benefit plans ...............
(19,284)
Leveraged lease ......................................................
(132,542)
Other ....................................................................
Total deferred tax liabilities ........................................
(714,182)
Net deferred tax assets (liabilities) .............................. ¥ (473,551) Net deferred tax assets (liabilities) .............................. ¥ (222,358)
Net unrealized gains on other securities .................
Gains on securities contributed to employee
retirement benefits trust ......................................
Deferred gains on hedges .......................................
Undistributed earnings of subsidiaries ...................
Other ....................................................................
Total deferred tax liabilities ........................................
(35,492)
(23,160)
(22,513)
(115,367)
(927,578)
(498,610)
2. Significant components of difference between the statutory tax rate used by SMFG and the effective income tax rate
March 31, 2015
Statutory tax rate ........................................................
Percentages
35.64%
Difference between SMFG and overseas
consolidated subsidiaries ......................................
Dividends exempted for income tax purposes.........
Valuation allowance ...............................................
Effects of changes in the corporate income tax rate .
Other ....................................................................
Effective income tax rate .............................................
(2.34)
(2.05)
(0.48)
2.10
0.84
33.71%
March 31, 2016
Statutory tax rate ........................................................
Valuation allowance ...............................................
Difference between SMFG and overseas
consolidated subsidiaries ......................................
Difference of the scope of taxable income between
corporate income tax and enterprise income tax ...
Dividends exempted for income tax purposes.........
Effects of changes in the corporate income tax rate .
Equity in losses of affiliates ....................................
Other ....................................................................
Effective income tax rate .............................................
Percentages
33.06%
(8.06)
(2.42)
(1.08)
(0.61)
1.34
1.22
(0.49)
22.96%
3. Adjustments to deferred tax assets and liabilities arising from a change in the income tax rate
In accordance with the Act for Partial Amendment of the Income Tax Act, etc. (Act No. 15, 2016) and the Act to Amend the Local Taxation
Act, etc. (Act No.13, 2016) on March 29, 2016, the corporate income tax rate is lowered from fiscal years beginning on or after April 1, 2016.
As a result of these changes, the effective statutory tax rate used by SMFG and its consolidated domestic subsidiaries for the calculation of
deferred tax assets and liabilities was changed from the current rate of 32.26 % to 30.86 % for temporary differences and other items expected
to be realized during the period beginning from the fiscal year beginning on April 1, 2016 or April 1 2017, and to 30.62 % for temporary
differences and other items expected to be realized in the fiscal year beginning on or after April 1, 2018. As a result of these changes in tax
rates, “Net deferred tax assets (liabilities)” increased by ¥16,552 million, “Net unrealized gains (losses) on other securities” increased by
¥26,903 million, “Net deferred gains (losses) on hedges” increased by ¥1,305 million, “Remeasurements of defined benefit plans” increased by
¥1,289 million, and “Income tax deferred” increased by ¥12,946 million before considering about non-controlling interests. “Deferred tax
liabilities for land revaluation excess” decreased by ¥1,705 million, while “Land revaluation excess” increased by the same amount before
considering about non-controlling interests.
176
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
(Notes to asset retirement obligations)
Fiscal year ended March 31, 2015
There is no significant information to be disclosed.
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
(Notes to real estate for rent)
Fiscal year ended March 31, 2015
There is no significant information to be disclosed.
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Notes to segment and other related information)
[Segment information]
1. Summary of reportable segment
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 and SMFG’s Management Committee regularly in order to make decisions about resources to be allocated to the segment
and assess its performance.
Besides commercial banking, SMFG Group companies conduct businesses such as leasing, securities, consumer finance, system development
and data processing. The primary businesses, “Commercial banking,” “Leasing,” “Securities” and “Consumer Finance,” are separate reportable
segments, and other businesses are aggregated as “Other business.”
SMBC assesses business performance by classifying “Commercial banking” into the following 4 business units: “Wholesale banking unit,”
“Retail banking unit” and “International banking unit” that are based on the client segment, and “Treasury unit” that is based on the financial
markets.
2. Method of calculating profit and loss amount by reportable segment
Accounting methods applied to the reported business segment are the same as those described in “(Notes to significant accounting policies for
preparing consolidated financial statements).”
SMFG does not assess assets by business segments.
178
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements 3. Information on profit and loss amount by reportable segment
Millions of yen
Commercial banking
SMBC
Year ended March 31, 2015
Sub-total
Gross profit ......................... ¥1,634,284
Interest income ............... 1,121,428
512,856
Non-interest income .......
(791,211)
Expenses, etc. ......................
(82,976)
Depreciation ..................
Consolidated net
business profit .................... ¥ 843,073
Wholesale
Banking
Unit
¥ 555,429
315,796
239,633
(206,778)
(23,281)
SMBC
Retail
Banking
Unit
¥ 386,784
313,171
73,613
(350,047)
(31,317)
International
Banking
Unit
¥ 345,332
227,808
117,524
(106,637)
(10,195)
Treasury
Unit
¥353,990
212,361
141,629
(25,918)
(4,682)
Head office
account
¥ (7,250)
52,292
(59,542)
(101,831)
(13,501)
Others
¥ 289,397
171,222
118,175
(202,923)
(10,041)
Total
¥1,923,682
1,292,650
631,032
(994,135)
(93,018)
¥ 348,651
¥ 36,737
¥238,695
¥328,072
¥(109,081)
¥ 86,473
¥ 929,547
Year ended March 31, 2015
Gross profit .........................
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Consolidated net
business profit ....................
SMFL
¥136,965
19,311
117,654
(56,497)
(3,555)
Leasing
Others
¥12,325
5,132
7,193
(4,244)
(4,720)
Millions of yen
Securities
Total
¥149,290
24,443
124,847
(60,742)
(8,275)
SMBC Nikko
¥ 346,294
1,498
344,796
(248,680)
(2,720)
SMBC Friend
¥ 50,393
1,246
49,146
(39,993)
(1,707)
Others
¥ (2,799)
1,015
(3,814)
(13,238)
(677)
Total
¥ 393,888
3,759
390,128
(301,913)
(5,105)
¥ 80,467
¥ 8,081
¥ 88,548
¥ 97,613
¥ 10,399
¥(16,037)
¥ 91,974
SMCC
Year ended March 31, 2015
Gross profit ......................... ¥ 196,462
13,667
182,794
(146,087)
(11,577)
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Millions of yen
Cedyna
¥ 164,205
25,916
138,289
(121,750)
(8,686)
Consumer Finance
SMBCCF
¥215,559
149,016
66,543
(96,123)
(5,942)
Others
¥ 661
(9,943)
10,605
(17,944)
(2,178)
Total
¥ 576,889
178,657
398,232
(381,906)
(28,385)
Grand
Total
Other
Business
¥(63,347) ¥ 2,980,403
1,505,178
1,475,224
(1,669,942)
(146,209)
5,668
(69,015)
68,754
(11,423)
Consolidated net
business profit .................... ¥ 50,375
¥ 42,455
¥119,436
¥(17,283)
¥ 194,982
¥ 5,407 ¥ 1,310,461
Notes: 1. Figures shown in the parenthesis represent the loss.
2. “SMFL” and “SMBCCF” represent consolidated figures of SMFL and SMBCCF.
“SMBC Nikko” represents non-consolidated figures of SMBC Nikko plus figures of the overseas incorporated securities companies.
“Cedyna” represents consolidated figures of Cedyna excluding figures of the immaterial subsidiaries.
3. “Other business” includes profit or loss to be eliminated as inter-segment transactions.
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
Millions of yen
Commercial banking
SMBC
Year ended March 31, 2016
Sub-total
Gross profit ......................... ¥1,534,271
Interest income ............... 1,023,576
510,694
Non-interest income .......
(805,483)
Expenses, etc. ......................
(92,376)
Depreciation ..................
Consolidated net
business profit .................... ¥ 728,787
Wholesale
Banking
Unit
¥ 545,350
300,125
245,225
(205,095)
(23,592)
SMBC
Retail
Banking
Unit
¥ 372,811
302,025
70,786
(354,116)
(35,577)
International
Banking
Unit
¥ 355,994
225,437
130,557
(116,484)
(10,934)
Treasury
Unit
¥293,570
168,190
125,380
(29,074)
(5,473)
Head office
account
¥ (33,453)
27,799
(61,253)
(100,714)
(16,800)
Others
Total
¥ 302,987 ¥ 1,837,258
1,198,007
639,250
(1,024,475)
(103,974)
174,431
128,555
(218,991)
(11,597)
¥ 340,255
¥ 18,695
¥ 239,510
¥264,496
¥(134,168)
¥ 83,995 ¥ 812,783
SMFL
Year ended March 31, 2016
Gross profit ......................... ¥142,813
17,847
124,965
(62,140)
(3,170)
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Leasing
Others
¥19,740
5,053
14,686
(4,944)
(5,487)
Millions of yen
Securities
Total
¥162,553
22,900
139,652
(67,084)
(8,658)
SMBC Nikko
¥ 316,329
1,605
314,724
(255,820)
(2,895)
SMBC Friend
¥ 43,771
1,499
42,271
(38,797)
(1,291)
Others
¥ (2,971)
1,531
(4,502)
(12,652)
(755)
Total
¥ 357,130
4,636
352,493
(307,270)
(4,942)
Consolidated net
business profit .................... ¥ 80,673
¥14,795
¥ 95,468
¥ 60,509
¥ 4,974
¥(15,624)
¥ 49,859
SMCC
Year ended March 31, 2016
Gross profit ......................... ¥208,514
13,579
194,934
(157,112)
(12,865)
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Millions of yen
Cedyna
¥ 165,143
23,685
141,458
(124,151)
(7,896)
Consumer Finance
SMBCCF
¥ 233,388
156,985
76,402
(104,843)
(7,028)
Others
¥ 4,467
(5,382)
9,849
(11,118)
(824)
Total
¥ 611,512
188,867
422,645
(397,225)
(28,615)
Grand
Total
Other
Business
¥(64,490) ¥ 2,903,964
1,422,928
1,481,036
(1,761,032)
(158,564)
8,515
(73,005)
35,023
(12,373)
Consolidated net
business profit ...................... ¥ 51,402
¥ 40,991
¥ 128,544
¥ (6,651)
¥ 214,287
¥(29,467) ¥ 1,142,931
Notes: 1. Figures shown in the parenthesis represent the loss.
2. “SMFL” and “SMBCCF” represent consolidated figures of SMFL and SMBCCF.
“SMBC Nikko” represents non-consolidated figures of SMBC Nikko plus figures of the overseas incorporated securities companies.
“Cedyna” represents consolidated figures of Cedyna excluding figures of the immaterial subsidiaries.
3. “Other business” includes profit or loss to be eliminated as inter-segment transactions.
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, 2015
Consolidated net business profit ................................................................................................................................
Other ordinary income .............................................................................................................................................
Other ordinary expenses (excluding equity in losses of affiliates) ...............................................................................
Ordinary profit on consolidated statements of income ...............................................................................................
Year ended March 31, 2016
Consolidated net business profit ................................................................................................................................
Other ordinary income .............................................................................................................................................
Other ordinary expenses (excluding equity in losses of affiliates) ...............................................................................
Ordinary profit on consolidated statements of income ...............................................................................................
Millions of yen
¥1,310,461
218,008
(207,313)
¥1,321,156
Millions of yen
¥1,142,931
197,494
(355,141)
¥ 985,284
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
[Related information]
Fiscal year ended March 31, 2015
1. Information on each service
Commercial
banking
Leasing
Securities
Consumer
Finance
Other
business
Total
Millions of yen
Ordinary income to external
customers ......................................
¥2,557,945
¥691,177
¥494,779
¥1,013,679
¥93,620
¥4,851,202
Note: Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Geographic information
(1) Ordinary income
Japan
¥3,783,696
The Americas
¥294,216
Millions of yen
Europe and Middle East
¥387,251
Asia and Oceania
¥386,037
Total
¥4,851,202
Notes: 1. Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income from transactions of SMFG and its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries is classified as “Japan.” Ordinary income from transactions of overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries is classified as “The Americas,” “Europe and Middle East” and “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.
(2) Tangible fixed assets
Japan
¥1,360,804
The Americas
¥191,232
Millions of yen
Europe and Middle East
¥1,201,437
Asia and Oceania
¥17,378
Total
¥2,770,853
3. Information on major customers
There are no major customers individually accounting for 10% or more of ordinary income reported on the consolidated statements of income.
Fiscal year ended March 31, 2016
1. Information on each service
Commercial
banking
Leasing
Securities
Consumer
Finance
Other
business
Total
Millions of yen
Ordinary income to external
customers ...............................
¥2,481,366
¥671,074
¥368,052
¥1,106,836
¥144,771
¥4,772,100
Note: Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Geographic information
(1) Ordinary income
Japan
¥3,592,825
The Americas
¥370,538
Millions of yen
Europe and Middle East
¥419,241
Asia and Oceania
¥389,495
Total
¥4,772,100
Notes: 1. Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income from transactions of SMFG and its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries is classified as “Japan.” Ordinary income from transactions of overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries is classified as “The Americas,” “Europe and Middle East” and “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.
(2) Tangible fixed assets
Japan
¥1,479,043
The Americas
¥238,373
Millions of yen
Europe and Middle East
¥1,181,711
Asia and Oceania
¥20,296
Total
¥2,919,424
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
3. Information on major customers
There are no major customers individually accounting for 10% or more of ordinary income reported on the consolidated statements of income.
[Information on impairment loss for fixed assets by reportable segment]
Year ended March 31,2015
Impairment loss .............................
Commercial
Banking
¥4,906
Leasing
Securities
¥—
¥173
Consumer finance
¥29
Other business
¥—
Total
¥5,109
Millions of yen
Year ended March 31,2016
Impairment loss .............................
Commercial
Banking
¥4,076
Leasing
Securities
¥—
¥241
Consumer finance
¥0
Other business
¥43
Total
¥4,362
Millions of yen
[Information on amortization of goodwill and unamortized balance by reportable segment]
Millions of yen
Year ended March 31, 2015
Amortization of goodwill ..............
Unamortized balance .....................
Year ended March 31, 2016
Amortization of goodwill ..............
Unamortized balance .....................
Commercial
Banking
¥ 2,010
22,098
Commercial
Banking
¥ 3,237
34,262
Leasing
Securities
¥ 6,446
75,414
¥ 14,013
188,202
Consumer finance
¥ 4,025
66,180
Other business
¥23
71
Total
¥ 26,521
351,966
Millions of yen
Leasing
Securities
¥ 6,375
68,526
¥ 14,013
174,188
Consumer finance
¥ 4,019
62,160
Other business
¥23
47
Total
¥ 27,670
339,185
[Information on gains on negative goodwill by reportable segment]
Fiscal year ended March 31, 2015
There are no corresponding transactions.
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
[Information on total credit cost by reportable segment]
Year ended March 31, 2015
Total credit cost .............................
Commercial
banking
Leasing
Securities
Consumer
finance
¥(68,299)
¥(6,066)
¥(212)
¥78,780
Other business
¥3,644
Total
¥7,847
Notes: 1. Total credit cost = Write-off loans + Losses on sales of delinquent loans – Gains on reversal of reserve for possible loan losses – Recoveries of written-off claims.
Millions of yen
2. “Other business” includes profit or loss to be eliminated as inter-segment transactions.
3. Figures shown in the parenthesis represent the reversal of total credit cost.
Year ended March 31, 2016
Total credit cost .............................
Commercial
banking
Leasing
Securities
Consumer
finance
¥10,333
¥(1,491)
¥(197)
¥91,425
Other business
¥2,750
Total
¥102,820
Notes: 1. Total credit cost = Provision for reserve for possible loan losses + Write-off loans + Losses on sales of delinquent loans – Recoveries of written-off claims.
Millions of yen
2. “Other business” includes profit or loss to be eliminated as inter-segment transactions.
3. Figures shown in the parenthesis represent the reversal of total credit cost.
182
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
[Information on related parties]
Fiscal year ended March 31, 2015
There is no significant information to be disclosed.
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
(Business Combinations)
The integration of Citibank’s retail banking business by SMBC Trust Bank
SMBC Trust Bank Ltd. (“SMBC Trust”), a wholly owned subsidiary of SMFG, succeeded the retail banking business from Citibank Japan
Ltd. (“Citibank”), a wholly owned subsidiary of Citigroup Inc., through the absorption-type split on November 1, 2015 (effective date). The
outline of the business combination through acquisition is as follows:
1. Outline of the business combination
(1) Name of the acquired company and its business
Citibank Japan Ltd. (Retail banking business)
(2) Main reasons for the business combination
The acquisition is aimed at achieving sustainable growth at SMFG, through expansion of the customer base with the integration of
retail customers acquired from Citibank; further strengthening of overseas operations through the acquisition of approximately 1 trillion
yen in foreign currency deposits; and the sharing of expertise in various areas, including foreign currency investment management and
marketing.
(3) Date of the business combination
November 1, 2015
(4) Legal form of the business combination
This is an absorption-type split in which SMBC Trust is the successor company.
(5) Name of the entity after the business combination
SMBC Trust Bank Ltd.
(6) Grounds for deciding on the acquirer
SMBC Trust allocated non-voting stocks to Citibank as the consideration of the acquisition.
2. Period of the acquired company’s financial result included in the consolidated statements of income of SMFG
From November 1, 2015 to March 31, 2016
3. Acquisition cost and consideration of the acquired business
Consideration
Acquisition cost
Non-voting stocks (900,000 shares)
¥45,000 million
¥45,000 million
Note that SMBC Trust allocated its non-voting stocks to Citibank and SMBC, a wholly owned subsidiary of SMFG, acquired them in cash.
4. Major acquisition-related costs
Advisory fees etc., ¥286 million
5. Amount of goodwill, reason for recognizing goodwill, amortization method and the period
(1) Amount of goodwill
¥14,476 million
(2) Reason for recognizing goodwill
SMFG accounted for the difference between the acquisition cost and fair value of the acquired net assets on the date of the business
combination as goodwill.
(3) Amortization method and the period
Straight-line method over 20 years
6. Amounts of assets and liabilities acquired on the date of the business combination
(1) Assets
Total assets ...................................................................................................................
Cash and due from banks .........................................................................................
Millions of yen
2,407,085
2,296,106
010_0800801372808.indd 183
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (2) Liabilities
Total liabilities .............................................................................................................
Deposits ..................................................................................................................
Millions of yen
2,376,561
2,361,907
7. The amounts allocated to intangible fixed assets other than goodwill, breakdown by component and the weighted average
amortization period by component
Intangible fixed assets, other than goodwill ........................................................................
Core deposits ......................................................................................................................
Assets related to customers .................................................................................................
¥36,807 million
¥27,487 million
¥9,320 million
(20 years)
(20 years)
(20 years)
8. Approximate amounts and their calculation method of impact on the consolidated statements of income for the fiscal year ended
March 31, 2016, assuming that the business combination had been completed at the beginning of the fiscal year
The approximate amounts have not been disclosed since they are immaterial.
(Per Share Data)
As of and year ended March 31
Net assets per share .................................................................................................................
Earnings per share ...................................................................................................................
Earnings per share (diluted) .....................................................................................................
Notes: 1. Earnings per share and earnings per share (diluted) are calculated based on the following.
Year ended March 31
Earnings per share:
Yen
2015
¥6,598.87
551.18
550.85
2016
¥6,519.60
472.99
472.67
Millions of yen except number of shares
2015
2016
Profit attributable to owners of parent .................................................................
Amount not attributable to common stockholders ...............................................
Profit attributable to owners of parent attributable to common stock...................
Average number of common stock during the fiscal year (in thousand) .................
¥ 753,610
—
¥ 753,610
1,367,258
Earnings per share (diluted):
Adjustment for profit attributable to owners of parent .........................................
Adjustment of dilutive shares issued by subsidiaries and affiliates ...................
Increase in number of common stock (in thousand) ..............................................
Stock acquisition rights ..................................................................................
Outline of dilutive shares which were not included in the calculation of “Earnings
per share (diluted)” because they do not have dilutive effect:
¥
(0)
(0)
816
816
—
¥ 646,687
—
¥ 646,687
1,367,228
¥
(0)
(0)
928
928
—
2. Net assets per share are calculated based on the following:
March 31
Net assets .................................................................................................................
Amounts excluded from Net assets ...........................................................................
Stock acquisition rights .......................................................................................
Non-controlling 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
2015
¥10,696,271
1,674,022
2,284
1,671,738
¥ 9,022,249
2016
¥10,447,669
1,533,907
2,884
1,531,022
¥ 8,913,761
1,367,241
1,367,224
(Significant Subsequent Events)
There is no significant subsequent event to be disclosed.
184
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements
[Consolidated supplementary financial schedules]
[Schedule of bonds]
Millions of yen
Company
SMFG
Type of bonds
Straight bonds, payable in U.S. dollars
Date of
issuance
At the beginning of
the fiscal year
—
99,399
34,800
—
209,788
($ 1,746,058 thousand)
25,000
[25,000]
35,000
729,974
[370,000]
500
[500]
2,562,816
($21,330,140 thousand)
[432,540]
—
44,502
(£250,000 thousand)
[44,502]
259,206
(€1,989,456 thousand)
137,981
(A$1,499,469 thousand)
[12,882]
13,392
(HK$864,000 thousand)
583,046
[50,000]
12,000
178,636
($1,486,780 thousand)
39,309
($327,169 thousand)
96,452
(€740,294 thousand)
43,152
(€331,204 thousand)
629,682
[91,114]
1,457
($13,000 thousand)
[108]
—
11,616
(RMB600,000 thousand)
[11,616]
—
35,000
[35,000]
359,992
[200,000]
—
-0.03943 ~
-0.03914
0.254 ~
0.69
At the end of
the fiscal year
450,480
($4,000,000 thousand)
255,815
153,531
300,000
196,717
($ 1,746,753 thousand)
—
2,538,524
($22,540,617 thousand)
[439,218]
73,766
($655,000 thousand)
—
445,008
(€3,491,084 thousand)
131,958
(A$1,529,597 thousand)
[53,487]
34,348
(HK$2,364,000 thousand)
534,055
[70,000]
Percentages
Interest
rate (Note 1) Collateral
Date of
maturity
Mar. 2021 ~
Mar. 2026
Sep. 2024 ~
May. 2030
Sep. 2024 ~
Oct. 2025
None
None
None
None
Perpetual
—
None
None
—
None
—
Aug. 2016 ~
Sep. 2016
Apr. 2016 ~
Apr. 2019
—
Jul. 2016 ~
Mar. 2030
2.3161 ~
3.784
0.849 ~
1.328
0.59 ~
0.61
2.49 ~
2.88
—
0.9411 ~
4.13
4.436
None
Apr. 2, 2024
4.3
None May. 30, 2045
—
0.085 ~
2.75
2.97 ~
4.13
2.09 ~
2.92
1.43 ~
2.8
0.87 ~
1.1
—
None
None
None
None
None
—
Sep. 2017 ~
Jul. 2023
Jun. 2016 ~
Mar. 2025
Apr. 2020 ~
Apr. 2025
Feb. 2017 ~
Dec. 2026
Nov. 2021 ~
Feb. 2023
2,000
168,794
($1,498,795 thousand)
2.564
None
Jun. 16, 2023
4.85
None
Mar. 1, 2022
—
94,421
(€740,733 thousand)
—
746,465
[139,660]
3,294
($32,530 thousand)
[886]
89
(A$1,040,thousand)
—
4
—
0.01 ~
19.2
0.01 ~
5
—
—
None
Nov. 9, 2020
—
None
None
—
Apr. 2016 ~
Mar. 2046
Apr. 2016 ~
Feb. 2036
0.01
None Mar. 29, 2019
—
36,365
(RMB2,093,569 thousand)
[36,365]
—
—
—
2.809 ~
5.8
None
May. 2016 ~
Jun. 2016
354,715
354,651
Subordinated bonds, payable in U.S.
Subordinated bonds, payable in Yen ...
Subordinated bonds, payable in Yen ...
Perpetual subordinated bonds, payable
in Yen ..............................................
(Note 3) ........................................... Mar. 9, 2016
Sep. 2014 ~
Sep. 2015
Sep. 2014 ~
Sep. 2015
Jul. 30,
2015
Apr. 2,
2014
Mar. 31,
2015
Aug. 2004 ~
Sep. 2004
Apr. 2010 ~
Apr. 2014
May. 8,
2006
(Note 4) ...........................................
dollars (Note 3) ...............................
(Note 4) ...........................................
(Note 4) ...........................................
(Note 4) ...........................................
Straight bonds, payable in Euroyen
Short-term bonds, payable in Yen
Straight bonds, payable in Yen
Straight bonds, payable in Yen
Straight bonds, payable in U.S. dollars
(Notes 3 and 4) ................................
Subordinated bonds, payable in U.S.
dollars (Note 3) ................................
Jul. 2010 ~
Jan. 2016
May. 28,
2015
Straight bonds, payable in British
pound sterling (Notes 3 and 4) .........
Straight bonds, payable in Euro
(Note 3) ...........................................
Mar. 18,
2013
Jul. 2013 ~
Nov. 2015
Straight bonds, payable in Australian
dollars (Notes 3 and 4) .....................
Straight bonds, payable in Hong Kong
dollars (Note 3) ................................
Subordinated bonds, payable in Yen
(Note 4) ...........................................
Subordinated bonds, payable
in Yen ..............................................
Subordinated bonds, payable
in Euroyen .......................................
Perpetual subordinated bonds, payable
in U. S. dollars (Note 3) ...................
Perpetual subordinated bonds, payable
in U. S. dollars (Note 3) ...................
Subordinated bonds, payable in Euro
(Note 3) ...........................................
Perpetual subordinated bonds, payable
in Euro (Note 3) ...............................
Consolidated subsidiaries, straight bonds,
payable in Yen (Notes 2 and 4) .............
Consolidated subsidiaries, straight
bonds, payable in U. S. dollars
(Notes 2,3 and 4) ............................
Consolidated subsidiaries, straight
bonds, payable in Australian dollars
(Notes 2 and 3) ...............................
Consolidated subsidiaries, straight bonds,
payable in Renminbi
(Notes 2,3 and 4) .................................
Consolidated subsidiaries, straight bonds,
Jun. 2012 ~
Aug. 2015
Mar. 2015 ~
Apr. 2015
Aug. 2005 ~
Dec. 2011
Nov. 2011 ~
Jan. 2013
Jun. 2005 ~
Jun. 2008
Mar. 1,
2012
Jul. 22,
2005
Nov. 9,
2010
Jul. 22,
2005
Apr. 2010 ~
Mar. 2016
Apr. 2014 ~
Mar. 2016
Mar. 29,
2016
Aug. 3,
2012
Consolidated subsidiaries, straight
bonds, payable in Indonesia rupiah
(Notes 2 and 3) ....................................
Consolidated subsidiaries, subordinated
bonds, payable in Yen
(Notes 2 and 4) ....................................
SMBC
(*1)
(*2)
(*3)
(*4)
(*5)
(*6)
(*7)
payable in Renminbi
(Notes 2,3 and 4) ....................................
May. 2014 ~
Mar. 2016
19,287
(RMB996,255 thousand)
(*8)
Consolidated subsidiaries, short-term
bonds, payable in Yen
(Notes 2 and 4) ....................................
Total ....................................................................
010_0800801372808.indd 185
Feb. 3,
2015
Mar. 1996~
Dec. 2012
Apr. 2014 ~
Mar. 2016
—
8,778
(IDR997,500,994 thousand)
—
9.85
None
Feb. 3, 2018
126,200
[10,000]
1,345,800
[1,345,800]
¥ 7,593,718
82,300
[11,250]
2.19 ~
4.5
1,271,300
[1,271,300]
¥ 8,277,657
-0.001 ~
0.15
—
None
None
—
Mar. 2016 ~
Perpetual
Apr. 2016 ~
Oct. 2016
—
185
2016/08/10 10:40:42
SMFG2016 Annual ReportNotes to Consolidated Financial Statements Notes: 1. “Interest rate” indicates a nominal interest rate which is applied at respective consolidated balance sheet dates. Therefore, this rate may differ from an actual interest rate.
2. (*1) This represents an aggregate of straight bond issued in yen by SMFL, SMBC Nikko and SMBCCF, domestic consolidated subsidiaries.
(*2) This represents an aggregate of straight bond issued in U.S. dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*3) This is a straight bond issued in Australian dollars by SMBC Nikko, a domestic consolidated subsidiary.
(*4) This is a straight bond issued in Renminbi by SMFL, a domestic consolidated subsidiary.
(*5) This represents an aggregate of straight bond issued in Renminbi by Sumitomo Mitsui Banking Corporation (China) Limited, an overseas consolidated subsidiary.
(*6) This is a straight bond issued in Indonesia rupiah by PT Bank Sumitomo Mitsui Indonesia, an overseas consolidated subsidiary.
(*7) This represents an aggregate of perpetual subordinated bonds and subordinated term bonds issued in yen by SMBC International Finance N.V., an overseas consolidated
subsidiary and KUBC and MINATO, domestic consolidated subsidiaries.
(*8) This represents an aggregate of short-term bond issued in yen by SMCC, SMFL and SMBC Nikko, domestic consolidated subsidiaries.
3. Figures showed in ( ) in “At the beginning of the fiscal year” and “At the end of the fiscal year” are in foreign currency.
4. Figures showed in [ ] in “At the beginning of the fiscal year” and “At the end of the fiscal year” are the amounts to be redeemed within one year.
5. The redemption schedule over the next 5 years after respective balance sheet dates of the consolidated subsidiaries was as follows:
Within 1 year
¥2,257,279
More than 1 year
to 2 years
¥1,025,581
Millions of yen
More than 2 years
to 3 years
¥674,297
More than 3 years
to 4 years
¥539,293
More than 4 years
to 5 years
¥974,411
[Schedule of borrowings]
Classification
Borrowed money ..........................................
Other borrowings ....................................
Lease obligations ..........................................
Millions of yen
At the beginning of
the fiscal year
At the end of
the fiscal year
Percentages
Average
interest rate
¥9,778,095
9,778,095
101,840
¥8,571,227
8,571,227
105,691
0.65
0.65
4.62
Repayment Term
—
Jan. 2016 ~ Perpetual
Apr. 2016 ~ Jul. 2032
Notes: 1. “Average interest rate” represents the weighted average interest rate based on the interest rates and “At the end of the fiscal year” at respective balance sheet dates of
consolidated subsidiaries.
2. The redemption schedule over the next 5 years on Borrowings and Lease obligations after respective balance sheet dates of the consolidated subsidiaries was as follows:
Other borrowings ...........................
Lease obligations ............................
Within 1 year
¥5,790,740
23,399
More than 1
year to 2 years
¥210,316
21,651
Millions of yen
More than 2
years to 3 years
¥482,027
19,304
More than 3
years to 4 years
¥345,289
17,035
More than 4
years to 5 years
¥255,066
14,984
Since the commercial banking business accepts deposits and raises and manages funds through the call loan and commercial paper markets
as a normal course of business, the schedule of borrowings shows a breakdown of Borrowed money included in the “Liabilities” and Lease
obligations included in “Other liabilities” in the consolidated balance sheet.
Reference: Commercial paper issued for funding purpose as a normal course of business is as follows:
Commercial paper ........................................
¥3,351,459
At the beginning of
the fiscal year
At the end of
the fiscal year
¥3,017,404
Millions of yen
Percentages
Average
interest rate
0.53
Repayment Term
Apr. 2016 ~ Mar. 2017
[Schedule of asset retirement obligations]
Since the amount of asset retirement obligations accounts for 1% or less than the total of liabilities and net assets, the schedule of asset liability
obligation is not disclosed.
186
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements [Others]
Quarterly consolidated financial information in the fiscal year ended March 31, 2016 is as follows;
Ordinary income ..........................................
Income before income taxes ..........................
Profit attributable to owners of parent ..........
Earnings per share ........................................
First quarter
consolidated
total period
¥1,259,549
406,501
267,869
195.92
Millions of yen (except Earnings per share)
Third quarter
Second quarter
consolidated
consolidated
total period
total period
¥2,388,800
630,832
388,137
283.89
¥3,574,474
897,938
626,242
458.04
Fiscal year ended March
31, 2016
¥4,772,100
980,170
646,687
472.99
Earnings per share ........................................
First quarter
consolidated
accounting period
¥195.92
Second quarter
consolidated
accounting period
¥87.96
Third quarter
consolidated
accounting period
¥174.15
Fourth quarter
consolidated
accounting period
¥14.95
Yen
010_0800801372808.indd 187
187
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements (Non-consolidated financial statements)
1. Non-consolidated balance sheets
March 31
Assets:
Current assets
Millions of yen
2015
2016
Millions of U�S�
dollars
2016
Cash and due from banks �������������������������������������������������������������������������
Prepaid expenses��������������������������������������������������������������������������������������
Accrued income ����������������������������������������������������������������������������������������
Accrued income tax refunds ���������������������������������������������������������������������
Other current assets ����������������������������������������������������������������������������������
Total current assets �����������������������������������������������������������������������������������
¥ 201,862
61
4,786
102,966
2,275
311,951
¥ 502,449
139
8,940
110,953
2,661
625,144
Fixed assets
Tangible fixed assets
Buildings ����������������������������������������������������������������������������������������������
Equipment��������������������������������������������������������������������������������������������
Total tangible fixed assets �������������������������������������������������������������������
Intangible fixed assets
Software �����������������������������������������������������������������������������������������������
Total intangible fixed assets�����������������������������������������������������������������
Investments and other assets
Investments in subsidiaries and affiliates ��������������������������������������������
Long-term loans receivable from subsidiaries and affiliates ���������������
Other investments and other assets ����������������������������������������������������
Total investments and other assets �����������������������������������������������������
Total fixed assets���������������������������������������������������������������������������������������
Total assets ����������������������������������������������������������������������������������������������������
Liabilities:
Current liabilities
Short-term borrowings ������������������������������������������������������������������������������
Accounts payable �������������������������������������������������������������������������������������
Accrued expenses ������������������������������������������������������������������������������������
Income taxes payable �������������������������������������������������������������������������������
Business office taxes payable �������������������������������������������������������������������
Reserve for employee bonuses�����������������������������������������������������������������
Reserve for executive bonuses �����������������������������������������������������������������
Other current liabilities ������������������������������������������������������������������������������
Total current liabilities ��������������������������������������������������������������������������������
Fixed liabilities
Bonds ��������������������������������������������������������������������������������������������������������
Long-term borrowings ������������������������������������������������������������������������������
Total fixed liabilities �����������������������������������������������������������������������������������
Total liabilities ������������������������������������������������������������������������������������������������
Net assets:
Stockholders’ equity
30
0
31
265
265
6,155,487
376,262
—
6,531,750
6,532,046
¥6,843,998
¥1,228,030
870
7,084
21
7
180
97
961
1,237,253
611,962
31,000
642,962
1,880,215
41
1
43
318
318
6,155,487
1,406,565
0
7,562,053
7,562,414
¥8,187,559
¥1,228,030
839
11,268
31
8
203
88
898
1,241,369
1,624,265
49,000
1,673,265
2,914,634
Capital stock ���������������������������������������������������������������������������������������������
Capital surplus
2,337,895
2,337,895
Capital reserve �������������������������������������������������������������������������������������
Other capital surplus����������������������������������������������������������������������������
Total capital surplus �����������������������������������������������������������������������������
1,559,374
24,349
1,583,723
1,559,374
24,332
1,583,706
Retained earnings
Other retained earnings
Voluntary reserve ���������������������������������������������������������������������������
Retained earnings brought forward �����������������������������������������������
Total retained earnings�������������������������������������������������������������������������
Treasury stock �������������������������������������������������������������������������������������������
Total stockholders’ equity �������������������������������������������������������������������������
Stock acquisition rights ���������������������������������������������������������������������������������
Total net assets ����������������������������������������������������������������������������������������������
Total liabilities and net assets ����������������������������������������������������������������������������
30,420
1,022,371
1,052,791
(12,713)
4,961,697
2,085
4,963,782
¥6,843,998
30,420
1,331,100
1,361,520
(12,833)
5,270,289
2,635
5,272,925
¥8,187,559
$ 4,461
1
79
985
24
5,551
0
0
0
3
3
54,657
12,489
0
67,147
67,150
$72,701
$10,904
7
100
0
0
2
1
8
11,023
14,423
435
14,858
25,880
20,759
13,846
216
14,062
270
11,819
12,090
(114)
46,797
23
46,821
$72,701
188
010_0800801372808.indd 188
2016/08/10 10:40:42
SMFG2016 Annual ReportNotes to Consolidated Financial Statements 2. Non-consolidated Statements of Income
Year ended March 31
Operating income:
Dividends on investments in subsidiaries and affiliates ����������������������������������
Fees and commissions received from subsidiaries ����������������������������������������
Interests on loans receivable from subsidiaries and affiliates �������������������������
Total operating income ������������������������������������������������������������������������������������
Operating expenses:
General and administrative expenses �������������������������������������������������������������
Interest on bonds ��������������������������������������������������������������������������������������������
Interest on long term borrowings ��������������������������������������������������������������������
Total operating expenses ��������������������������������������������������������������������������������
Operating profit ���������������������������������������������������������������������������������������������������
Non-operating income:
Interest income on deposits ����������������������������������������������������������������������������
Fees and commissions income �����������������������������������������������������������������������
Other non-operating income ���������������������������������������������������������������������������
Total non-operating income ����������������������������������������������������������������������������
Non-operating expenses:
Interest on borrowings ������������������������������������������������������������������������������������
Fees and commissions payments �������������������������������������������������������������������
Amortization of bond issuance cost ����������������������������������������������������������������
Other non-operating expenses �����������������������������������������������������������������������
Total non-operating expenses �������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Income before income taxes ������������������������������������������������������������������������������
Income taxes-current ��������������������������������������������������������������������������������������
Income taxes ��������������������������������������������������������������������������������������������������������
Net income �����������������������������������������������������������������������������������������������������������
Millions of yen
2015
2016
Millions of U�S�
dollars
2016
¥504,097
13,800
9,492
527,391
8,683
25,034
20
33,739
493,651
163
2
80
246
5,894
0
2,028
0
7,923
485,974
485,974
3
3
¥485,970
¥543,143
16,621
18,080
577,845
9,742
29,259
347
39,349
538,496
267
2
222
492
5,787
—
5,906
1
11,696
527,292
527,292
3
3
¥527,288
$4,823
148
161
5,131
87
260
3
349
4,782
2
0
2
4
51
—
52
0
104
4,682
4,682
0
0
$4,682
Per share data:
Earnings per share �����������������������������������������������������������������������������������������������
Earnings per share (diluted) ����������������������������������������������������������������������������������
Yen
2015
2016
U�S� dollars
2016
¥344�64
344�44
¥373.95
373.70
$3
3
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2016/08/10 10:40:42
SMFG2016 Annual ReportNotes to Consolidated Financial Statements
3. Non-consolidated Statements of changes in net assets
Millions of yen
Stockholders’ equity
Capital surplus
Retained earnings
Year ended March 31, 2015
Balance at the beginning of the fiscal year ��� ¥2,337,895
Capital
stock
Capital
reserve
¥1,559,374
Other capital
surplus
¥24,347
Total capital
surplus
¥1,583,721
Changes in the fiscal year:
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Net changes in items other than
2
2
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥ 712,661
Total retained
earnings
¥ 743,081
(176,260)
485,970
(176,260)
485,970
stockholders’ equity in the fiscal year �����
—
Net changes in the fiscal year ��������������
Balance at the end of the fiscal year ���� ¥2,337,895
—
¥1,559,374
2
¥24,349
2
¥1,583,723
—
¥30,420
309,709
¥1,022,371
309,709
¥1,052,791
Year ended March 31, 2015
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 ��������������
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 ����
Millions of yen
Stockholders’ equity
Treasury
stock
¥(12,566)
Total
¥4,652,131
Stock
acquisition
rights
¥1,634
Total
net assets
¥4,653,766
(176,260)
485,970
(161)
17
(161)
15
(176,260)
485,970
(161)
17
(146)
¥(12,713)
309,565
¥4,961,697
451
451
¥2,085
451
310,016
¥4,963,782
190
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements Millions of yen
Stockholders’ equity
Capital surplus
Retained earnings
Year ended March 31, 2016
Balance at the beginning of the fiscal year ��� ¥2,337,895
Capital
stock
Capital
reserve
¥1,559,374
Other capital
surplus
¥24,349
Total capital
surplus
¥1,583,723
Changes in the fiscal year:
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Net changes in items other than
(17)
(17)
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥1,022,371
Total retained
earnings
¥1,052,791
(218,558)
527,288
(218,558)
527,288
stockholders’ equity in the fiscal year �����
Net changes in the fiscal year ��������������
—
Balance at the end of the fiscal year ���� ¥2,337,895
—
¥1,559,374
(17)
¥24,332
(17)
¥1,583,706
—
¥30,420
308,729
¥1,331,100
308,729
¥1,361,520
Year ended March 31, 2016
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 ��������������
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 ����
Millions of yen
Stockholders’ equity
Treasury
stock
Total
¥(12,713) ¥4,961,697
Stock
acquisition
rights
¥2,085
Total
net assets
¥4,963,782
(218,558)
527,288
(191)
54
(191)
71
(218,558)
527,288
(191)
54
(119)
308,592
¥(12,833) ¥5,270,289
549
549
¥2,635
549
309,142
¥5,272,925
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2016/08/10 10:40:42
SMFG2016 Annual ReportNotes to Consolidated Financial Statements Year ended March 31, 2016
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 ��������������
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 ����
Millions of U� S� dollars
Stockholders’ equity
Capital surplus
Retained earnings
Capital
stock
$20,759
Capital
reserve
$13,846
Other capital
surplus
$216
Total capital
surplus
$14,063
Other retained earnings
Voluntary
reserve
Retained earnings
brought forward
$ 9,078
$270
Total retained
earnings
$ 9,348
(1,941)
4,682
(1,941)
4,682
(0)
(0)
—
$20,759
—
$13,846
(0)
$216
(0)
$14,062
—
$270
2,741
$11,819
2,741
$12,090
Year ended March 31, 2016
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 ��������������
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 ����
Millions of U� S� dollars
Stockholders’ equity
Treasury
stock
$(113)
(2)
1
Total
$44,057
(1,941)
4,682
(2)
0
Stock
acquisition
rights
$19
Total
net assets
$44,075
(1,941)
4,682
(2)
0
(1)
$(114)
2,740
$46,797
5
5
$23
5
2,745
$46,821
192
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SMFG2016 Annual ReportNotes to Consolidated Financial Statements Independent 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, 2015 and 2016, 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
accordance 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
conducted 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, 2015 and 2016, 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, 2016 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S.
dollar amounts and, in our opinion, such translation has been made on the basis described in basis of presentation.
June 28, 2016
Tokyo, Japan
010_0800801372808.indd 193
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SMFG2016 Annual Report Supplemental Information
Consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Millions of yen
2015
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 39,569,276
Call loans and bills bought �����������������������������������������������������������������������������������
1,326,965
746,431
Receivables under resale agreements �����������������������������������������������������������������
6,447,116
Receivables under securities borrowing transactions ������������������������������������������
4,128,907
Monetary claims bought ���������������������������������������������������������������������������������������
7,364,988
Trading assets ������������������������������������������������������������������������������������������������������
Money held in trust �����������������������������������������������������������������������������������������������
1
29,559,334
Securities ��������������������������������������������������������������������������������������������������������������
75,119,565
Loans and bills discounted ����������������������������������������������������������������������������������
1,907,667
Foreign exchanges �����������������������������������������������������������������������������������������������
252,213
Lease receivables and investment assets ������������������������������������������������������������
Other assets ���������������������������������������������������������������������������������������������������������
3,422,970
1,073,206
Tangible fixed assets ��������������������������������������������������������������������������������������������
158,224
Assets for rent �������������������������������������������������������������������������������������������������
287,583
Buildings ����������������������������������������������������������������������������������������������������������
Land ����������������������������������������������������������������������������������������������������������������
468,728
11,270
Lease assets ���������������������������������������������������������������������������������������������������
Construction in progress ���������������������������������������������������������������������������������
75,883
71,515
Other tangible fixed assets �����������������������������������������������������������������������������
454,584
Intangible fixed assets ������������������������������������������������������������������������������������������
Software ����������������������������������������������������������������������������������������������������������
261,433
157,350
Goodwill ����������������������������������������������������������������������������������������������������������
Lease assets ���������������������������������������������������������������������������������������������������
140
35,660
Other intangible fixed assets ���������������������������������������������������������������������������
367,953
Net defined benefit asset �������������������������������������������������������������������������������������
Deferred tax assets ����������������������������������������������������������������������������������������������
68,265
6,289,881
Customers’ liabilities for acceptances and guarantees ���������������������������������������
Reserve for possible loan losses ��������������������������������������������������������������������������
(540,134)
Total assets ���������������������������������������������������������������������������������������������������������� ¥177,559,197
2016
¥ 42,594,225
1,291,365
494,949
7,964,208
4,183,995
7,980,971
3
25,153,750
77,331,124
1,577,167
269,429
3,697,438
1,167,627
206,419
357,116
488,708
10,885
27,084
77,413
526,112
299,159
160,067
136
66,749
198,637
66,570
6,407,272
(496,178)
¥180,408,672
Millions of
U�S� dollars
2016
$ 378,212
11,467
4,395
70,718
37,151
70,866
0
223,351
686,655
14,004
2,392
32,831
10,368
1,833
3,171
4,339
97
240
687
4,672
2,656
1,421
1
593
1,764
591
56,893
(4,406)
$1,601,924
194
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2016 Annual ReportSMBCSupplemental Information (Continued)
Millions of yen
2015
March 31
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥101,503,889
14,032,798
Negotiable certificates of deposit ������������������������������������������������������������������������
5,873,123
Call money and bills sold �������������������������������������������������������������������������������������
991,860
Payables under repurchase agreements ��������������������������������������������������������������
7,833,219
Payables under securities lending transactions ���������������������������������������������������
Commercial paper ������������������������������������������������������������������������������������������������
3,352,662
5,636,406
Trading liabilities ���������������������������������������������������������������������������������������������������
8,223,808
Borrowed money ��������������������������������������������������������������������������������������������������
1,110,822
Foreign exchanges �����������������������������������������������������������������������������������������������
545,700
Short-term bonds �������������������������������������������������������������������������������������������������
Bonds �������������������������������������������������������������������������������������������������������������������
5,663,566
718,133
Due to trust account ���������������������������������������������������������������������������������������������
5,098,781
Other liabilities ������������������������������������������������������������������������������������������������������
59,893
Reserve for employee bonuses ����������������������������������������������������������������������������
Reserve for executive bonuses ����������������������������������������������������������������������������
2,567
12,641
Net defined benefit liability �����������������������������������������������������������������������������������
Reserve for executive retirement benefits ������������������������������������������������������������
759
1,798
Reserve for point service program �����������������������������������������������������������������������
20,870
Reserve for reimbursement of deposits ���������������������������������������������������������������
Reserve for losses on interest repayment ������������������������������������������������������������
632
755
Reserve under the special laws ����������������������������������������������������������������������������
Deferred tax liabilities �������������������������������������������������������������������������������������������
514,070
34,550
Deferred tax liabilities for land revaluation excess �����������������������������������������������
6,289,881
Acceptances and guarantees �������������������������������������������������������������������������������
167,523,193
Total liabilities ������������������������������������������������������������������������������������������������������
Net assets :
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
2,717,421
Capital surplus �����������������������������������������������������������������������������������������������������
Retained earnings ������������������������������������������������������������������������������������������������
2,751,080
(210,003)
Treasury stock ������������������������������������������������������������������������������������������������������
7,029,494
Total stockholders’ equity �����������������������������������������������������������������������������������
1,756,894
Net unrealized gains (losses) on other securities �������������������������������������������������
(27,049)
Net deferred gains (losses) on hedges �����������������������������������������������������������������
Land revaluation excess ���������������������������������������������������������������������������������������
38,943
114,413
Foreign currency translation adjustments ������������������������������������������������������������
44,216
Accumulated remeasurements of defined benefit plans ��������������������������������������
1,927,419
Total accumulated other comprehensive income ����������������������������������������������
198
Stock acquisition rights ����������������������������������������������������������������������������������������
1,078,891
Non-controlling interests ��������������������������������������������������������������������������������������
10,036,003
Total net assets ����������������������������������������������������������������������������������������������������
Total liabilities and net assets ����������������������������������������������������������������������������� ¥177,559,197
2016
¥111,238,673
14,740,434
1,220,455
1,761,822
5,309,003
3,018,218
6,105,982
8,058,848
1,083,450
367,000
5,450,145
944,542
4,853,664
54,925
1,767
17,844
743
1,249
16,979
234
1,129
275,887
32,203
6,407,272
170,962,478
1,770,996
2,702,093
2,909,898
(210,003)
7,172,985
1,255,877
61,781
39,348
58,693
(65,290)
1,350,409
249
922,549
9,446,193
¥180,408,672
Millions of
U�S� dollars
2016
$ 987,735
130,886
10,837
15,644
47,141
26,800
54,218
71,558
9,620
3,259
48,394
8,387
43,098
488
16
158
7
11
151
2
10
2,450
286
56,893
1,518,047
15,725
23,993
25,838
(1,865)
63,692
11,151
549
349
521
(580)
11,991
2
8,192
83,877
$1,601,924
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2016 Annual ReportSMBCSupplemental Information
Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
(Consolidated Statements of Income)
Millions of yen
Year ended March 31
Ordinary income ���������������������������������������������������������������������������������������������������
Interest income ������������������������������������������������������������������������������������������������
Interest on loans and discounts �����������������������������������������������������������������
Interest and dividends on securities ����������������������������������������������������������
Interest on call loans and bills bought �������������������������������������������������������
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 ����������������������������������������������������������������������������������
Lease-related income ���������������������������������������������������������������������������������
Installment-related income �������������������������������������������������������������������������
Other ����������������������������������������������������������������������������������������������������������
Other income ���������������������������������������������������������������������������������������������������
Gains on reversal of reserve for possible loan losses ��������������������������������
Recoveries of written-off claims �����������������������������������������������������������������
Other ����������������������������������������������������������������������������������������������������������
Ordinary expenses ������������������������������������������������������������������������������������������
Interest expenses ��������������������������������������������������������������������������������������������
Interest on deposits �����������������������������������������������������������������������������������
Interest on negotiable certificates of deposit ���������������������������������������������
Interest on call money and bills sold ����������������������������������������������������������
Interest on payables under repurchase agreements ����������������������������������
Interest on payables under securities lending transactions �����������������������
Interest on commercial paper ��������������������������������������������������������������������
Interest on borrowed money ����������������������������������������������������������������������
Interest on short-term bonds ���������������������������������������������������������������������
Interest on bonds ���������������������������������������������������������������������������������������
Other interest expenses �����������������������������������������������������������������������������
Fees and commissions payments �������������������������������������������������������������������
Trading losses �������������������������������������������������������������������������������������������������
Other operating expenses �������������������������������������������������������������������������������
Lease-related expenses �����������������������������������������������������������������������������
Installment-related expenses ���������������������������������������������������������������������
Other ����������������������������������������������������������������������������������������������������������
General and administrative expenses �������������������������������������������������������������
Other expenses �����������������������������������������������������������������������������������������������
Provision for reserve for possible loan losses ��������������������������������������������
Other ����������������������������������������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Extraordinary gains �����������������������������������������������������������������������������������������������
Gains on disposal of fixed assets �������������������������������������������������������������������
Gains on negative goodwill �����������������������������������������������������������������������������
Other extraordinary gains ��������������������������������������������������������������������������������
Extraordinary losses ���������������������������������������������������������������������������������������������
Losses on disposal of fixed assets �����������������������������������������������������������������
Losses on impairment of fixed assets �������������������������������������������������������������
Provision for reserve for eventual future operating losses from financial
instruments transactions �������������������������������������������������������������������������������
Income before income taxes ��������������������������������������������������������������������������������
Income taxes-current
Income taxes-deferred �����������������������������������������������������������������������������������������
Income taxes ��������������������������������������������������������������������������������������������������������
Profit ���������������������������������������������������������������������������������������������������������������������
Profit attributable to non-controlling interests ������������������������������������������������������
Profit attributable to owners of parent �����������������������������������������������������������������
2015
¥3,199,409
1,690,086
1,170,833
335,694
19,600
9,640
7,813
42,649
7,494
96,359
2,795
782,349
235,239
279,857
13,882
18,956
247,018
209,080
73,566
6,619
128,894
2,000,453
365,074
126,966
44,065
4,200
4,921
5,029
8,047
29,312
433
99,581
42,516
145,171
57,856
94,424
2,022
11,148
81,253
1,261,746
76,179
—
76,179
1,198,955
452
452
—
—
11,326
5,893
5,080
353
1,188,081
276,257
106,233
382,490
805,591
68,686
¥ 736,904
2016
¥3,059,022
1,652,508
1,167,181
302,821
20,457
10,100
10,740
37,097
7,565
96,543
3,587
779,388
209,722
232,513
16,203
18,139
198,170
181,301
—
10,324
170,976
2,128,690
426,091
141,085
49,561
5,360
8,077
6,724
10,415
44,514
573
110,489
49,290
150,788
—
86,746
2,159
9,837
74,749
1,314,581
150,482
5,632
144,850
930,332
3,777
3,709
20
46
8,136
3,400
4,361
374
925,972
205,051
(24,868)
180,183
745,788
65,626
¥ 680,162
Millions of
U�S� dollars
2016
$27,162
14,673
10,364
2,689
182
90
95
329
67
857
32
6,921
1,862
2,065
144
161
1,760
1,610
—
92
1,518
18,902
3,783
1,253
440
48
72
60
92
395
5
981
438
1,339
—
770
19
87
664
11,673
1,336
50
1,286
8,261
34
33
0
0
72
30
39
3
8,222
1,821
(221)
1,600
6,622
583
$ 6,039
196
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2016 Annual ReportSMBCSupplemental Information
(Continued)
(Consolidated Statements of Comprehensive Income)
Millions of yen
Year ended March 31
Profit ���������������������������������������������������������������������������������������������������������������������
Other comprehensive income (losses) ���������������������������������������������������������������
Net unrealized gains (losses) on other securities ��������������������������������������������
Net deferred gains (losses) on hedges �����������������������������������������������������������
Land revaluation excess ���������������������������������������������������������������������������������
Foreign currency translation adjustments �������������������������������������������������������
Remeasurements of defined benefit plans �����������������������������������������������������
Share of other comprehensive income of affiliates �����������������������������������������
Total comprehensive income ������������������������������������������������������������������������������
Comprehensive income attributable to owners of parent �������������������������������
Comprehensive income attributable to non-controlling interests �������������������
2015
¥ 805,591
1,131,783
829,208
32,956
3,604
145,730
120,738
(454)
1,937,374
1,818,350
119,024
2016
¥ 745,788
(602,702)
(503,395)
89,188
1,705
(73,687)
(113,411)
(3,101)
143,086
104,454
38,631
Millions of
U�S� dollars
2016
$ 6,622
(5,352)
(4,470)
792
15
(654)
(1,007)
(28)
1,271
927
343
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2016 Annual ReportSMBCSupplemental Information
Non-consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation
Millions of yen
2015
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 37,008,665
Call loans ��������������������������������������������������������������������������������������������������������������
539,916
Receivables under resale agreements �����������������������������������������������������������������
417,473
Receivables under securities borrowing transactions ������������������������������������������
2,012,795
Monetary claims bought ���������������������������������������������������������������������������������������
1,047,498
Trading assets ������������������������������������������������������������������������������������������������������
3,627,862
Securities ��������������������������������������������������������������������������������������������������������������
29,985,267
Loans and bills discounted ����������������������������������������������������������������������������������
68,274,308
Foreign exchanges �����������������������������������������������������������������������������������������������
1,798,843
Other assets ���������������������������������������������������������������������������������������������������������
2,460,344
Tangible fixed assets ��������������������������������������������������������������������������������������������
812,383
Intangible fixed assets ������������������������������������������������������������������������������������������
200,966
Prepaid pension cost �������������������������������������������������������������������������������������������
293,082
Customers’ liabilities for acceptances and guarantees ���������������������������������������
6,721,131
Reserve for possible loan losses ��������������������������������������������������������������������������
(394,140)
Reserve for possible losses on investments ��������������������������������������������������������
(82,321)
Total assets ���������������������������������������������������������������������������������������������������������� ¥154,724,079
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥ 91,337,714
Negotiable certificates of deposit ������������������������������������������������������������������������
14,022,064
Call money ������������������������������������������������������������������������������������������������������������
4,579,940
Payables under repurchase agreements ��������������������������������������������������������������
350,010
Payables under securities lending transactions ���������������������������������������������������
5,113,896
Commercial paper ������������������������������������������������������������������������������������������������
2,551,652
Trading liabilities ���������������������������������������������������������������������������������������������������
2,754,739
Borrowed money ��������������������������������������������������������������������������������������������������
8,096,070
Foreign exchanges �����������������������������������������������������������������������������������������������
1,172,969
Short-term bonds �������������������������������������������������������������������������������������������������
25,000
Bonds �������������������������������������������������������������������������������������������������������������������
5,095,577
Due to trust account ���������������������������������������������������������������������������������������������
717,529
Other liabilities ������������������������������������������������������������������������������������������������������
3,672,970
Reserve for employee bonuses ����������������������������������������������������������������������������
13,738
Reserve for executive bonuses ����������������������������������������������������������������������������
644
Reserve for point service program �����������������������������������������������������������������������
1,119
Reserve for reimbursement of deposits ���������������������������������������������������������������
19,589
Deferred tax liabilities �������������������������������������������������������������������������������������������
444,863
Deferred tax liabilities for land revaluation �����������������������������������������������������������
34,141
Acceptances and guarantees �������������������������������������������������������������������������������
6,721,131
Total liabilities ������������������������������������������������������������������������������������������������������
146,725,363
Net assets:
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
Capital surplus �����������������������������������������������������������������������������������������������������
2,481,273
Retained earnings ������������������������������������������������������������������������������������������������
2,327,186
Treasury stock ������������������������������������������������������������������������������������������������������
(210,003)
Total stockholders’ equity �����������������������������������������������������������������������������������
6,369,453
Net unrealized gains (losses) on other securities �������������������������������������������������
1,726,573
Net deferred gains (losses) on hedges �����������������������������������������������������������������
(124,906)
Land revaluation excess ���������������������������������������������������������������������������������������
27,593
Total valuation and translation adjustments ������������������������������������������������������
1,629,261
Total net assets ����������������������������������������������������������������������������������������������������
7,998,715
Total liabilities and net assets ����������������������������������������������������������������������������� ¥154,724,079
2016
¥ 38,862,725
899,594
359,318
2,798,855
950,106
3,511,957
25,602,156
69,276,735
1,558,252
2,131,869
831,326
220,174
279,917
6,737,089
(357,186)
(21,465)
¥153,641,430
¥ 98,839,722
14,428,338
1,107,825
496,236
1,374,280
1,980,153
2,987,815
7,868,311
1,131,796
—
4,775,072
921,320
2,924,495
13,869
566
1,086
15,374
249,427
31,837
6,737,089
145,884,620
1,770,996
2,470,198
2,414,989
(210,003)
6,446,181
1,233,910
48,706
28,011
1,310,628
7,756,810
¥153,641,430
Millions of
U�S� dollars
2016
$ 345,078
7,988
3,191
24,852
8,436
31,184
227,332
615,137
13,836
18,930
7,382
1,955
2,485
59,821
(3,172)
(191)
$1,364,246
$ 877,639
128,115
9,837
4,406
12,203
17,583
26,530
69,866
10,050
—
42,400
8,181
25,968
123
5
10
137
2,215
283
59,821
1,295,370
15,725
21,934
21,444
(1,865)
57,238
10,956
432
249
11,638
68,876
$1,364,246
198
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2016 Annual ReportSMBCSupplemental Information
Non-consolidated Statements of Income (Unaudited)
Sumitomo Mitsui Banking Corporation
Year ended March 31
Millions of yen
2015
2016
Ordinary income ���������������������������������������������������������������������������������������������������
¥2,370,998
¥2,277,812
Interest income ������������������������������������������������������������������������������������������������
1,455,992
1,422,367
Interest on loans and discounts �����������������������������������������������������������������
Interest and dividends on securities ����������������������������������������������������������
Trust fees ���������������������������������������������������������������������������������������������������������
Fees and commissions �����������������������������������������������������������������������������������
Trading income ������������������������������������������������������������������������������������������������
Other operating income ����������������������������������������������������������������������������������
Other Income���������������������������������������������������������������������������������������������������
990,485
356,754
1,872
517,528
12,799
194,059
188,745
980,604
326,077
2,589
527,316
66,593
123,606
135,338
Millions of
U�S� dollars
2016
$20,226
12,630
8,707
2,895
23
4,682
591
1,098
1,202
Ordinary expenses �����������������������������������������������������������������������������������������������
1,415,005
1,529,919
13,585
Interest expenses ��������������������������������������������������������������������������������������������
Interest on deposits �����������������������������������������������������������������������������������
Fees and commissions payments �������������������������������������������������������������������
Other operating expenses �������������������������������������������������������������������������������
General and administrative expenses �������������������������������������������������������������
Other expenses �����������������������������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Extraordinary gains �����������������������������������������������������������������������������������������������
Extraordinary losses ���������������������������������������������������������������������������������������������
Net income before taxes ��������������������������������������������������������������������������������������
Income taxes - current �����������������������������������������������������������������������������������������
Income taxes - deferred ���������������������������������������������������������������������������������������
334,564
71,588
167,548
45,855
820,216
46,820
955,992
356
8,700
947,648
224,845
79,787
398,791
93,258
168,796
40,613
842,710
79,007
747,892
3,706
5,379
746,219
170,558
(33,509)
3,541
828
1,499
361
7,483
702
6,641
33
48
6,626
1,514
(298)
Net income �����������������������������������������������������������������������������������������������������������
¥ 643,015
¥ 609,171
$ 5,409
Per share data:
Earnings per share ��������������������������������������������������������������������������������������
¥6,052�00
¥5,733.46
Earnings per share (diluted) ������������������������������������������������������������������������
—
—
$51
—
Yen
2015
2016
U�S� dollars
2016
010_0800801372808.indd 199
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2016/08/10 10:40:43
2016 Annual ReportSMBCSupplemental Information
Income Analysis (Consolidated)
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Year ended March 31
Domestic
operations
Interest income ����������������������������������������������������� ¥1,241,523
Interest expenses ��������������������������������������������������
268,976
972,546
Net interest income ���������������������������������������������������
Trust fees �������������������������������������������������������������������
3,681
Fees and commissions �����������������������������������������
946,124
Fees and commissions payments ������������������������
97,907
848,216
Net fees and commissions ����������������������������������������
Trading income������������������������������������������������������
221,701
Trading losses �������������������������������������������������������
5,655
216,045
Net trading income ����������������������������������������������������
Other operating income ���������������������������������������� 1,059,947
Other operating expenses�������������������������������������
939,328
120,619
Net other operating income���������������������������������������
Millions of yen
2016
Overseas
operations Elimination
Total
¥699,307
228,429
470,878
—
202,621
37,190
165,431
37,330
27,894
9,436
283,600
156,041
127,559
¥(72,518) ¥1,868,313
445,385
1,422,928
3,681
1,134,463
130,625
1,003,838
225,481
—
225,481
1,342,665
1,094,630
248,034
(52,020)
(20,497)
—
(14,282)
(4,472)
(9,809)
(33,549)
(33,549)
—
(882)
(738)
(144)
Domestic
operations
¥1,288,486
254,843
1,033,643
2,890
934,396
92,048
842,347
297,967
95,388
202,578
1,106,301
924,058
182,242
2015
Overseas
operations Elimination
Total
¥707,196
209,420
497,775
—
206,274
40,906
165,367
44,531
51,990
(7,459)
253,900
155,049
98,850
¥(103,750) ¥1,891,932
386,753
1,505,178
2,890
1,126,285
129,609
996,676
252,976
57,856
195,119
1,359,109
1,078,570
280,538
(77,510)
(26,240)
—
(14,385)
(3,346)
(11,039)
(89,522)
(89,522)
—
(1,092)
(536)
(555)
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. Inter-segment transactions are reported in the “Elimination” column.
Average Balance, Interest and Average Rate of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥ 87,513,636
52,187,299
22,510,229
147,992
32,450
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
6,722,143
826,050
1,480,695
Interest-bearing liabilities ������������������������������������������ ¥120,395,742
84,632,369
7,027,344
2,295,334
1,281,321
6,795,925
145,053
9,777,958
1,451,156
6,177,841
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 ��������������������������������������������������������������������
2016
Interest
¥1,241,523
846,804
267,665
861
15
10,747
5,088
40,742
¥ 268,976
40,303
5,466
1,523
3,714
6,726
203
77,974
1,400
119,326
Millions of yen
Average rate
1.42%
1.62
1.19
0.58
0.05
0.16
0.62
2.75
0.22%
0.05
0.08
0.07
0.29
0.10
0.14
0.80
0.10
1.93
Average balance
¥ 84,712,912
51,247,709
23,023,102
226,408
22,061
4,745,783
792,696
1,444,682
¥111,286,366
80,783,198
5,969,372
2,040,724
782,571
5,278,677
192,088
8,830,463
1,255,740
5,647,401
2015
Interest
¥1,288,486
861,937
297,680
1,176
48
7,826
4,942
41,751
¥ 254,843
43,595
5,375
1,503
1,314
5,036
282
76,433
1,393
113,814
Average rate
1�52%
1�68
1�29
0�52
0�22
0�16
0�62
2�89
0�23%
0�05
0�09
0�07
0�17
0�10
0�15
0�87
0�11
2�02
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 (2016, ¥28,376,025 million; 2015, ¥22,049,623
million).
200
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SMFG2016 Annual Report Income Analysis (Consolidated)
Overseas Operations
Year ended March 31
Interest-earning assets ����������������������������������������������
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
Average balance
¥37,621,327
22,365,670
3,154,767
918,358
1,521,170
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
—
5,678,537
444,069
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 ��������������������������������������������������������������������
¥28,979,734
15,827,172
6,502,114
525,808
1,934,523
—
2,807,578
752,364
—
77,162
2016
Interest
¥699,307
528,869
49,677
19,596
11,934
—
32,833
18,624
¥228,429
100,722
43,853
3,836
6,212
—
10,211
10,861
—
3,934
Millions of yen
Average rate
1.86%
2.36
1.57
2.13
0.78
—
0.58
4.19
0.79%
0.64
0.67
0.73
0.32
—
0.36
1.44
—
5.10
Average balance
¥36,521,313
21,676,966
3,328,456
1,046,258
921,297
—
5,918,336
400,645
¥28,006,363
13,367,188
8,945,965
925,341
1,165,238
—
2,744,976
662,081
—
58,407
2015
Interest
¥707,196
519,030
54,772
18,423
9,888
—
38,765
20,345
¥209,420
83,631
38,528
2,697
3,902
—
7,764
10,376
—
2,736
Average rate
1�94%
2�39
1�65
1�76
1�07
—
0�66
5�08
0�75%
0�63
0�43
0�29
0�33
—
0�28
1�57
—
4�69
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 (2016, ¥1,732,890 million; 2015, ¥1,519,693
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥123,153,560
73,713,490
25,450,418
1,066,351
727,468
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
6,722,143
6,421,181
1,924,764
Interest-bearing liabilities ������������������������������������������ ¥148,078,275
100,364,107
13,529,459
2,821,143
2,389,693
6,795,925
2,952,632
9,731,272
1,451,156
6,698,959
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 ��������������������������������������������������������������������
2016
Interest
¥1,868,313
1,326,402
303,132
20,457
10,100
10,747
37,537
59,366
¥ 445,385
140,633
49,319
5,360
8,077
6,726
10,415
39,825
1,400
129,295
Average rate
1.52%
1.80
1.19
1.92
1.39
0.16
0.58
3.08
0.30%
0.14
0.36
0.19
0.34
0.10
0.35
0.41
0.10
1.93
Average balance
¥119,166,662
71,417,716
26,030,785
1,272,667
776,681
4,745,783
6,645,194
1,845,302
¥138,047,887
94,110,334
14,915,337
2,966,065
1,781,132
5,278,677
2,937,065
8,624,212
1,255,740
5,588,700
2015
Interest
¥1,891,932
1,312,629
336,345
19,599
9,640
7,826
43,147
62,097
¥ 386,753
126,371
43,904
4,201
4,921
5,036
8,047
34,814
1,393
110,461
Average rate
1�59%
1�84
1�29
1�54
1�24
0�16
0�65
3�37
0�28%
0�13
0�29
0�14
0�28
0�10
0�27
0�40
0�11
1�98
Notes: 1. The figures above comprise totals for domestic and overseas operations after inter-segment 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 (2016, ¥30,098,341 million; 2015, ¥23,551,730
million).
011_0800804262808.indd 201
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SMFG2016 Annual Report Income Analysis (Consolidated)
Fees and Commissions
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 ��������������������������������������������������
Domestic
operations
¥946,124
21,076
114,071
110,138
16,380
5,509
74,257
255,217
112,928
Millions of yen
2016
Total
Overseas
operations Elimination
¥ 202,621
110,113
17,867
35,935
—
2
12,369
1
3,128
¥(14,282) ¥1,134,463
126,111
131,924
142,880
16,380
5,512
85,085
255,218
116,057
(5,079)
(14)
(3,194)
—
—
(1,541)
—
—
Domestic
operations
¥934,396
20,893
113,596
109,754
16,905
5,746
70,065
243,633
145,016
2015
Overseas
operations Elimination
Total
¥206,274
110,261
17,143
41,832
—
2
15,275
3
2,009
¥(14,385) ¥1,126,285
126,444
130,723
146,462
16,905
5,749
84,572
243,636
147,024
(4,711)
(15)
(5,124)
—
—
(768)
—
(1)
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥ 97,907
29,282
¥ 37,190
8,507
¥ (4,472) ¥ 130,625
37,789
(0)
¥ 92,048
28,219
¥ 40,906
9,335
¥ (3,346) ¥ 129,609
37,318
(236)
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. Inter-segment transactions are reported in the “Elimination” column.
Trading Income
Year ended March 31
Trading income ����������������������������������������������������������
Gains on trading securities �����������������������������������
Gains on securities related to
2016
Domestic
operations
¥221,701
77,921
Overseas
operations Elimination
¥(33,549)
(5,795)
¥37,330
—
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
115
143,554
110
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
5,655
—
—
5,655
—
—
37,330
—
27,894
5,795
49
22,048
—
(49)
(27,704)
—
(33,549)
(5,795)
(49)
(27,704)
—
Millions of yen
2015
Domestic
operations
¥297,967
264,068
Overseas
operations Elimination
¥(89,522)
(14,189)
¥44,531
—
Total
¥252,976
249,878
3,054
30,691
153
95,388
—
—
95,388
—
—
44,531
—
51,990
14,189
109
37,691
—
(109)
(75,222)
—
(89,522)
(14,189)
(109)
(75,222)
—
2,944
—
153
57,856
—
—
57,856
—
Total
¥225,481
72,125
65
153,180
110
—
—
—
—
—
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. Inter-segment transactions are reported in the “Elimination” column.
202
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SMFG2016 Annual Report 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
2016
2015
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Overseas operations:
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Grand total ������������������������������������������������������������������������������������������������������
¥ 62,436,739
22,898,011
7,242,799
92,577,550
6,451,869
¥ 99,029,420
¥ 11,763,251
6,222,716
105,310
18,091,277
7,798,564
¥ 25,889,842
¥124,919,262
¥ 55,897,677
24,167,542
5,724,501
85,789,720
5,705,861
¥ 91,495,582
¥ 10,243,488
4,897,880
116,829
15,258,197
8,120,036
¥ 23,378,233
¥114,873,816
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
2016
2015
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,372,033
126,815
918,357
4,633,300
4,392,082
2,565,738
8,237,116
4,613,843
1,265,341
19,960,159
¥53,084,789
¥ 173,548
1,347,443
17,787,538
2,672,760
¥21,981,290
¥75,066,080
12.00%
0.24
1.73
8.73
8.28
4.83
15.52
8.69
2.38
37.60
100.00%
0.79%
6.13
80.92
12.16
100.00%
—
¥ 5,975,126
135,284
913,596
4,606,952
4,429,816
2,721,873
7,642,781
4,232,714
1,243,108
19,949,501
¥51,850,756
¥ 71,691
1,348,888
17,224,073
2,572,829
¥21,217,483
¥73,068,240
11�52%
0�26
1�76
8�89
8�54
5�25
14�74
8�16
2�40
38�48
100�00%
0�34%
6�36
81�18
12�12
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.
011_0800804262808.indd 203
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SMFG2016 Annual Report Assets and Liabilities (Consolidated)
Reserve for Possible Loan Losses
March 31
General reserve �����������������������������������������������������������������������������������������������
Specific reserve �����������������������������������������������������������������������������������������������
Loan loss reserve for specific overseas countries ������������������������������������������
Reserve for possible loan losses ���������������������������������������������������������������������
Amount of direct reduction ������������������������������������������������������������������������������
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
Millions of yen
Millions of yen
2016
¥395,546
228,161
1,311
¥625,019
¥301,983
2016
¥ 44,748
594,077
19,845
266,698
¥925,370
¥273,009
2015
¥387,047
283,481
719
¥671,248
¥363,585
2015
¥ 35,861
774,058
13,714
278,622
¥1,102,256
¥ 325,980
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
2016
¥ 178,059
526,763
287,921
992,743
85,579,406
¥86,572,150
¥ 301,983
Millions of yen
2015
¥ 152,036
727,986
294,756
1,174,779
83,475,568
¥84,650,348
¥ 363,585
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
204
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SMFG2016 Annual Report Securities
Year-End Balance
March 31
Domestic operations:
Assets and Liabilities (Consolidated)
Millions of yen
2016
2015
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Unallocated corporate assets:
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥10,346,596
52,070
2,679,706
3,698,605
5,087,628
¥21,864,608
¥
—
—
82,314
—
3,263,832
¥ 3,346,147
¥
—
—
—
53,689
—
¥ 53,689
¥25,264,445
¥14,290,051
119,993
2,634,119
4,248,281
5,103,864
¥26,396,309
¥
—
—
52,548
—
3,133,532
¥ 3,186,081
¥
—
—
—
51,276
—
¥ 51,276
¥29,633,667
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 ����������������������������������������������������������� ¥7,176,926
Trading securities �������������������������������������������������� 3,431,314
Derivatives of trading securities ����������������������������
13,581
Securities related to trading transactions �������������
—
Derivatives of securities related to
2016
2015
Millions of yen
Overseas
operations Elimination
Total
¥942,823
138,744
—
—
¥(56,468) ¥8,063,281
— 3,570,058
13,581
—
—
—
Domestic
operations
¥6,752,166
3,057,436
16,803
—
Overseas
operations Elimination
Total
¥787,124
76,279
—
—
¥(55,609) ¥7,483,681
— 3,133,716
16,803
—
—
—
trading transactions ��������������������������������������������
18,098
Trading-related financial derivatives ��������������������� 3,649,936
Other trading assets����������������������������������������������
63,995
120
803,958
—
—
(56,468)
—
18,218
4,397,427
63,995
24,343
3,551,598
101,984
293
710,550
—
—
(55,609)
—
24,637
4,206,539
101,984
Trading liabilities �������������������������������������������������������� ¥5,361,628
Trading securities sold for short sales ������������������ 2,153,965
Derivatives of trading securities ����������������������������
29,724
Securities related to trading transactions
¥807,507
43,707
—
¥(56,468) ¥6,112,667
— 2,197,673
29,724
—
¥5,038,136
2,169,647
25,816
¥682,161
23,752
—
¥(55,609) ¥5,664,688
— 2,193,399
25,816
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
17,275
Trading-related financial derivatives ��������������������� 3,160,662
Other trading liabilities ������������������������������������������
—
80
763,719
—
—
(56,468)
—
17,356
3,867,913
—
26,580
2,816,092
—
298
658,109
—
—
(55,609)
—
26,878
3,418,593
—
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. Inter-segment transactions are reported in the “Elimination” column.
011_0800804262808.indd 205
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SMFG2016 Annual Report Capital (Non-consolidated)
Sumitomo Mitsui Financial Group, Inc�
Changes in Number of Shares Issued and Capital Stock
April 1, 2011* �������������������������������������������
Number of shares issued
Changes
(70,001)
Balances
1,414,055,625
Capital stock
Changes
—
Balances
2,337,895
Capital reserve
Changes
—
Balances
1,559,374
Millions of yen
Remarks:
* 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, 2016
Common stock ���������������������������������������������������������������������������������������������������������������������������������������������������������������
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of shares issued
1,414,055,625
1,414,055,625
206
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SMFG2016 Annual Report Capital (Non-consolidated)
Stock Exchange Listings
Tokyo Stock 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, 2016
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
350
102
7,097
1,108
337
278,835
287,836
—
Number of
units
4,774
4,086,694
648,686
1,357,155
6,342,641
4,015
1,675,796
14,119,761
2,079,525
Percentage of
total
0�03%
28�94
4�60
9�61
44�92
0�03
11�87
100�00%
—
Notes: 1. Of 4,010,018 shares in treasury stock, 40,100 units are included in “Individuals and others” and the remaining 18 shares are included in “Fractional shares.”
2. “Other institutions” and “Fractional shares” includes 29 units and 48 shares, held at Japan Securities Depository Center, Incorporated.
3. In the row “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.
Principal Shareholders
March 31, 2016
Japan Trustee Services Bank, Ltd� (Trust Account) �������������������������������������������������������������������������������������
The Master Trust Bank of Japan, Ltd� (Trust Account) ��������������������������������������������������������������������������������
Sumitomo Mitsui Banking Corporation �������������������������������������������������������������������������������������������������������
STATE STREET BANK AND TRUST COMPANY 505223* ���������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 9) ����������������������������������������������������������������������������������
THE BANK OF NEW YORK MELLON SA/NV 10** ��������������������������������������������������������������������������������������
NATSCUMCO*** ������������������������������������������������������������������������������������������������������������������������������������������
STATE STREET BANK AND TRUST COMPANY 505001**** �����������������������������������������������������������������������
STATE STREET BANK WEST CLIENT - TREATY 505234***** ���������������������������������������������������������������������
STATE STREET BANK AND TRUST COMPANY****** ����������������������������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of
shares
71,063,600
51,171,600
42,820,924
35,764,641
27,917,100
27,518,378
24,593,200
19,426,073
18,341,126
17,518,902
336,135,544
Percentage of
shares outstanding
5�02%
3�61
3�02
2�52
1�97
1�94
1�73
1�37
1�29
1�23
23�77%
* Standing agent: Mizuho Bank, Ltd. Settlement Service Department
** Standing agent: The Bank of Tokyo-Mitsubishi UFJ, Ltd.
*** Standing agent: Sumitomo Mitsui Banking Corporation
**** Standing agent: Mizuho Bank, Ltd. Settlement Service Department
***** Standing agent: Mizuho Bank, Ltd. Settlement Service Department
****** Standing agent: The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch Custody Department
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. BlackRock Japan Co., Ltd. has submitted a Report of Possession of Large Volume regarding its shareholding as of January 21, 2015. It stated that
BlackRock Japan Co., Ltd. and eight other shareholders hold common shares in SMFG as of January 15, 2015. But these nine 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: BlackRock Japan Co., Ltd. (and eight other joint holders)
Number of share held: 70,812,990 shares (including joint ownership)
Shareholding ratio:
5.01%
011_0800804262808.indd 207
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SMFG2016 Annual Report Capital (Non-consolidated)
Stock Options
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
89,600 shares
Common stock
¥2,216 per share
¥1,108 per share
From August 13, 2010 to August 12, 2040
Date of resolution: Meeting of the Board of Directors held on July 28, 2010
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
259,600 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
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
268,100 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
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
114,400 shares
Common stock
¥4,160 per share
¥2,080 per share
From August 14, 2013 to August 13, 2043
Date of resolution: Meeting of the Board of Directors held on July 29, 2013
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
120,300 shares
Common stock
¥3,662 per share
¥1,831 per share
From August 15, 2014 to August 14, 2044
Date of resolution: Meeting of the Board of Directors held on July 30, 2014
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
2016
132,400 shares
Common stock
¥4,905 per share
¥2,453 per share
From August 18, 2015 to August 17, 2045
Date of resolution: Meeting of the Board of Directors held on July 31, 2015
Common Stock Price Range
Stock Price Performance
Year ended March 31
High ���������������������������������������������������������������������������������������
Low ����������������������������������������������������������������������������������������
2016
¥5,770.0
2,819.5
2015
¥4,915�0
3,800
Note: Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
Yen
2014
¥5,470
3,545
2013
¥4,255
2,231
2012
¥2,933
2,003
Six-Month Performance
High ��������������������������������������������������������������
Low ���������������������������������������������������������������
October 2015
¥4,950�0
4,549�0
November 2015
¥5,220�0
4,691�0
Yen
December 2015
¥4,833�0
4,471�0
January 2016
¥4,640�0
3,781�0
February 2016
¥3,745�0
2,819�5
March 2016
¥3,802�0
3,126�0
Note: Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
208
011_0800804262808.indd 208
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SMFG2016 Annual Report Basel III Information
Capital Ratio Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
The consolidated capital ratio is calculated using the method stipulated in “Standards for Bank Holding Company to Examine the Adequacy of
Its Capital Based on Assets, Etc. Held by It and Its Subsidiaries Pursuant to Article 52-25 of the Banking Act” (Notification No. 20 issued by
the Japanese Financial Services Agency in 2006; hereinafter referred to as “the Notification”).
In addition to the method stipulated in the Notification to calculate the consolidated capital ratio (referred to as “International Standard” in the
Notification), SMFG has adopted the Advanced Internal Ratings-Based (AIRB) approach for calculating credit risk-weighted asset amounts and
the Advanced Measurement Approach (AMA) for calculating the operational risk equivalent amount.
“Consolidated Capital Ratio Information” was prepared principally based on the Notification, and the terms and details in the section may
differ from those in other sections of this report.
■ Scope of Consolidation
1. Consolidated Capital Ratio Calculation
• Number of consolidated subsidiaries: 341
Please refer to “Principal Subsidiaries and Affiliates” on page 104 for their names and business outline.
• Scope of consolidated subsidiaries for calculation of the consolidated capital ratio is based on the scope of consolidated subsidiaries for
preparing consolidated financial statements.
• There are no affiliates to which the proportionate consolidation method is applied.
2. Restrictions on Movement of Funds and Capital within Holding Company Group
There are no special restrictions on movement of funds and capital among SMFG and its group companies.
3. Names of companies among subsidiaries of bank-holding companies (other financial institutions), with the Basel Capital Accord
required amount, and total shortfall amount
Not applicable.
■ Capital Structure Information (Consolidated Capital Ratio (International Standard))
Regarding the calculation of the capital ratio, certain procedures were performed by KPMG AZSA LLC pursuant to “Treatment of Inspection
of the Capital Ratio Calculation Framework Based on Agreed-Upon Procedures” (JICPA Industry Committee Practical Guideline No. 30).
The certain procedures performed by the external auditor are not part of the audit of consolidated financial statements. The certain procedures
performed on our internal control framework for calculating the capital ratio are based on procedures agreed upon by SMFG and the external
auditor and are not a validation of appropriateness of the capital ratio itself or opinion on the internal controls related to the capital ratio
calculation.
012_0800885852807.indd 209
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2016/08/10 19:28:57
SMFG2016 Annual Report Basel III
Template No.
Items
Common Equity Tier 1 capital: instruments and reserves
1a+2-1c-26
Directly issued qualifying common share capital plus related capital surplus and retained
earnings
1a
2
1c
26
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: cash dividends to be paid (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Accumulated other comprehensive income and other disclosed reserves
5
Adjusted non-controlling interests, etc. (amount allowed to be included in group Common Equity
Tier 1)
Total of items included in Common Equity Tier 1 capital: instruments and reserves subject to
transitional arrangements
of which: non-controlling interests and other items corresponding to common share capital
issued by consolidated subsidiaries (amount allowed to be included in group
Common Equity Tier 1)
(Millions of yen, except percentages)
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
As of March 31, 2015
Amounts
excluded
under
transitional
arrangements
7,351,752
3,095,202
4,534,472
175,381
102,541
—
2,635
875,680
164,550
48,257
48,257
6,909,010
3,095,225
4,098,425
175,261
109,379
—
2,085
583,787
801,543 1,202,315
153,863
70,451
70,451
6 Common Equity Tier 1 capital: instruments and reserves
(A)
8,442,875
7,936,954
Common Equity Tier 1 capital: regulatory adjustments
8+9 Total intangible assets (excluding those relating to mortgage servicing rights)
8
9
10
of which: goodwill (including those equivalent)
of which: other intangible assets other than goodwill and mortgage servicing rights
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
11 Net deferred gains or losses on hedges
12 Shortfall of eligible provisions to expected losses
13 Gain on sale on securitization transactions
14 Gains and losses due to changes in own credit risk on fair valued liabilities
15 Net defined benefit asset
16 Investments in own shares (excluding those reported in the Net assets section)
17 Reciprocal cross-holdings in common equity
18
Investments in the capital of banking, financial and insurance entities that are outside the
scope of regulatory consolidation (“Other Financial Institutions”), net of eligible short positions,
where the bank does not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
19
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
27
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
451,805
223,573
228,232
301,203
149,048
152,154
303,449
174,118
129,330
455,174
261,177
193,996
1,282
34,278
34,496
30,051
5,089
84,995
4,424
—
855
2,003
3,004
22,852
22,997
20,034
3,392
56,663
2,949
—
(11,477)
12,822
18,683
2,597
102,160
3,954
—
(17,216)
19,233
28,025
3,896
153,241
5,931
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
26,239
39,359
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
646,423
460,433
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,796,451
7,476,520
210
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SMFG2016 Annual ReportBasel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments
(Millions of yen, except percentages)
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
As of March 31, 2015
Amounts
excluded
under
transitional
arrangements
31a
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as equity under applicable accounting standards and the breakdown
31b Stock acquisition rights to Additional Tier 1 instruments
30
32
34-35
33+35
33
35
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Additional
Tier 1)
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional
Tier 1 capital: instruments
of which: instruments issued by bank holding companies and their special purpose vehicles
of which: instruments issued by subsidiaries (excluding bank holding companies’ special
purpose vehicles)
—
—
300,000
—
183,267
961,997
961,997
—
Total of items included in Additional Tier 1 capital: items subject to transitional arrangements
of which: foreign currency translation adjustments
36 Additional Tier 1 capital: instruments
Additional Tier 1 capital: regulatory adjustments
37 Investments in own Additional Tier 1 instruments
38 Reciprocal cross-holdings in Additional Tier 1 instruments
34,817
34,817
1,480,082
(D)
39
40
Non-significant Investments in the Additional Tier 1 capital of Other Financial Institutions, net of
eligible short positions (amount above 10% threshold)
Significant investments in the Additional Tier 1 capital of Other Financial Institutions (net of
eligible short positions)
Total of items included in Additional Tier 1 capital: regulatory adjustments subject to transitional
arrangements
of which: goodwill and others
of which: gain on sale on securitization transactions
of which: amount equivalent to 50% of shortfall of eligible provisions to expected losses
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
196,827
165,294
20,034
11,498
—
43 Additional Tier 1 capital: regulatory adjustments
(E)
244,860
—
—
—
—
182,251
1,124,296
1,124,296
—
93,785
93,785
1,400,333
284,571
246,929
28,025
9,616
—
348,227
—
—
—
—
—
—
—
—
203
—
—
304
48,032
32,021
63,453
95,180
Additional Tier 1 capital (AT1)
44 Additional Tier 1 capital ((D)-(E))
Tier 1 capital (T1 = CET1 + AT1)
45 Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
Tier 2 capital: instruments and provisions
(F)
1,235,221
1,052,105
(G)
9,031,672
8,528,626
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and its breakdown
Stock acquisition rights to Tier 2 instruments
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
liabilities under applicable accounting standards
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
48-49 Adjusted non-controlling interests, etc. (amount allowed to be included in group Tier 2)
47+49
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2:
instruments and provisions
47
49
of which: instruments issued by bank holding companies and their special purpose vehicles
of which: instruments issued by subsidiaries (excluding bank holding companies’ special
purpose vehicles)
50 Total of general reserve for possible loan losses and eligible provisions included in Tier 2
50a
50b
of which: general reserve for possible loan losses
of which: eligible provisions
Total of items included in Tier 2 capital: instruments and provisions subject to transitional
arrangements
of which: unrealized gains on other securities after 55% discount
of which: land revaluation excess after 55% discount
51 Tier 2 capital: instruments and provisions
(H)
—
—
655,064
—
42,036
—
—
374,988
—
39,348
1,220,569
1,423,997
—
—
1,220,569
1,423,997
78,017
78,017
—
345,673
332,809
12,863
2,341,360
64,776
64,776
—
699,394
679,578
19,816
2,602,505
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2016/08/10 19:28:58
SMFG2016 Annual ReportBasel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments
54
55
Non-significant Investments in the Tier 2 capital of Other Financial Institutions, net of eligible
short positions (amount above the 10% threshold)
Significant investments in the Tier 2 capital of Other Financial Institutions (net of eligible short
positions)
Total of items included in Tier 2 capital: regulatory adjustments subject to transitional
arrangements
of which: Tier 2 and deductions under Basel II
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
(Millions of yen, except percentages)
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
As of March 31, 2015
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
4,043
6,065
75,000
50,000
50,023
75,034
62,109
62,109
137,109
(I)
111,149
111,149
165,216
(J)
2,204,250
2,437,289
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
11,235,923
10,965,916
Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
of which: intangible assets (excluding those relating to mortgage servicing rights)
of which: net defined benefit asset
of which: Non-significant Investments in the capital of Other Financial Institutions, net of
eligible short positions (amount above the 10% threshold)
of which: significant investments in Additional Tier 1 capital of Other Financial Institutions
(net of eligible short positions)
of which: significant investments in Tier 2 capital of Other Financial Institutions
(net of eligible short positions)
68,865
31,824
16,093
—
83
16,156
210,891
32,434
33,867
64,835
52,936
17,981
(L)
66,011,621
66,136,801
60 Risk weighted assets
Capital ratio (consolidated)
61 Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
62 Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))
63 Total risk-weighted capital ratio (consolidated) ((K)/(L))
Regulatory adjustments
72
73
Non-significant Investments in the capital of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
Significant investments in the common stock of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
74 Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
75
Provisions included in Tier 2 capital: instruments and provisions
76 Provisions (general reserve for possible loan losses)
77 Cap on inclusion of provisions (general reserve for possible loan losses)
78
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal
ratings-based approach (prior to application of cap)
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
Capital instruments subject to transitional arrangements
82 Current cap on Additional Tier 1 instruments subject to transitional arrangements
83
Amount excluded from Additional Tier 1 due to cap (excess over cap after redemptions and
maturities)
11.81%
13.68%
17.02%
620,209
522,466
—
9,700
78,017
88,359
—
309,031
975,514
—
84 Current cap on Tier 2 instruments subject to transitional arrangements
85 Amount excluded from Tier 2 due to cap (excess over cap after redemptions and maturities)
1,220,569
30,203
11.30%
12.89%
16.58%
798,335
477,320
—
5,285
64,776
84,065
—
312,347
1,138,100
—
1,423,997
43,258
Items
Required capital ((L) ✕ 8%)
212
(Millions of yen)
As of March 31, 2016
5,280,929
As of March 31, 2015
5,290,944
012_0800885852807.indd 212
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SMFG2016 Annual ReportBasel III Information
■ Capital Requirements
March 31
Capital requirements for credit risk:
Billions of yen
2016
2015
Internal ratings-based approach ............................................................................................................
Corporate exposures: ........................................................................................................................
Corporate exposures (excluding specialized lending) ....................................................................
Sovereign exposures ......................................................................................................................
Bank exposures ..............................................................................................................................
Specialized lending .........................................................................................................................
Retail exposures: ................................................................................................................................
Residential mortgage exposures ....................................................................................................
Qualifying revolving retail exposures ..............................................................................................
Other retail exposures .....................................................................................................................
Equity exposures: ...............................................................................................................................
PD/LGD approach ..........................................................................................................................
Market-based approach .................................................................................................................
Simple risk weight method..........................................................................................................
Internal models method ..............................................................................................................
Credit risk-weighted assets under Article 145 of the Notification ......................................................
Securitization exposures ....................................................................................................................
Other exposures .................................................................................................................................
Standardized approach ..........................................................................................................................
Amount corresponding to CVA risk ........................................................................................................
CCP-related exposures ..........................................................................................................................
Total capital requirements for credit risk ................................................................................................
Capital requirements for market risk:
Standardized method .............................................................................................................................
Interest rate risk ..................................................................................................................................
Equity position risk .............................................................................................................................
Foreign exchange risk.........................................................................................................................
Commodities risk ................................................................................................................................
Options ...............................................................................................................................................
Internal models approach .......................................................................................................................
Securitization exposures ........................................................................................................................
Total capital requirements for market risk ..............................................................................................
4,954.4
3,102.8
2,645.2
43.1
136.5
278.1
623.1
373.1
134.9
115.1
459.5
317.6
141.9
92.4
49.4
252.6
78.6
437.8
547.2
197.0
8.3
5,706.9
64.7
38.0
17.6
2.2
0.2
6.7
52.3
—
116.9
Capital requirements for operational risk:
Advanced measurement approach ........................................................................................................
Basic indicator approach ........................................................................................................................
Total capital requirements for operational risk........................................................................................
Total amount of capital requirements .......................................................................................................
226.7
40.6
267.2
6,091.1
5,093.8
3,091.1
2,588.4
42.1
183.2
277.4
661.2
404.9
127.4
128.9
498.3
374.7
123.6
87.7
35.9
324.0
75.5
443.6
519.6
179.5
8.2
5,801.1
74.6
42.0
26.0
1.9
1.4
3.3
82.7
—
157.3
193.3
33.1
226.4
6,184.8
Notes: 1. Capital requirements for credit risk are capital equivalents to “credit risk-weighted assets ✕ 8%” under the standardized approach and “credit risk-weighted assets ✕ 8% +
expected loss amount” under the Internal-Ratings Based (IRB) approach.
2. Portfolio classification is after CRM.
3. “Securitization exposures” includes such exposures based on the standardized approach.
4. “Other exposures” includes estimated lease residual values, purchased receivables (including exposures to qualified corporate enterprises and others), long settlement
transactions and other assets.
■ Internal Ratings-Based (IRB) Approach
1. Scope
SMFG and the following consolidated subsidiaries have adopted the Advanced Internal Ratings-Based (AIRB) approach for exposures as of
March 31, 2009.
(1) Domestic Operations
Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card Company, Limited and SMBC Guarantee Co., Ltd.
(2) Overseas Operations
Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking Corporation (China) Limited, Sumitomo Mitsui
Banking Corporation of Canada, Banco Sumitomo Mitsui Brasileiro S.A., JSC Sumitomo Mitsui Rus Bank, PT Bank Sumitomo Mitsui
Indonesia, Sumitomo Mitsui Banking Corporation Malaysia Berhad, SMBC Leasing and Finance, Inc., SMBC Capital Markets, Inc.,
SMBC Nikko Capital Markets Limited, SMBC Derivative Products Limited and SMBC Capital Markets (Asia) Limited
THE MINATO BANK, LTD., Kansai Urban Banking Corporation, SMBC Finance Service Co., Ltd. and Sumitomo Mitsui Finance and
Leasing Co., Ltd. have adopted the Foundation Internal Ratings-Based (FIRB) approach.
Note: Directly controlled SPCs and limited partnerships for investment of consolidated subsidiaries using the AIRB approach have also adopted the AIRB approach. Further, the
AIRB approach is applied to equity exposures on a group basis, including equity exposures of consolidated subsidiaries applying the standardized approach.
012_0800885852807.indd 213
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SMFG2016 Annual ReportBasel III Information 2. Exposures by Asset Class
(1) Corporate Exposures
A. Corporate, Sovereign and Bank Exposures
(A) Rating Procedures
• “Corporate, sovereign and bank exposures” includes credits to domestic and overseas commercial/industrial (C&I) companies,
individuals for business purposes (domestic only), sovereigns, public sector entities, and financial institutions. Business loans such
as apartment construction loans are, in principle, included in “retail exposures.” However, credits of more than ¥100 million are
treated as corporate exposures in accordance with the Notification.
• An obligor is assigned an obligor grade by first assigning a financial grade using a financial strength grading model and data
obtained from the obligor’s financial statements. The financial grade is then adjusted taking into account the actual state of the
obligor’s balance sheet and qualitative factors to derive the obligor grade (for details, please refer to “Credit Risk Assessment
and Quantification” on page 81). Different rating series are used for domestic and overseas obligors — J1 ~ J10 for domestic
obligors and G1 ~ G10 for overseas obligors — as shown in the table below due to differences in actual default rate levels and
portfolios’ grade distribution. Different Probability of Default (PD) values are applied also.
• In addition to the above basic rating procedure which builds on the financial grade assigned at the beginning, in some cases, the
obligor grade is assigned based on the parent company’s credit quality or credit ratings published by external rating agencies. The
Japanese government, local authorities and other public sector entities with special basis for existence and unconventional financial
statements are assigned obligor grades based on their attributes (for example, “local municipal corporations”), as the data on these
obligors are not suitable for conventional grading models. Further, credits to individuals for business purposes and business loans
are assigned obligor grades using grading models developed specifically for these exposures.
• PDs used for calculating credit risk-weighted assets are estimated based on the default experience for each grade and taking into
account the possibility of estimation errors. In addition to internal data, external data are used to estimate and validate PDs. The
definition of default is the definition stipulated in the Notification (an event that would lead to an exposure being classified as
“substandard loans,” “doubtful assets” or “bankrupt and quasi-bankrupt assets” occurring to the obligor).
• Loss Given Defaults (LGDs) and exposure at default (EAD) used in the calculation of credit risk-weighted assets are estimated
based on historical loss experience of credits in default, taking into account the possibility of estimation errors.
Obligor Grade
Domestic
Corporate
J1
J2
J3
J4
Overseas
Corporate
G1
G2
G3
G4
Definition
Very high certainty of debt repayment
High certainty of debt repayment
Satisfactory certainty of debt repayment
Debt repayment is likely but this could change in cases of
significant changes in economic trends or business environment
No problem with debt repayment over the short term, but not
satisfactory over the mid to long term and the situation could
change in cases of significant changes in economic trends or
business environment
Currently no problem with debt repayment, but there are unstable
business and financial factors that could lead to debt repayment
problems
Close monitoring is required due to problems in meeting loan
terms and conditions, sluggish/unstable business, or financial
problems
Borrower Category
Normal Borrowers
Borrowers Requiring Caution
G5
G6
G7
G7R Of which Substandard Borrowers
G8
G9
G10
Currently not bankrupt, but experiencing business difficulties,
making insufficient progress in restructuring, and highly likely to
go bankrupt
Though not yet legally or formally bankrupt, has serious business
difficulties and rehabilitation is unlikely; thus, effectively bankrupt
Legally or formally bankrupt
Substandard Borrowers
Potentially Bankrupt Borrowers
Effectively Bankrupt Borrowers
Bankrupt Borrowers
J5
J6
J7
J7R
J8
J9
J10
214
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SMFG2016 Annual ReportBasel III Information (B) Portfolio
a. Domestic Corporate, Sovereign and Bank Exposures
Billions of yen
Exposure amount
Undrawn amount
On-balance
sheet assets
March 31, 2016
J1-J3 ................................... 25,425.1 20,176.1
J4-J6 ................................... 16,856.1 14,637.0
J7 (excluding J7R) ...............
745.3
Japanese government and
791.2
Total
Off-balance
sheet assets
5,249.0
2,219.1
45.9
local municipal corporations ..... 45,890.5 45,414.0
Others ..................................
4,346.0
Default (J7R, J8-J10) ...........
692.3
Total ..................................... 94,570.0 86,010.6
4,874.7
732.3
476.5
528.7
40.1
8,559.4
Weighted
average
LGD
Weighted
Weighted
average
average
CCF
PD
49.47% 0.07% 35.03%
0.74
49.97
15.69
49.39
34.65
34.24
Weighted
average
EL default
Weighted
average
risk weight
—% 19.36%
—
50.60
— 149.46
49.39
49.86
96.36
—
0.00
0.81
100.00
—
35.31
44.36
47.52
—
—
—
46.87
—
0.01
54.86
8.15
—
Total
5,214.0
1,070.1
24.2
106.1
253.7
0.6
6,668.8
Billions of yen
Exposure amount
Undrawn amount
On-balance
sheet assets
March 31, 2015
J1-J3 ................................... 24,669.4 19,660.6
J4-J6 ................................... 16,265.1 14,077.4
J7 (excluding J7R) ...............
894.2
Japanese government and
936.5
Total
Off-balance
sheet assets
5,008.8
2,187.7
42.2
local municipal corporations ..... 47,942.0 47,447.1
4,575.3
Others ..................................
Default (J7R, J8-J10) ...........
873.8
Total ..................................... 95,797.7 87,528.3
5,070.3
914.4
494.9
495.1
40.7
8,269.4
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
50.41% 0.07% 34.52%
0.78
50.85
15.42
50.72
33.10
33.77
Weighted
average
EL default
Weighted
average
risk weight
—% 19.82%
—
49.61
— 146.52
50.32
50.41
98.50
—
0.00
0.84
100.00
—
35.31
43.50
46.88
—
—
—
45.98
—
0.03
50.10
11.21
—
Total
4,323.8
844.1
9.8
237.9
158.7
1.3
5,575.6
Note: “Others” includes exposures guaranteed by credit guarantee corporations, exposures to public sector entities and voluntary organizations, exposures to obligors not
assigned obligor grades because they have yet to close their books (for example, newly established companies), as well as business loans of more than ¥100 million.
b. Overseas Corporate, Sovereign and Bank Exposures
Billions of yen
Exposure amount
Undrawn amount
Total
Off-balance
On-balance
sheet assets
sheet assets
March 31, 2016
G1-G3 .................................. 38,146.3 28,329.7
9,816.6
G4-G6 ..................................
638.9
1,461.7
G7 (excluding G7R) .............
103.4
386.6
Others ..................................
196.5
117.8
Default (G7R, G8-G10) ........
29.6
89.8
Total ..................................... 41,170.4 30,385.5 10,785.0
2,100.5
490.0
314.3
119.3
Total
8,977.6
347.0
129.0
193.3
26.6
9,673.5
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
49.39% 0.14% 30.26%
2.87
49.39
14.86
49.39
2.59
49.39
100.00
100.00
—
—
24.37
26.66
25.04
54.56
—
Weighted
average
EL default
Weighted
average
risk weight
—% 17.98%
—
—
—
50.41
—
69.62
132.5
73.14
51.88
—
Billions of yen
Exposure amount
Undrawn amount
Total
Off-balance
On-balance
sheet assets
sheet assets
March 31, 2015
9,242.7
G1-G3 .................................. 36,212.6 26,970.0
1,354.5
1,255.5
G4-G6 ..................................
41.4
355.2
G7 (excluding G7R) .............
198.5
143.3
Others ..................................
27.8
86.7
Default (G7R, G8-G10) ........
Total ..................................... 39,675.6 28,810.6 10,865.0
2,610.0
396.6
341.8
114.6
Total
8,406.7
383.2
58.1
49.0
25.4
8,922.4
012_0800885852807.indd 215
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
50.32% 0.13% 30.44%
3.07
50.32
13.98
50.32
2.44
50.32
100.00
100.00
—
—
18.42
27.59
31.65
48.94
—
Weighted
average
EL default
Weighted
average
risk weight
—% 17.93%
—
50.47
— 132.48
92.25
—
53.25
44.68
—
—
215
2016/08/10 19:28:58
SMFG2016 Annual ReportBasel III Information
B. Specialized Lending (SL)
(A) Rating Procedures
• “Specialized lending” is sub-classified into “project finance,” “object finance,” “commodity finance,” “income-producing real
estate” (IPRE) and “high-volatility commercial real estate” (HVCRE) in accordance with the Notification. Project finance is
financing of a single project, such as a power plant or transportation infrastructure, and cash flows generated by the project are the
primary source of repayment. Object finance includes aircraft finance and ship finance, and IPRE and HVCRE include real estate
finance (a primary example is non-recourse real estate finance). There were no commodity finance exposures as of March 31, 2016.
• Each SL product is classified as either a facility assigned a PD grade and LGD grade or a facility assigned a grade based primarily
on the expected loss ratio, both using grading models and qualitative assessment. The former has the same grading structure as
that of corporate, and the latter has ten grade levels as with obligor grades but the definition of each grade differs from that of the
obligor grade which is focused on PD.
For the credit risk-weighted asset amount for the SL category, the former facility is calculated in a manner similar to corporate
exposures, while the latter facility is calculated by mapping the expected loss-based facility grades to the below five categories
(hereinafter the “slotting criteria”) of the Notification because it does not satisfy the requirements for PD application specified in
the Notification.
(B) Portfolio
a. Slotting Criteria Applicable Portion
(a) Project Finance, Object Finance and Income-Producing Real Estate (IPRE)
March 31
Strong:
Billions of yen
2016
2015
Project finance Object finance
IPRE
Project finance Object finance
IPRE
Risk
weight
Residual term less than 2.5 years .....
Residual term 2.5 years or more .......
50%
70%
Good:
Residual term less than 2.5 years .....
Residual term 2.5 years or more .......
Satisfactory ...........................................
Weak ......................................................
Default ...................................................
Total .......................................................
70%
90%
115%
250%
—
0.0
28.2
33.2
20.6
4.5
20.9
3.5
110.8
—
2.8
—
—
0.9
—
—
3.6
2.5
11.5
5.0
5.4
23.4
0.7
0.0
48.6
0.0
15.5
35.9
27.8
29.2
—
3.8
112.4
—
3.0
—
—
—
—
—
3.0
0.3
12.2
2.7
4.7
10.3
—
1.6
31.7
(b) High-Volatility Commercial Real Estate (HVCRE)
March 31
Strong:
Risk
weight
Residual term less than 2.5 years .....
Residual term 2.5 years or more .......
70%
95%
Good:
Residual term less than 2.5 years .....
Residual term 2.5 years or more .......
Satisfactory ...........................................
Weak ......................................................
Default ...................................................
Total .......................................................
95%
120%
140%
250%
—
Billions of yen
2016
8.7
4.8
113.7
71.1
156.5
1.8
—
356.7
2015
3.6
6.6
94.9
48.7
103.0
—
—
256.7
216
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SMFG2016 Annual ReportBasel III Information
b. PD/LGD Approach Applicable Portion, Other Than Slotting Criteria Applicable Portion
(a) Project Finance
Billions of yen
Exposure amount
Undrawn amount
March 31, 2016
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
3,279.4
214.3
21.8
—
29.3
3,544.9
On-balance
sheet assets
2,279.7
168.8
21.2
—
29.1
2,498.8
Off-balance
sheet assets
999.8
45.5
0.6
—
0.1
1,046.0
Total
1,039.7
44.4
—
—
0.1
1,084.2
Weighted
average
CCF
49.39%
49.39
—
—
100.00
—
Billions of yen
Exposure amount
Undrawn amount
Weighted
average
LGD
Weighted
average
PD
0.29% 27.51%
3.16
19.28
—
100.00
—
33.98
27.45
—
53.30
—
March 31, 2015
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
3,069.8
210.5
33.0
—
15.1
3,328.3
On-balance
sheet assets
2,184.3
178.8
30.9
—
15.1
2,409.0
Off-balance
sheet assets
885.5
31.7
2.1
—
—
919.3
Total
914.9
41.8
0.1
—
—
956.8
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
0.29% 29.91%
50.32%
2.46
50.32
17.45
50.32
—
—
— 100.00
—
—
22.83
45.64
—
62.68
—
(b) Object Finance
Billions of yen
Exposure amount
Undrawn amount
March 31, 2016
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
226.1
19.2
0.6
—
0.0
246.0
On-balance
sheet assets
183.8
18.2
0.6
—
0.0
202.6
Off-balance
sheet assets
42.4
1.0
—
—
—
43.4
Total
33.8
—
—
—
—
33.8
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
0.32% 13.04%
49.39%
3.43
—
14.44
—
—
—
— 100.00
—
—
22.46
45.00
—
91.00
—
Billions of yen
Exposure amount
Undrawn amount
March 31, 2015
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
198.9
11.0
0.7
—
1.3
211.8
On-balance
sheet assets
151.0
11.0
0.7
—
1.3
163.9
Off-balance
sheet assets
47.9
—
—
—
—
47.9
Total
42.0
—
—
—
—
42.0
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
0.26% 17.70%
50.32%
4.05
—
13.71
—
—
—
— 100.00
—
—
14.31
5.00
—
62.77
—
(c) Income-Producing Real Estate (IPRE)
Billions of yen
Exposure amount
Undrawn amount
Total
March 31, 2016
J1-J3 ...................................
850.1
J4-J6 ...................................
469.2
J7 (excluding J7R) ...............
12.6
Others ..................................
301.7
Default (J7R, J8-J10) ...........
20.4
Total ..................................... 1,654.0
On-balance
sheet assets
746.8
376.8
5.4
290.7
—
1,419.8
Off-balance
sheet assets
103.3
92.4
7.2
11.0
20.4
234.3
Total
2.6
1.2
—
14.5
—
18.4
012_0800885852807.indd 217
Weighted
average
LGD
Weighted
average
CCF
49.39%
49.39
—
49.39
Weighted
average
PD
0.04% 22.28%
1.16
25.57
0.81
— 100.00
—
—
27.60
19.95
30.05
35.12
—
Weighted
average
EL default
Weighted
average
risk weight
—% 42.48%
— 113.01
— 148.59
—
—
51.88
49.15
—
—
Weighted
average
EL default
Weighted
average
risk weight
—% 41.97%
74.63
—
— 254.13
—
—
53.25
58.42
—
—
Weighted
average
EL default
Weighted
average
risk weight
—% 19.02%
—
83.48
— 246.61
—
—
51.88
86.85
—
—
Weighted
average
EL default
Weighted
average
risk weight
—% 25.08%
—
—
—
58.51
—
50.86
22.09
—
53.25
—
Weighted
average
EL default
Weighted
average
risk weight
—% 9.95%
61.50
—
— 110.47
26.31
—
10.63
34.27
—
—
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SMFG2016 Annual ReportBasel III Information
Billions of yen
Exposure amount
Undrawn amount
March 31, 2015
J1-J3 ...................................
J4-J6 ...................................
J7 (excluding J7R) ...............
Others ..................................
Default (J7R, J8-J10) ...........
Total .....................................
Total
504.9
859.5
5.5
250.1
27.0
1,647.0
On-balance
sheet assets
459.1
717.1
5.5
242.6
0.7
1,425.0
Off-balance
sheet assets
45.8
142.4
—
7.5
26.3
222.0
Total
2.2
—
—
11.7
—
13.9
(2) Retail Exposures
A. Residential Mortgage Exposures
(A) Rating Procedures
Weighted
average
LGD
Weighted
average
CCF
50.32%
—
—
50.32
Weighted
average
PD
0.05% 29.91%
1.20
10.38
1.18
— 100.00
—
—
33.11
1.00
33.84
37.73
—
Weighted
average
EL default
Weighted
average
risk weight
—% 14.12%
—
—
—
36.55
—
76.26
4.45
30.59
14.75
—
• “Residential mortgage exposures” includes mortgage loans to individuals and some real estate loans in which the property consists
of both residential and commercial facilities such as a store or rental apartment units, but excludes apartment construction loans.
• Mortgage loans are rated as follows.
Mortgage loans are allocated to a portfolio segment with similar risk characteristics in terms of (a) default risk determined using
loan contract information, results of an exclusive grading model and a borrower category under self-assessment executed in
accordance with the financial inspection manual of the Japanese FSA, and (b) recovery risk at the time of default determined using
Loan To Value (LTV) calculated based on the assessment value of collateral real estate. PDs and LGDs are estimated based on the
default experience for each segment and taking into account the possibility of estimation errors.
Further, the portfolio is subdivided based on the lapse of years from the contract date, and the effectiveness of segmentation in
terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2016
Mortgage loans
PD segment:
Not delinquent
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
12,005.4
428.3
86.5
184.0
12,704.3
11,980.6
428.3
82.3
183.9
12,675.1
24.9
—
4.2
0.1
29.2
0.45%
1.05
19.54
100.00
—
34.20%
51.55
37.29
35.15
—
—%
—
—
33.64
—
23.75%
69.54
194.86
18.95
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
March 31, 2015
Mortgage loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
12,134.0
473.2
97.2
201.0
12,905.4
12,104.3
473.2
92.4
200.8
12,870.6
29.8
—
4.8
0.2
34.8
0.45%
1.07
20.59
100.00
—
35.37%
53.26
38.08
36.70
—
—%
—
—
34.86
—
24.77%
73.55
202.39
22.99
—
Notes: 1. “Others” includes loans guaranteed by employers.
2. “Delinquent” loans are past due loans and loans to obligors categorized as “Borrowers Requiring Caution” that do not satisfy the definition of default stipulated
in the Notification.
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SMFG2016 Annual ReportBasel III Information
B. Qualifying Revolving Retail Exposures (QRRE)
(A) Rating Procedures
• “Qualifying revolving retail exposures” includes card loans and credit card balances.
• Card loans and credit card balances are rated as follows.
Card loans and credit card balances are allocated to a portfolio segment with similar risk characteristics determined based, for card
loans, on the credit quality of the loan guarantee company, credit limit, settlement account balance and payment history, and, for
credit card balances, on repayment history and frequency of use.
PDs and LGDs used to calculate credit risk-weighted asset amounts are estimated based on the default experience for each
segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2016
Card loans
PD segment:
Not delinquent .....
Delinquent ............
Credit card balances
PD segment:
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Balance
Increase
Undrawn amount
Off-balance
sheet
assets
Weighted
average
CCF
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
Total
846.6
16.0
736.4
15.4
108.4
0.6
1.8
—
233.1
3.1
46.51% 2.63% 83.31%
20.67
28.09
77.69
—% 62.07%
— 213.34
Not delinquent ..... 1,514.6
Delinquent ............
6.2
Default .........................
25.7
Total ............................. 2,409.2
893.4
5.3
22.9
1,673.4
334.0
0.9
2.8
446.8
287.2
—
—
289.0
4,368.5
—
—
4,604.7
1.00
7.65
—
77.63
— 100.00
—
—
71.74
72.21
80.60
—
—
22.63
— 122.12
80.39
—
74.17
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Balance
Increase
Undrawn amount
Off-balance
sheet
assets
Weighted
average
CCF
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
Total
789.4
15.0
683.5
14.4
103.9
0.6
2.0
—
221.3 46.97% 2.49% 83.32%
3.1
19.50
26.61
77.40
—% 59.90%
— 210.88
March 31, 2015
Card loans
PD segment:
Not delinquent .....
Delinquent ............
Credit card balances
PD segment:
Not delinquent ..... 1,506.1
Delinquent ............
6.8
Default .........................
24.6
Total .............................
2,341.9
845.6
5.7
21.7
1,570.9
333.8
1.1
2.9
442.3
326.7
—
—
328.7
4,243.4
—
—
4,467.8
0.99
7.87
76.40
—
— 100.00
—
—
72.92
72.98
80.99
—
—
22.93
— 126.20
77.94
—
74.75
—
Notes: 1. The on-balance sheet exposure amount is estimated by estimating the amount of increase in each transaction balance and not by multiplying the undrawn
amount by the CCF.
2. “Weighted average CCF” is “On-balance sheet exposure amount ÷ Undrawn amount” and provided for reference only. It is not used for estimating
on-balance sheet exposure amounts.
3. Past due loans of less than three months are recorded in “Delinquent.”
012_0800885852807.indd 219
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SMFG2016 Annual ReportBasel III Information
C. Other Retail Exposures
(A) Rating Procedures
• “Other retail exposures” includes business loans such as apartment construction loans and consumer loans such as My Car Loan.
• Business loans and consumer loans are rated as follows.
a. Business loans are allocated to a portfolio segment with similar risk characteristics in terms of (a) default risk determined using
loan contract information, results of exclusive grading model and borrower category under self-assessment executed in
accordance with the financial inspection manual of the Japanese FSA, and (b) recovery risk determined based on LTV for
business loans.
PDs and LGDs are estimated based on the default experience for each segment and taking into account the possibility of
estimation errors.
b. Rating procedures for consumer loans depends on whether the loan is collateralized. Collateralized consumer loans are allocated
to a portfolio segment using the same standards as for mortgage loans of “A. Residential Mortgage Exposures.” Uncollateralized
consumer loans are allocated to a portfolio segment based on account history. PDs and LGDs are estimated based on the default
experience for each segment and taking into account the possibility of estimation errors.
Further, the effectiveness of segmentation in terms of default risk and recovery risk is validated periodically.
Internal data are used to estimate and validate PDs and LGDs. The definition of default is the definition stipulated in the
Notification.
(B) Portfolio
March 31, 2016
Business loans
PD segment:
Not delinquent
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
Use model .........................
Others ...............................
Delinquent .............................
1,024.3
214.4
92.5
1,006.1
213.3
91.1
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
323.6
133.3
24.5
67.1
1,879.7
323.1
131.9
24.3
67.0
1,856.9
18.1
1.1
1.4
0.5
1.5
0.2
0.1
22.8
0.93%
0.78
6.43
48.13%
41.51
42.63
—%
—
—
41.99%
33.56
67.78
0.78
1.64
16.94
100.00
—
42.07
53.77
45.78
52.55
—
—
—
—
48.90
—
33.84
64.94
94.52
45.60
—
Billions of yen
Exposure amount
On-balance
sheet assets
Total
Off-balance
sheet assets
Weighted
average
PD
Weighted
average
LGD
Weighted
average
EL default
Weighted
average
risk weight
March 31, 2015
Business loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
1,029.5
210.5
111.0
1,012.5
209.2
109.6
17.0
1.3
1.4
0.99%
0.82
6.50
47.87%
42.77
43.40
—%
—
—
43.26%
35.64
69.19
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
324.2
138.5
30.6
80.1
1,924.3
323.5
136.8
30.5
79.9
1,901.9
0.7
1.7
0.2
0.2
22.5
0.87
1.67
16.69
100.00
—
43.25
55.52
46.73
53.54
—
—
—
—
49.81
—
36.25
67.59
95.47
46.69
—
Notes: 1. “Business loans” includes apartment construction loans. Following implementation of our domestic business structure revision started in April 2014, “Domestic
Corporate Exposures” includes SME loans because their grading system is integrated into that of Corporate loans.
2. “Others” includes loans guaranteed by employers.
3. “Delinquent” loans are past due loans and loans to obligors categorized as “Borrowers Requiring Caution” that do not satisfy the definition of default stipulated
in the Notification.
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SMFG2016 Annual ReportBasel III Information
(3) Equity Exposures and Credit Risk-Weighted Assets under Article 145 of the Notification
A. Equity Exposures
(A) Rating Procedures
When acquiring equities subject to the PD/LGD approach, issuers are assigned obligor grades using the same rules as those of
general credits to C&I companies, sovereigns and financial institutions. The obligors are monitored (for details, please refer to page
83) and their grades are revised if necessary (credit risk-weighted asset amount is set to 1.5 times when they are not monitored
individually). In the case there is no credit transaction with the issuer or it is difficult to obtain financial information, internal
grades are assigned using ratings of external rating agencies if it is a qualifying investment.
In the case it is difficult to obtain financial information and it is not a qualifying investment, the simple risk weight method
under the market-based approach is applied.
(B) Portfolio
a. Equity Exposure Amounts
March 31
Market-based approach ............................................................................................................
Simple risk weight method ....................................................................................................
Listed equities (300%) .......................................................................................................
Unlisted equities (400%) ....................................................................................................
Internal models method .........................................................................................................
PD/LGD approach .....................................................................................................................
Total ...........................................................................................................................................
2016
532.6
322.0
197.9
124.1
210.6
3,514.6
4,047.2
2015
809.1
305.2
185.9
119.3
503.9
4,093.4
4,902.5
Note: The above exposures are “equity exposures” stipulated in the Notification and differ from “stocks” described in the consolidated financial statements.
Billions of yen
b. PD/LGD Approach
March 31
J1-J3 .......................................................
J4-J6 .......................................................
J7 (excluding J7R) ...................................
Others ......................................................
Default (J7R, J8-J10) ...............................
Total .........................................................
Exposure
amount
3,229.5
195.5
2.5
86.7
0.4
3,514.6
Billions of yen
2016
Weighted
average
PD
0.05%
0.45
10.56
0.45
100.00
—
Weighted
average
risk weight
100.45%
161.79
561.96
192.60
1,125.00
—
2015
Weighted
average
PD
0.06%
0.47
10.88
0.36
100.00
—
Weighted
average
risk weight
100.55%
166.81
570.39
172.78
1,125.00
—
Exposure
amount
3,687.2
240.5
5.0
160.4
0.3
4,093.4
Notes: 1. The above exposures are “equity exposures” stipulated in the Notification to which the PD/LGD approach is applied and differ from “stocks” described in the
consolidated financial statements.
2. “Others” includes exposures to overseas corporate entities.
3. Weighted average risk weight is calculated by including the amount derived by multiplication of the expected loss by a risk weight of 1250% in the credit
risk-weighted assets.
B. Credit Risk-Weighted Assets under Article 145 of the Notification
(A) Outline of Method for Calculating Credit Risk Assets
Exposures under Article 145 of the Notification include credits to funds. In the case of such exposures, in principle, each underlying
asset of the fund is assigned an obligor grade to calculate the asset’s credit risk-weighted asset amount and the amounts are totaled
to derive the credit risk-weighted asset amount of the fund. When equity exposures account for more than half of the underlying
assets of the fund, or it is difficult to directly calculate the credit risk-weighted asset amount of individual underlying assets,
the credit risk-weighted asset amount of the fund is calculated using the simple majority adjustment method, in which credit
risk-weighted assets are calculated using a risk weight of 400% (when the risk-weighted average of individual assets underlying the
portfolio is less than 400%) or a risk weight of 1250% (in other cases).
(B) Portfolio
March 31
Exposures under Article 145 of the Notification ........................................................................
2016
1,317.3
2015
1,763.4
Billions of yen
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SMFG2016 Annual ReportBasel III Information
(4) Analysis of Actual Losses
A. Year-on-Year Comparison of Actual Losses
SMFG recorded an increase of ¥95.0 billion in total credit costs (the total of the general reserve, non-performing loan write-offs and
gains on collection of written-off claims) compared to the previous fiscal year, amounting to ¥102.8 billion on a consolidated basis for
fiscal year 2015.
SMBC recorded an increase of ¥76.9 billion in total credit costs compared to the previous fiscal year, which resulted in a gain on re-
versal of allowance for loan losses of ¥3.2 billion on a non-consolidated basis in fiscal year 2015. This was due primarily to a decrease in
a gain on reversal of allowance for loan losses and the recognition of expenses derived from the deterioration in credit quality of natural
resources-related borrowers, mainly overseas.
Total Credit Costs
Billions of yen
Fiscal 2015 (A)
Fiscal 2014 (B)
Fiscal 2013
SMFG (consolidated) total .....................................................
SMBC (consolidated) total ....................................................
SMBC (non-consolidated) total .............................................
Corporate exposures .........................................................
Sovereign exposures .........................................................
Bank exposures .................................................................
Residential mortgage exposures .......................................
QRRE .................................................................................
Other retail exposures .......................................................
102.8
13.9
(3.2)
0.1
(1.7)
(0.1)
0.0
0.0
(1.8)
7.8
(65.4)
(80.1)
(40.6)
(6.0)
(0.7)
(0.3)
(0.1)
(2.6)
(49.1)
(113.3)
(123.9)
(122.8)
0.3
(0.9)
(0.1)
(0.0)
(0.5)
Increase
(decrease)
(A) – (B)
95.0
79.3
76.9
40.7
4.3
0.6
0.4
0.1
0.8
Notes: 1. The above amounts do not include gains/losses on “equity exposures,” “exposures on capital market-driven transactions (such as bonds)” and “exposures under Article
145 of the Notification” that were recognized as gains/losses on bonds and stocks in the statements of income.
2. Exposure category amounts do not include general reserve for Normal Borrowers.
3. Bracketed fiscal year amounts indicate gains generated by the reversal of reserve, etc.
4. Credit costs for “Residential mortgage exposures” and “QRRE” guaranteed by consolidated subsidiaries are not included in the total credit costs of SMBC
(non-consolidated).
222
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SMFG2016 Annual ReportBasel III Information B. Comparison of Estimated and Actual Losses
Fiscal 2015
Fiscal 2014
Estimated loss amounts
Estimated loss amounts
Billions of yen
SMFG (consolidated) total ................................
SMBC (consolidated) total ...............................
SMBC (non-consolidated) total ........................
Corporate exposures ....................................
Sovereign exposures ....................................
Bank exposures ............................................
Residential mortgage exposures ..................
QRRE ............................................................
Other retail exposures ..................................
—
—
513.1
483.0
9.1
10.7
3.9
0.0
6.4
After deduction
of reserves
—
—
153.9
139.0
3.8
7.2
3.5
0.0
5.5
Actual loss
amounts
102.8
13.9
(3.2)
0.1
(1.7)
(0.1)
0.0
0.0
(1.8)
After deduction
of reserves
—
—
171.1
128.1
1.4
4.2
2.3
(0.0)
40.7
Actual loss
amounts
7.8
(65.4)
(80.1)
(40.6)
(6.0)
(0.7)
(0.3)
(0.1)
(2.6)
—
—
642.5
523.6
12.7
8.5
2.9
0.0
94.8
Fiscal 2013
Fiscal 2012
Estimated loss amounts
Estimated loss amounts
Billions of yen
SMFG (consolidated) total ................................
SMBC (consolidated) total ...............................
SMBC (non-consolidated) total ........................
Corporate exposures ....................................
Sovereign exposures ....................................
Bank exposures ............................................
Residential mortgage exposures ..................
QRRE ............................................................
Other retail exposures ..................................
—
—
871.2
734.0
5.6
11.4
5.2
0.0
114.9
After deduction
of reserves
—
—
171.2
123.6
4.1
6.1
4.3
(0.0)
38.2
Actual loss
amounts
(49.1)
(113.3)
(123.9)
(122.8)
0.3
(0.9)
(0.1)
(0.0)
(0.5)
After deduction
of reserves
—
—
245.4
164.9
11.4
5.5
2.9
(0.0)
65.6
Actual loss
amounts
173.1
70.6
19.5
10.7
(0.3)
(0.4)
0.2
0.1
9.7
—
—
940.1
765.9
22.0
14.9
3.7
0.1
133.5
Fiscal 2011
Fiscal 2010
Estimated loss amounts
Estimated loss amounts
Billions of yen
SMFG (consolidated) total ................................
SMBC (consolidated) total ...............................
SMBC (non-consolidated) total ........................
Corporate exposures ....................................
Sovereign exposures ....................................
Bank exposures ............................................
Residential mortgage exposures ..................
QRRE ............................................................
Other retail exposures ..................................
—
—
1,062.7
889.3
12.4
14.9
3.8
0.1
142.3
After deduction
of reserves
—
—
213.9
132.2
1.8
4.7
2.9
(0.0)
77.4
Actual loss
amounts
121.3
91.7
58.6
57.5
(0.2)
(0.0)
0.2
(0.0)
10.5
After deduction
of reserves
—
—
417.2
277.4
6.3
19.2
3.2
(0.0)
111.2
Actual loss
amounts
217.3
159.8
94.3
71.9
5.4
(14.0)
0.3
(0.1)
34.0
—
—
1,204.3
1,021.1
7.8
30.5
4.1
0.1
140.8
Notes: 1. Amounts on consumer loans guaranteed by consolidated subsidiaries or affiliates as well as on “equity exposures” and “exposures under Article 145 of the Notification”
are excluded.
2. “Estimated loss amounts” are the EL at the beginning of the term.
3. “After deduction of reserves” represents the estimated loss amounts after deduction of reserves for possible losses on substandard borrowers or below.
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SMFG2016 Annual ReportBasel III Information
■ Standardized Approach
1. Scope
The following consolidated subsidiaries have adopted the standardized approach for exposures as of March 31, 2016 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 213).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the IRB Approach
Cedyna Financial Corporation, SMBC Aviation Capital Limited
(2) Other Consolidated Subsidiaries
These are consolidated subsidiaries judged not to be significant in terms of credit risk management based on the type of business, scale,
and other factors. These subsidiaries will adopt the standardized approach on a permanent basis.
2. Credit Risk-Weighted Asset Calculation Methodology
A 100% risk weight is applied to claims on corporates in accordance with Article 45 of the Notification, and risk weights corresponding to
country risk scores published by the Organization for Economic Co-operation and Development (OECD) are applied to claims on sovereigns
and financial institutions.
3. Exposure Balance by Risk Weight Segment
March 31
0% ............................................................................................
10% ..........................................................................................
20% ..........................................................................................
35% ..........................................................................................
50% ..........................................................................................
75% ..........................................................................................
100% ........................................................................................
150% ........................................................................................
250% ........................................................................................
1250% ......................................................................................
Others .......................................................................................
Total ..........................................................................................
8,337.8
0.2
1,209.2
51.5
109.0
3,381.0
3,589.6
96.6
117.5
0.1
0.0
16,892.6
Billions of yen
2016
2015
Of which assigned
country risk score
598.7
—
724.8
—
10.6
—
3.9
0.0
—
—
—
1,338.1
6,992.0
0.1
1,189.6
0.5
99.5
3,231.1
3,446.3
93.1
97.5
0.1
0.0
15,149.7
Of which assigned
country risk score
639.0
—
639.6
—
20.2
—
2.2
0.0
—
—
—
1,300.9
Notes: 1. The above amounts are exposures after CRM (but before deduction of direct write-offs). Please note that for off-balance sheet assets the credit equivalent amount has been
included.
2. “Securitization exposures” have not been included.
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SMFG2016 Annual ReportBasel III Information ■ Credit Risk Mitigation (CRM) Techniques
1. Risk Management Policy and Procedures
In calculating credit risk-weighted asset amounts, SMFG takes into account credit risk mitigation (CRM) techniques. Specifically, amounts
are adjusted for eligible financial or real estate collateral, guarantees, and credit derivatives. The methods and scope of these adjustments and
methods of management are as follows.
(1) Scope and Management
A. Collateral (Eligible Financial or Real Estate Collateral)
SMBC designates deposits and securities as eligible financial collateral, and land and buildings as eligible real estate collateral.
Real estate collateral is evaluated by taking into account its fair value, appraisal value, and current condition, as well as our lien
position. Real estate collateral must maintain sufficient collateral value in the event security rights must be exercised due to delinquency.
However, during the period from acquiring the rights to exercising the rights, the property may deteriorate or suffer damage from
earthquakes or other natural disasters, or there may be changes in the lien position due to, for example, attachment or establishment of
liens by a third party. Therefore, the regular monitoring of collateral is implemented according to the type of property and the type of
security interest.
B. Guarantees and Credit Derivatives
Guarantors are sovereigns, municipal corporations, credit guarantee corporations and other public entities, financial institutions, and
C&I companies. Counterparties to credit derivative transactions are mostly domestic and overseas banks and securities companies.
Credit risk-weighted asset amounts are calculated taking into account credit risk mitigation of guarantees and credit derivatives
acquired from entities with sufficient ability to provide protection such as sovereigns, municipal corporations and other public sector
entities of comparable credit quality, and financial institutions and C&I companies with sufficient credit ratings.
(2) Concentration of Credit Risk and Market Risk Accompanying Application of Credit Risk Mitigation Techniques
At SMBC, there is a framework in place for controlling concentration of risk in obligors with large exposures which includes large expo-
sure limit lines, risk concentration monitoring, and reporting to the Credit Risk Committee (please refer to pages 80 to 84). Further, ex-
posures to these obligors are monitored on a group basis, taking into account risk concentration in their parent companies in cases of
guaranteed exposures.
When marketable financial products (for example, credit derivatives) are used as credit risk mitigants, market risk generated by these
products is controlled by setting upper limits.
2. Exposure Balance after CRM
March 31
Advanced Internal Ratings-Based (AIRB) approach.................
Foundation Internal Ratings-Based (FIRB) approach...............
Corporate exposures.............................................................
Sovereign exposures.............................................................
Bank exposures.....................................................................
Standardized approach.............................................................
Total...........................................................................................
Billions of yen
2016
Eligible financial
collateral
—
134.3
46.4
—
87.8
5,409.5
5,543.8
Other eligible
IRB collateral
—
56.0
56.0
—
—
—
56.0
2015
Eligible financial
collateral
—
84.3
44.9
—
39.5
5,040.9
5,125.2
Other eligible
IRB collateral
—
55.0
55.0
—
—
—
55.0
Note: For exposures to which the AIRB approach was applied, eligible collateral is separately taken into account in Loss Given Default (LGD) estimates.
Billions of yen
2016
2015
March 31
Internal Ratings-Based (IRB) approach ....................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Residential mortgage exposures ..........................................
QRRE ....................................................................................
Other retail exposures ..........................................................
Standardized approach ............................................................
Total ..........................................................................................
Guarantee
8,955.9
8,377.2
305.7
168.1
104.9
—
—
34.1
8,990.0
Credit derivative
373.8
373.8
—
—
—
—
—
—
373.8
Guarantee
8,966.1
8,083.1
522.7
242.1
118.3
—
—
43.3
9,009.4
Credit derivative
374.2
374.2
—
—
—
—
—
—
374.2
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SMFG2016 Annual ReportBasel III Information
■ Derivative Transactions and Long Settlement Transactions
1. Risk Management Policy and Procedures
(1) Policy on Collateral Security and Impact of Deterioration of Our Credit Quality
Collateralized derivative is a CRM technique in which collateral is delivered or received regularly in accordance with replacement cost.
The Group conducts collateralized derivative transactions as necessary, thereby reducing credit risk. In the event our credit quality
deteriorates, however, the counterparty may demand additional collateral, but its impact is deemed to be insignificant.
(2) Netting
Netting is another CRM technique, and “close-out netting” is the main type of netting. In close-out netting, when a default event, such
as bankruptcy, occurs to the counterparty, all claims against, and obligations to, the counterparty, regardless of maturity and currency,
are netted out to create a single claim or obligation. Close-out netting is applied to foreign exchange and swap transactions covered
under a master agreement with a net-out clause or other means of securing legal effectiveness, and the effect of CRM is taken into
account only for such claims and obligations.
2. Credit Equivalent Amounts
(1) Derivative Transactions and Long Settlement Transactions
A. Calculation Method
Current exposure method
B. Credit Equivalent Amounts
Billions of yen
March 31
Gross replacement cost ................................................................................................................
Gross add-on amount ...................................................................................................................
Gross credit equivalent amount ....................................................................................................
Foreign exchange related transactions .....................................................................................
Interest rate related transactions ...............................................................................................
Gold related transactions ..........................................................................................................
Equities related transactions .....................................................................................................
Precious metals (excluding gold) related transactions ..............................................................
Other commodity related transactions ......................................................................................
Credit default swaps ..................................................................................................................
Reduction in credit equivalent amount due to netting ..................................................................
Net credit equivalent amount ........................................................................................................
Collateral amount ..........................................................................................................................
Eligible financial collateral .........................................................................................................
Other eligible IRB collateral .......................................................................................................
Net credit equivalent amount
2016
6,182.7
4,302.9
10,485.6
3,397.0
6,809.2
—
158.7
—
75.3
45.3
4,895.2
5,590.3
20.9
20.9
—
2015
6,629.6
4,718.7
11,348.4
3,365.0
7,680.5
—
194.5
—
74.6
33.8
5,869.0
5,479.3
35.2
35.2
—
(after taking into account the CRM effect of collateral) ...............................................................
5,569.4
5,444.1
(2) Notional Principal Amounts of Credit Derivatives
Credit Default Swaps
Billions of yen
2016
2015
Notional principal amount
Notional principal amount
March 31
Protection purchased .........................................................
Protection provided ............................................................
Total
719.8
373.4
Of which
for CRM
373.8
—
Total
605.4
332.9
Of which
for CRM
370.2
—
Note: “Notional principal amount” is defined as the total of “amounts subject to calculation of credit equivalents” and “amounts employed for CRM.”
226
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SMFG2016 Annual ReportBasel III Information ■ Securitization Exposures
1. Risk Management Policy
Definition of securitization exposure has been clarified in order to properly identify, measure, evaluate and report risks, and a risk management
department, independent of business units, has been established to centrally manage risks from recognizing securitization exposures to
measuring, evaluating and reporting risks.
Securitization transactions are subject to the following policies.
• Undertake those which allow separate assessment of underlying short-term assets by making credit decisions on individual underlying
assets.
• Undertake those which cover short-term receivables, etc., by creating a framework mainly to estimate the default rate of the underlying
assets based on the historical loan-loss ratio and ensure that they have sufficient subordination.
• Undertake others such as those requiring special management by implementing additional management, such as an analysis of the market
environment. Particularly, with respect to securitization transactions backed by retail loans whose creditworthiness is relatively inferior,
such as subprime loans in the U.S., the Group deals only with transactions that are sufficiently structured by taking into account not only
the above policies, but others such as the underlying asset selection criteria of the originator and the average life.
The Group shall basically not conduct resecuritization transactions.
Its policy is to conduct securitization transactions by verifying effectiveness in mitigating credit risk through the use of the asset transfer
type or synthetic type securitization transactions covering domestic and foreign exposures and using them as underlying exposures if
securitization transactions are used as an approach for credit risk mitigation.
The Group takes one of the following positions for securitization transactions.
• Originator (a direct or indirect originator of underlying assets or a sponsor of an ABCP conduit or a similar program that acquires
exposures from third-party entities)
• Investor
• Others (for example, provider of swap for preventing a mismatch between the dividend on trust beneficiary rights and cash flows
generated by underlying assets on which the rights are issued)
2. Overview of Risk Characteristics
Securitization exposures have, in addition to credit risk and market risk, the following intrinsic risks, which are properly managed based on
the nature of each risk.
(1) Dilution Risk
Means the risk of a decrease in purchased receivables due to cancellation or termination of the original contract for the purchased receiv-
ables, or netting of debts between the original obligor and the original obligee.
(2) Servicer Risk
A. Commingling Risk
Means the risk of uncollectible funds, which should be collected from the underlying assets, due to the bankruptcy of the servicer
before the delivery of the funds collected from the obligor of the receivables.
B. Performance Risk
Means the risk of difficulty in maintenance and collection due to the servicer’s failure to properly and accurately perform its clerical
duties and procedures.
(3) Liquidity Risk
Means the risk that cash flows related to the underlying assets may be insufficient for paying the principal and interest of the securitiza-
tion exposure due to a timing mismatch between the securitization conduit’s receipt of the cash flows related to the underlying assets and
payment of the securitization exposure of the principal and interest, etc.
(4) Fraud Risk
Means the risk of a decrease in or complete loss of the receivables subject to collection due to a fraud, prejudicial or other malicious act by
a customer or a third-party obligor.
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SMFG2016 Annual ReportBasel III Information 3. Calculation Methodology for Credit Risk-Weighted Assets and Market Risk Equivalent Amount
There are three methods of calculating the credit risk-weighted asset amount of securitization exposures subject to the IRB approach:
the ratings-based approach, the supervisory formula, and the internal assessment approach. The methods are used as follows.
• First, securitization exposures are examined and the ratings-based approach is applied to qualifying exposures.
• The remaining exposures are examined and the supervisory formula is applied to qualifying exposures.
• In cases where neither the ratings-based approach nor the supervisory formula can be applied, a risk weight of 1250% is applied.
Note that the application of the ratings-based approach is subject to monitoring in accordance with the “Regulations Concerning the
Distribution, etc. of Securitized Products” and the “Standardized Information Reporting Package (SIRP)” published by the Japan Securities
Dealers Association. The same applies to resecuritized products.
The credit risk-weighted asset amount for securitization exposures subject to the standardized approach is calculated mostly using ratings
published by qualifying rating agencies or based on weighted average risk weights of underlying assets as stipulated in the Notification.
In order to determine market risk equivalent amounts of “securitization exposures,” general market risk is subject to the standardized
measurement method while specific risk is based on the risk weights corresponding to the ratings published by qualifying rating agencies
pursuant to the regulations set forth in the Notification.
4. Type of Securitization Conduit Used in Securitization Transactions Associated with Third Party Assets and Status of Holdings of
Securitization Exposures Related to Such Transactions
In order to undertake securitization transactions related to third-party assets, the Group mainly uses a special purpose company (SPC) as a
securitization conduit.
If such transactions are undertaken, the following securitization exposures result.
• Backup line to the ABCP issued by the securitization conduit (off-balance sheet assets)
• ABL to the securitization conduit (on-balance sheet assets), etc.
5. Names of Subsidiaries and Affiliated Companies Holding Securitization Exposures Related to Securitization Transactions
Conducted by Holding Company Group
No securitization exposures related to the security transactions conducted by the Holding Company Group are held by the subsidiaries or
affiliated companies excluding consolidated subsidiaries.
6. Accounting Policy on Securitization Transactions
The recognition of the generation and extinguishment of financial assets and financial liabilities associated with securitization transactions
and the valuation and accounting treatment thereof are mainly governed by the “Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10).
7. Qualifying External Ratings Agencies
In order to apply the rating-based approach under the IRB approach or standardized approach or to calculate an amount of market risk asso-
ciated with specific risk, the risk weights are determined by mapping the ratings of qualifying rating agencies to the risk weights stipulated
in the Notification. The qualifying rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating Agency, Ltd.
(JCR), Moody’s Investors Service, Inc. (Moody’s), Standard & Poor’s Ratings Services (S&P), and Fitch Ratings Ltd. (Fitch).
When more than one rating is available for an exposure, the second smallest risk weight is used, in accordance with the Notification.
228
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SMFG2016 Annual ReportBasel III Information 8. Portfolio (Credit Risk)
(1) Securitization Transactions as Originator
A. As Originator (Excluding as Sponsor)
(A) Underlying Assets
March 31, 2016
Underlying asset amount
Asset
transfer type
0.0
1,278.1
Total
9.1
1,278.1
Synthetic
type
—
0.4
1,287.5
—
0.4
1,278.5
9.1
—
—
—
9.1
March 31, 2015
Underlying asset amount
Asset
transfer type
0.1
1,277.6
Total
10.8
1,277.6
Synthetic
type
10.7
—
—
87.6
1,376.0
—
2.5
1,280.2
—
85.1
95.8
Billions of yen
Fiscal 2015
Securitized
amount
—
164.7
Default
amount
4.4
1.5
—
—
164.7
—
—
5.9
Loss
amount
24.3
0.4
—
—
24.7
Gains/losses
on sales
—
12.5
—
—
12.5
Billions of yen
Securitized
amount
—
182.6
—
—
182.6
Fiscal 2014
Default
amount
Loss
amount
4.9
1.4
—
—
6.3
24.1
0.3
—
—
24.4
Gains/losses
on sales
—
14.5
—
—
14.5
Claims on corporates ................
Mortgage loans .........................
Retail loans
(excluding mortgage loans) .....
Other claims ..............................
Total ...........................................
Claims on corporates ................
Mortgage loans .........................
Retail loans
(excluding mortgage loans) .....
Other claims ..............................
Total ...........................................
Notes: 1. The above amounts include the amount of underlying assets securitized during the term without entailing “securitization exposures.”
2. “Default amount” is the total of underlying assets which are past due three months or more and defaulted underlying assets.
3. Asset type classification is based on the major items in the underlying assets for each transaction.
4. “Other claims” includes claims on Private Finance Initiative (PFI) businesses and lease fees.
5. Following Articles 230 and 248 of the Notification, there are no amounts that represent “exposure to products subject to early amortization provisions” to
investors.
6. There are no amounts that represent “assets held for securitization transactions.”
(B) Securitization Exposures (Excluding Resecuritization Exposures)
a. Underlying Assets by Asset Type
Billions of yen
2016
Term-end balance
Total
4.7
289.2
—
0.3
294.2
On-balance
sheet assets
1.5
289.2
—
0.3
291.0
Off-balance
sheet assets
3.2
—
—
—
3.2
Amounts
subject to
a 1250%
risk weight
2.1
24.0
Increase
in capital
equivalent
—
50.1
—
0.0
26.1
—
—
50.1
2015
Term-end balance
On-balance
sheet assets
1.6
272.7
Off-balance
sheet assets
3.4
—
Amounts
subject to
a 1250%
risk weight
2.3
25.7
Increase
in capital
equivalent
—
46.7
—
0.5
274.8
—
35.6
39.0
—
0.7
28.7
—
—
46.7
Total
4.9
272.7
—
36.1
313.8
Billions of yen
2016
Term-end balance
On-balance
sheet assets
—
—
—
—
291.0
291.0
Total
0.0
0.3
0.7
0.0
293.2
294.2
Off-balance
sheet assets
0.0
0.3
0.7
0.0
2.2
3.2
Required
capital
0.0
0.0
0.1
0.0
27.7
27.8
2015
Term-end balance
On-balance
sheet assets
—
—
—
—
274.8
274.8
Off-balance
sheet assets
34.6
0.3
1.1
—
3.0
39.0
Total
34.6
0.3
1.1
—
277.7
313.8
Required
capital
0.1
0.0
0.2
—
30.4
30.7
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
mortgage loans) ............
Other claims ...................
Total ................................
b. Risk Weights
March 31
20% or less ....................
100% or less ..................
650% or less ..................
Less than 1250% ...........
1250% ............................
Total ................................
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SMFG2016 Annual ReportBasel III Information
(C) Resecuritization Exposures
There are no amounts that represent “resecuritization exposures.”
B. As Sponsor
(A) Underlying Assets
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Claims on corporates ..............................
Mortgage loans .......................................
Retail loans (excluding mortgage loans) ....
Other claims ............................................
Total .........................................................
Billions of yen
March 31, 2016
Underlying asset amount
Asset
transfer type
883.6
—
583.5
10.4
1,477.6
Total
883.6
—
583.5
10.4
1,477.6
Synthetic
type
—
—
—
—
—
Fiscal 2015
Securitized
amount
7,138.8
—
477.7
10.6
7,627.1
Default
amount
Loss
amount
75.8
—
2.7
0.0
78.5
104.0
—
7.3
0.0
111.4
Billions of yen
March 31, 2015
Underlying asset amount
Asset
transfer type
1,059.5
—
404.5
31.8
1,495.8
Total
1,059.5
—
404.5
31.8
1,495.8
Synthetic
type
—
—
—
—
—
Fiscal 2014
Securitized
amount
7,849.0
—
300.2
10.7
8,160.0
Default
amount
Loss
amount
63.3
—
0.6
1.2
65.2
91.4
—
3.0
0.3
94.7
Notes: 1. The above amounts include the amount of underlying assets securitized during the term without entailing “securitization exposures.”
2. “Default amount” is the total of underlying assets which are past due three months or more and defaulted underlying assets.
3. “Default amount” and “Loss amount” when acting as a sponsor of securitization of customer claims are estimated using the following methods and
alternative data, as in some cases it can be difficult to obtain relevant data in a timely manner because the underlying assets have been recovered by the
customer.
(1) “Default amount” estimation method
• For securitization transactions subject to the ratings-based approach, the amount is estimated based on information on underlying assets obtainable from
customers, etc.
• For securitization transactions subject to the supervisory formula, the amount is estimated based on obtainable information on, or default rate of, each
obligor. Further, when it is difficult to estimate the amount using either method, it is conservatively estimated by assuming that the underlying asset is a
default asset.
(2) “Loss amount” estimation method
• For securitization transactions subject to the ratings-based approach, the amount is the same amount as the “Default amount” estimated conservatively in (1)
above.
• For securitization transactions subject to the supervisory formula, when expected loss ratios of defaulted underlying assets can be determined, the amount
is estimated using the ratios. When it is difficult to determine the ratios, the amount is the same amount as the “Default amount” estimated conservatively
in (1) above.
4. Asset type classification is based on the major items in the underlying assets for each transaction.
5. “Other claims” includes lease fees.
6. Following Articles 230 and 248 of the Notification, there are no amounts that represent “exposure to products subject to early amortization provisions” to
investors.
7. There are no amounts that represent “assets held for securitization transactions.”
(B) Securitization Exposures (Excluding Resecuritization Exposures)
a. Underlying Assets by Asset Type
Billions of yen
2016
Term-end balance
Total
681.7
—
On-balance
sheet assets
681.7
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 1250%
risk weight
1.5
—
2015
Term-end balance
Increase
in capital
equivalent
Total
— 826.3
—
—
On-balance
sheet assets
826.3
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 1250%
risk weight
0.3
—
Increase
in capital
equivalent
—
—
497.7
5.9
497.7
5.9
1,185.2 1,185.2
—
—
—
—
—
1.5
375.0
—
25.1
—
— 1,226.4
375.0
25.1
1,226.4
—
—
—
—
—
0.3
—
—
—
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
mortgage loans) .............
Other claims ...................
Total ................................
230
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SMFG2016 Annual ReportBasel III Information
b. Risk Weights
2016
2015
Billions of yen
March 31
20% or less ....................
100% or less ..................
650% or less ..................
Less than 1250% ...........
1250% ............................
Total ................................
Total
1,158.9
24.9
—
—
1.5
1,185.2
Term-end balance
On-balance
sheet assets
1,158.9
24.9
—
—
1.5
1,185.2
Off-balance
sheet assets
—
—
—
—
—
—
Required
capital
7.1
0.9
—
—
1.6
9.7
Term-end balance
On-balance
sheet assets
1,218.7
7.5
—
—
0.3
1,226.4
Total
1,218.7
7.5
—
—
0.3
1,226.4
Off-balance
sheet assets
Required
capital
—
—
—
—
—
—
7.3
0.4
—
—
0.3
8.0
(C) Resecuritization Exposures
There are no amounts that represent “resecuritization exposures.”
(2) Securitization Transactions in which the Group is the Investor
(A) Securitization Exposures (Excluding Resecuritization Exposures)
a. Underlying Assets by Asset Type
Billions of yen
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
Total
685.5
83.6
mortgage loans) .............
338.1
Other claims ...................
8.4
Total ................................ 1,115.6
2016
Term-end balance
On-balance
sheet assets
303.2
83.6
Off-balance
sheet assets
382.3
—
Amounts
subject to
a 1250%
risk weight
32.1
—
Increase
in capital
equivalent
—
—
2015
Term-end balance
On-balance
sheet assets
201.0
76.9
Off-balance
sheet assets
332.6
—
Amounts
subject to
a 1250%
risk weight
30.9
—
Increase
in capital
equivalent
—
—
325.5
8.2
720.5
12.5
0.3
395.2
—
0.1
32.2
—
—
—
190.0
—
467.9
2.4
—
335.0
—
—
30.9
—
—
—
Total
533.6
76.9
192.4
—
802.9
Notes: 1. Asset type classification is based on the major items in the underlying assets for each transaction.
2. “Retail loans (excluding mortgage loans)” includes balances of ¥5.6 billion as of March 31, 2016 and ¥3.6 billion as of March 31, 2015 for the securitization
exposures which includes loans whose credit risk are relatively high, such as U.S. subprime loans.
b. Risk Weights
March 31
20% or less ....................
100% or less ..................
650% or less ..................
Less than 1250% ...........
1250% ............................
Total ................................
Total
976.3
31.7
—
—
107.6
1,115.6
Billions of yen
2016
Term-end balance
On-balance
sheet assets
688.7
31.7
—
—
0.1
720.5
Off-balance
sheet assets
287.6
—
—
—
107.5
395.2
Required
capital
5.1
1.7
—
—
34.2
41.0
2015
Term-end balance
On-balance
sheet assets
462.4
5.5
—
—
—
467.9
Off-balance
sheet assets
220.3
—
—
—
114.7
335.0
Total
682.7
5.5
—
—
114.7
802.9
Required
capital
3.4
0.3
—
—
32.8
36.4
Note: The risk weight of “100% or less” includes balances of ¥5.6 billion as of March 31, 2016 and ¥3.6 billion as of March 31, 2015 for the securitization exposures
which includes loans whose credit risk are relatively high, such as U.S. subprime loans.
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SMFG2016 Annual ReportBasel III Information (B) Resecuritization Exposures
a. Underlying Assets by Asset Type
2016
Term-end balance
Billions of yen
On-balance
sheet assets
0.1
—
Off-balance
sheet assets
0.1
—
Amounts
subject to
a 1250%
risk weight
0.1
—
Increase
in capital
equivalent
—
—
2015
Term-end balance
On-balance
sheet assets
0.5
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 1250%
risk weight
0.1
—
Increase
in capital
equivalent
—
—
—
0.1
0.3
0.3
—
0.4
—
0.0
0.1
—
—
—
—
0.3
0.9
—
0.4
0.4
—
0.3
0.4
—
—
—
Total
0.5
—
—
0.7
1.2
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
mortgage loans) .............
Other claims ...................
Total ................................
Total
0.2
—
0.3
0.1
0.6
Notes: 1. Asset type classification is based on the major items in the underlying assets for each transaction.
2. “Other claims” includes securitization products.
3. Credit risk mitigation (CRM) techniques are not applied to the resecuritization exposures.
b. Risk Weights
March 31
20% or less ....................
100% or less ..................
650% or less ..................
Less than 1250% ...........
1250% ............................
Total ................................
Billions of yen
2016
Term-end balance
On-balance
sheet assets
Off-balance
sheet assets
Total
0.4
—
—
—
0.2
0.6
0.1
—
—
—
0.2
0.3
0.4
—
—
—
—
0.4
Required
capital
0.0
—
—
—
0.1
0.1
2015
Term-end balance
On-balance
sheet assets
0.5
—
—
—
0.4
0.9
Off-balance
sheet assets
0.2
0.1
0.1
—
—
0.4
Total
0.7
0.1
0.1
—
0.4
1.2
Required
capital
0.0
0.0
0.0
—
0.4
0.5
9. Portfolio (Market Risk)
(1) Securitization Transactions as Originator
There are no amounts that represent “securitization transactions where the Group serves as the originator.”
(2) Securitization Transactions as Investor
There are no amounts that represent “securitization transactions where the Group serves as the investor.”
232
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SMFG2016 Annual ReportBasel III Information ■ Equity Exposures in Banking Book
1. Risk Management Policy and Procedures
Securities in the banking book are properly managed, for example, by setting upper limits on the allowable amount of risk under the market
or credit risk management framework selected according to their holding purpose and risk characteristics.
For securities held as “available-for-sale securities,” the upper limits are also set in terms of price fluctuation risk and default risk.
Regarding stocks of subsidiaries, assets and liabilities of subsidiaries are risk-managed on a consolidated basis. As for stocks of affiliates,
risks related to gains and losses from investments are recognized separately. As in each case maximum allowable amount of risk is managed
individually, risks as stocks are not measured.
The limits are established within the “risk capital limit” of SMFG, taking into account the financial and business situations of the
subsidiaries and affiliates.
2. Valuation of Securities in Banking Book and Other Significant Accounting Policies
Stocks of subsidiaries and affiliates are carried at amortized cost using the moving-average method. Available-for-sale securities with market
prices (including foreign stocks) are carried at their average market prices during the final month of the fiscal year. Securities other than
these securities are carried at their fiscal year-end market prices (cost of securities sold is calculated using primarily the moving-average
method), and those with no available market prices are carried at cost using the moving-average method.
Net unrealized gains (losses) on available-for-sale securities and net of income taxes are reported as a component of “net assets.”
Derivative transactions are carried at fair value.
3. Consolidated Balance Sheet Amounts and Fair Values
March 31
Listed equity exposures ...........................................................
Equity exposures other than above ..........................................
Total ..........................................................................................
Balance sheet amount
3,811.3
227.2
4,038.5
Fair value
3,811.3
—
—
Balance sheet amount
4,383.7
276.9
4,660.6
Fair value
4,383.7
—
—
Billions of yen
2016
2015
4. Gains (Losses) on Sale and Devaluation of Equity Exposures
Gains (losses) .........................................................................................................................................
Gains on sale ..................................................................................................................................
Losses on sale ................................................................................................................................
Devaluation .....................................................................................................................................
Note: The above amounts are gains (losses) on stocks and available-for-sale securities in the consolidated statements of income.
Billions of yen
Fiscal 2015
69.0
100.3
20.8
10.4
Fiscal 2014
66.7
83.5
4.0
12.8
5. Unrealized Gains (Losses) Recognized on Consolidated Balance Sheets but Not on Consolidated Statements of Income
Billions of yen
March 31
Unrealized gains (losses) recognized on consolidated balance sheets
2016
2015
but not on consolidated statements of income ....................................................................................
1,734.3
2,259.1
Note: The above amount is for stocks of Japanese companies and foreign stocks with market prices.
6. Unrealized Gains (Losses) Not Recognized on Consolidated Balance Sheets or Consolidated Statements of Income
March 31
Unrealized gains (losses) not recognized on
Billions of yen
2016
2015
consolidated balance sheets or consolidated statements of income ..................................................
(25.6)
(50.1)
Note: The above amount is for stocks of affiliates with market prices.
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SMFG2016 Annual ReportBasel III Information
■ Exposure Balance by Type of Assets, Geographic Region, Industry and Residual Term
1. Exposure Balance by Type of Assets, Geographic Region and Industry
March 31, 2016
Domestic operations (excluding offshore banking accounts)
Manufacturing............................................................................
Agriculture, forestry, fishery and mining ....................................
Construction ..............................................................................
Transport, information, communications and utilities ................
Wholesale and retail ..................................................................
Financial and insurance .............................................................
Real estate, goods rental and leasing .......................................
Services .....................................................................................
Local municipal corporations ....................................................
Other industries .........................................................................
Subtotal .....................................................................................
Overseas operations and offshore banking accounts
Sovereigns .................................................................................
Financial institutions ..................................................................
C&I companies ..........................................................................
Others ........................................................................................
Subtotal .....................................................................................
Total ...............................................................................................
Loans, etc.
Bonds
Billions of yen
Derivatives
Others
Total
9,649.7
368.2
1,238.9
6,124.1
6,130.8
42,235.4
9,438.2
5,627.8
1,558.8
27,111.3
109,483.2
7,755.5
5,882.2
22,624.1
5,288.5
41,550.2
151,033.4
140.2
8.2
22.8
51.3
38.1
418.2
411.9
30.9
56.8
13,380.7
14,559.1
1,190.7
557.9
164.0
829.4
2,742.0
17,301.2
240.4
3.1
4.6
164.0
182.7
1,637.7
64.7
59.1
11.8
338.7
2,706.7
21.8
1,849.3
903.0
84.4
2,858.5
5,565.3
2,661.0
30.1
242.5
1,131.7
898.2
1,382.3
422.9
649.9
20.7
5,630.9
13,070.2
21.8
915.7
899.6
2,356.9
4,194.0
17,264.2
12,691.3
409.7
1,508.8
7,471.2
7,249.8
45,673.7
10,337.7
6,367.7
1,648.1
46,461.5
139,819.3
8,989.7
9,205.2
24,590.7
8,559.2
51,344.7
191,164.0
March 31, 2015
Domestic operations (excluding offshore banking accounts)
Loans, etc.
Bonds
Billions of yen
Derivatives
Others
Total
Manufacturing............................................................................
Agriculture, forestry, fishery and mining ....................................
Construction ..............................................................................
Transport, information, communications and utilities ................
Wholesale and retail ..................................................................
Financial and insurance .............................................................
Real estate, goods rental and leasing .......................................
Services .....................................................................................
Local municipal corporations ....................................................
Other industries .........................................................................
Subtotal .....................................................................................
9,095.1
189.5
1,217.2
6,018.7
6,119.0
39,834.8
8,784.0
5,244.2
1,864.7
27,552.6
105,919.6
Overseas operations and offshore banking accounts
Sovereigns .................................................................................
Financial institutions ..................................................................
C&I companies ..........................................................................
Others ........................................................................................
Subtotal .....................................................................................
Total ...............................................................................................
7,453.1
6,008.0
21,393.5
5,050.7
39,905.3
145,824.9
143.2
3.7
18.3
54.6
37.5
358.6
394.0
36.4
156.0
16,690.0
17,892.4
1,080.3
429.3
233.1
879.7
2,622.4
20,514.9
204.1
8.1
2.9
115.6
148.1
1,919.6
47.8
63.5
10.4
189.7
2,709.9
22.7
1,762.6
850.2
98.3
2,733.7
5,443.6
2,980.0
36.7
221.6
1,052.6
859.8
1,804.0
442.6
668.0
18.4
6,115.3
14,199.2
22.7
801.3
841.1
2,447.9
4,113.0
18,312.2
12,422.4
238.1
1,460.0
7,241.5
7,164.4
43,917.1
9,668.4
6,012.1
2,049.5
50,547.6
140,721.1
8,578.7
9,001.2
23,317.8
8,476.6
49,374.4
190,095.6
Notes: 1. The above amounts are exposures after CRM.
2. The above amounts do not include “securitization exposures” and “credit risk-weighted assets under Article 145 of the Notification.”
3. “Loans, etc.” includes loans, commitments and off-balance sheet assets except derivatives, and “Others” includes equity exposures, standardized approach applied funds,
and CVA risk equivalent amount exposures, etc.
4. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
234
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SMFG2016 Annual ReportBasel III Information
2. Exposure Balance by Type of Assets and Residual Term
March 31, 2016
To 1 year ........................................................................................
More than 1 year to 3 years...........................................................
More than 3 years to 5 years .........................................................
More than 5 years to 7 years .........................................................
More than 7 years ..........................................................................
No fixed maturity ...........................................................................
Total ...............................................................................................
Loans, etc.
39,469.8
18,046.6
17,316.5
7,318.5
25,408.3
43,473.7
151,033.4
Bonds
4,442.1
3,550.6
5,449.0
564.1
3,295.4
—
17,301.2
March 31, 2015
To 1 year ........................................................................................
More than 1 year to 3 years...........................................................
More than 3 years to 5 years .........................................................
More than 5 years to 7 years .........................................................
More than 7 years ..........................................................................
No fixed maturity ...........................................................................
Total ...............................................................................................
Loans, etc.
40,443.4
16,895.6
16,656.4
6,652.4
25,508.1
39,669.0
145,824.9
Bonds
4,621.5
7,981.9
4,787.3
1,006.1
2,117.9
—
20,514.9
Billions of yen
Derivatives
826.9
1,243.0
1,356.7
576.6
1,562.1
—
5,565.3
Billions of yen
Derivatives
750.0
1,494.2
1,364.7
512.6
1,322.3
—
5,443.6
Others
1,003.6
1,393.3
1,256.8
507.3
1,363.4
11,739.8
17,264.2
Total
45,742.3
24,233.5
25,379.0
8,966.4
31,629.2
55,213.5
191,164.0
Others
891.5
1,660.5
1,314.0
524.3
1,134.6
12,787.3
18,312.2
Total
46,706.4
28,032.1
24,122.4
8,695.4
30,082.9
52,456.3
190,095.6
Notes: 1. The above amounts are exposures after CRM.
2. The above amounts do not include “securitization exposures” and “credit risk-weighted assets under Article 145 of the Notification.”
3. “Loans, etc.” includes loans, commitments and off-balance sheet assets except derivatives, and “Others” includes equity exposures, standardized approach applied funds,
and CVA risk equivalent amount exposures, etc.
4. “No fixed maturity” includes exposures not classified by residual term.
3. Term-End Balance of Exposures Past Due 3 Months or More or Defaulted and Their Breakdown
(1) By Geographic Region
Billions of yen
March 31
Domestic operations (excluding offshore banking accounts) ........................................................
Overseas operations and offshore banking accounts .....................................................................
Asia ..............................................................................................................................................
North America..............................................................................................................................
Other regions ...............................................................................................................................
Total .................................................................................................................................................
2016
1,301.9
177.9
47.3
67.8
62.8
1,479.8
2015
1,526.4
171.5
46.8
42.9
81.8
1,697.9
Notes: 1. The above amounts are credits subject to self-assessment, including mainly off-balance sheet credits to obligors categorized as “Substandard Borrowers” or lower
under self-assessment.
2. The above amounts include partial direct write-offs (direct reductions).
3. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
(2) By Industry
Billions of yen
March 31
Domestic operations (excluding offshore banking accounts)
Manufacturing...................................................................................
Agriculture, forestry, fishery and mining ...........................................
Construction .....................................................................................
Transport, information, communications and utilities .......................
Wholesale and retail .........................................................................
Financial and insurance ....................................................................
Real estate, goods rental and leasing ..............................................
Services ............................................................................................
Other industries ................................................................................
Subtotal ............................................................................................
Overseas operations and offshore banking accounts
Financial institutions .........................................................................
C&I companies .................................................................................
Others ...............................................................................................
Subtotal ............................................................................................
Total ......................................................................................................
2016
173.1
3.0
34.0
130.9
171.6
9.1
233.7
137.6
408.9
1,301.9
2.8
123.8
51.3
177.9
1,479.8
2015
190.0
7.4
44.5
185.7
191.1
10.4
304.1
169.0
424.2
1,526.4
1.0
152.5
18.0
171.5
1,697.9
Notes: 1. The above amounts are credits subject to self-assessment, including mainly off-balance sheet credits to obligors categorized as “Substandard Borrowers” or lower
under self-assessment.
2. The above amounts include partial direct write-offs (direct reductions).
3. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries.
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SMFG2016 Annual ReportBasel III Information
4. Term-End Balances of General Reserve for Possible Loan Losses, Specific Reserve for Possible Loan Losses and Loan Loss
Reserve for Specific Overseas Countries
(1) By Geographic Region
Billions of yen
March 31
General reserve for possible loan losses.........................................
Loan loss reserve for specific overseas countries ..........................
Specific reserve for possible loan losses ........................................
Domestic operations (excluding offshore banking accounts) .....
Overseas operations and offshore banking accounts .................
Asia ..........................................................................................
North America ..........................................................................
Other regions ...........................................................................
Total .................................................................................................
2016 (A)
395.5
1.3
530.1
457.9
72.2
19.0
15.3
37.9
926.9
2015 (B)
387.0
0.7
647.1
590.0
57.1
28.6
5.4
23.1
1,034.8
2014
473.2
0.7
784.6
745.6
39.0
14.3
3.3
21.4
1,258.5
Increase (decrease)
(A) – (B)
8.5
0.6
(117.0)
(132.1)
15.1
(9.6)
9.9
14.8
(107.9)
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
2. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
(2) By Industry
Billions of yen
March 31
General reserve for possible loan losses.........................................
Loan loss reserve for specific overseas countries ..........................
Specific reserve for possible loan losses ........................................
Domestic operations (excluding offshore banking accounts) .....
Manufacturing ..........................................................................
Agriculture, forestry, fishery and mining ..................................
Construction ............................................................................
Transport, information, communications and utilities ..............
Wholesale and retail.................................................................
Financial and insurance ...........................................................
Real estate, goods rental and leasing .....................................
Services ...................................................................................
Other industries .......................................................................
Overseas operations and offshore banking accounts .................
Financial institutions ................................................................
C&I companies ........................................................................
Others ......................................................................................
Total .................................................................................................
2016 (A)
395.5
1.3
530.1
457.9
60.0
2.6
13.7
69.8
63.9
6.7
81.3
48.0
111.9
72.2
0.3
65.9
6.0
926.9
2015 (B)
387.0
0.7
647.1
590.0
83.7
2.9
20.0
81.9
79.2
8.2
109.1
68.1
136.9
57.1
0.3
43.7
13.1
1,034.8
2014
473.2
0.7
784.6
745.6
110.0
3.0
38.4
63.7
115.1
10.9
173.0
89.9
141.6
39.0
2.9
34.1
2.0
1,258.5
Increase (decrease)
(A) – (B)
8.5
0.6
(117.0)
(132.1)
(23.7)
(0.3)
(6.3)
(12.1)
(15.3)
(1.5)
(27.8)
(20.1)
(25.0)
15.1
0.0
22.2
(7.1)
(107.9)
Notes: 1. “Specific reserve for possible loan losses” includes partial direct write-offs (direct reductions).
2. “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic
consolidated subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas
consolidated subsidiaries.
5. Loan Write-Offs by Industry
Billions of yen
Fiscal 2015
Fiscal 2014
Domestic operations (excluding offshore banking accounts)
Manufacturing.........................................................................................
Agriculture, forestry, fishery and mining .................................................
Construction ...........................................................................................
Transport, information, communications and utilities .............................
Wholesale and retail ...............................................................................
Financial and insurance ..........................................................................
Real estate, goods rental and leasing ....................................................
Services ..................................................................................................
Other industries ......................................................................................
Subtotal ..................................................................................................
Overseas operations and offshore banking accounts
Financial institutions ...............................................................................
C&I companies .......................................................................................
Others .....................................................................................................
Subtotal ..................................................................................................
Total ............................................................................................................
(0.3)
0.0
0.1
1.3
0.5
(0.1)
0.1
(0.0)
64.8
66.4
—
0.6
7.2
7.8
74.2
(0.3)
(0.0)
(0.1)
0.1
(0.9)
0.0
0.1
0.2
74.5
73.6
—
0.0
3.4
3.4
77.0
Note: “Domestic operations” comprises the operations of SMFG, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
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SMFG2016 Annual ReportBasel III Information ■ Market Risk
1. Scope
The following approaches are used to calculate market risk equivalent amounts.
(1) Internal Models Method
General market risk of SMBC, Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking Corporation (China)
Limited, SMBC Capital Markets, Inc., SMBC Nikko Capital Markets Limited, SMBC Derivative Products Limited, and SMBC Capital
Markets (Asia) Limited
(2) Standardized Measurement Method
• Specific risk
• General market risk of consolidated subsidiaries other than SMBC, Sumitomo Mitsui Banking Corporation Europe Limited,
Sumitomo Mitsui Banking Corporation (China) Limited, SMBC Capital Markets, Inc., SMBC Nikko Capital Markets Limited,
SMBC Derivative Products Limited, and SMBC Capital Markets (Asia) Limited
• A portion of general market risk of SMBC
2. Valuation Method Corresponding to Transaction Characteristics
All assets and liabilities held in the trading book — therefore, subject to calculation of the market risk equivalent amount — are transactions
with high market liquidity. Securities and monetary claims are carried at the fiscal year-end market price, and derivatives such as swaps,
futures and options are stated at amounts that would be settled if the transactions were terminated at the consolidated balance sheet date.
3. VaR Results (Trading Book)
Billions of yen
Fiscal 2015
Fiscal 2014
VaR
Stressed VaR
VaR
Stressed VaR
Fiscal year-end .........................................................................
Maximum ..................................................................................
Minimum ...................................................................................
Average ....................................................................................
1.7
5.9
1.2
2.6
1.9
11.7
1.8
4.4
2.7
5.6
1.7
3.2
3.5
13.2
2.3
7.1
Notes: 1. The VaR results for a one-day holding period with a one-sided confidence interval of 99.0%, computed daily using the historical simulation method based on four years of
historical observations.
2. The stressed VaR is calculated on a daily basis by using the historical simulation method for the holding period of one day, one-sided confidence interval of 99.0%, and
measurement period of 12 months (including the stress period).
3. Specific risks for the trading book are excluded.
4. Principal consolidated subsidiaries are included.
■ Interest Rate Risk in Banking Book
Interest rate risk in the banking book fluctuates significantly depending on the method of recognizing maturity of demand deposits (such
as current accounts and ordinary deposits from which funds can be withdrawn on demand) and the method of predicting early withdrawal
from fixed-term deposits and prepayment of consumer loans. Key assumptions made by SMBC in measuring interest rate risk in the banking
book are as follows.
1. Method of Recognizing Maturity of Demand Deposits
The total amount of demand deposits expected to remain with the bank for the long term (with 50% of the lowest balance during the past
5 years as the upper limit) is recognized as a core deposit amount and interest rate risk is measured for each maturity with 5 years as the
maximum term (the average is 2.5 years).
2. Method of Estimating Early Withdrawal from Fixed-term Deposits and Prepayment of Consumer Loans
The rate of early withdrawal from fixed-term deposits and the rate of prepayment of consumer loans are estimated and the rates are used to
calculate cash flows used for measuring interest rate risk.
3. VaR Results (Banking Book)
Fiscal year-end .......................................................................................................................................
Maximum ................................................................................................................................................
Minimum .................................................................................................................................................
Average ..................................................................................................................................................
Billions of yen
Fiscal 2015
34.0
48.9
23.5
38.7
Fiscal 2014
39.0
46.1
36.6
41.7
Notes: 1. The VaR results for a one-day holding period with a one-sided confidence interval of 99.0%, computed daily using the historical simulation method based on four years of
historical observations.
2. Principal consolidated subsidiaries are included.
012_0800885852807.indd 237
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2016/08/10 19:28:59
SMFG2016 Annual ReportBasel III Information ■ Operational Risk
1. Operational Risk Equivalent Amount Calculation Methodology
SMFG adopted the Advanced Measurement Approach (AMA) for exposures as of March 31, 2008. The following consolidated subsidiaries
have also adopted the AMA, and the remaining consolidated subsidiaries have adopted the Basic Indicator Approach (BIA).
Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Card Company, Limited, The Japan Research Institute, Limited, SMBC
Friend Securities Co., Ltd., Sumitomo Mitsui Finance and Leasing Co., Ltd., SMBC Finance Service Co., Ltd., Kansai Urban Banking
Corporation, SMBC Guarantee Co., Ltd., THE MINATO BANK, LTD., SMBC Center Service Co., Ltd., SMBC Delivery Service Co.,
Ltd., SMBC Green Service Co., Ltd., SMBC International Business Co., Ltd., SMBC Loan Business Service Co., Ltd., SMBC Loan
Administration and Operations Service Co., Ltd., Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking
Corporation (China) Limited, SMBC Nikko Securities Inc., Cedyna Financial Corporation and SMBC Consumer Finance Co., Ltd.
2. Outline of the AMA
For the “Outline of the AMA,” please refer to pages 88 to 90.
3. Usage of Insurance to Mitigate Risk
SMFG had not taken measures to mitigate operational risk through insurance coverage for exposures.
238
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2016/08/10 19:28:59
SMFG2016 Annual ReportBasel III Information ■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2015 and 2016)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Items
(Assets)
Cash and due from 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
Net defined benefit asset
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets
(Liabilities)
Deposits
Negotiable certificates of deposit
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
Net defined benefit liability
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 gains or losses on hedges
Land revaluation excess
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets
(Millions of yen)
Consolidated balance sheet as
in published financial
statements
As of
March 31,
2016
As of
March 31,
2015
42,789,236
1,291,365
494,949
7,972,918
4,350,012
8,063,281
5,163
25,264,445
75,066,080
1,577,167
1,987,034
6,702,774
2,919,424
878,265
203,274
125,832
7,519,635
(625,019)
186,585,842
110,668,828
14,250,434
1,220,455
1,761,822
5,309,003
3,017,404
6,112,667
8,571,227
1,083,450
1,271,300
7,006,357
944,542
6,632,027
68,476
2,446
48,570
2,202
19,706
16,979
228,741
1,498
348,190
32,203
7,519,635
176,138,173
2,337,895
757,306
4,534,472
(175,381)
7,454,294
1,347,689
55,130
39,416
87,042
(69,811)
1,459,467
2,884
1,531,022
10,447,669
186,585,842
39,748,979
1,326,965
746,431
6,477,063
4,286,592
7,483,681
7,087
29,633,667
73,068,240
1,907,667
1,909,143
6,156,091
2,770,853
819,560
376,255
127,841
7,267,713
(671,248)
183,442,585
101,047,918
13,825,898
5,873,123
991,860
7,833,219
3,351,459
5,664,688
9,778,095
1,110,822
1,370,800
6,222,918
718,133
6,728,951
73,359
3,344
38,096
2,128
19,050
20,870
166,793
1,124
601,393
34,550
7,267,713
172,746,314
2,337,895
757,329
4,098,425
(175,261)
7,018,389
1,791,049
(30,180)
39,014
156,309
47,667
2,003,859
2,284
1,671,738
10,696,271
183,442,585
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
012_0800885852807.indd 239
Cross-reference to
Appended Table
Reference # of Basel III common
disclosure template under the
Composition of Capital Disclosure
(Basel III Template)
7-a
3-b, 7-b
7-c
3-a
4
5-a
7-d
9-a
9-b
5-b
5-c
1-a
1-b
1-c
1-d
6
2, 8-a
8-b
3
239
2016/08/10 19:28:59
SMFG2016 Annual ReportBasel III Information (Appended Table)
1. Stockholders’ equity
(1) Consolidated balance sheet
Consolidated balance sheet items
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
(2) Composition of capital
As of March
31, 2016
2,337,895
757,306
4,534,472
(175,381)
7,454,294
As of March
31, 2015
2,337,895
757,329
4,098,425
(175,261)
7,018,389
(Millions of yen)
Remarks
Ref. No.
1-a
1-b
1-c
1-d
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus related capital
surplus and retained earnings
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
7,454,294
7,018,389
3,095,202
4,534,472
175,381
—
3,095,225
4,098,425
175,261
—
Stockholders’ equity attributable to common shares
(before adjusting national specific regulatory
adjustments (earnings to be distributed))
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as equity under applicable
accounting standards and the breakdown
—
—
Stockholders’ equity attributable to preferred shares
with a loss absorbency clause upon entering into
effectively bankruptcy
1a
2
1c
31a
Ref. No.
2
(Millions of yen)
Remarks
Remarks
(Millions of yen)
Basel III Template
No.
(Millions of yen)
Remarks
(Millions of yen)
Remarks
Software and other
(Millions of yen)
Remarks
1b
31b
46
Ref. No.
3-a
3-b
Basel III Template
No.
8
9
20
24
74
Ref. No.
4
2. Stock acquisition rights
(1) Consolidated balance sheet
Consolidated balance sheet items
Stock acquisition rights
of which: Stock acquisition rights issued by
bank holding company
(2) Composition of capital
Composition of capital disclosure
Stock acquisition rights to common shares
Stock acquisition rights to Additional Tier 1 instruments
Stock acquisition rights to Tier 2 instruments
3. Intangible assets
(1) Consolidated balance sheet
Consolidated balance sheet items
Intangible fixed assets
Securities
of which: goodwill attributable to equity-method investees
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Goodwill (including those equivalent)
Other intangible assets other than goodwill and mortgage servicing rights
Mortgage servicing rights
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Mortgage servicing rights that are below the thresholds for
deduction (before risk weighting)
4. Net defined benefit asset
(1) Consolidated balance sheet
Consolidated balance sheet items
Net defined benefit asset
As of March
31, 2016
As of March
31, 2015
2,884
2,635
2,284
2,085
As of March
31, 2016
As of March
31, 2015
2,635
—
—
2,085
—
—
As of March
31, 2016
878,265
25,264,445
46,540
As of March
31, 2015
819,560
29,633,667
92,771
171,796
153,707
As of March
31, 2016
As of March
31, 2015
372,622
380,386
—
—
—
435,296
323,327
—
—
—
—
—
As of March
31, 2016
As of March
31, 2015
203,274
376,255
Income taxes related to above
61,615
120,853
240
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SMFG2016 Annual ReportBasel III Information (2) Composition of capital
Composition of capital disclosure
Net defined benefit asset
5. Deferred tax assets
(1) Consolidated balance sheet
Consolidated balance sheet items
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Tax effects on other intangible assets
Tax effects on net defined benefit asset
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
141,659
255,401
As of March
31, 2016
As of March
31, 2015
125,832
348,190
32,203
171,796
61,615
127,841
601,393
34,550
153,707
120,853
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Basel III Template
No.
15
Ref. No.
5-a
5-b
5-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
2,137
5,008
Deferred tax assets arising from temporary differences (net of related tax
liability)
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Deferred tax assets arising from temporary differences that are
below the thresholds for deduction (before risk weighting)
9,700
5,285
—
—
—
—
9,700
5,285
6. Deferred gains or losses on derivatives under hedge accounting
(1) Consolidated balance sheet
Consolidated balance sheet items
Net deferred gains or losses on hedges
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
55,130
(30,180)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Net deferred gains or losses on hedges
57,131
(28,694)
Excluding those items whose valuation differences
arising from hedged items are recognized as
“Accumulated other comprehensive income”
10
21
25
75
Ref. No.
6
Basel III Template
No.
11
7. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
Consolidated balance sheet items
Trading assets
Securities
Loans and bills discounted
Trading liabilities
As of March
31, 2016
As of March
31, 2015
8,063,281
7,483,681
25,264,445
75,066,080
29,633,667
73,068,240
6,112,667
5,664,688
(Millions of yen)
Remarks
Ref. No.
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including trading account securities sold and
derivatives for trading liabilities
7-a
7-b
7-c
7-d
012_0800885852807.indd 241
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SMFG2016 Annual ReportBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Investments in own capital instruments
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Reciprocal cross-holdings in the capital of banking, financial and
insurance entities
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (“Other Financial
Institutions”), net of eligible short positions, where the bank does
not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Non-significant investments in the capital of Other Financial
Institutions that are below the thresholds for deductions
(before risk weighting)
Significant investments in the capital of Other Financial Institutions,
net of eligible short positions
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Additional Tier 1 capital
Tier 2 capital
Significant investments in the common stocks of Other
Financial Institutions that are below the thresholds for
deductions (before risk weighting)
7,374
7,374
—
—
—
—
—
—
9,886
9,886
—
—
—
—
—
—
620,209
874,552
—
—
—
65,599
507
10,109
620,209
798,335
727,520
761,011
—
—
80,053
125,000
—
—
158,633
125,057
522,466
477,320
8. Non-controlling interests
(1) Consolidated balance sheet
Consolidated balance sheet items
Stock acquisition rights
Non-controlling interests
(2) Composition of capital
Composition of capital disclosure
Amount allowed to be included in group Common Equity Tier 1
Qualifying Additional Tier 1 instruments plus related capital surplus
issued by special purpose vehicles and other equivalent entities
Amount allowed to be included in group Additional Tier 1
Qualifying Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities
Amount allowed to be included in group Tier 2
9. Other capital instruments
(1) Consolidated balance sheet
Consolidated balance sheet items
Borrowed money
Bonds
(2) Composition of capital
Composition of capital disclosure
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as liabilities under applicable
accounting standards
Directly issued qualifying Tier 2 instruments plus related capital
surplus of which: classified as liabilities under applicable accounting
standards
As of March
31, 2016
As of March
31, 2015
2,884
1,531,022
2,284
1,671,738
As of March
31, 2016
As of March
31, 2015
164,550
153,863
—
—
183,267
182,251
—
—
42,036
39,348
As of March
31, 2016
8,571,227
7,006,357
As of March
31, 2015
9,778,095
6,222,918
As of March
31, 2016
As of March
31, 2015
300,000
—
655,064
374,988
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Remarks
Remarks
Ref. No.
8-a
8-b
Basel III Template
No.
5
30-31ab-32
34-35
46
48-49
Ref. No.
9-a
9-b
Basel III Template
No.
32
46
Note:
Amounts in the “Composition of capital disclosure” are based on those before considering under transitional arrangements and includes “Amounts excluded under transitional arrange-
ments” disclosed in “Capital Structure Information” as well as amounts included as regulatory capital. In addition, items for regulatory purpose under transitional arrangement are
excluded from this table.
242
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SMFG2016 Annual ReportBasel III Information Leverage Ratio Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
■ Composition of Leverage Ratio
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
On-balance sheet exposures (1)
Item
(In million yen, %)
As of March 31,
2016
As of March 31,
2015
1a
1b
1c
1d
1
2
3
1
2
7
3
7
On-balance sheet exposures before deducting adjustment items
Total assets reported in the consolidated balance sheet
The amount of assets of subsidiaries that are not included in the scope
of the leverage ratio on a consolidated basis (-)
The amount of assets of subsidiaries that are included in the scope of
the leverage ratio on a consolidated basis (except those included in
the total assets reported in the consolidated balance sheet)
The amount of assets that are deducted from the total assets reported
in the consolidated balance sheet (except adjustment items) (-)
The amount of adjustment items pertaining to Tier 1 capital (-)
Total on-balance sheet exposures
(a)
Exposures related to derivative transactions (2)
4
5
6
7
8
9
10
11
Replacement cost associated with derivatives transactions, etc.
Add-on amount associated with derivatives transactions, etc.
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
The amount of receivables arising from providing cash margin,
provided where deducted from the consolidated balance sheet
pursuant to the operative accounting framework
The amount of deductions of receivables (out of those arising from
providing cash variation margin) (-)
The amount of client-cleared trade exposures for which a bank or bank
holding company acting as clearing member is not obliged to make
any indemnification (-)
Adjusted effective notional amount of written credit derivatives
The amount of deductions from effective notional amount of written
credit derivatives (-)
Total exposures related to derivative transactions
(b)
4
Exposures related to repo transactions (3)
12
13
14
15
16
The amount of assets related to repo transactions, etc.
The amount of deductions from the assets above (line 12) (-)
The exposures for counterparty credit risk for repo transactions, etc.
The exposures for agent repo transaction
Total exposures related to repo transactions, etc.
5
Exposures related to off-balance sheet transactions (4)
162,192,848
186,585,842
160,371,631
183,442,585
—
—
—
—
24,392,993
23,070,954
625,036
161,567,811
514,287
159,857,344
2,296,889
3,047,557
533,429
2,197,309
3,322,792
615,854
—
—
533,429
615,854
583,300
459,631
491,723
294,754
5,468,116
5,717,070
8,467,867
—
52,386
7,223,495
—
59,050
(c)
8,520,253
7,282,545
17
18
19
Notional amount of off-balance sheet transactions
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
Total exposures related to off-balance sheet transactions
59,207,893
56,677,029
39,001,675
38,217,588
(d)
20,206,217
18,459,440
6
Leverage ratio on a consolidated basis (5)
20
21
22
8
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio on a consolidated basis ((e)/(f))
(e)
(f)
9,031,672
195,762,400
4.61%
8,528,626
191,316,401
4.45%
012_0800885852807.indd 243
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SMFG2016 Annual ReportBasel III Information Liquidity Risk Information (Consolidated)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Since March 31, 2015, the “Liquidity Coverage Ratio” (hereinafter referred to as “LCR”), the liquidity regulation under the Basel III, has been
introduced in Japan. In addition to the application of uniform international standards, SMFG calculates its consolidated LCR using the
calculation formula stipulated in the “Criteria for Evaluating the Soundness of Liquidity Status Set Forth by a Bank Holding Company as a
Benchmark for Judging the Soundness of Management of Itself and its Subsidiaries, etc., Based on the Provision of Article 52-25 of the
Banking Act, and Which Are Also the Criteria to be Referred to for Judging the Soundness of Management in Banks” (Notification No. 62
issued by the Japanese Financial Services Agency in 2014; hereinafter referred to as the “LCR Notification”). Meanwhile, SMFG discloses its
liquidity risk management and LCR in compliance with “Matters Related to the Status of the Soundness of Management Concerning Liquidity
Separately Specified by the Commissioner of the Japanese Financial Services Agency, Based on the Provision of Article 19-2, Paragraph 1, Item
5 (e) of the Ordinance for Enforcement of the Banking Act, etc.” (Notification No. 7 issued by the Japanese Financial Services Agency in 2015).
■ Disclosure of Liquidity Risk Management
1. Liquidity Risk Management Policy and Procedures
At SMFG, liquidity risk is centrally managed by the Corporate Risk Management Department, which is operated independently of business
units engaged in market transactions. The department is responsible for the measurement of funding gaps and monitoring of the risk status
through stress tests and other means, in addition to the development and analysis of risk appetite indicators, with a view to maintaining a
stable balance between the lending and funding structure. It reports these sets of information to the Management Committee and Board of
Directors, etc. In addition, in accordance with SMFG’s “Principal Policy for Group Risk Management,” principle policies of liquidity risk
management and important risk-related matters, such as a risk tolerance, are determined by the Management Committee before they are
approved by the Board of Directors.
2. Indicators for Assessing Liquidity Risk and Other Liquidity Risk Management
(1) Risk appetite indicator
This indicator demonstrates the degree of deviance from the quantitative risks (e.g. LCR) estimated at the beginning of the fiscal year.
SMFG has set three alert levels of deviance to monitor the status of the liquidity risk it exposes.
(2) Maintaining supplementary liquidity
Supplementary liquidity is maintained by holding assets, such as U.S. government bonds, which can be immediately converted to cash in
order to smoothly raise the required funds even during market disruption, and these asset holdings are monitored regularly.
(3) Funding gap management
A funding gap is defined as the maturity mismatch between source of funds and use of funds and shows forthcoming funding
requirements. SMFG manages this funding gap properly by setting limits on the size of the gap and limiting reliance on short-term
funding. These limits are set in place on both a bank-wide basis and individual branch basis, and take into account funding status, cash
management planning, economic environments, and individual currency characteristics and other factors. Additionally, funding gap
limits are set for individual currencies if necessary. SMFG monitors the funding gap on a daily basis.
(4) Stress tests
Stress tests are designed to ensure the development of a robust liquidity structure to cope with substantial cash outflows in a stress
period. The test is regularly carried out by simulating the impact triggered, for example, by deposit outflows or difficulties in money
market funding, in order to appraise and manage the amount of funding required when liquidity risk is realized.
(5) Measures against realized liquidity stress
Contingency plans are developed to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering
the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective
circumstances.
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Consolidated LCR
As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)” on the following page, the LCR has
remained stable with no significant fluctuation following the introduction of the liquidity regulation on March 31, 2015.
2. Assessment of Consolidated LCR
The LCR Notification stipulates that the minimum requirement of LCR for 2016 is set at 70.0% and from 2017 onwards, the LCR is raised
in increments of 10.0% in stages, reaching 100.0% in and after 2019 (see table below).
The minimum requirement of LCR ..............................................
60.0%
70.0%
80.0%
90.0%
2015
2016
2017
2018
2019 onwards
100.0%
Consolidated LCR of SMFG exceeds the minimum requirements of LCR for 2016 (70.0%) and for 2019 onwards (100.0%), having no cause
for concern. SMFG does not expect that the future LCR forecasts will differ significantly from the announced ratios. In addition, the actual
LCR does not differ significantly from the initial forecast.
244
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SMFG2016 Annual ReportBasel III Information
3. Composition of High-Quality Liquid Assets
The consolidated high-quality liquid assets held by SMFG that are allowed to be included in the calculation of LCR include deposits with
central banks, highly-rated bonds and cash. As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio
(Consolidated)” in the following table, the amount of such high-quality liquid assets exceed the amount of net cash outflows. Meanwhile,
currency denominations, categories and location, etc. of the high-quality liquid assets allowed to be included in the calculation have not
shown any significant changes. In addition, in respect of major currencies (those of which the aggregate amount of liabilities denominated in
a certain currency accounts for 5.0 % or more of SMFG’s total liabilities on the consolidated basis), there is no significant mismatch in
currency denomination between the total amount of the high-quality liquid assets allowed to be included in the calculation and the amount
of net cash outflows.
4. Other Information Concerning Consolidated LCR
SMFG has not applied “special provisions concerning qualifying operational deposits” prescribed in Article 28 of the LCR Notification and
“increased liquidity needs related to market valuation changes on derivative or other transactions simulated through Scenario Approach”
prescribed in Article 37 of the same Notification. Meanwhile, SMFG records “cash outflows related to small-sized consolidated subsidiaries,”
etc. under “cash outflows based on other contracts” prescribed in Article 59 of the same Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2016/1/1
To 2016/3/31)
Prior Quarter
(From 2015/10/1
To 2015/12/31)
TOTAL
UNWEIGHTED
VALUE
49,743,188
15,459,536
34,283,652
55,311,931
—
49,664,698
TOTAL
WEIGHTED
VALUE
3,892,979
463,846
3,429,132
30,862,377
—
TOTAL
UNWEIGHTED
VALUE
48,865,918
14,915,420
33,950,498
54,687,009
—
48,621,338
TOTAL
WEIGHTED
VALUE
3,843,214
447,463
3,395,751
31,318,058
—
48,108,832
23,659,278
47,298,845
23,929,893
7,203,099
7,203,099
64,128
7,388,165
7,388,165
71,137
20,118,571
6,911,940
20,510,320
6,848,060
1,845,259
582,882
17,690,430
8,969,609
65,635,893
TOTAL
UNWEIGHTED
VALUE
4,900,450
4,372,853
4,276,699
13,550,002
1,588,137
632,800
18,289,383
8,008,212
64,204,284
TOTAL
UNWEIGHTED
VALUE
4,018,112
4,523,449
3,988,910
12,530,470
1,845,259
582,882
4,483,799
5,828,019
917,321
48,476,765
TOTAL
WEIGHTED
VALUE
262,466
2,918,343
2,210,086
5,390,895
49,664,698
43,085,870
115.2%
3
1,588,137
632,800
4,627,123
5,286,320
919,477
48,286,266
TOTAL
WEIGHTED
VALUE
221,480
2,985,454
2,042,753
5,249,686
48,621,338
43,036,580
112.9%
3
The data following the introduction of the liquidity regulation on March 31, 2015 is available on SMFG’s website.
(http://www.smfg.co.jp/english/investor/financial/basel_3.html)
012_0800885852807.indd 245
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SMFG2016 Annual ReportBasel III Information
Indicators for assessing Global Systemically Important Banks (G-SIBs)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
■ Indicators for assessing Global Systemically Important Banks (G-SIBs)
Item No.
Description
Total exposures (a + b + c + d):
a. On-balance sheet assets (other than assets specifically identified below b., c. and contra-account
of guarantees)
b. Sum of counterparty exposure of derivatives contracts, capped notional amount of written credit
derivatives and potential future exposure of derivatives contracts
c. Adjusted gross value of securities financing transactions (SFTs) and counterparty exposure of SFTs
d. Gross notional amount of off-balance sheet items (other than derivatives contracts and SFTs)
(In 0.1 billion yen)
As of March 31,
2016
As of March 31,
2015
1,967,830
1,911,845
Intra-financial system assets (a + b + c + d):
a. Funds deposited with or lent to other financial institutions and undrawn committed lines extended
290,434
298,339
to other financial institutions
b. Holdings of securities issued by other financial institutions (Note 1)
c. Net positive current exposure of SFTs with other financial institutions
d. Over-the-counter (OTC) derivatives with other financial institutions that have a net positive fair
value
Intra-financial system liabilities (a + b + c):
a. Deposits due to, and loans and undrawn committed lines obtained from, other financial institutions
b. Net negative current exposure of SFTs with other financial institutions
c. OTC derivatives with other financial institutions that have a net negative fair value
Securities outstanding (Note 1)
Assets under custody
Notional amount of OTC derivatives
Held-for-trading (HFT) securities and available-for-sale (AFS) securities, excluding HFT and AFS
securities that meet the definition of Level 1 assets and Level 2 assets with haircuts (Note 2)
Level 3 assets (Note 3)
Cross-jurisdictional claims
10
Cross-jurisdictional liabilities
184,610
216,396
303,703
121,293
6,237,931
99,021
8,309
442,652
222,418
312,779
128,754
6,569,083
118,027
10,938
424,438
213,958
1
2
3
4
5
6
7
8
9
Item No.
11
12
Description
FY ended
March 31, 2016
FY ended
March 31, 2015
Payments (settled through the BOJ-NET, the Japanese Banks’ Payment Clearing Network and other
31,745,875
27,326,202
similar settlement systems, excluding intragroup payments)
Underwritten transactions in debt and equity markets (Note 4)
72,413
47,619
Notes: 1. Securities refer to secured debt securities, senior unsecured debt securities, subordinated debt securities, commercial paper, certificate of deposits, and common equities.
2. Level 1 and Level 2 assets with haircuts are defined in the Basel III Liquidity Coverage Ratio (LCR).
3. The amount is calculated in accordance with the International Financial Reporting Standards.
4. This refers to underwriting of securities defined in article 2 paragraph 8 item 6 of the Financial Instruments and Exchange Act.
246
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SMFG2016 Annual ReportBasel III Information Financial Highlights
Sumitomo Mitsui Banking Corporation
Consolidated
Year ended March 31
For the Year:
2016
2015
Ordinary income ����������������������������������������������������������� ¥ 3,059,022
Ordinary profit ��������������������������������������������������������������
930,332
Profit attributable to owners of parent �������������������������
680,162
Comprehensive income �����������������������������������������������
143,086
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 9,446,193
Total assets ������������������������������������������������������������������
180,408,672
Capital ratio (International standard) ����������������������������
/
Total capital ratio (International standard) ��������������������
Tier 1 capital ratio (International standard) ������������������
Common equity Tier 1 capital ratio
18.19%
14.58%
(International standard) ����������������������������������������������
Number of employees ��������������������������������������������������
13.04%
54,192
¥ 3,199,409
1,198,955
736,904
1,937,374
¥ 10,036,003
177,559,197
/
17�93%
13�91%
12�61%
50,249
Millions of yen
2014
¥ 3,105,992
1,298,738
785,687
1,174,292
¥ 8,640,763
155,824,141
/
17�08%
13�43%
12�27%
48,824
2013
2012
¥ 2,810,681
928,713
734,514
1,373,623
¥ 8,257,091
143,203,127
/
16�84%
12�69%
11�26%
47,852
¥ 2,687,911
857,919
533,816
632,889
¥ 7,276,706
138,251,602
19�63%
/
/
/
50,768
Note: “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.
Non-consolidated
Year ended March 31
For the Year:
2016
2015
Ordinary income ����������������������������������������������������������� ¥ 2,277,812
2,589
1,534,271
805,483
Trust fees �����������������������������������������������������������������
Gross banking profit (A) �����������������������������������������������
Expenses (excluding nonrecurring losses) (B) �������������
Overhead ratio (B) / (A) �������������������������������������������������
Banking profit ���������������������������������������������������������������
Banking profit (before provision for general
Millions of yen
2014
¥ 2,342,582
1,972
1,558,184
745,745
2013
2012
¥ 2,121,369
1,823
1,540,095
727,736
¥ 2,018,585
1,736
1,532,511
719,495
¥ 2,370,998
1,872
1,634,284
791,211
52.5%
728,787
48�4%
843,073
47�9%
812,438
47�3%
812,358
46�9%
856,796
reserve for possible loan losses) �����������������������������
Ordinary profit ��������������������������������������������������������������
Net income �������������������������������������������������������������������
728,787
747,892
609,171
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 7,756,810
Total assets ������������������������������������������������������������������
153,641,430
Deposits �����������������������������������������������������������������������
98,839,722
Loans and bills discounted ������������������������������������������
69,276,735
Securities ���������������������������������������������������������������������
25,602,156
Trust assets and liabilities ��������������������������������������������
3,394,170
Loans and bills discounted ��������������������������������������
537,839
Securities �����������������������������������������������������������������
1,305,284
Capital stock ����������������������������������������������������������������
1,770,996
Number of shares issued (in thousands)
Common stock ����������������������������������������������������
Preferred stock ����������������������������������������������������
Dividend payout ratio ���������������������������������������������������
Capital ratio (International standard) ����������������������������
Total capital ratio (International standard) �������������������
Tier 1 capital ratio (International standard) ������������������
Common equity Tier 1 capital ratio
(International standard) ��������������������������������������������
Number of employees ��������������������������������������������������
106,248
70
67.02%
/
19.47%
15.29%
13.44%
28,002
843,073
955,992
643,015
¥ 7,998,715
154,724,079
91,337,714
68,274,308
29,985,267
3,542,957
373,230
1,451,206
1,770,996
812,438
952,516
605,255
¥ 7,077,360
135,966,434
84,137,339
63,370,678
27,317,549
3,108,012
143,469
1,420,372
1,770,996
812,358
670,852
617,791
¥ 6,554,446
125,910,020
80,006,438
59,770,763
41,347,000
2,693,092
131,913
1,076,225
1,770,996
813,015
695,342
477,973
¥ 5,709,663
119,037,469
75,804,088
56,411,492
42,441,134
1,891,853
235,829
424,478
1,770,996
106,248
70
77�18%
/
18�89%
14�26%
12�80%
26,416
106,248
70
75�92%
/
18�30%
14�02%
12�47%
22,915
106,248
70
29�04%
/
18�62%
13�92%
11�75%
22,569
106,248
70
33�00%
21�91%
/
/
/
22,686
Note: “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.
013_0800804262808.indd 247
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SMBC2016 Annual Report 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 ����������������������������������������������������� ¥1,035,709
Interest expenses ��������������������������������������������������
263,226
Net interest income ���������������������������������������������������
772,483
Trust fees �������������������������������������������������������������������
3,587
Fees and commissions �����������������������������������������
590,211
Fees and commissions payments ������������������������
117,909
Net fees and commissions ����������������������������������������
472,302
Trading income������������������������������������������������������
205,942
Trading losses �������������������������������������������������������
5,655
Net trading income ����������������������������������������������������
200,286
Other operating income ����������������������������������������
176,824
Other operating expenses�������������������������������������
80,709
Net other operating income���������������������������������������
96,115
Millions of yen
2016
Overseas
operations Elimination
Total
¥678,627
222,074
456,552
—
202,620
37,190
165,430
37,330
27,894
9,436
56,453
6,674
49,779
¥(61,828) ¥1,652,508
426,091
1,226,416
3,587
779,388
150,788
628,599
209,722
—
209,722
232,513
86,746
145,767
(59,208)
(2,619)
—
(13,444)
(4,310)
(9,133)
(33,549)
(33,549)
—
(764)
(637)
(126)
Domestic
operations
¥1,098,229
238,131
860,097
2,795
589,311
107,477
481,834
280,230
95,388
184,842
246,129
85,867
160,262
2015
Overseas
operations Elimination
Total
¥667,869
202,461
465,407
—
206,271
40,906
165,364
44,531
51,990
(7,459)
34,401
8,946
25,455
¥(76,011) ¥1,690,086
365,074
1,325,011
2,795
782,349
145,171
637,178
235,239
57,856
177,382
279,857
94,424
185,433
(75,518)
(493)
—
(13,233)
(3,212)
(10,021)
(89,522)
(89,522)
—
(673)
(389)
(284)
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. Inter-segment transactions are reported in the “Elimination” column.
Average Balance, Interest and Average Rate of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥ 87,277,238
53,632,502
22,503,531
147,527
32,450
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
6,694,461
763,613
Interest-bearing liabilities ������������������������������������������ ¥119,039,647
84,841,300
7,422,076
2,295,143
1,281,197
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 ��������������������������������������������������������������������
6,791,583
145,053
9,157,549
598,174
5,700,673
2016
Interest
¥1,035,709
683,057
267,401
861
15
10,740
5,001
¥263,226
40,376
5,708
1,523
3,714
6,724
203
88,978
573
106,825
Millions of yen
Average rate
1.19%
1.27
1.19
0.58
0.05
Average balance
¥ 84,231,395
52,422,192
22,967,038
226,408
22,061
2015
Interest
¥1,098,229
711,603
297,093
1,177
48
0.16
0.65
0.22
0.05
0.08
0.07
0.29
0.10
0.14
0.97
0.10
1.87
4,712,301
761,822
7,813
4,818
¥109,010,312
80,981,456
6,207,049
2,040,532
782,372
¥ 238,131
43,657
5,536
1,503
1,314
5,267,621
192,088
7,529,796
430,553
5,064,906
5,029
282
77,864
433
96,844
Average rate
1�30%
1�36
1�29
0�52
0�22
0�17
0�63
0�22%
0�05
0�09
0�07
0�17
0�10
0�15
1�03
0�10
1�91
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some 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 (2016, ¥28,295,713 million; 2015, ¥21,948,242
million).
248
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SMBC2016 Annual Report Income Analysis (Consolidated)
Overseas Operations
Year ended March 31
Interest-earning assets ����������������������������������������������
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
Average balance
¥37,624,624
22,900,739
2,886,777
918,358
1,521,170
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
—
5,645,875
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 ��������������������������������������������������������������������
¥28,578,720
15,875,574
6,502,114
525,808
1,934,523
—
2,807,578
310,574
—
67,592
2016
Interest
¥678,627
534,084
38,103
19,596
11,934
—
32,480
¥222,074
101,157
43,853
3,836
6,212
—
10,211
5,495
—
3,664
Millions of yen
Average rate
1.80%
2.33
1.32
2.13
0.78
—
0.58
0.78%
0.64
0.67
0.73
0.32
—
0.36
1.77
—
5.42
Average balance
¥35,770,885
21,538,900
2,957,732
1,046,258
921,297
—
5,874,640
¥27,687,592
13,447,542
8,945,965
925,341
1,165,238
—
2,744,976
263,837
—
57,527
2015
Interest
¥667,869
512,068
39,150
18,423
9,888
—
38,325
¥202,461
83,859
38,528
2,697
3,902
—
7,764
4,284
—
2,736
Average rate
1�87%
2�38
1�32
1�76
1�07
—
0�65
0�73%
0�62
0�43
0�29
0�33
—
0�28
1�62
—
4�76
Notes: 1. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
2. In principle, average balances are calculated by using daily balances. However, some 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 (2016, ¥1,730,410 million; 2015, ¥1,518,716
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥123,077,998
75,626,679
25,390,309
1,065,886
727,468
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
2016
Interest
¥1,652,508
1,167,181
302,821
20,457
10,100
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
6,694,461
6,335,306
10,740
37,097
Interest-bearing liabilities ������������������������������������������ ¥145,790,207
100,632,418
13,924,191
2,820,952
2,389,569
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 ��������������������������������������������������������������������
6,791,583
2,952,632
8,561,582
598,174
5,768,265
¥ 426,091
141,085
49,561
5,360
8,077
6,724
10,415
44,514
573
110,489
Average rate
1.34%
1.54
1.19
1.92
1.39
0.16
0.59
0.29%
0.14
0.36
0.19
0.34
0.10
0.35
0.52
0.10
1.92
Average balance
¥118,839,156
73,051,387
25,924,771
1,272,667
776,681
2015
Interest
¥1,690,086
1,170,833
335,694
19,600
9,640
4,712,301
6,556,848
7,813
42,649
¥135,572,201
94,391,674
15,153,014
2,965,873
1,780,933
¥ 365,074
126,966
44,065
4,200
4,921
5,267,621
2,937,065
6,924,199
430,553
5,122,433
5,029
8,047
29,312
433
99,581
Average rate
1�42%
1�60
1�29
1�54
1�24
0�17
0�65
0�27%
0�13
0�29
0�14
0�28
0�10
0�27
0�42
0�10
1�94
Notes: 1. The figures above comprise totals for domestic and overseas operations after inter-segment 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 (2016, ¥30,015,849 million; 2015, ¥23,464,258
million).
013_0800804262808.indd 249
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2016/08/10 16:54:31
SMBC2016 Annual Report Income Analysis (Consolidated)
Fees and Commissions
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 ��������������������������������������������������
Millions of yen
Domestic
operations
¥590,211
21,087
116,425
99,357
15,146
5,509
36,974
3,834
101,211
2016
Overseas
operations Elimination
¥(13,444)
(4,766)
(1)
(3,194)
—
—
(1,275)
—
—
¥202,620
110,113
17,867
35,935
—
2
12,369
—
3,128
Total
¥779,388
126,435
134,291
132,098
15,146
5,512
48,068
3,834
104,339
Domestic
operations
¥589,311
20,902
114,823
95,244
15,605
5,746
36,373
6,536
128,829
2015
Overseas
operations Elimination
¥(13,233)
(4,413)
(1)
(5,124)
—
—
(211)
—
(1)
¥206,271
110,261
17,143
41,832
—
2
15,275
—
2,009
Total
¥782,349
126,751
131,965
131,952
15,605
5,749
51,438
6,536
130,837
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥117,909
29,282
¥ 37,190
8,507
¥ (4,310)
(0)
¥150,788
37,789
¥107,477
28,219
¥ 40,906
9,335
¥ (3,212)
(236)
¥145,171
37,318
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. Inter-segment transactions are reported in the “Elimination” column.
Trading Income
Year ended March 31
Trading income ����������������������������������������������������������
Gains on trading securities �����������������������������������
Gains on securities related to
2016
2015
Millions of yen
Domestic
operations
¥205,942
62,162
Overseas
operations Elimination
¥(33,549)
(5,795)
¥37,330
—
Total
¥209,722
56,366
Domestic
operations
¥280,230
246,331
Overseas
operations Elimination
¥(89,522)
(14,189)
¥44,531
—
Total
¥235,239
232,141
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
115
143,554
110
—
37,330
—
(49)
(27,704)
—
65
153,180
110
3,054
30,691
153
—
44,531
—
(109)
(75,222)
—
2,944
—
153
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
¥ 5,655
—
¥27,894
5,795
¥(33,549)
(5,795)
¥ —
—
¥ 95,388
—
¥51,990
14,189
¥(89,522)
(14,189)
¥ 57,856
—
—
5,655
—
49
22,048
—
(49)
(27,704)
—
—
—
—
—
95,388
—
109
37,691
—
(109)
(75,222)
—
—
57,856
—
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. Inter-segment transactions are reported in the “Elimination” column.
250
013_0800804262808.indd 250
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SMBC2016 Annual Report 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
2016
2015
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Overseas operations:
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Grand total ������������������������������������������������������������������������������������������������������
¥ 62,952,848
22,909,471
7,246,396
93,108,716
6,941,869
¥100,050,586
¥ 11,796,260
6,228,385
105,310
18,129,956
7,798,564
¥ 25,928,521
¥125,979,107
¥ 56,265,737
24,177,202
5,731,119
86,174,059
5,912,761
¥ 92,086,821
¥ 10,296,949
4,916,051
116,829
15,329,830
8,120,036
¥ 23,449,866
¥115,536,687
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
2016
2015
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,365,352
125,724
918,357
4,619,874
4,388,586
5,456,967
8,401,005
4,601,322
1,265,341
18,730,598
¥54,873,131
¥ 173,548
1,351,816
18,336,668
2,595,939
¥22,457,993
¥77,331,124
11.60%
0.23
1.67
8.42
8.00
9.94
15.31
8.39
2.31
34.13
100.00%
0.77%
6.02
81.65
11.56
100.00%
—
¥ 5,968,319
134,045
913,596
4,588,546
4,423,655
5,387,024
7,770,408
4,214,981
1,243,108
18,742,690
¥53,386,375
¥ 71,691
1,354,146
17,805,942
2,501,409
¥21,733,190
¥75,119,565
11�18%
0�25
1�71
8�59
8�29
10�09
14�55
7�90
2�33
35�11
100�00%
0�33%
6�23
81�93
11�51
100�00%
—
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. Japan offshore banking accounts are included in overseas operations’ accounts.
013_0800804262808.indd 251
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SMBC2016 Annual Report Assets and Liabilities (Consolidated)
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
2016
¥ 44,732
547,362
12,695
208,691
¥813,481
¥249,567
Millions of yen
2015
¥ 35,630
710,773
6,071
224,707
¥977,183
¥307,412
1. Bankrupt loans: Credits for which accrued interest is not accounted in revenue; credits extended to borrowers that are undergoing bankruptcy,
corporate reorganization and rehabilitation proceedings or debtors receiving orders of disposition by suspension of business at bill clearinghouses
2. Non-accrual loans: Credits for which accrued interest is not accounted in revenue; credits, excluding loans to bankrupt borrowers and loans with grace for
interest payment to assist in corporate reorganization or to support business
3. Past due loans (3 months or more): Loans with payment of principal or interest in arrears for more than 3 months, calculated from the day following the
contractual due date, excluding borrowers in categories 1. and 2.
4. Restructured loans: Loans to borrowers in severe financial condition given certain favorable terms and conditions to assist in corporate rehabilitation or to
support business, excluding borrowers in categories 1. through 3.
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2016
2015
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥10,346,596
52,070
2,679,207
3,748,625
4,982,142
¥21,808,642
¥
—
—
82,314
—
3,262,793
¥ 3,345,108
¥25,153,750
¥14,290,030
119,993
2,634,819
4,337,096
4,991,120
¥26,373,060
¥
—
—
52,548
—
3,133,725
¥ 3,186,274
¥29,559,334
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. “Others” include foreign bonds and foreign stocks.
Trading Assets and Liabilities
Domestic
March 31
operations
Trading assets ����������������������������������������������������������� ¥7,094,562
Trading securities �������������������������������������������������� 3,348,958
Derivatives of trading securities ����������������������������
13,573
Securities related to trading transactions �������������
—
Derivatives of securities related to
2016
2015
Millions of yen
Overseas
operations Elimination
Total
¥942,877
138,744
—
—
¥(56,468) ¥7,980,971
— 3,487,702
13,573
—
—
—
Domestic
operations
¥6,633,222
2,938,860
16,429
—
Overseas
operations Elimination
Total
¥787,375
76,279
—
—
¥(55,609) ¥7,364,988
— 3,015,139
16,429
—
—
—
trading transactions ��������������������������������������������
18,098
Trading-related financial derivatives ��������������������� 3,649,936
Other trading assets����������������������������������������������
63,995
120
804,012
—
—
(56,468)
—
18,218
4,397,481
63,995
24,343
3,551,604
101,984
293
710,801
—
—
(55,609)
—
24,637
4,206,797
101,984
Trading liabilities �������������������������������������������������������� ¥5,354,889
Trading securities sold for short sales ������������������ 2,147,529
Derivatives of trading securities ����������������������������
29,421
Securities related to trading transactions
¥807,561
43,707
—
¥(56,468) ¥6,105,982
— 2,191,237
29,421
—
¥5,009,602
2,141,153
25,770
¥682,412
23,752
—
¥(55,609) ¥5,636,406
— 2,164,905
25,770
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
17,275
Trading-related financial derivatives ��������������������� 3,160,662
Other trading liabilities ������������������������������������������
—
80
763,773
—
—
(56,468)
—
17,356
3,867,967
—
26,580
2,816,098
—
298
658,361
—
—
(55,609)
—
26,878
3,418,850
—
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. Inter-segment transactions are reported in the “Elimination” column.
252
013_0800804262808.indd 252
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SMBC2016 Annual Report Income Analysis (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Gross Banking Profit, Classified by Domestic and International Operations
Year ended March 31
Domestic
operations
Interest income ������������������������������������������� ¥ 854,216
2016
International
operations
¥581,173
Interest expenses ���������������������������������������
66,604
345,208
Net interest income ����������������������������������������
787,611
Trust fees ��������������������������������������������������������
2,550
Fees and commissions �������������������������������
347,923
Fees and commissions payments ��������������
126,929
Net fees and commissions �����������������������������
220,993
Trading income �������������������������������������������
5,102
Trading losses ���������������������������������������������
—
Net trading income �����������������������������������������
5,102
Other operating income ������������������������������
39,882
Other operating expenses ��������������������������
25,978
Net other operating income����������������������������
13,903
Gross banking profit ��������������������������������������� ¥1,030,162
Gross banking profit rate (%) �������������������������
1.43%
235,964
38
179,392
41,867
137,525
61,491
—
61,491
83,723
14,634
69,089
¥504,108
Millions of yen
Total
¥1,422,367
[13,021]
398,791
[13,021]
1,023,576
2,589
527,316
168,796
358,519
66,593
—
66,593
123,606
40,613
82,992
¥1,534,271
Domestic
operations
¥ 926,308
2015
International
operations
¥542,110
62,770
284,220
863,538
1,841
337,140
121,569
215,570
3,380
—
3,380
27,321
13,928
13,393
¥1,097,724
257,890
31
180,387
45,978
134,409
9,418
—
9,418
166,738
31,927
134,810
¥536,560
Total
¥1,455,992
[12,426]
334,564
[12,426]
1,121,428
1,872
517,528
167,548
349,979
12,799
—
12,799
194,059
45,855
148,204
¥1,634,284
1.25%
1.42%
1�55%
1�41%
1�56%
Notes: 1. Domestic operations include yen-denominated transactions by domestic branches, while international operations include foreign-currency-denominated
transactions by domestic branches and operations by overseas branches. Yen-denominated nonresident transactions and Japan offshore banking
accounts are included in international operations.
2. Figures in brackets [ ] indicate interest payments between domestic and international operations. As net interest figures are shown for interest rate swaps
and similar instruments, some figures for domestic and international operations do not add up to their sums.
3. Gross banking profit rate = Gross banking profit / Average balance of interest-earning assets ✕ 100
Average Balance, Interest and Average Rate of Interest-Earning Assets and Interest-Bearing Liabilities
Domestic Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥71,694,907
[4,503,590]
45,425,766
19,490,418
53,089
2
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
1,842,235
—
12,067
Interest-bearing liabilities ������������������������������� ¥94,110,848
73,328,279
7,701,125
1,655,876
38,649
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
2,761,590
6,376,138
18,218
1,457,179
Millions of yen
2016
Interest
¥854,216
[13,021]
556,364
245,712
108
0
1,990
—
6
¥ 66,604
21,733
5,907
864
28
1,512
18,868
12
16,605
Average rate
1.19%
1.22
1.26
0.20
0.07
0.10
—
0.05
0.07%
0.02
0.07
0.05
0.07
0.05
0.29
0.06
1.13
Average balance
¥70,641,557
[4,225,764]
45,297,845
20,185,808
99,639
—
456,748
14,850
7,757
¥87,716,915
70,404,105
6,486,838
1,398,849
53,749
1,767,038
4,946,776
24,999
1,824,687
2015
Interest
¥926,308
[12,426]
593,408
289,726
259
—
957
390
1
¥ 62,770
23,868
5,788
683
47
961
10,570
17
19,811
Average rate
1�31%
1�31
1�43
0�26
—
0�20
2�62
0�01
0�07%
0�03
0�08
0�04
0�08
0�05
0�21
0�07
1�08
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2016, ¥26,578,642 million; 2015, ¥20,982,578
million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international operations
and related interest expenses. As net interest figures are shown for interest rate swaps and similar instruments, some figures for domestic and international
operations do not add up to their sums.
013_0800804262808.indd 253
253
2016/08/10 16:54:31
SMBC2016 Annual Report Income Analysis (Non-consolidated)
International Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥40,309,868
22,679,209
6,529,804
620,731
497,349
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
283,887
6,548,702
Interest-bearing liabilities ������������������������������� ¥39,908,088
[4,503,590]
16,198,658
7,392,396
868,088
1,128,307
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
1,031,227
2,139,371
3,659,097
2016
Interest
¥581,173
424,239
80,365
4,057
5,540
1,195
30,854
¥345,208
[13,021]
71,524
42,343
4,085
4,087
2,989
69,366
87,852
Millions of yen
Average rate
1.44%
1.87
1.23
0.65
1.11
Average balance
¥37,906,621
20,797,386
6,338,457
369,455
412,957
2015
Interest
¥542,110
397,077
67,027
5,272
4,760
Average rate
1�43%
1�90
1�05
1�42
1�15
0.42
0.47
0.86%
0.44
0.57
0.47
0.36
0.28
3.24
2.40
294,806
6,538,186
1,407
27,241
¥36,790,634
[4,225,764]
13,603,482
8,671,748
608,136
1,260,612
¥284,220
[12,426]
47,719
37,351
1,947
3,248
904,212
1,987,396
2,795,189
1,592
66,250
74,317
0�47
0�41
0�77%
0�35
0�43
0�32
0�25
0�17
3�33
2�65
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2016, ¥104,906 million; 2015, ¥93,568 million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international operations
and related interest expenses. As net interest figures are shown for interest rate swaps and similar instruments, some figures for domestic and international
operations do not add up to their sums.
3. The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method, under which the TT middle rate at the end of the previous month is applied to nonexchange transactions of the month concerned.
Total of Domestic and International Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥107,501,185
68,104,976
26,020,222
673,821
497,352
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
2,126,123
—
6,560,770
Interest-bearing liabilities ������������������������������� ¥129,515,345
89,526,938
15,093,522
2,523,964
1,166,957
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
3,792,817
8,515,510
18,218
5,116,277
2016
Interest
¥1,422,367
980,604
326,077
4,165
5,540
3,185
—
30,860
¥ 398,791
93,258
48,250
4,949
4,116
4,501
88,235
12
104,458
Millions of yen
Average rate
1.32%
1.43
1.25
0.61
1.11
Average balance
¥104,322,413
66,095,232
26,524,265
469,094
412,957
2015
Interest
¥1,455,992
990,485
356,754
5,532
4,760
Average rate
1�39%
1�49
1�34
1�17
1�15
0.14
—
0.47
0.30%
0.10
0.31
0.19
0.35
0.11
1.03
0.06
2.04
751,554
14,850
6,545,943
2,365
390
27,242
¥120,281,785
84,007,587
15,158,586
2,006,986
1,314,362
¥ 334,564
71,588
43,140
2,630
3,295
2,671,250
6,934,173
24,999
4,619,876
2,554
76,821
17
94,128
0�31
2�62
0�41
0�27%
0�08
0�28
0�13
0�25
0�09
1�10
0�07
2�03
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2016, ¥26,683,548 million; 2015, ¥21,076,146
million).
2. Figures in the table above indicate the net average balances of amounts adjusted for interdepartmental lending and borrowing activities between domestic
and international operations and related interest expenses.
254
013_0800804262808.indd 254
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SMBC2016 Annual Report Breakdown of Interest Income and Interest Expenses
Domestic Operations
Year ended March 31
Interest income �����������������������������������������������
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
Interest expenses �������������������������������������������
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
International Operations
Year ended March 31
Interest income �����������������������������������������������
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
Interest expenses �������������������������������������������
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Commercial paper�����������������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
Volume-related
increase
(decrease)
¥12,550
1,566
(9,712)
(103)
0
1,496
(195)
1
¥ 4,524
866
931
131
(12)
544
3,558
(4)
(3,990)
Volume-related
increase
(decrease)
¥34,617
35,201
2,075
1,642
940
(50)
43
¥25,278
10,103
(5,510)
1,018
(340)
249
(98)
4,927
20,741
Total of Domestic and International Operations
Year ended March 31
Interest income �����������������������������������������������
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
Interest expenses �������������������������������������������
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Commercial paper�����������������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
Volume-related
increase
(decrease)
¥42,058
28,937
(6,678)
1,265
940
2,059
(195)
61
¥26,831
4,941
(185)
792
(369)
1,236
(98)
16,385
(4)
10,134
2016
Rate-related
increase
(decrease)
¥(84,642)
(38,610)
(34,301)
(47)
0
(463)
(195)
4
¥ (691)
(3,001)
(812)
49
(6)
6
4,739
(0)
783
2016
Rate-related
increase
(decrease)
¥ 4,446
(8,039)
11,262
(2,857)
(159)
(161)
3,569
¥35,710
13,702
10,502
1,119
1,179
1,147
1,537
(1,811)
(7,206)
2016
Rate-related
increase
(decrease)
¥(75,682)
(38,818)
(23,998)
(2,631)
(159)
(1,239)
(195)
3,556
¥ 37,396
16,728
5,295
1,526
1,189
710
1,537
(4,971)
(0)
194
Note: Volume/rate variance is prorated according to changes in volume and rate.
Income Analysis (Non-consolidated)
Millions of yen
Net
increase
(decrease)
¥(72,092)
(37,043)
(44,014)
(151)
0
1,032
(390)
5
¥ 3,833
(2,134)
118
181
(18)
550
8,297
(5)
(3,206)
Volume-related
increase
(decrease)
¥(23,587)
(1,022)
(28,810)
77
—
76
(358)
0
¥ 4,910
538
570
207
14
651
7,187
0
(4,958)
Millions of yen
Net
increase
(decrease)
¥39,063
27,162
13,337
(1,214)
780
(212)
3,613
¥60,988
23,805
4,991
2,137
838
1,396
1,438
3,116
13,535
Volume-related
increase
(decrease)
¥92,859
80,210
6,641
(254)
924
462
3,615
¥46,828
8,026
7,272
44
(142)
219
1,082
573
18,452
Millions of yen
Net
increase
(decrease)
¥(33,624)
(9,881)
(30,676)
(1,366)
780
820
(390)
3,618
¥ 64,227
21,670
5,110
2,318
820
1,947
1,438
11,414
(5)
10,329
Volume-related
increase
(decrease)
¥ 56,094
62,037
(21,301)
92
924
421
(358)
3,616
¥ 34,143
3,177
6,625
575
(102)
1,270
1,082
37,454
0
4,898
2015
Rate-related
increase
(decrease)
¥ 950
(43,057)
50,454
(34)
—
(142)
(15)
0
¥(10,437)
(3,078)
(1,016)
(15)
(2)
(46)
(3,740)
(0)
(1,778)
2015
Rate-related
increase
(decrease)
¥ 7,653
8,900
(6,285)
850
(810)
50
(161)
¥(19,946)
3,318
(2,223)
23
309
171
97
(5,561)
(2,277)
2015
Rate-related
increase
(decrease)
¥ 32,295
(17,006)
43,300
547
(810)
25
(15)
(161)
¥ (2,274)
5,626
(2,021)
(315)
281
(274)
97
(38,995)
(0)
4,539
Net
increase
(decrease)
¥(22,636)
(44,080)
21,643
43
—
(66)
(374)
0
¥ (5,527)
(2,540)
(445)
192
11
605
3,447
0
(6,736)
Net
increase
(decrease)
¥100,512
89,111
356
596
114
512
3,454
¥ 26,881
11,344
5,049
67
166
391
1,179
(4,987)
16,175
Net
increase
(decrease)
¥88,390
45,031
21,999
639
114
446
(374)
3,454
¥31,869
8,803
4,603
260
178
996
1,179
(1,540)
0
9,438
013_0800804262808.indd 255
255
2016/08/10 16:54:32
SMBC2016 Annual Report
Income Analysis (Non-consolidated)
Fees and Commissions
Year ended March 31
Fees and commissions �����������������������������������
Deposits and loans �������������������������������������
Remittances and transfers �������������������������
Securities-related business ������������������������
Agency ��������������������������������������������������������
Safe deposits ����������������������������������������������
Guarantees �������������������������������������������������
Millions of yen
Domestic
operations
¥347,923
12,011
91,858
10,797
10,358
5,094
16,669
2016
International
operations
¥179,392
98,975
36,407
1,929
—
—
19,888
Total
¥527,316
110,986
128,265
12,727
10,358
5,094
36,558
Domestic
operations
¥337,140
11,806
91,204
12,485
11,955
5,325
17,212
2015
International
operations
¥180,387
96,126
34,602
2,620
—
—
22,160
Total
¥517,528
107,933
125,806
15,105
11,955
5,325
39,373
Fees and commissions payments ������������������
Remittances and transfers �������������������������
¥126,929
23,534
¥ 41,867
12,386
¥168,796
35,920
¥121,569
22,532
¥ 45,978
13,505
¥167,548
36,037
Trading Income
Year ended March 31
Trading income �����������������������������������������������
Gains on trading securities �������������������������
Gains on securities related to
trading transactions ����������������������������������
Gains on trading-related
financial derivatives ����������������������������������
Others ���������������������������������������������������������
Trading losses ������������������������������������������������
Losses on trading securities �����������������������
Losses on securities related to
trading transactions ����������������������������������
Losses on trading-related
financial derivatives ����������������������������������
Others ���������������������������������������������������������
Millions of yen
Domestic
operations
¥5,102
4,992
2016
International
operations
¥61,491
—
Total
¥66,593
4,992
Domestic
operations
¥3,380
3,227
2015
International
operations
¥9,418
—
—
—
109
¥ —
—
—
—
—
65
65
61,424
0
¥ —
—
—
—
—
61,424
110
¥ —
—
—
—
—
—
—
153
¥ —
—
—
—
—
2,944
6,474
—
¥ —
—
—
—
—
Total
¥12,799
3,227
2,944
6,474
153
¥ —
—
—
—
—
Note: Figures represent net gains after offsetting income against expenses.
Net Other Operating Income (Expenses)
Year ended March 31
Net other operating income (expenses) ���������
Gains (losses) on bonds �����������������������������
Gains (losses) on derivatives ����������������������
Gains on foreign exchange transactions ����
General and Administrative Expenses
Millions of yen
Domestic
operations
¥13,903
3,390
(394)
—
2016
International
operations
¥69,089
50,613
(1,397)
22,831
Total
¥82,992
54,003
(1,791)
22,831
Domestic
operations
¥13,393
3,341
(3,596)
—
2015
International
operations
¥134,810
44,558
(16,342)
107,262
Total
¥148,204
47,899
(19,939)
107,262
Year ended March 31
Salaries and related expenses ������������������������������������������������������������������������
Retirement benefit cost �����������������������������������������������������������������������������������
Welfare expenses ��������������������������������������������������������������������������������������������
Depreciation ����������������������������������������������������������������������������������������������������
Rent and lease expenses ��������������������������������������������������������������������������������
Building and maintenance expenses ��������������������������������������������������������������
Supplies expenses ������������������������������������������������������������������������������������������
Water, lighting, and heating expenses�������������������������������������������������������������
Traveling expenses ������������������������������������������������������������������������������������������
Communication expenses �������������������������������������������������������������������������������
Publicity and advertising expenses �����������������������������������������������������������������
Taxes, other than income taxes�����������������������������������������������������������������������
Deposit insurance ��������������������������������������������������������������������������������������������
Others ��������������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥283,791
(289)
44,487
92,376
63,026
8,484
5,920
5,601
6,053
7,106
16,553
46,629
30,290
195,450
¥805,483
Millions of yen
2015
¥270,814
4,162
42,902
82,976
64,934
5,405
5,202
5,757
6,005
7,117
12,522
42,859
49,063
191,487
¥791,211
256
013_0800804262808.indd 256
2016/08/10 16:54:32
SMBC2016 Annual Report Deposits (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Millions of yen
2016
2015
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
International operations:
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Grand total ������������������������������������������������������������������������������������������������������
¥ 58,803,480
19,099,675
1,648,767
79,551,923
7,090,524
¥ 86,642,448
¥ 9,288,738
5,083,772
4,915,287
19,287,798
7,337,814
¥ 26,625,613
¥113,268,061
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
67.9% ¥ 53,460,725
20,328,986
22.0
1,424,917
1.9
75,214,629
91.8
6,186,789
8.2
100.0% ¥ 81,401,419
34.9% ¥ 8,026,383
3,743,876
19.1
4,352,824
18.4
16,123,085
72.4
7,835,274
27.6
100.0% ¥ 23,958,359
¥105,359,778
—
65�7%
25�0
1�7
92�4
7�6
100�0%
33�5%
15�6
18�2
67�3
32�7
100�0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2016
2015
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
International operations:
Liquid deposits ��������������������������������������������������������������������������������������������
Fixed-term deposits ������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Negotiable certificates of deposit ����������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������
Grand total ������������������������������������������������������������������������������������������������������
¥ 52,992,916
19,806,534
528,829
73,328,279
7,701,125
¥ 81,029,405
¥ 8,262,536
3,894,999
4,041,122
16,198,658
7,392,396
¥ 23,591,054
¥104,620,460
¥49,585,981
20,305,098
513,025
70,404,105
6,486,838
¥76,890,943
¥ 7,022,248
2,599,982
3,981,250
13,603,482
8,671,748
¥22,275,230
¥99,166,173
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
3. The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
Balance of Deposits, Classified by Type of Depositor
March 31
Individual ���������������������������������������������������������������������������������������������������������
Corporate ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥42,312,525
39,822,162
¥82,134,687
51.5%
48.5
100.0%
2015
¥41,768,103
36,020,995
¥77,789,098
53�7%
46�3
100�0%
Millions of yen
Note: The figures above exclude negotiable certificates of deposit and Japan offshore banking accounts.
013_0800804262808.indd 257
257
2016/08/10 16:54:32
SMBC2016 Annual Report Deposits (Non-consolidated)
Balance of Investment Trusts, Classified by Type of Customer
March 31
Individual ���������������������������������������������������������������������������������������������������������
Corporate ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥2,077,514
364,493
¥2,442,007
2015
¥2,689,700
390,369
¥3,080,069
Note: Balance of investment trusts is recognized on a contract basis and measured according to each fund’s net asset balance at the fiscal year-end.
Millions of yen
Balance of Time Deposits, Classified by Maturity
March 31
Less than three months �����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Three — six months ����������������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Six months — one year �����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
One — two years ���������������������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Two — three years �������������������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Three years or more ����������������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Note: The figures above do not include installment savings.
2016
¥10,054,986
6,254,255
54,567
3,746,162
4,165,144
3,558,214
35,037
571,891
5,433,077
5,056,580
58,896
317,600
1,784,267
1,630,848
31,282
122,137
1,186,316
1,045,544
23,075
117,696
1,559,617
571,234
780,099
208,283
¥24,183,409
18,116,678
982,959
5,083,772
Millions of yen
2015
¥ 9,789,514
6,780,000
71,389
2,938,125
4,302,602
3,755,675
180,469
366,457
5,467,537
5,195,839
125,714
145,983
1,822,536
1,719,362
79,026
24,146
1,221,641
977,282
26,424
217,934
1,468,992
666,721
796,859
5,412
¥24,072,824
19,094,881
1,279,883
3,698,059
258
013_0800804262808.indd 258
2016/08/10 16:54:32
SMBC2016 Annual Report Loans (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Loans and Bills Discounted
Year-End Balance
March 31
Domestic operations:
Millions of yen
2016
2015
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 534,074
35,801,510
9,856,733
88,554
¥46,280,872
¥ 912,383
21,934,123
149,356
—
¥22,995,862
¥69,276,735
¥ 675,286
35,669,028
9,704,976
106,324
¥46,155,615
¥ 1,127,209
20,845,536
145,946
—
¥22,118,693
¥68,274,308
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2016
2015
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 616,951
35,366,905
9,354,814
87,094
¥45,425,766
¥ 1,033,312
21,477,275
168,621
—
¥22,679,209
¥68,104,976
¥ 739,344
35,366,084
9,090,851
101,565
¥45,297,845
¥ 1,139,269
19,492,102
166,013
—
¥20,797,386
¥66,095,232
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
Balance of Loans and Bills Discounted, Classified by Purpose
March 31
Funds for capital investment ���������������������������������������������������������������������������
Funds for working capital ��������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥20,875,436
48,401,299
¥69,276,735
30.1%
69.9
100.0%
2015
¥21,002,318
47,271,990
¥68,274,308
30�8%
69�2
100�0%
Millions of yen
Balance of Loans and Bills Discounted, Classified by Collateral
Millions of yen
March 31
Securities ���������������������������������������������������������������������������������������������������������
Commercial claims ������������������������������������������������������������������������������������������
Commercial goods ������������������������������������������������������������������������������������������
Real estate �������������������������������������������������������������������������������������������������������
Others ��������������������������������������������������������������������������������������������������������������
Subtotal �����������������������������������������������������������������������������������������������������������
Guaranteed ������������������������������������������������������������������������������������������������������
Unsecured �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥ 570,049
1,170,056
—
6,766,633
1,278,085
9,784,824
23,589,094
35,902,816
¥69,276,735
2015
¥ 614,963
1,096,237
—
6,579,256
1,260,709
9,551,166
23,562,770
35,160,371
¥68,274,308
013_0800804262808.indd 259
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SMBC2016 Annual Report Loans (Non-consolidated)
Balance of Loans and Bills Discounted, Classified by Maturity
March 31
One year or less ����������������������������������������������������������������������������������������������
One — three years ������������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Three — five years �������������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Five — seven years �����������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
More than seven years ������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
No designated term �����������������������������������������������������������������������������������������
Floating interest rates ����������������������������������������������������������������������������������
Fixed interest rates ��������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Note: Loans with a maturity of one year or less are not classified by floating or fixed interest rates.
2016
¥10,578,408
11,434,150
9,138,844
2,295,305
11,868,263
9,540,806
2,327,457
5,333,958
4,392,917
941,041
20,055,864
18,903,945
1,151,919
10,006,090
10,006,090
—
¥69,276,735
Millions of yen
2015
¥10,629,695
10,834,296
8,580,386
2,253,910
11,700,384
9,349,175
2,351,208
5,030,127
4,314,552
715,574
20,228,880
19,038,738
1,190,142
9,850,923
9,850,923
—
¥68,274,308
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2016
2015
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 �����������������������������������������������������������������������������������������������������������������
¥ 5,968,107
121,805
711,002
4,294,743
3,949,130
7,042,440
7,014,185
3,954,330
1,087,248
15,929,369
¥50,072,362
¥ 164,623
1,362,414
15,876,722
1,800,612
¥19,204,373
¥69,276,735
11.9%
0.2
1.4
8.6
7.9
14.1
14.0
7.9
2.2
31.8
100.0%
0.8%
7.1
82.7
9.4
100.0%
—
¥ 5,622,478
129,596
713,769
4,322,866
4,015,619
7,284,507
6,524,281
3,634,027
1,070,825
16,028,577
¥49,346,549
¥ 52,598
1,557,891
15,603,083
1,714,185
¥18,927,759
¥68,274,308
11�4%
0�3
1�4
8�8
8�1
14�8
13�2
7�4
2�2
32�4
100�0%
0�3%
8�2
82�4
9�1
100�0%
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches). Overseas operations comprise the operations of SMBC’s overseas
branches.
2. Japan offshore banking accounts are included in overseas operations’ accounts.
Loans to Individuals/Small and Medium-Sized Enterprises
March 31
Total domestic loans (A) ����������������������������������������������������������������������������������
Loans to individuals, and small and medium-sized enterprises (B) ����������������
(B) / (A) �������������������������������������������������������������������������������������������������������������
2016
¥50,072,362
33,860,723
67.6%
2015
¥49,346,549
33,498,552
67�9%
Millions of yen
Notes: 1. The figures above exclude the outstanding balance of loans at overseas branches and of Japan offshore banking accounts.
2. Small and medium-sized enterprises are individuals or companies with capital stock of ¥300 million or less, or an operating staff of 300 or fewer employ-
ees. (Exceptions to these capital stock and staff restrictions include wholesalers: ¥100 million, 100 employees; retailers: ¥50 million, 50 employees; and
service industry companies: ¥50 million, 100 employees.)
260
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SMBC2016 Annual Report Loans (Non-consolidated)
Consumer Loans Outstanding
March 31
Consumer loans ����������������������������������������������������������������������������������������������
Housing loans ����������������������������������������������������������������������������������������������
Residential purpose ���������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
2016
¥14,148,084
13,207,194
10,598,147
940,889
2015
¥14,347,459
13,437,910
10,788,338
909,548
Note: Housing loans include general-purpose loans used for housing purposes as well as housing loans and apartment house acquisition loans.
Millions of yen
Breakdown of Reserve for Possible Loan Losses
Year ended March 31, 2016
General reserve for possible loan losses������������������
Specific reserve for possible loan losses �����������������
For nonresident loans �������������������������������������������
Loan loss reserve for specific overseas countries ���
Total ��������������������������������������������������������������������������
Balance at beginning
of the fiscal year
¥225,897
[5,133]
161,627
[763]
36,337
[761]
719
¥388,243
[5,896]
* Transfer from reserves by reversal or origination method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
Millions of yen
Increase during
the fiscal year
¥221,297
Decrease during the fiscal year
Objectives
¥ —
Others
¥225,897*
Balance at end
of the fiscal year
¥221,297
134,708
24,269
137,357*
134,708
39,550
12,223
24,113*
39,550
1,179
¥357,186
—
¥24,269
719*
¥363,974
1,179
¥357,186
Year ended March 31, 2015
General reserve for possible loan losses������������������
Balance at beginning
of the fiscal year
¥322,558
Increase during
the fiscal year
¥231,030
Decrease during the fiscal year
Objectives
¥ —
Others
¥322,558*
Balance at end
of the fiscal year
¥231,030
Millions of yen
Specific reserve for possible loan losses �����������������
For nonresident loans �������������������������������������������
Loan loss reserve for specific overseas countries ���
Total ��������������������������������������������������������������������������
[(9,782)]
159,423
[(397)]
32,106
[(394)]
747
¥482,729
[(10,180)]
* Transfer from reserves by reversal or origination method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
162,390
9,579
149,843*
162,390
37,099
24
32,082*
37,099
719
¥394,140
—
¥9,579
747*
¥473,149
719
¥394,140
Write-Off of Loans
Year ended March 31
Write-off of loans ���������������������������������������������������������������������������������������������
2016
¥805
2015
¥417
Millions of yen
Note: Write-off of loans include amount of direct reduction.
Specific Overseas Loans
March 31
Azerbaijan ��������������������������������������������������������������������������������������������������������
Egypt ���������������������������������������������������������������������������������������������������������������
Argentina ���������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Ratio of the total amounts to total assets �������������������������������������������������������
Number of countries ����������������������������������������������������������������������������������������
2016
¥10,631
9,112
11
¥19,755
0.01%
3
2015
¥ —
11,552
5
¥11,557
0�00%
2
Millions of yen
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SMBC2016 Annual Report Loans (Non-consolidated)
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
2016
¥ 39,906
410,020
4,574
106,071
¥560,573
¥121,686
Millions of yen
2015
¥ 30,122
552,933
4,932
115,919
¥703,907
¥149,442
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
2016
¥ 135,604
376,366
110,646
622,617
79,046,057
¥79,668,674
¥ 129,826
Millions of yen
2015
¥ 92,996
555,150
120,851
768,998
78,132,366
¥78,901,365
¥ 160,661
These assets are disclosed based on the provisions of Article 7 of the Financial Reconstruction Act (Act No. 132 of 1998) and classified into the 4
categories based on financial position and business performance of obligors in accordance with Article 6 of the Act. Assets in question include private place-
ment bonds, loans and bills discounted, foreign exchanges, accrued interest, and suspense payment in “other assets,” customers’ liabilities for acceptances
and guarantees, and securities lent under the loan for consumption or leasing agreements.
1. Bankrupt and quasi-bankrupt assets: Credits to borrowers undergoing bankruptcy, corporate reorganization, and rehabilitation proceedings, as well as
claims of a similar nature
2. Doubtful assets: Credits for which final collection of principal and interest in line with original agreements is highly improbable due to deterioration of
financial position and business performance, but not insolvency of the borrower
3. Substandard loans: Past due loans (3 months or more) and restructured loans, excluding 1. and 2.
4. Normal assets: Credits to borrowers with good business performance and in financial standing without identified problems and not classified into the 3
categories above
Problem Assets Based on the Financial Reconstruction Act, and Risk-Monitored Loans
Category of borrowers under
self-assessment
Problem assets based on the Financial
Reconstruction Act
Risk-monitored loans
Total loans
Other assets
Total loans
Other assets
Bankrupt Borrowers
Effectively Bankrupt Borrowers
Bankrupt and
quasi-bankrupt assets
Potentially Bankrupt Borrowers
Doubtful assets
Borrowers Requiring Caution
Substandard loans
Normal Borrowers
(Normal assets)
Bankrupt loans
Non-accrual loans
Past due loans (3 months or more)
Restructured loans
A
B
C
C
262
013_0800804262808.indd 262
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SMBC2016 Annual Report Classification under Self-Assessment, Disclosure of Problem Assets, and Write-Offs/Reserves
Loans (Non-consolidated)
Problem assets based on
the Financial Reconstruction Act
Classification under self-assessment
I
Classification Classification
II
Classification
III
Classification
IV
(Billions of yen)
Reserve for possible
loan losses
Reserve ratio
Bankrupt and
quasi-bankrupt assets (1)
Portion of claims secured by
collateral or guarantees, etc. (5)
Fully reserved
¥135.6
¥101.1
¥34.5
Direct
write-offs
(Note 1)
¥37.3
(Note 2)
100%
(Note 3)
March 31, 2016
Category of
borrowers under
self-assessment
Bankrupt Borrowers
Effectively Bankrupt
Borrowers
Potentially
Bankrupt
Borrowers
Borrowers
Requiring
Caution
Doubtful assets (2)
¥376.4
Substandard loans (3)
¥110.6
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥79,046.1
NPL ratio (A) / (4)
0.78%
(Note 5)
Total
(4)
¥79,668.7
(A) = (1) + (2) + (3)
¥622.6
Portion of claims secured by
collateral or guarantees, etc. (6)
¥240.6
Necessary
amount
reserved
¥135.8
Portion of substandard loans
secured by collateral or
guarantees, etc. (7)
¥49.3
Claims to borrowers requiring
caution, excluding claims to
substandard borrowers
Claims to normal
borrowers
Loan loss reserve for specific overseas countries
Total reserve for possible loan losses
(B) Specific reserve + General reserve
for substandard loans
Portion secured by collateral or
guarantees, etc.
(C) = ( 5 ) + (6 ) + (7)
¥391.0
Unsecured portion
(D) = ( A ) – (C)
Specific
reserve
General
reserve
¥97.1
(Note 2)
71.48%
(Note 3)
General reserve
for substandard
loans ¥24.6
¥221.7
(Note 6)
¥1.2
¥357.2
¥159.0
¥231.7
12.48%
(Note 3)
40.73%
(Note 3)
4.83%
9.70%
(Note 4)
[
]
0.13%
(Note 4)
Reserve ratio
(B) / (D)
68.62%
(Note 7)
Coverage ratio { ( B) + (C) } / (A)
88.32%
Notes: 1. Includes amount of direct reduction totaling ¥129.8 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Act. (Bankrupt/Effectively Bankrupt Borrowers: ¥2.7
billion; Potentially Bankrupt Borrowers: ¥4.8 billion)
3. Reserve ratios for claims on Bankrupt/Effectively Bankrupt Borrowers, Potentially Bankrupt Borrowers, Substandard Borrowers, and Borrowers Requiring
Caution: The proportion of each category’s total unsecured claims covered by reserve for possible loan losses.
4. Reserve ratios for claims on Normal Borrowers and Borrowers Requiring Caution (excluding claims to Substandard Borrowers): The proportion of each
category’s total claims covered by reserve for possible loan losses. The reserve ratio for unsecured claims on Borrowers Requiring Caution (excluding
claims to Substandard Borrowers) is shown in brackets.
5. Ratio of problem assets to total assets subject to the Financial Reconstruction Act.
6. Includes Specific reserve for Borrowers Requiring Caution totaling ¥0.4 billion.
7. Reserve ratio = (Specific reserve + General reserve for substandard loans) / (Bankrupt and quasi-bankrupt assets + Doubtful assets + Substandard loans –
Portion secured by collateral or guarantees, etc.)
Off-Balancing Problem Assets
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
March 31, 2014
➀
¥114�3
574�4
¥688�7
Fiscal 2014
New occurrences Off-balanced
¥ (44�6)
(186�6)
¥(231�2)
¥ 23�3
167�3
¥190�6
Billions of yen
March 31, 2015
➁
¥ 93�0
555�1
¥648�1
Fiscal 2015
New occurrences Off-balanced
¥ 40�7
98�5
¥139�2
¥ 1�9
(277�2)
¥(275�3)
March 31, 2016
➂
¥135�6
376�4
¥512�0
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
Increase/
Decrease
➁ – ➀
¥(21�3)
(19�3)
¥(40�6)
Increase/
Decrease
➂ – ➁
¥ 42�6
¥(178�7)
¥(136�1)
Notes: 1. The off-balancing (also known as “final disposal”) of problem assets refers to the removal of such assets from the bank’s balance sheet by way of sale,
direct write-off or other means.
2. The figures shown in the above table under “new occurrences” and “off-balanced” are simple additions of the figures for the first and second halves of
fiscal 2015. Amount of ¥27.8 billion in fiscal 2015, recognized as “new occurrences” in the first half of the term, was included in the amounts off-balanced
in the second half.
013_0800804262808.indd 263
263
2016/08/10 16:54:32
SMBC2016 Annual Report
Securities (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2016
2015
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 9,797,359
7,734
2,465,960
4,642,919
813,099
/
/
¥17,727,073
¥
—
—
—
—
7,875,082
5,153,769
2,721,313
¥ 7,875,082
¥25,602,156
¥13,970,107
32,589
2,386,604
5,180,246
1,319,934
/
/
¥22,889,483
¥
—
—
—
—
7,095,783
4,238,647
2,857,136
¥ 7,095,783
¥29,985,267
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2016
2015
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥12,943,834
11,525
2,346,113
3,243,272
945,671
/
/
¥19,490,418
¥
—
—
—
—
6,529,804
3,723,634
2,806,170
¥ 6,529,804
¥26,020,222
¥13,479,162
43,599
2,378,427
3,227,368
1,057,250
/
/
¥20,185,808
¥
—
—
—
—
6,338,457
3,739,007
2,599,449
¥ 6,338,457
¥26,524,265
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
264
013_0800804262808.indd 264
2016/08/10 16:54:32
SMBC2016 Annual Report Balance of Securities Held, Classified by Maturity
March 31
One year or less
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
One — three years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Three — five years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Five — seven years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Seven — 10 years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
More than 10 years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
No designated term
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
Total
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Japanese stocks ������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
2016
¥2,522,716
—
255,302
1,424,612
1,422,111
—
2,376,765
89
764,905
1,011,379
942,788
593
4,644,981
4,491
716,150
408,506
366,158
5,587
—
—
306,821
393,875
381,139
—
—
3,114
281,105
902,795
782,801
7,305
252,896
39
141,675
1,384,013
1,258,768
91,292
—
—
—
4,642,919
3,163,000
—
2,616,534
¥9,797,359
7,734
2,465,960
4,642,919
8,688,182
5,153,769
2,721,313
Securities (Non-consolidated)
Millions of yen
2015
¥ 2,988,136
31,944
253,859
1,163,927
1,153,064
—
6,769,101
—
761,548
852,950
713,223
—
3,872,810
125
796,838
858,640
706,363
77
340,059
478
262,889
506,117
484,599
5,932
—
—
244,804
790,603
641,970
—
—
40
66,664
715,754
539,425
134,782
—
—
—
5,180,246
3,527,724
—
2,716,343
¥13,970,107
32,589
2,386,604
5,180,246
8,415,718
4,238,647
2,857,136
013_0800804262808.indd 265
265
2016/08/10 16:54:32
SMBC2016 Annual Report Ratios (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Income Ratio
Year ended March 31
Ordinary profit to total assets ��������������������������������������������������������������������������
Ordinary profit to stockholders’ equity ������������������������������������������������������������
Net income to total assets ������������������������������������������������������������������������������
Net income to stockholders’ equity ����������������������������������������������������������������
2016
0.48%
9.49
0.39
7.73
Percentage
2015
0�67%
12�65
0�45
8�51
Notes: 1. Ordinary profit (net income) to total assets = Ordinary profit (net income) / Average balance of total assets excluding customers’ liabilities for acceptances
and guarantees ✕ 100
2. Ordinary profit (net income) to stockholders’ equity = (Ordinary profit (net income) – Preferred dividends) / {(Net assets at the beginning of the fiscal year
– Number of shares of preferred stock outstanding at the beginning of the fiscal year ✕ Issue price) + (Net assets at the end of the fiscal year – Number of
shares of preferred stock outstanding at the end of the fiscal year ✕ Issue price)} divided by 2 ✕ 100
Yield/Interest Rate
Year ended March 31
Domestic operations:
Percentage
2016
2015
Interest-earning assets (A) ���������������������������������������������������������������������������
Interest-bearing liabilities (B) �����������������������������������������������������������������������
(A) – (B) ��������������������������������������������������������������������������������������������������������
International operations:
Interest-earning assets (A) ���������������������������������������������������������������������������
Interest-bearing liabilities (B) �����������������������������������������������������������������������
(A) – (B) ��������������������������������������������������������������������������������������������������������
Total:
Interest-earning assets (A) ���������������������������������������������������������������������������
Interest-bearing liabilities (B) �����������������������������������������������������������������������
(A) – (B) ��������������������������������������������������������������������������������������������������������
1.19%
0.74
0.45
1.44%
1.27
0.17
1.32%
0.92
0.40
1�31%
0�79
0�52
1�43%
1�18
0�25
1�39%
0�93
0�46
Loan-Deposit Ratio
March 31
Domestic operations:
Loans and bills discounted (A) ��������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Loan-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
International operations:
Loans and bills discounted (A) ��������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Loan-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
Total:
Loans and bills discounted (A) ��������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Loan-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
Note: Deposits include negotiable certificates of deposit.
Millions of yen
2016
2015
¥ 46,280,872
86,642,448
¥ 46,155,615
81,401,419
53.41%
56.06
56�70%
58�91
¥ 22,995,862
26,625,613
¥ 22,118,693
23,958,359
86.36%
96.13
92�32%
93�36
¥ 69,276,735
113,268,061
¥ 68,274,308
105,359,778
61.16%
65.09
64�80%
66�65
266
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SMBC2016 Annual Report Ratios (Non-consolidated)
Securities-Deposit Ratio
March 31
Domestic operations:
Securities (A) ������������������������������������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Securities-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
International operations:
Securities (A) ������������������������������������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Securities-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
Total:
Securities (A) ������������������������������������������������������������������������������������������������
Deposits (B) �������������������������������������������������������������������������������������������������
Securities-deposit ratio (%)
(A) / (B) �����������������������������������������������������������������������������������������������������
Ratio by average balance for the fiscal year ��������������������������������������������
Note: Deposits include negotiable certificates of deposit.
Millions of yen
2016
2015
¥ 17,727,073
86,642,448
¥ 22,889,483
81,401,419
20.46%
24.05
28�11%
26�25
¥ 7,875,082
26,625,613
¥ 7,095,783
23,958,359
29.57%
27.67
29�61%
28�45
¥ 25,602,156
113,268,061
¥ 29,985,267
105,359,778
22.60%
24.87
28�45%
26�74
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SMBC2016 Annual Report Capital (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Changes in Number of Shares Issued and Capital Stock
February 16, 2010* ����������������������������������� 20,016,015
Number of shares issued
Changes
Balances
106,318,401
Millions of yen
Capital stock
Capital reserve
Changes
484,037
Balances
1,770,996
Changes
484,037
Balances
1,771,043
Remarks:
* Allotment to third parties: Common stock: 20,016,015 shares
Issue price: ¥48,365 Capitalization: ¥24,182.5
Number of Shares Issued
March 31, 2016
Common stock ���������������������������������������������������������������������������������������������������������������������������������������������������������������
Preferred stock (1st series Type 6) ���������������������������������������������������������������������������������������������������������������������������������
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of shares issued
106,248,400
70,001
106,318,401
Note: The shares above are not listed on any stock exchange.
Principal Shareholders
a. Common Stock
March 31, 2016
Sumitomo Mitsui Financial Group, Inc� ����������������������������������������������������������
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2016
Sumitomo Mitsui Banking Corporation �����������������������������������������������������������
Number of shares
70,001
Percentage of
shares outstanding
100�00%
Percentage of
shares outstanding
100�00%
268
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SMBC2016 Annual Report Others (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Employees
March 31
Number of employees �������������������������������������������������������������������������������������
Average age (years–months) ���������������������������������������������������������������������������
Average length of employment (years–months) ����������������������������������������������
Average annual salary (thousands of yen) �������������������������������������������������������
2016
28,002
36-6
13-4
¥8,301
2015
26,416
36-5
13-4
¥8,437
Notes: 1. Temporary and part-time staff are excluded from the above calculations but includes overseas local staff. Executive officers who do not concurrently serve
as Directors are excluded from “Number of employees.”
2. “Average annual salary” includes bonus, overtime pay and other fringe benefits.
3. Overseas local staff are excluded from the above calculations other than “Number of employees.”
Number of Offices
March 31
Domestic network:
Main offices and branches ��������������������������������������������������������������������������
Subbranches �����������������������������������������������������������������������������������������������
Agency ���������������������������������������������������������������������������������������������������������
Overseas network:
Branches �����������������������������������������������������������������������������������������������������
Subbranches �����������������������������������������������������������������������������������������������
Representative offices ���������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
506
469
2
17
17
5
1,016
2015
507
475
2
15
17
7
1,023
Notes: 1. “Main offices and branches” includes the International Business Operations Dept. (2016, 2 branches; 2015, 2 branches), specialized deposit account
branches (2016, 46 branches; 2015, 46 branches) and ATM administration branches (2016, 17 branches; 2015, 17 branches).
2. “Subbranches” includes Corporate Business Office, etc. from beginning of the fiscal year ended March 31, 2015.
Number of Automated Service Centers
March 31
Automated service centers������������������������������������������������������������������������������
2016
46,408
2015
44,232
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2016
2015
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
400,108
¥ 567,440,690
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
302,632
¥ 968,425,075
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
2,240
¥ 5,425,339
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
797
¥ 1,710,056
¥1,543,001,161
367,767
¥ 577,687,912
300,453
¥ 989,403,191
2,366
¥ 6,137,295
901
¥ 2,166,712
¥1,575,395,111
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SMBC2016 Annual Report Others (Non-consolidated)
Foreign Exchange Transactions
Year ended March 31
Outward exchanges:
Foreign bills sold������������������������������������������������������������������������������������������
Foreign bills bought �������������������������������������������������������������������������������������
Incoming exchanges:
Foreign bills payable ������������������������������������������������������������������������������������
Foreign bills receivable ��������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Note: The figures above include foreign exchange transactions by overseas branches.
Millions of U�S� dollars
2016
$2,294,970
1,777,561
$ 901,403
30,044
$5,003,979
Breakdown of Collateral for Customers’ Liabilities for Acceptances and Guarantees
Millions of yen
March 31
Securities ���������������������������������������������������������������������������������������������������������
Commercial claims ������������������������������������������������������������������������������������������
Commercial goods ������������������������������������������������������������������������������������������
Real estate �������������������������������������������������������������������������������������������������������
Others ��������������������������������������������������������������������������������������������������������������
Subtotal �����������������������������������������������������������������������������������������������������������
Guaranteed ������������������������������������������������������������������������������������������������������
Unsecured �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2016
¥ 26,695
122,716
—
55,060
21,074
¥ 225,547
762,878
5,748,664
¥6,737,089
2015
$2,225,773
1,836,710
$ 963,513
37,385
$5,063,382
2015
¥ 23,399
40,391
—
64,614
14,405
¥ 142,810
898,719
5,679,600
¥6,721,131
270
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SMBC2016 Annual Report Trust Assets and Liabilities (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Statements of Trust Assets and Liabilities
March 31
Assets:
Loans and bills discounted ��������������������������������������������������������������������������
Loans on deeds ���������������������������������������������������������������������������������������
Securities �����������������������������������������������������������������������������������������������������
Japanese government bonds ������������������������������������������������������������������
Corporate bonds��������������������������������������������������������������������������������������
Japanese stocks ��������������������������������������������������������������������������������������
Foreign securities�������������������������������������������������������������������������������������
Trust beneficiary right ����������������������������������������������������������������������������������
Entrusted securities �������������������������������������������������������������������������������������
Monetary claims ������������������������������������������������������������������������������������������
Monetary claims for housing loans ����������������������������������������������������������
Other monetary claims ����������������������������������������������������������������������������
Other claims ������������������������������������������������������������������������������������������������
Call loans �����������������������������������������������������������������������������������������������������
Due from banking account ��������������������������������������������������������������������������
Cash and due from banks ���������������������������������������������������������������������������
Deposits with banks ��������������������������������������������������������������������������������
Total assets ��������������������������������������������������������������������������������������������������
Liabilities:
Designated money trusts�����������������������������������������������������������������������������
Specified money trusts ��������������������������������������������������������������������������������
Money in trusts other than money trusts �����������������������������������������������������
Securities in trusts ���������������������������������������������������������������������������������������
Monetary claims trusts ��������������������������������������������������������������������������������
Composite trusts �����������������������������������������������������������������������������������������
Total liabilities ����������������������������������������������������������������������������������������������
2016
¥ 537,839
537,839
1,305,284
221,728
1,073,615
—
9,940
36,269
7,123
474,129
15,964
458,165
1,429
—
920,070
112,024
112,024
¥3,394,170
¥1,059,035
1,750,117
100,000
7,123
477,772
122
¥3,394,170
Notes: 1. Amounts less than 1 million yen have been rounded down.
2. SMBC has no co-operative trusts under any other trust bank’s administration as of the year-end.
3. Excludes trusts whose monetary values are difficult to calculate.
Millions of yen
2015
¥ 373,230
373,230
1,451,206
320,619
1,055,893
1,931
72,762
42,402
—
552,911
9,690
543,220
1,579
244,248
716,289
161,090
161,090
¥3,542,957
¥1,217,532
1,671,868
100,000
—
552,391
1,165
¥3,542,957
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SMBC2016 Annual Report
Basel III Information
Capital Ratio Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
■ Capital Structure Information (Consolidated Capital Ratio (International Standard))
Basel III
Template No.
Items
Common Equity Tier 1 capital: instruments and reserves
1a+2-1c-26
Directly issued qualifying common share capital plus related capital surplus and retained
earnings
1a
2
1c
26
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: cash dividends to be paid (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Accumulated other comprehensive income and other disclosed reserves
5
Adjusted non-controlling interests, etc. (amount allowed to be included in group Common Equity
Tier 1)
Total of items included in Common Equity Tier 1 capital: instruments and reserves subject to
transitional arrangements
of which: non-controlling interests and other items corresponding to common share capital
issued by consolidated subsidiaries (amount allowed to be included in group
Common Equity Tier 1)
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
6,955,707
4,263,087
2,909,898
—
217,277
—
—
810,245
175,353
5,276
5,276
6,697,893
4,278,414
2,751,080
—
331,601
—
—
540,163
770,967 1,156,451
163,992
7,344
7,344
6 Common Equity Tier 1 capital: instruments and reserves
(A)
7,946,582
7,640,198
Common Equity Tier 1 capital: regulatory adjustments
8+9 Total intangible assets (excluding those relating to mortgage servicing rights)
8
9
10
of which: goodwill (including those equivalent)
of which: other intangible assets other than goodwill and mortgage servicing rights
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
11 Net deferred gains or losses on hedges
12 Shortfall of eligible provisions to expected losses
13 Gain on sale on securitization transactions
14 Gains and losses due to changes in own credit risk on fair valued liabilities
15 Net defined benefit asset
16 Investments in own shares (excluding those reported in the Net assets section)
17 Reciprocal cross-holdings in common equity
18
Investments in the capital of banking, financial and insurance entities that are outside the
scope of regulatory consolidation (“Other Financial Institutions”), net of eligible short positions,
where the bank does not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
19
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
27
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
266,335
110,209
156,126
177,557
73,473
104,084
175,288
92,138
83,149
262,932
138,208
124,724
927
618
1,048
1,572
38,273
15,573
30,051
5,089
83,065
29
—
25,515
10,382
20,034
3,392
55,376
19
—
(10,225)
887
18,683
2,597
99,911
55
—
(15,338)
1,330
28,025
3,896
149,866
83
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
439,345
288,245
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,507,237
7,351,952
272
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SMBC2016 Annual Report
Basel III
Template No.
Items
Additional Tier 1 capital: instruments
31a
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as equity under applicable accounting standards and the breakdown
31b Stock acquisition rights to Additional Tier 1 instruments
30
32
34-35
33+35
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Additional
Tier 1)
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional
Tier 1 capital: instruments
33
35
of which: instruments issued by banks and their special purpose vehicles
of which: instruments issued by subsidiaries (excluding banks’ special purpose vehicles)
Total of items included in Additional Tier 1 capital: items subject to transitional arrangements
of which: foreign currency translation adjustments
36 Additional Tier 1 capital: instruments
Additional Tier 1 capital: regulatory adjustments
37 Investments in own Additional Tier 1 instruments
38 Reciprocal cross-holdings in Additional Tier 1 instruments
(D)
39
40
Non-significant Investments in the Additional Tier 1 capital of Other Financial Institutions, net of
eligible short positions (amount above 10% threshold)
Significant investments in the Additional Tier 1 capital of Other Financial Institutions (net of
eligible short positions)
Total of items included in Additional Tier 1 capital: regulatory adjustments subject to transitional
arrangements
of which: goodwill and others
of which: gain on sale on securitization transactions
of which: amount equivalent to 50% of shortfall of eligible provisions to expected losses
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
43 Additional Tier 1 capital: regulatory adjustments
Additional Tier 1 capital (AT1)
44 Additional Tier 1 capital ((D)-(E))
Tier 1 capital (T1 = CET1 + AT1)
45 Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
Tier 2 capital: instruments and provisions
(E)
(F)
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
—
—
300,000
—
17,660
698,497
698,497
—
23,477
23,477
1,039,636
—
—
—
—
—
—
—
—
—
—
25,321
860,796
860,796
—
68,648
68,648
954,766
—
—
—
—
—
—
48,032
32,021
63,453
95,180
102,270
77,045
20,034
5,191
—
150,303
889,332
131,540
102,850
28,025
665
—
194,994
759,772
(G)
8,396,570
8,111,724
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and its breakdown
Stock acquisition rights to Tier 2 instruments
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
liabilities under applicable accounting standards
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
48-49 Adjusted non-controlling interests, etc. (amount allowed to be included in group Tier 2)
47+49
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2:
instruments and provisions
of which: instruments issued by banks and their special purpose vehicles
of which: instruments issued by subsidiaries (excluding banks’ special purpose vehicles)
47
49
50 Total of general reserve for possible loan losses and eligible provisions included in Tier 2
50a
50b
of which: general reserve for possible loan losses
of which: eligible provisions
Total of items included in Tier 2 capital: instruments and provisions subject to transitional
arrangements
of which: unrealized gains on other securities after 55% discount
of which: land revaluation excess after 55% discount
51 Tier 2 capital: instruments and provisions
(H)
—
—
—
—
655,064
374,988
—
3,069
1,220,717
1,220,717
—
7,666
7,666
—
319,291
306,445
12,845
2,205,808
—
2,359
1,424,169
1,424,169
—
9,848
9,848
—
671,467
651,680
19,787
2,482,833
014_0800885852807.indd 273
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SMBC2016 Annual ReportSMBCBasel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments
54
55
Non-significant Investments in the Tier 2 capital of Other Financial Institutions, net of eligible
short positions (amount above the 10% threshold)
Significant investments in the Tier 2 capital of Other Financial Institutions (net of eligible short
positions)
Total of items included in Tier 2 capital: regulatory adjustments subject to transitional
arrangements
of which: Tier 2 and deductions under Basel II
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
—
—
75,000
50,000
50,000
75,000
51,809
51,809
126,809
(I)
95,379
95,379
145,379
(J)
2,078,998
2,337,454
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
10,475,569
10,449,179
Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
of which: intangible assets (excluding those relating to mortgage servicing rights)
of which: net defined benefit asset
of which: significant investments in Additional Tier 1 capital of Other Financial Institutions
(net of eligible short positions)
of which: significant investments in the Tier 2 capital of Other Financial Institutions (net of
eligible short positions)
60 Risk weighted assets
Capital ratio (consolidated)
58,545
24,719
15,658
83
16,156
132,839
25,478
32,903
52,936
17,835
(L)
57,558,088
58,277,062
61 Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
62 Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))
63 Total risk-weighted capital ratio (consolidated) ((K)/(L))
Regulatory adjustments
72
73
Non-significant Investments in the capital of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
Significant investments in the common stock of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
74 Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
75
Provisions included in Tier 2 capital: instruments and provisions
76 Provisions (general reserve for possible loan losses)
77 Cap on inclusion of provisions (general reserve for possible loan losses)
78
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal
ratings-based approach (prior to application of cap)
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
Capital instruments subject to transitional arrangements
82 Current cap on Additional Tier 1 instruments subject to transitional arrangements
83
Amount excluded from Additional Tier 1 due to cap (excess over cap after redemptions and
maturities)
13.04%
14.58%
18.19%
445,253
729,943
—
3,700
7,666
24,487
—
293,681
742,714
—
12.61%
13.91%
17.93%
691,075
748,706
—
6,443
9,848
22,831
—
299,355
866,500
—
84 Current cap on Tier 2 instruments subject to transitional arrangements
85 Amount excluded from Tier 2 due to cap (excess over cap after redemptions and maturities)
1,220,717
31,434
1,424,169
44,040
Items
Required capital ((L) ✕ 8%)
274
(Millions of yen)
As of March 31,2016
4,604,647
As of March 31,2015
4,662,165
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SMBC2016 Annual ReportSMBCBasel III Information
■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2015 and 2016)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Items
(Assets)
Cash and due from 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
Net defined benefit asset
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Total assets
(Liabilities)
Deposits
Negotiable certificates of deposit
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
Net defined benefit liability
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 gains or losses on hedges
Land revaluation excess
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets
(Millions of yen)
Consolidated balance sheet as
in published financial
statements
As of
March 31,
2016
As of
March 31,
2015
42,594,225
1,291,365
494,949
7,964,208
4,183,995
7,980,971
3
25,153,750
77,331,124
1,577,167
269,429
3,697,438
1,167,627
526,112
198,637
66,570
6,407,272
(496,178)
180,408,672
111,238,673
14,740,434
1,220,455
1,761,822
5,309,003
3,018,218
6,105,982
8,058,848
1,083,450
367,000
5,450,145
944,542
4,853,664
54,925
1,767
17,844
743
1,249
16,979
234
1,129
275,887
32,203
6,407,272
170,962,478
1,770,996
2,702,093
2,909,898
(210,003)
7,172,985
1,255,877
61,781
39,348
58,693
(65,290)
1,350,409
249
922,549
9,446,193
180,408,672
39,569,276
1,326,965
746,431
6,447,116
4,128,907
7,364,988
1
29,559,334
75,119,565
1,907,667
252,213
3,422,970
1,073,206
454,584
367,953
68,265
6,289,881
(540,134)
177,559,197
101,503,889
14,032,798
5,873,123
991,860
7,833,219
3,352,662
5,636,406
8,223,808
1,110,822
545,700
5,663,566
718,133
5,098,781
59,893
2,567
12,641
759
1,798
20,870
632
755
514,070
34,550
6,289,881
167,523,193
1,770,996
2,717,421
2,751,080
(210,003)
7,029,494
1,756,894
(27,049)
38,943
114,413
44,216
1,927,419
198
1,078,891
10,036,003
177,559,197
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
014_0800885852807.indd 275
Cross-reference to
Appended Table
Reference # of Basel III common
disclosure template under the
Composition of Capital Disclosure
(Basel III Template)
6-a
2-b, 6-b
6-c
2-a
3
4-a
6-d
8
4-b
4-c
1-a
1-b
1-c
1-d
5
7-a
7-b
3
275
2016/08/10 18:09:49
SMBC2016 Annual ReportSMBCBasel III Information (Appended Table)
1. Stockholders’ equity
(1) Consolidated balance sheet
Consolidated balance sheet items
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
1,770,996
1,770,996
2,702,093
2,717,421
2,909,898
2,751,080
(210,003)
(210,003)
7,172,985
7,029,494
(Millions of yen)
Remarks
Ref. No.
Including eligible Tier 1 capital instruments subject
to transitional arrangement
Including eligible Tier 1 capital instruments subject
to transitional arrangement
Eligible Tier 1 capital instruments subject to
transitional arrangement
1-a
1-b
1-c
1-d
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus related capital
surplus and retained earnings
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
7,172,985
7,029,494
4,263,087
2,909,898
—
—
4,278,414
2,751,080
—
—
Stockholders’ equity attributable to common shares
(before adjusting national specific regulatory
adjustments (earnings to be distributed))
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as equity under applicable
accounting standards and the breakdown
—
—
Stockholders’ equity attributable to preferred shares
with a loss absorbency clause upon entering into
effectively bankruptcy
2. Intangible assets
(1) Consolidated balance sheet
Consolidated balance sheet items
Intangible fixed assets
Securities
of which: goodwill attributable to equity-method investees
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Goodwill (including those equivalent)
Other intangible assets other than goodwill and mortgage servicing rights
Mortgage servicing rights
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Mortgage servicing rights that are below the thresholds for
deduction (before risk weighting)
3. Net defined benefit asset
(1) Consolidated balance sheet
Consolidated balance sheet items
Net defined benefit asset
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Net defined benefit asset
As of March
31, 2016
526,112
25,153,750
36,559
As of March
31, 2015
454,584
29,559,334
82,257
118,778
98,622
As of March
31, 2016
As of March
31, 2015
183,682
260,210
—
—
—
230,346
207,873
—
—
—
—
—
As of March
31, 2016
As of March
31, 2015
198,637
367,953
60,195
118,175
As of March
31, 2016
As of March
31, 2015
138,441
249,777
(Millions of yen)
Remarks
(Millions of yen)
Remarks
Software and other
(Millions of yen)
Remarks
Remarks
(Millions of yen)
Basel III Template
No.
15
1a
2
1c
31a
Ref. No.
2-a
2-b
Basel III Template
No.
8
9
20
24
74
Ref. No.
3
276
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SMBC2016 Annual ReportSMBCBasel III Information 4. Deferred tax assets
(1) Consolidated balance sheet
Consolidated balance sheet items
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Tax effects on other intangible assets
Tax effects on net defined benefit asset
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
66,570
275,887
32,203
118,778
60,195
68,265
514,070
34,550
98,622
118,175
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
4-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
1,545
2,620
Deferred tax assets arising from temporary differences (net of related tax
liability)
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Deferred tax assets arising from temporary differences that
are below the thresholds for deduction (before risk weighting)
3,700
6,443
—
—
—
—
3,700
6,443
5. Deferred gains or losses on derivatives under hedge accounting
(1) Consolidated balance sheet
Consolidated balance sheet items
Net deferred gains or losses on hedges
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
61,781
(27,049)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Net deferred gains or losses on hedges
63,789
(25,563)
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Excluding those items whose valuation differences
arising from hedged items are recognized as
“Accumulated other comprehensive income”
10
21
25
75
Ref. No.
5
Basel III Template
No.
11
6. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
Consolidated balance sheet items
Trading assets
Securities
Loans and bills discounted
Trading liabilities
As of March
31, 2016
As of March
31, 2015
7,980,971
7,364,988
25,153,750
77,331,124
29,559,334
75,119,565
6,105,982
5,636,406
(Millions of yen)
Remarks
Ref. No.
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including trading account securities sold and
derivatives for trading liabilities
6-a
6-b
6-c
6-d
014_0800885852807.indd 277
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SMBC2016 Annual ReportSMBCBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Investments in own capital instruments
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Reciprocal cross-holdings in the capital of banking, financial and
insurance entities
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (“Other Financial
Institutions”), net of eligible short positions, where the bank does
not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Non-significant investments in the capital of Other Financial
Institutions that are below the thresholds for deduction
(before risk weighting)
Significant investments in the capital of Other Financial Institutions,
net of eligible short positions
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Additional Tier 1 capital
Tier 2 capital
Significant investments in the common stocks of Other
Financial Institutions that are below the thresholds for
deduction (before risk weighting)
49
49
—
—
—
—
—
—
139
139
—
—
—
—
—
—
445,253
691,075
—
—
—
—
—
—
445,253
691,075
934,997
1,032,340
—
—
80,053
125,000
—
—
158,633
125,000
729,943
748,706
7. Non-controlling interests
(1) Consolidated balance sheet
Consolidated balance sheet items
Stock acquisition rights
Non-controlling interests
(2) Composition of capital
Composition of capital disclosure
Amount allowed to be included in group Common Equity Tier 1
Qualifying Additional Tier 1 instruments plus related capital surplus
issued by special purpose vehicles and other equivalent entities
Amount allowed to be included in group Additional Tier 1
Qualifying Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities
Amount allowed to be included in group Tier 2
8. Other capital instruments
(1) Consolidated balance sheet
Consolidated balance sheet items
Borrowed money
(2) Composition of capital
Composition of capital disclosure
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as liabilities under applicable
accounting standards
Directly issued qualifying Tier 2 instruments plus related capital
surplus of which: classified as liabilities under applicable accounting
standards
As of March
31, 2016
As of March
31, 2015
249
922,549
198
1,078,891
As of March
31, 2016
As of March
31, 2015
175,353
163,992
—
—
17,660
25,321
—
3,069
—
2,359
As of March
31, 2016
8,058,848
As of March
31, 2015
8,223,808
As of March
31, 2016
As of March
31, 2015
300,000
—
655,064
374,988
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
(Millions of yen)
(Millions of yen)
Remarks
Remarks
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Ref. No.
7-a
7-b
Basel III Template
No.
5
30-31ab-32
34-35
46
48-49
Ref. No.
8
Basel III Template
No.
32
46
Note:
Amounts in the “Composition of capital disclosure” are based on those before considering under transitional arrangements and includes “Amounts excluded under transitional arrange-
ments” disclosed in “Capital Structure Information” as well as amounts included as regulatory capital. In addition, items for regulatory purpose under transitional arrangement are
excluded from this table.
278
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SMBC2016 Annual ReportSMBCBasel III Information Leverage Ratio Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
■ Composition of Leverage Ratio
Corresponding line #
on Basel III disclosure
template (Table2)
Corresponding line #
on Basel III disclosure
template (Table1)
On-balance sheet exposures (1)
Item
(In million yen, %)
As of March 31,
2016
As of March 31,
2015
1a
1b
1c
1d
1
2
3
1
2
7
3
7
On-balance sheet exposures before deducting adjustment items
Total assets reported in the consolidated balance sheet
The amount of assets of subsidiaries that are not included in the scope
of the leverage ratio on a consolidated basis (-)
The amount of assets of subsidiaries that are included in the scope of
the leverage ratio on a consolidated basis (except those included in
the total assets reported in the consolidated balance sheet)
The amount of assets that are deducted from the total assets reported
in the consolidated balance sheet (except adjustment items) (-)
The amount of adjustment items pertaining to Tier 1 capital (-)
Total on-balance sheet exposures
(a)
Exposures related to derivative transactions (2)
4
5
6
7
8
9
10
11
Replacement cost associated with derivatives transactions, etc.
Add-on amount associated with derivatives transactions, etc.
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
The amount of receivables arising from providing cash margin,
provided where deducted from the consolidated balance sheet
pursuant to the operative accounting framework
The amount of deductions of receivables (out of those arising from
providing cash variation margin) (-)
The amount of client-cleared trade exposures for which a bank acting
as clearing member is not obliged to make any indemnification (-)
Adjusted effective notional amount of written credit derivatives
The amount of deductions from effective notional amount of written
credit derivatives (-)
Total exposures related to derivative transactions
(b)
4
Exposures related to repo transactions (3)
12
13
14
15
16
The amount of assets related to repo transactions, etc.
The amount of deductions from the assets above (line 12) (-)
The exposures for counterparty credit risk for repo transactions, etc.
The exposures for agent repo transaction
Total exposures related to repo transactions, etc.
5
Exposures related to off-balance sheet transactions (4)
157,139,218
180,408,672
155,497,153
177,559,197
—
—
—
—
23,269,453
22,062,043
413,963
156,725,255
340,643
155,156,510
2,318,694
3,050,084
533,429
2,208,431
3,326,000
615,854
—
—
533,429
615,854
583,300
459,631
491,723
294,754
5,492,448
5,731,400
8,459,158
—
52,367
7,193,548
—
58,999
(c)
8,511,525
7,252,547
17
18
19
Notional amount of off-balance sheet transactions
The amount of adjustments for conversion in relation to off-balance
sheet transactions (-)
Total exposures related to off-balance sheet transactions
53,385,837
51,113,302
34,955,755
34,046,090
(d)
18,430,082
17,067,211
6
Leverage ratio on a consolidated basis (5)
20
21
22
8
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio on a consolidated basis ((e)/(f))
(e)
(f)
8,396,570
189,159,312
4.43%
8,111,724
185,207,669
4.37%
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SMBC2016 Annual ReportSMBCBasel III Information Liquidity Risk Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Since March 31, 2015, the “Liquidity Coverage Ratio” (hereinafter referred to as “LCR”), the liquidity regulation under the Basel III, has been
introduced in Japan. In addition to the application of uniform international standards, SMBC calculates its consolidated LCR using the
calculation formula stipulated in the “Criteria for Evaluating the Soundness of Liquidity Status Set Forth by a Bank as a Benchmark for Judging
its Soundness of Management, Based on the Provision of Article 14-2 of the Banking Act” (Notification No. 60 issued by the Japanese Financial
Services Agency in 2014; hereinafter referred to as the “LCR Notification”). Meanwhile, SMBC discloses its liquidity risk management and
LCR in compliance with “Matters Related to the Status of the Soundness of Management Concerning Liquidity Separately Specified by the
Commissioner of the Japanese Financial Services Agency, Based on the Provision of Article 19-2, Paragraph 1, Item 5 (e) of the Ordinance for
Enforcement of the Banking Act, etc.” (Notification No. 7 issued by the Japanese Financial Services Agency in 2015).
■ Disclosure of Liquidity Risk Management
1. Liquidity Risk Management Policy and Procedures
At SMBC, liquidity risk is centrally managed by the Corporate Risk Management Department, which is operated independently of business
units engaged in market transactions. The department is responsible for the measurement of funding gaps and monitoring of the risk status
through stress tests and other means, in addition to the development and analysis of risk appetite indicators, with a view to maintaining a
stable balance between the lending and funding structure. It reports these sets of information to the Management Committee and Board of
Directors, etc. In addition, in accordance with SMFG’s “Principal Policy for Group Risk Management,” principle policies of liquidity risk
management and important risk-related matters, such as a risk tolerance, are determined by the Management Committee before they are
approved by the Board of Directors.
2. Indicators for Assessing Liquidity Risk and Other Liquidity Risk Management
(1) Risk appetite indicator
This indicator demonstrates the degree of deviance from the quantitative risks (e.g. LCR) estimated at the beginning of the fiscal year.
SMBC has set three alert levels of deviance to monitor the status of the liquidity risk it exposes.
(2) Maintaining supplementary liquidity
Supplementary liquidity is maintained by holding assets, such as U.S. government bonds, which can be immediately converted to cash in
order to smoothly raise the required funds even during market disruption, and these asset holdings are monitored regularly.
(3) Funding gap management
A funding gap is defined as the maturity mismatch between source of funds and use of funds and shows forthcoming funding
requirements. SMBC manages this funding gap properly by setting limits on the size of the gap and limiting reliance on short-term
funding. These limits are set in place on both a bank-wide basis and individual branch basis, and take into account funding status, cash
management planning, economic environments, and individual currency characteristics and other factors. Additionally, funding gap
limits are set for individual currencies if necessary. SMBC monitors the funding gap on a daily basis.
(4) Early Warning Indicator
SMBC monitors various indicators and carries out quantitative management of alert indications in order to promptly and systematically
detect liquidity risks.
(5) Stress tests
Stress tests are designed to ensure the development of a robust liquidity structure to cope with substantial cash outflows in a stress
period. The test is regularly carried out by simulating the impact triggered, for example, by deposit outflows or difficulties in money
market funding, in order to appraise and manage the amount of funding required when liquidity risk is realized.
(6) Measures against realized liquidity stress
Contingency plans are developed to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering
the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective
circumstances.
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Consolidated LCR
As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)” on the following page, the LCR has
remained stable with no significant fluctuation following the introduction of the liquidity regulation on March 31, 2015.
2. Assessment of Consolidated LCR
The LCR Notification stipulates that the minimum requirement of LCR for 2016 is set at 70.0% and from 2017 onwards, the LCR is raised
in increments of 10.0% in stages, reaching 100.0% in and after 2019 (see table below).
The minimum requirement of LCR ..............................................
60.0%
70.0%
80.0%
90.0%
2015
2016
2017
2018
2019 onwards
100.0%
Consolidated LCR of SMBC exceeds the minimum requirements of LCR for 2016 (70.0%) and for 2019 onwards (100.0%), having no cause
for concern. SMBC does not expect that the future LCR forecasts will differ significantly from the announced ratios. In addition, the actual
LCR does not differ significantly from the initial forecast.
280
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SMBC2016 Annual ReportSMBCBasel III Information
3. Composition of High-Quality Liquid Assets
The consolidated high-quality liquid assets held by SMBC that are allowed to be included in the calculation of LCR include deposits with
central banks, highly-rated bonds and cash. As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio
(Consolidated)” in the following table, the amount of such high-quality liquid assets exceed the amount of net cash outflows. Meanwhile,
currency denominations, categories and location, etc. of the high-quality liquid assets allowed to be included in the calculation have not
shown any significant changes. In addition, in respect of major currencies (those of which the aggregate amount of liabilities denominated in
a certain currency accounts for 5.0 % or more of SMBC’s total liabilities on the consolidated basis), there is no significant mismatch in
currency denomination between the total amount of the high-quality liquid assets allowed to be included in the calculation and the amount
of net cash outflows.
4. Other Information Concerning Consolidated LCR
SMBC has not applied “special provisions concerning qualifying operational deposits” prescribed in Article 29 of the LCR Notification and
“increased liquidity needs related to market valuation changes on derivative or other transactions simulated through Scenario Approach”
prescribed in Article 38 of the same Notification. Meanwhile, SMBC records “cash outflows related to small-sized consolidated subsidiaries,”
etc. under “cash outflows based on other contracts” prescribed in Article 60 of the same Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2016/1/1
To 2016/3/31)
Prior Quarter
(From 2015/10/1
To 2015/12/31)
TOTAL
UNWEIGHTED
VALUE
49,743,188
15,459,536
34,283,652
54,893,877
—
49,567,386
TOTAL
WEIGHTED
VALUE
3,892,979
463,846
3,429,132
30,435,718
—
TOTAL
UNWEIGHTED
VALUE
48,865,918
14,915,420
33,950,498
54,735,053
—
48,516,872
TOTAL
WEIGHTED
VALUE
3,843,214
447,463
3,395,751
31,350,957
—
47,937,845
23,479,686
46,982,821
23,598,726
6,956,032
6,956,032
56,794
7,752,231
7,752,231
63,200
20,185,491
6,935,130
20,605,440
6,876,173
1,843,173
582,028
17,760,290
7,164,474
59,316,445
TOTAL
UNWEIGHTED
VALUE
4,866,642
3,968,312
4,045,022
12,879,976
1,585,784
631,821
18,387,835
6,319,492
57,842,965
TOTAL
UNWEIGHTED
VALUE
3,985,540
4,130,242
3,857,502
11,973,284
1,843,173
582,028
4,509,930
4,058,041
743,378
46,122,040
TOTAL
WEIGHTED
VALUE
262,466
2,708,564
1,997,997
4,969,026
49,567,386
41,153,013
120.4%
3
1,585,784
631,821
4,658,568
3,644,803
744,453
46,522,800
TOTAL
WEIGHTED
VALUE
221,480
2,785,951
1,922,684
4,930,114
48,516,872
41,592,686
116.6%
3
The data following the introduction of the liquidity regulation on March 31, 2015 is available on SMFG’s website.
(http://www.smfg.co.jp/english/investor/financial/basel_3.html)
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SMBC2016 Annual ReportSMBCBasel III Information
Capital Ratio Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
■ Capital Structure Information (Non-consolidated Capital Ratio (International Standard))
Basel III
Template No.
Items
Common Equity Tier 1 capital: instruments and reserves
1a+2-1c-26
Directly issued qualifying common share capital plus related capital surplus and retained
earnings
1a
2
1c
26
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: cash dividends to be paid (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Valuation and translation adjustment and other disclosed reserves
Total of items included in Common Equity Tier 1 capital: instruments and reserves subject to
transitional arrangements
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
6,228,421
4,031,192
2,414,507
—
217,277
—
—
785,705
—
6,038,295
4,042,266
2,327,629
—
331,601
—
—
651,493
—
523,803
977,239
6 Common Equity Tier 1 capital: instruments and reserves
(A)
7,014,126
6,689,788
Common Equity Tier 1 capital: regulatory adjustments
8+9 Total intangible assets (excluding those relating to mortgage servicing rights)
8
9
10
of which: goodwill (including those equivalent)
of which: other intangible assets other than goodwill and mortgage servicing rights
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences (net of related tax liability)
11 Net deferred gains or losses on hedges
12 Shortfall of eligible provisions to expected losses
13 Gain on sale on securitization transactions
14 Gains and losses due to changes in own credit risk on fair valued liabilities
15 Prepaid pension cost
16 Investments in own shares (excluding those reported in the Net assets section)
17 Reciprocal cross-holdings in common equity
18
Investments in the capital of banking, financial and insurance entities that are outside the
scope of regulatory consolidation (“Other Financial Institutions”), net of eligible short positions,
where the bank does not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
19
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
27
of which: significant investments in the common stock of Other Financial Institutions, net of
eligible short positions
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1
and Tier 2 to cover deductions
91,707
—
91,707
61,138
—
61,138
54,502
—
54,502
81,753
—
81,753
—
—
—
—
30,158
43,929
30,051
—
116,591
—
—
20,105
29,286
20,034
—
77,727
—
—
(49,439)
25,304
18,683
—
79,484
—
—
(74,159)
37,957
28,025
—
119,226
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,040
2,040
3,060
3,060
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
312,437
130,575
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
6,701,689
6,559,212
282
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SMBC2016 Annual ReportSMBCBasel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments
31a
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as equity under applicable accounting standards and the breakdown
31b Stock acquisition rights to Additional Tier 1 instruments
30
32
33+35
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which:
classified as liabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose
vehicles and other equivalent entities
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional
Tier 1 capital: instruments
Total of items included in Additional Tier 1 capital: items subject to transitional arrangements
of which: foreign currency translation adjustments
36 Additional Tier 1 capital: instruments
Additional Tier 1 capital: regulatory adjustments
37 Investments in own Additional Tier 1 instruments
38 Reciprocal cross-holdings in Additional Tier 1 instruments
(D)
39
40
Non-significant Investments in the Additional Tier 1 capital of Other Financial Institutions, net of
eligible short positions (amount above 10% threshold)
Significant investments in the Additional Tier 1 capital of Other Financial Institutions (net of
eligible short positions)
Total of items included in Additional Tier 1 capital: regulatory adjustments subject to transitional
arrangements
of which: gain on sale on securitization transactions
of which: amount equivalent to 50% of shortfall of eligible provisions to expected losses
42
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
43 Additional Tier 1 capital: regulatory adjustments
Additional Tier 1 capital (AT1)
44 Additional Tier 1 capital ((D)-(E))
Tier 1 capital (T1 = CET1 + AT1)
45 Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))
Tier 2 capital: instruments and provisions
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
—
—
300,000
—
698,497
(268)
(268)
998,229
—
—
—
—
860,796
(210)
(210)
860,586
—
—
—
—
—
—
—
—
—
—
—
—
45,756
30,504
63,692
95,538
34,677
20,034
14,643
—
80,434
917,795
47,003
28,025
18,978
—
110,695
749,890
(E)
(F)
(G)
7,619,484
7,309,102
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and its breakdown
Stock acquisition rights to Tier 2 instruments
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
liabilities under applicable accounting standards
Qualifying Tier 2 instruments plus related capital surplus issued by special purpose vehicles
and other equivalent entities
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2:
instruments and provisions
46
47+49
50 Total of general reserve for possible loan losses and eligible provisions included in Tier 2
50a
50b
of which: general reserve for possible loan losses
of which: eligible provisions
—
—
—
—
656,085
376,262
—
—
1,210,344
1,412,068
—
—
—
Total of items included in Tier 2 capital: instruments and provisions subject to transitional
arrangements
of which: unrealized gains on other securities after 55% discount
of which: land revaluation excess after 55% discount
51 Tier 2 capital: instruments and provisions
310,455
299,682
10,772
2,176,885
(H)
014_0800885852807.indd 283
—
—
—
654,063
637,394
16,668
2,442,394
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SMBC2016 Annual ReportSMBCBasel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments
54
55
Non-significant Investments in the Tier 2 capital of Other Financial Institutions, net of eligible
short positions (amount above the 10% threshold)
Significant investments in the Tier 2 capital of Other Financial Institutions (net of eligible short
positions)
Total of items included in Tier 2 capital: regulatory adjustments subject to transitional
arrangements
of which: Tier 2 and deductions under Basel II
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
(Millions of yen, except percentages)
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
As of March 31,2015
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
—
—
75,000
50,000
50,000
75,000
14,643
14,643
89,643
(I)
18,978
18,978
68,978
(J)
2,087,242
2,373,415
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
9,706,726
9,682,518
Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
of which: intangible assets (excluding those relating to mortgage servicing rights)
of which: prepaid pension cost
of which: significant investments in Additional Tier 1 capital of Other Financial Institutions (net
of eligible short positions)
60 Risk weighted assets
Capital ratio
61 Common Equity Tier 1 risk-weighted capital ratio ((C)/(L))
62 Tier 1 risk-weighted capital ratio ((G)/(L))
63 Total risk-weighted capital ratio ((K)/(L))
Regulatory adjustments
72
73
Non-significant Investments in the capital of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
Significant investments in the common stock of Other Financial Institutions that are below the
thresholds for deduction (before risk weighting)
74 Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)
Deferred tax assets arising from temporary differences that are below the thresholds for
deduction (before risk weighting)
75
Provisions included in Tier 2 capital: instruments and provisions
76 Provisions (general reserve for possible loan losses)
77 Cap on inclusion of provisions (general reserve for possible loan losses)
78
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal
ratings-based approach (prior to application of cap)
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
Capital instruments subject to transitional arrangements
82 Current cap on Additional Tier 1 instruments subject to transitional arrangements
83
Amount excluded from Additional Tier 1 due to cap (excess over cap after redemptions and
maturities)
140,505
16,700
21,232
86,416
252,584
17,689
25,797
183,151
(L)
49,829,205
51,232,836
13.44%
15.29%
19.47%
336,156
657,720
—
—
—
2,295
—
269,384
742,414
—
12.80%
14.26%
18.89%
524,368
734,569
—
—
—
2,386
—
278,163
866,150
—
84 Current cap on Tier 2 instruments subject to transitional arrangements
85 Amount excluded from Tier 2 due to cap (excess over cap after redemptions and maturities)
1,210,344
42,804
1,412,068
60,062
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2016
3,986,336
As of March 31,2015
4,098,626
284
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SMBC2016 Annual ReportSMBCBasel III Information
■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2015 and 2016)
Sumitomo Mitsui Banking Corporation
Items
(Assets)
Cash and due from banks
Call loans
Receivables under resale agreements
Receivables under securities borrowing transactions
Monetary claims bought
Trading assets
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses
Reserve for possible losses on investments
Total assets
(Liabilities)
Deposits
Negotiable certificates of deposit
Call money
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
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 or losses on hedges
Land revaluation excess
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets
(Millions of yen)
Balance sheet as
in published financial
statements
Cross-reference to
Appended Table
Reference # of Basel III common
disclosure template under the
Composition of Capital Disclosure
(Basel III Template)
As of
March 31,
2016
As of
March 31,
2015
38,862,725
899,594
359,318
2,798,855
950,106
3,511,957
25,602,156
69,276,735
1,558,252
2,131,869
831,326
220,174
279,917
6,737,089
(357,186)
(21,465)
153,641,430
98,839,722
14,428,338
1,107,825
496,236
1,374,280
1,980,153
2,987,815
7,868,311
1,131,796
—
4,775,072
921,320
2,924,495
13,869
566
1,086
15,374
249,427
31,837
6,737,089
145,884,620
1,770,996
2,470,198
2,414,989
(210,003)
6,446,181
1,233,910
48,706
28,011
1,310,628
7,756,810
153,641,430
37,008,665
539,916
417,473
2,012,795
1,047,498
3,627,862
29,985,267
68,274,308
1,798,843
2,460,344
812,383
200,966
293,082
6,721,131
(394,140)
(82,321)
154,724,079
91,337,714
14,022,064
4,579,940
350,010
5,113,896
2,551,652
2,754,739
8,096,070
1,172,969
25,000
5,095,577
717,529
3,672,970
13,738
644
1,119
19,589
444,863
34,141
6,721,131
146,725,363
1,770,996
2,481,273
2,327,186
(210,003)
6,369,453
1,726,573
(124,906)
27,593
1,629,261
7,998,715
154,724,079
6-a
6-c
2
3
6-d
4-a
4-b
1-a
1-b
1-d
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SMBC2016 Annual ReportSMBCBasel III Information Note: The non-consolidated capital ratio is calculated based on the consolidated financial statements which include special purpose vehicles and other equivalent entities in accordance
with Article 15 of “Criteria for Judging Whether A Financial Institution’s Capital Is Sufficient in Light of the Assets Held, etc. under the Provision of Article 14-2 of the Banking
Act” (Notification No. 19 of 2006, the Financial Services Agency). The above capital ratio is calculated using the following balance sheet accounts reported on the consolidated
financial statements.
Balance sheet account
Securities
Borrowed money
Retained earnings
Net deferred gains or losses on hedges
Total valuation and translation adjustments
(Millions of yen)
Amount reported on the
consolidated financial statements
Cross-reference to
Appended Table
25,588,578
7,162,861
2,414,507
48,257
1,309,508
29,971,688
7,226,652
2,327,629
(125,084)
1,628,732
6-b
7
1-c
5
Reference # of Basel III common
disclosure template under the
Composition of Capital Disclosure
(Basel III Template)
3
286
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SMBC2016 Annual ReportSMBCBasel III Information (Appended Table)
1. Stockholders’ equity
(1) Balance sheet
Balance sheet items
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders’ equity
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
1,770,996
1,770,996
2,470,198
2,481,273
2,414,507
2,327,629
(210,003)
(210,003)
6,445,699
6,369,896
(Millions of yen)
Remarks
Ref. No.
Including eligible Tier 1 capital instruments subject
to transitional arrangement
Including eligible Tier 1 capital instruments subject
to transitional arrangement
Eligible Tier 1 capital instruments subject to
transitional arrangement
1-a
1-b
1-c
1-d
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus related capital
surplus and retained earnings
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
6,445,699
6,369,896
4,031,192
2,414,507
—
—
4,042,266
2,327,629
—
—
Stockholders’ equity attributable to common shares
(before adjusting national specific regulatory
adjustments (earnings to be distributed))
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as equity under applicable
accounting standards and the breakdown
—
—
Stockholders’ equity attributable to preferred shares
with a loss absorbency clause upon entering into
effectively bankruptcy
2. Intangible assets
(1) Balance sheet
Balance sheet items
Intangible fixed assets
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Goodwill (including those equivalent)
Other intangible assets other than goodwill and mortgage servicing rights
Mortgage servicing rights
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Mortgage servicing rights that are below the thresholds for
deduction (before risk weighting)
3. Prepaid pension cost
(1) Balance sheet
Balance sheet items
Prepaid pension cost
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Prepaid pension cost
As of March
31, 2016
As of March
31, 2015
220,174
200,966
67,329
64,711
As of March
31, 2016
As of March
31, 2015
—
152,845
—
—
—
—
136,255
—
—
—
—
—
As of March
31, 2016
As of March
31, 2015
279,917
293,082
85,598
94,372
As of March
31, 2016
As of March
31, 2015
194,318
198,710
Software and other
Remarks
Remarks
Remarks
Remarks
(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)
Basel III Template
No.
15
1a
2
1c
31a
Ref. No.
2
Basel III Template
No.
8
9
20
24
74
Ref. No.
3
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SMBC2016 Annual ReportSMBCBasel III Information 4. Deferred tax assets
(1) Balance sheet
Balance sheet items
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Tax effects on other intangible assets
Tax effects on prepaid pension cost
(2) Composition of capital
As of March
31, 2016
As of March
31, 2015
249,427
31,837
444,863
34,141
67,329
85,598
64,711
94,372
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
Deferred tax assets arising from temporary differences (net of related tax
liability)
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Deferred tax assets arising from temporary differences that
are below the thresholds for deduction (before risk weighting)
—
—
—
—
—
—
—
—
—
—
5. Deferred gains or losses on derivatives under hedge accounting
(1) Balance sheet
Balance sheet items
Net deferred gains or losses on hedges
(2) Composition of capital
As of March
31, 2016
48,257
As of March
31, 2015
(125,084)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Net deferred gains or losses on hedges
50,264
(123,598)
This item does not agree with the amount reported
on the balance sheet due to offsetting of assets and
liabilities.
This item does not agree with the amount reported
on the balance sheet due to offsetting of assets and
liabilities.
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Excluding those items whose valuation differences
arising from hedged items are recognized as “Total
valuation and translation adjustments”
10
21
25
75
Ref. No.
5
Basel III Template
No.
11
6. Items associated with investments in the capital of financial institutions
(1) Balance sheet
Balance sheet items
Trading assets
Securities
Loans and bills discounted
Trading liabilities
As of March
31, 2016
As of March
31, 2015
3,511,957
3,627,862
25,588,578
69,276,735
29,971,688
68,274,308
2,987,815
2,754,739
(Millions of yen)
Remarks
Ref. No.
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including trading account securities sold and
derivatives for trading liabilities
6-a
6-b
6-c
6-d
288
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SMBC2016 Annual ReportSMBCBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2016
As of March
31, 2015
Remarks
Basel III Template
No.
Investments in own capital instruments
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Reciprocal cross-holdings in the capital of banking, financial and
insurance entities
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (“Other Financial
Institutions”), net of eligible short positions, where the bank does
not own more than 10% of the issued share capital (“Non-significant
Investment”) (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital
Non-significant investments in the capital of Other Financial
Institutions that are below the thresholds for deduction
(before risk weighting)
Significant investments in the capital of Other Financial Institutions,
net of eligible short positions
Amount exceeding the 10% threshold on specified items
Amount exceeding the 15% threshold on specified items
Additional Tier 1 capital
Tier 2 capital
Significant investments in the common stocks of Other
Financial Institutions that are below the thresholds for
deduction (before risk weighting)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
336,156
524,368
—
—
—
—
—
—
336,156
524,368
858,981
1,023,901
—
—
76,261
125,000
5,101
—
159,230
125,000
657,720
734,569
7. Other capital instruments
(1) Balance sheet
Balance sheet items
Borrowed money
(2) Composition of capital
Composition of capital disclosure
Directly issued qualifying Additional Tier 1 instruments plus related
capital surplus of which: classified as liabilities under applicable
accounting standards
Directly issued qualifying Tier 2 instruments plus related capital
surplus of which: classified as liabilities under applicable accounting
standards
As of March
31, 2016
7,162,861
As of March
31, 2015
7,226,652
As of March
31, 2016
As of March
31, 2015
300,000
—
656,085
376,262
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Ref. No.
7
Basel III Template
No.
32
46
Note:
Amounts in the “Composition of capital disclosure” are based on those before considering under transitional arrangements and includes “Amounts excluded under transitional arrange-
ments” disclosed in “Capital Structure Information” as well as amounts included as regulatory capital. In addition, items for regulatory purpose under transitional arrangement are
excluded from this table.
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SMBC2016 Annual ReportSMBCBasel III Information Liquidity Risk Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Since March 31, 2015, the “Liquidity Coverage Ratio” (hereinafter referred to as “LCR”), the liquidity regulation under the Basel III, has been
introduced in Japan. In addition to the application of uniform international standards, SMBC calculates its non-consolidated LCR using the
calculation formula stipulated in the “Criteria for Evaluating the Soundness of Liquidity Status Set Forth by a Bank as a Benchmark for Judging
its Soundness of Management, Based on the Provision of Article 14-2 of the Banking Act” (Notification No. 60 issued by the Japanese Financial
Services Agency in 2014; hereinafter referred to as the “LCR Notification”). Meanwhile, SMBC discloses its liquidity risk management and
LCR in compliance with “Matters Related to the Status of the Soundness of Management Concerning Liquidity Separately Specified by the
Commissioner of the Japanese Financial Services Agency, Based on the Provision of Article 19-2, Paragraph 1, Item 5 (e) of the Ordinance for
Enforcement of the Banking Act, etc.” (Notification No. 7 issued by the Japanese Financial Services Agency in 2015).
■ Disclosure of Liquidity Risk Management
1. Liquidity Risk Management Policy and Procedures
At SMBC, liquidity risk is centrally managed by the Corporate Risk Management Department, which is operated independently of business
units engaged in market transactions. The department is responsible for the measurement of funding gaps and monitoring of the risk status
through stress tests and other means, in addition to the development and analysis of risk appetite indicators, with a view to maintaining a
stable balance between the lending and funding structure. It reports these sets of information to the Management Committee and Board of
Directors, etc. In addition, in accordance with SMFG’s “Principal Policy for Group Risk Management,” principle policies of liquidity risk
management and important risk-related matters, such as a risk tolerance, are determined by the Management Committee before they are
approved by the Board of Directors. Furthermore, SMBC holds ALM Committee on a monthly basis to report on the compliance status of
the liquidity risk tolerance and deliberate on the ALM management policy.
2. Indicators for Assessing Liquidity Risk and Other Liquidity Risk Management
(1) Risk appetite indicator
This indicator demonstrates the degree of deviance from the quantitative risks (e.g. LCR) estimated at the beginning of the fiscal year.
SMBC has set three alert levels of deviance to monitor the status of the liquidity risk it exposes.
(2) Maintaining supplementary liquidity
Supplementary liquidity is maintained by holding assets, such as U.S. government bonds, which can be immediately converted to cash in
order to smoothly raise the required funds even during market disruption, and these asset holdings are monitored regularly.
(3) Funding gap management
A funding gap is defined as the maturity mismatch between source of funds and use of funds and shows forthcoming funding
requirements. SMBC manages this funding gap properly by setting limits on the size of the gap and limiting reliance on short-term
funding. These limits are set in place on both a bank-wide basis and individual branch basis, and take into account funding status, cash
management planning, economic environments, and individual currency characteristics and other factors. Additionally, funding gap
limits are set for individual currencies if necessary. SMBC monitors the funding gap on a daily basis.
(4) Early Warning Indicator
SMBC monitors various indicators and carries out quantitative management of alert indications in order to promptly and systematically
detect liquidity risks.
(5) Stress tests
Stress tests are designed to ensure the development of a robust liquidity structure to cope with substantial cash outflows in a stress
period. The test is regularly carried out by simulating the impact triggered, for example, by deposit outflows or difficulties in money
market funding, in order to appraise and manage the amount of funding required when liquidity risk is realized.
(6) Measures against realized liquidity stress
Contingency plans are developed to respond to the liquidity risk when being realized, by creating detailed action plans such as lowering
the upper limit for the funding gap, depending on the existing situation (i.e. normal, concerned, or critical) and the respective
circumstances.
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Non-consolidated LCR
As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio (Non-Consolidated)” on the following page, the
LCR has remained stable with no significant fluctuation following the introduction of the liquidity regulation on March 31, 2015.
2. Assessment of Non-consolidated LCR
The LCR Notification stipulates that the minimum requirement of LCR for 2016 is set at 70.0% and from 2017 onwards, the LCR is raised
in increments of 10.0% in stages, reaching 100.0% in and after 2019 (see table below).
The minimum requirement of LCR ..............................................
60.0%
70.0%
80.0%
90.0%
2015
2016
2017
2018
2019 onwards
100.0%
Non-consolidated LCR of SMBC exceeds the minimum requirements of LCR for 2016 (70.0%) and for 2019 onwards (100.0%), having no
cause for concern. SMBC does not expect that the future LCR forecasts will differ significantly from the announced ratios. In addition, the
actual LCR does not differ significantly from the initial forecast.
290
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SMBC2016 Annual ReportSMBCBasel III Information
3. Composition of High-Quality Liquid Assets
The non-consolidated high-quality liquid assets held by SMBC that are allowed to be included in the calculation of LCR include deposits
with central banks, highly-rated bonds and cash. As described in “Disclosure of Quantitative Information about Liquidity Coverage Ratio
(Non-Consolidated)” in the following table, the amount of such high-quality liquid assets exceed the amount of net cash outflows.
Meanwhile, currency denominations, categories and location, etc. of the high-quality liquid assets allowed to be included in the calculation
have not shown any significant changes. In addition, in respect of major currencies (those of which the aggregate amount of liabilities
denominated in a certain currency accounts for 5.0 % or more of SMBC’s total liabilities on the non-consolidated basis), there is no
significant mismatch in currency denomination between the total amount of the high-quality liquid assets allowed to be included in the
calculation and the amount of net cash outflows.
4. Other Information Concerning Non-consolidated LCR
SMBC has not applied “special provisions concerning qualifying operational deposits” prescribed in Article 29 of the LCR Notification and
“increased liquidity needs related to market valuation changes on derivative or other transactions simulated through Scenario Approach”
prescribed in Article 38 of the same Notification. Meanwhile, SMBC records “due to trust account,” etc. under “cash outflows based on other
contracts” prescribed in Article 60 of the same Notification.
■ Disclosure of Quantitative Information about Liquidity Coverage Ratio (Non-Consolidated)
Item
High-Quality Liquid Assets (1)
1 Total high-quality liquid assets (HQLA)
Cash Outflows (2)
of which, Stable deposits
of which, Less stable deposits
2 Cash outflows related to unsecured retail funding
3
4
5 Cash outflows related to unsecured wholesale funding
6
7
of which, Qualifying operational deposits
of which, Cash outflows related to unsecured wholesale funding
other than qualifying operational deposits and debt securities
of which, Debt securities
8
9 Cash outflows related to secured funding, etc.
10
Cash outflows related to derivative transactions, etc. funding
programs, credit and liquidity facilities
of which, Cash outflows related to derivative transactions, etc.
of which, Cash outflows related to funding programs
of which, Cash outflows related to credit and liquidity facilities
11
12
13
14 Cash outflows related to contractual funding obligations, etc.
15 Cash outflows related to contingencies
16 Total cash outflows
Cash Inflows (3)
17 Cash inflows related to secured lending, etc.
18 Cash inflows related to collection of loans, etc.
19 Other cash inflows
20 Total cash inflows
Non-Consolidated Liquidity Coverage Ratio (4)
21 Total HQLA allowed to be included in the calculation
22 Net cash outflows
23 Non-consolidated liquidity coverage ratio (LCR)
24 The number of data used to calculate the average value
(In million yen, %, the number of data)
Current Quarter
(From 2016/1/1
To 2016/3/31)
Prior Quarter
(From 2015/10/1
To 2015/12/31)
TOTAL
UNWEIGHTED
VALUE
42,308,517
13,519,383
28,789,133
51,050,633
—
43,742,724
TOTAL
WEIGHTED
VALUE
3,284,834
405,581
2,879,253
28,598,144
—
TOTAL
UNWEIGHTED
VALUE
42,163,262
13,471,285
28,691,978
50,823,997
—
42,471,573
TOTAL
WEIGHTED
VALUE
3,273,642
404,139
2,869,503
29,507,820
—
44,520,049
22,067,560
43,657,242
22,341,065
6,530,584
6,530,584
38,136
7,166,755
7,166,755
55,817
18,357,313
6,076,970
18,931,915
6,146,168
1,096,661
582,028
16,678,625
4,272,403
57,729,061
TOTAL
UNWEIGHTED
VALUE
1,378,581
4,406,020
2,477,219
8,261,821
933,343
631,821
17,366,751
3,246,393
56,243,348
TOTAL
UNWEIGHTED
VALUE
960,237
4,609,058
2,521,906
8,091,200
1,096,661
582,028
4,398,281
2,205,538
708,821
40,912,443
TOTAL
WEIGHTED
VALUE
255,452
3,376,101
1,650,840
5,282,393
43,742,724
35,630,050
122.7%
3
933,343
631,821
4,581,004
1,955,181
711,567
41,650,195
TOTAL
WEIGHTED
VALUE
220,347
3,484,455
1,911,910
5,616,713
42,471,573
36,033,482
117.8%
3
The data following the introduction of the liquidity regulation on March 31, 2015 is available on SMFG’s website.
(http://www.smfg.co.jp/english/investor/financial/basel_3.html)
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SMBC2016 Annual ReportSMBCBasel III Information
Glossary
ABL
Abbreviation for Asset Based Lending of having movable assets as col-
lateral such as accounts receivable and/or inventory.
Advanced Measurement Approach (AMA)
Based on the operational risk measurement methods used in the internal
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%.
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.
Calculation of credit risk-weighted assets under Article 145 of the
Notification
Method used for calculating the credit risk-weighted assets for the fund
exposure, etc. There is a method of making the total credit risk-weighted
asset of individual underlying asset of funds, etc. as the relevant expo-
sure of the credit risk-weighted asset; or a method of applying the risk
weight determined based on the formation of underlying assets to the
relevant exposure.
Capital adequacy ratio notification (“the Notification”)
Administrative action or written ordinance by which the Financial
Services Agency officially informs Japanese banks of regulations regard-
ing capital adequacy ratio.
CCF
Abbreviation for Credit Conversion Factor
Ratio required for converting off-balance sheet items such as guarantees
or derivatives into on-balance sheet credit exposure equivalents.
CCP-related exposure
Exposure to a central counterparty (CCP) that interposes itself between
counterparties to contracts traded in one or more financial markets,
becoming the buyer to every seller and the seller to every buyer and
thereby ensuring the future performance of open contracts.
CDS
Abbreviation for Credit Default Swap
Derivative transactions which transfer the credit risk.
High-quality liquid assets (HQLA)
Assets that can be converted into cash without significant loss of value
under stress events, and for which there is no impediment to conversion
into cash.
Historical simulation method
Method of simulating future fluctuations without the use of random num-
bers, by using historical data for risk factors.
Internal models approach
Methods of measuring market risk equivalent amount as the value at risk
(VaR) calculated with models determined by each bank.
Internal models method
One of the methods of market-based approach using the VaR model
to calculate the loss for shares held by the bank applying the Internal
Ratings-Based Approach, and dividing such loss amount by 8% to
obtain the credit risk-weighted asset of the equity exposure.
The Internal Ratings-Based (IRB) Approach
A method of calculating the risk asset by applying PD (Probability of
Default) estimated internally by financial institution which conducts
sophisticated risk management. There are two methods to calculate
exposures to corporate client, etc.: the Advanced Internal Ratings-
Based (AIRB) Approach and the Foundation Internal Ratings-Based
(FIRB) Approach. The former uses self-estimated LGD and EAD values,
while the latter uses LGD and EAD values designated by the authorities.
LCR Notification
Administrative action and written ordinance for official notification to the
general public of regulations concerning LCR of financial institutions in
Japan which are decided by the Japanese Financial Services Agency
based on the Basel Agreement.
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.
Liquidity Coverage Ratio (LCR)
Indicator of liquidity regulations under the Basel III which has been ap-
plied in stages starting from March 31, 2015.
LCR regulations require banks to hold high-quality liquid assets more
than a certain amount in order to cover total cash outflows over a 30-
day period under stress events.
Credit Risk Mitigation (CRM) Techniques
Method of reducing credit risk by guarantees, collateral and purchase of
credit derivatives, etc.
Market-based approach
Method of calculating the risk assets of equity exposures, etc., by using
the simple risk weight method or internal model method.
Credit risk-weighted assets
Total assets (lending exposures, including credit equivalent amount of
off-balance sheet transactions, etc.) which is reevaluated according to
the level of credit risk.
Current exposure method
One of the methods for calculating the credit exposure equivalents of
derivative transactions, etc. Method of calculating the equivalents by
adding the amount (multiplying the notional amount by certain rate, and
equivalent to the future exposure fluctuation amount) to the mark-to-
market replacement cost calculated by evaluating the market price of
the transaction.
CVA (credit value adjustment) amount
Capital charges for market-price fluctuation of derivatives transaction
due to deteriorated creditworthiness of a counterparty.
EL
Abbreviation for Expected Loss
Average loss expected to occur over the coming one year.
Market risk equivalent amount
Pursuant to the Basel Capital Accord, the required capital amount im-
posed on the market-related risk calculated for the four risk categories of
mainly the trading book: interest rates, stocks, foreign exchange and
commodities.
Net cash outflows
Amount obtained after subtracting the amount of cash inflows from the
amount of cash outflows under stress events.
Object finance
For providing credit for purchasing ships or aircrafts, the only source of
repayments for the financing should be profits generated from the said
tangible assets; and the said tangible assets serve as collaterals, and
having an appreciable extent of control over the said tangible assets and
profits generated from the said tangible assets.
Operational risk equivalent amount
Operational risk capital requirements under the Basel Capital Accord.
292
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SMFG2016 Annual ReportBasel III Information Originator
The term “originator” is used in the case that SMFG is directly or indi-
rectly involved in the formation of underlying assets for securitization
transactions when SMFG has the securitization exposure; or the cases
of providing the back-up line for ABCP issued by the securitization
conduit for the purpose of obtaining exposure from the third party, or
providing ABL to the securitization conduit (as sponsor).
Small-sized consolidated subsidiaries
Small-sized consolidated subsidiaries that have extremely small impact
on the level of consolidated LCR.
Specialized Lending (SL)
General term used for project finance, object finance, commodity
finance and lending for commercial real estate.
The Standardized Approach (SA)
Method of calculating risk-weighted assets by multiplying each obligor
classification (corporation, financial institution, country, retail, etc.) by the
risk-weight designated by the authorities.
Standardized method
Method of calculating market risk using formula determined by the
Financial Services Agency.
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
certain probability.
PD
Abbreviation for Probability of Default
Probability of becoming default by obligor during one year.
Phased rollout
Under the Basel Capital Accord (credit risk, operational risk), it is a tran-
sition made by certain group companies planning to apply the Internal
Ratings-Based Approach or the Advanced Measurement Approach after
the implementation of such methods on consolidated-basis.
Project finance
Out of credit provided for specified businesses such as electric power
plants and transportation infrastructure, the only source of repayments
is profits generated from the said businesses, and the collateral is tangi-
ble assets of the said businesses, and having an appreciable extent of
control over the said tangible assets and profits generated from the said
tangible assets.
Qualifying Revolving Retail Exposures (QRRE)
Exposure which may fluctuate up to the upper limit set forth by an
agreement according to the individual’s voluntary decision, such as card
loan and credit card, etc., and the upper limit of the exposure without
any collateral is 10 million yen or less.
Resecuritization transaction
Out of securitization transactions, it is a transaction with securitiza-
tion exposure for part of or entire underlying assets. However, in the
case that all of underlying assets is the single securitization exposure
and the transaction’s risk characteristics are substantively unchanged
prior to or after the securitization, the transaction is excluded from the
resecuritization transactions.
Risk capital
The amount of required capital, which is statistically calculated from
the historical market fluctuations, default rates, etc., to cover an
unexpected 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 weight
Indicator which indicates the extent of credit risk determined by the
types of assets (claims) owned. Risk weight becomes higher for assets
with high risk of default.
Securitization transaction
It is a transaction which stratifies the credit risk for the underlying assets
into more than two exposures of senior/subordinated structure and has
the quality of transferring part of or entire exposure to the third party.
Servicer risk
The risk of becoming unable to claim for the collectives, in cases of
which bankruptcy of the supplier/servicer occurs prior to collecting
receivables, in securitization and purchased claims transactions.
Simple risk weight method
One of market-based approaches for calculating the risk-weighted asset
amount for the equity exposure, etc. by multiplying the listed shares and
unlisted shares with the risk weights of 300% and 400%, respectively.
Slotting criteria
For risk-weighted asset calculation under the Internal Ratings-Based
(IRB) Approach, it is a method of mapping the credit rating to the
risk-weight in 5 levels set forth by the Financial Services Agency for
Specialised Lending.
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SMFG2016 Annual ReportBasel III Information Compensation
Sumitomo Mitsui Financial Group (SMFG)
■ Compensation Framework of SMFG and Its Group Companies
1. Scope of Officers, Employees and Others
The scope of officers, employees and others whose compensation is subject to disclosure under the revised Cabinet Office on Disclosure of
Corporate Affairs, etc. and other ordinances are as described below.
(1) Scope of Officers
Officers subject to compensation disclosure are directors and corporate auditors of SMFG (excluding outside directors and corporate
auditors).
(2) Scope of Employees and Others
Employees and others subject to compensation disclosure are employees of SMFG and officers and employees of its major consolidated
subsidiaries who are highly compensated and have a material influence on the business management or the assets of SMFG and its major
consolidated subsidiaries.
a) Scope of major consolidated subsidiaries
A major consolidated subsidiary is a consolidated subsidiary of SMFG with total assets accounting for more than 2% of the total
consolidated assets of SMFG and has a material influence on the management of SMFG and its group companies. Specifically, they are
Sumitomo Mitsui Banking Corporation, SMBC Nikko Securities Inc., Kansai Urban Banking Corporation, Sumitomo Mitsui Finance
and Leasing Company, Limited and overseas subsidiaries such as Sumitomo Mitsui Banking Corporation Europe Limited and
Sumitomo Mitsui Banking Corporation (China) Limited.
b) Scope of highly compensated persons
A highly compensated person is an individual whose compensation paid by SMFG or its major subsidiaries is equal to or more than
the base amount. The base amount of SMFG is set at ¥60 million which is based on the average amount of compensation paid to the
officers of SMFG and SMBC (excluding officers appointed or retired during the fiscal year in question) over the last three fiscal years
(hereinafter “executive compensation amount”) and is applied to all group companies. This is because many of the officers of SMFG
also serve as officers of SMBC, and their executive compensation amount is determined according to their contribution to the group
as a whole. With respect to lump-sum retirement payment, the executive compensation amount for the fiscal year in question is “(his/
her executive compensation amount – lump-sum retirement payment) + (lump-sum retirement payment/years of service)” and the
executive compensation amount calculated using this formula is compared to the base amount.
c) Material influence on the business management or assets of SMFG and its major consolidated subsidiaries
A person has a material influence on the business management or assets of SMFG and its major consolidated subsidiaries if his/her
regular transactions or regular matters managed by him/her have a substantial impact on the business management of SMFG and its
group companies, or losses incurred through such actions have a significant impact on the financial situation of SMFG and its group
companies. Specifically, persons having such influence are directors, corporate auditors and corporate officers of SMFG and its major
consolidated subsidiaries, both domestic and overseas.
2. Determination of Compensation
(1) For Officers
The compensation committee of SMFG, a majority of which is comprised of outside directors, deliberates on the compensation structure
and the amount and type of compensation paid to directors and corporate officers of SMFG and SMBC, independent from the influence
of business units of SMBC. The committee deliberates on the amount and type of compensation paid to directors and corporate officers
within the maximum total amount of compensation approved at an ordinary general meeting of shareholders. The amount and type of
compensation paid to corporate auditors is determined through discussions among the corporate auditors, within the maximum total
amount of compensation approved at an ordinary general meeting of shareholders, in accordance with the provisions of Article 387 (2) of
the Companies Act.
(2) For Employees and Others
The amount and type of compensation paid to the employees of SMFG and SMBC and the officers and employees of major consolidated
subsidiaries are determined and paid according to the compensation policies established by the boards of directors of SMFG and its
major consolidated subsidiaries. Compensation systems based on the compensation policies are designed and documented by the HR
departments of respective companies, independent from the influence of business units. The compensation policies of major consolidated
subsidiaries are regularly reported to the HR department of SMFG for review. The amount and type of compensation for overseas officers
and employees is determined and paid under the compensation system established by the relevant office or subsidiary in accordance with
local laws, regulations and employment practices.
(3) Total Amount of Compensation Paid to Compensation Committee Members and Number of Compensation Committee
Meetings Held
Compensation Committee (SMFG) �����������������������������������������������������������������������������������������������
Compensation Committee (SMBC Nikko Securities Inc�) �������������������������������������������������������������
Number of Meetings Held
(April 1, 2015 to March 31, 2016)
2
1
Note: The total amount of compensation is not provided because the portion of the compensation paid to a committee member for services rendered as a committee member
cannot be calculated as the amount of compensation paid is based on the committee member’s position in the company.
294
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SMFG2016 Annual Report ■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
(1) For Officers
SMFG has designed its compensation system for officers in accordance with its management plan based on its vision for the next decade
of becoming a global financial group that, by earning the highest trust of our customers, leads the growth of Japan and the Asian region
by enhancing its corporate value over the medium to long term. Specifically, the compensation paid to officers consists of:
• base salary;
• bonuses; and
• stock options
The base salary is determined based on job responsibilities, business performance and other factors, and bonuses are determined based
on the assessment of business results for the fiscal year and the performance status of job responsibilities in the short term as well as the
medium to long term for individual officers. Stock options are granted to officers (excluding outside directors and corporate auditors)
according to their positions, subject to an exercise period, to foster the creation of long-term corporate value.
The amount and type of compensation for each fiscal year, which is set within the maximum total amount of compensation approved
at an ordinary general meeting of shareholders, are examined by a third party for appropriateness; deliberated by the compensation
committee chaired by an outside director; and submitted to the board of directors for approval. In addition, the amount and type of
compensation to corporate auditors are determined through discussions among the corporate auditors, including outside corporate audi-
tors, within the maximum total amount of compensation approved at an ordinary general meeting of shareholders.
(2) For Employees and Others
SMFG and its major consolidated subsidiaries pay compensation to domestic employees and others consisting of:
• base salary;
• bonuses and other benefits
In order to link the business philosophy and strategy of the company to the roles and responsibilities of the employees and others, SMFG
and its major consolidated subsidiaries determine the amount and type of compensation taking into account their job responsibilities,
business performance and other factors. In addition, the HR departments of respective companies determine the amount and type
of compensation based on the overall company situation, including the business environment, business trends, and past payments of
compensation. The compensation policies for overseas employees and others have been established based on the domestic compensation
policies and taking into account local laws, regulations, employment practices and other relevant factors.
■ Consistency between Compensation Structure and Risk Management and Link between Compensation and
Performance
1. SMFG
SMFG determines the amount and type of compensation paid to officers within the maximum total amount of compensation approved at an
ordinary general meeting of shareholders. SMFG also sets a budget for paying compensation to employees taking into account the group’s
financial situation and other factors. Performance-based compensation accounts for a relatively small percentage of total compensation, and
SMFG has not adopted a compensation structure that could affect the risk management of the group.
2. Major Consolidated Subsidiaries
The amount and type of compensation for officers and employees of a major subsidiary are determined by comprehensively taking into
account the assessment of the subsidiary’s medium- and long-term earnings, and in the case of an overseas subsidiary, local laws, regulations
and employment practices, and a compensation structure that could affect the risk management of the group has not been adopted. In addi-
tion, expenses for employee retention are recorded for employees of certain major consolidated subsidiaries.
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SMFG2016 Annual ReportCompensation ■ Type, Total Amount Paid, and Payment Method of Compensation for Officers, Employees and Others of SMFG and
Its Group Companies
Total Amount of Compensation Paid to Officers, Employees and Others (April 1, 2015 to March 31, 2016)
Millions of yen
Amount of compensation
Amount of fixed compensation
Amount of variable
compensation
Total
Total
Base salary
Stock
options
Other
benefits
Total
Bonuses
Retirement
allowance
Other
benefits
Number of
officers/
employees
and others
Officers (excluding outside
directors and corporate
auditors) ����������������������������
Employees and others ��������
12
88
900
7,294
773
3,620
659
3,504
108
111
5
4
127
3,288
127
3,288
—
—
—
385
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥219 million in deferred compensation accrued during the fiscal year (officers: ¥108 million; employees and others: ¥111
million).
3. The total amount of variable compensation includes ¥598 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥598
million).
4. Stock options are classified as fixed compensation because the number of stock options granted depends on the individual’s position.
5. The exercise period of stock option is shown in the table below.
Under the stock option agreement, the exercise of stock options is deferred until the retirement date, regardless of the exercise period:
Company name
1st series of stock acquisition rights of SMFG ���������������������������
Stock option rights exercise period
August 13, 2010 to August 12, 2040
2nd series of stock acquisition rights of SMFG ��������������������������
August 16, 2011 to August 15, 2041
3rd series of stock acquisition rights of SMFG ���������������������������
August 15, 2012 to August 14, 2042
4th series of stock acquisition rights of SMFG ���������������������������
August 14, 2013 to August 13, 2043
5th series of stock acquisition rights of SMFG ���������������������������
August 15, 2014 to August 14, 2044
6th series of stock acquisition rights of SMFG ���������������������������
August 18, 2015 to August 17, 2045
6. Payment of the following compensation, including the above, has been deferred:
Type of compensation, etc�
1st series of stock acquisition rights of SMFG ����������������������������
March 31, 2016
60
Payment during the fiscal year
—
2nd series of stock acquisition rights of SMFG ��������������������������
3rd series of stock acquisition rights of SMFG ���������������������������
4th series of stock acquisition rights of SMFG ���������������������������
5th series of stock acquisition rights of SMFG ���������������������������
140
138
118
178
—
—
—
—
Millions of yen
■ Other Information Regarding Compensation Structures of SMFG and its Group Companies
Not applicable
296
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SMFG2016 Annual ReportCompensation Compensation
Sumitomo Mitsui Banking Corporation (SMBC) and Its Group Companies
■ Compensation Framework of SMBC Group
1. Scope of Officers and Employees
The scope of officers, employees and others whose compensation is subject to disclosure under the revised Cabinet Office on Disclosure of
Corporate Affairs, etc. and other ordinances are as described below.
(1) Scope of Officers
Officers subject to compensation disclosure are directors and corporate auditors SMBC (excluding outside directors and corporate
auditors).
(2) Scope of Employees and Others
Employees and others subject to compensation disclosure are employees of SMBC and officers and employees of its major consolidated
subsidiaries who are highly compensated and have a material influence on the business management or the assets of SMBC and its major
consolidated subsidiaries.
a) Scope of major consolidated subsidiaries
A major consolidated subsidiary is a consolidated subsidiary of SMBC with total assets accounting for more than 2% of the total
consolidated assets of SMBC and has a material influence on the management of SMBC and its group companies. Specifically, they are
SMBC Nikko Securities Inc., Kansai Urban Banking Corporation and overseas subsidiaries such as Sumitomo Mitsui Banking
Corporation Europe Limited and Sumitomo Mitsui Banking Corporation (China) Limited.
b) Scope of highly compensated persons
A highly compensated person is an individual whose compensation paid by SMBC or its major subsidiaries is equal to or more than
the base amount. The base amount of SMBC is set at ¥60 million which is based on the average amount of compensation paid to the
officers of SMFG and SMBC (excluding officers appointed or retired during the fiscal year in question) over the last three fiscal years
(hereinafter “executive compensation amount”) and is applied to all group companies. This is because many of the officers of SMFG
also serve as officers of SMBC, and their executive compensation amount is determined according to their contribution to the group
as a whole. With respect to lump-sum retirement payment, the executive compensation amount for the fiscal year in question is “(his/
her executive compensation amount – lump-sum retirement payment) + (lump-sum retirement payment/years of service)” and the
executive compensation amount calculated using this formula is compared to the base amount.
c) Material influence on the business management or assets of SMBC and its major consolidated subsidiaries
A person has a material influence on the business management or assets of SMBC and its major consolidated subsidiaries if his/her
regular transactions or regular matters managed by him/her have a substantial impact on the business management of SMBC and its
group companies, or losses incurred through such actions have a significant impact on the financial situation of SMBC and its group
companies. Specifically, persons having such influence are directors, corporate auditors and corporate officers of SMBC and its major
consolidated subsidiaries, both domestic and overseas.
2. Determination of Compensation
(1) For Officers
The compensation committee of SMFG, a majority of which is comprised of outside directors, deliberates on the compensation structure
and the amount and type of compensation paid to directors and corporate officers of SMFG and SMBC, independent from the influence
of business units of SMBC. The committee deliberates on the amount and type of compensation paid to directors and corporate officers
within the maximum total amount of compensation approved at an ordinary general meeting of shareholders. The amount and type of
compensation paid to corporate auditors is determined through discussions among the corporate auditors, within the maximum total
amount of compensation approved at an ordinary general meeting of shareholders, in accordance with the provisions of Article 387(2) of
the Companies Act.
(2) For Employees and Others
The amount and type of compensation paid to the employees of SMBC and SMBC and the officers and employees of major consolidated
subsidiaries are determined and paid according to the compensation policies established by the boards of directors of SMBC and its
major consolidated subsidiaries. Compensation systems based on the compensation policies are designed and documented by the HR
departments of respective companies, independent from the influence of business units. The compensation policies of major consolidated
subsidiaries are regularly reported to the HR department of SMBC for review. The amount and type of compensation for overseas officers
and employees is determined and paid under the compensation system established by the relevant office or subsidiary in accordance with
local laws, regulations and employment practices.
(3) Total Amount of Compensation Paid to Compensation Committee Members and Number of Compensation Committee
Meetings Held
Compensation Committee (SMFG) �����������������������������������������������������������������������������������������������
Compensation Committee (SMBC Nikko Securities Inc�) �������������������������������������������������������������
Number of Meetings Held
(April 1, 2015 to March 31, 2016)
2
1
Note: The total amount of compensation is not provided because the portion of the compensation paid to a committee member for services rendered as a committee member
cannot be calculated as the amount of compensation paid is based on the committee member’s position in the company.
015_0800885852807.indd 297
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SMBC2016 Annual Report ■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
(1) For Officers
SMBC has designed its compensation system for officers in accordance with SMFG’s management plan based on its vision for the next
decade of becoming a global financial group that, by earning the highest trust of our customers, leads the growth of Japan and the Asian
region by enhancing its corporate value over the medium to long term. Specifically, the compensation paid to officers consists of:
• base salary;
• bonuses; and
• stock options
The base salary is determined based on job responsibilities, business performance and other factors, and bonuses are determined based
on the assessment of business results for the fiscal year and the performance status of job responsibilities in the short term as well as the
medium to long term for individual officers. Stock options are granted to officers (excluding outside directors and corporate auditors)
according to their positions, subject to an exercise period, to foster the creation of long-term corporate value.
The amount and type of compensation for each fiscal year, which is set within the maximum total amount of compensation approved
at an ordinary general meeting of shareholders, are examined by a third party for appropriateness; deliberated by the compensation com-
mittee of SMFG, chaired by an outside director; and submitted to the board of directors for approval. In addition, the amount and type
of compensation to corporate auditors are determined through discussions among the corporate auditors, including outside corporate
auditors, within the maximum total amount of compensation approved at an ordinary general meeting of shareholders.
(2) For Employees and Others
SMBC and its major consolidated subsidiaries pay compensation to domestic employees and others consisting of:
• base salary;
• bonuses and other benefits
In order to link the business philosophy and strategy of the company to the roles and responsibilities of the employees and others, SMBC
and its major consolidated subsidiaries determine the amount and type of compensation taking into account their job responsibilities,
business performance and other factors. In addition, the HR departments of respective companies determine the amount and type
of compensation based on the overall company situation, including the business environment, business trends, and past payments of
compensation. The compensation policies for overseas employees and others have been established based on the domestic compensation
policies and taking into account local laws, regulations, employment practices and other relevant factors.
■ Consistency between Compensation Structure and Risk Management and Link between Compensation and
Performance
1. SMBC
SMBC determines the amount and type of compensation paid to officers within the maximum total amount of compensation approved at an
ordinary general meeting of shareholders. SMBC also sets a budget for paying compensation to employees taking into account the group’s
financial situation and other factors. Performance-based compensation accounts for a relatively small percentage of total compensation, and
SMBC has not adopted a compensation structure that could affect the risk management of the group. In addition, expenses for employee
retention are recorded for certain employees.
2. Major Consolidated Subsidiaries
The amount and type of compensation for officers and employees of a major subsidiary are determined by comprehensively taking into
account the assessment of the subsidiary’s medium- and long-term earnings, and in the case of an overseas subsidiary, local laws, regulations
and employment practices, and a compensation structure that could affect the risk management of the group has not been adopted. In addi-
tion, expenses for employee retention are recorded for employees of certain major consolidated subsidiaries.
298
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SMBC2016 Annual ReportCompensation ■ Type, Total Amount Paid, and Payment Method of Compensation for Officers, Employees and Others of SMBC and
Its Group Companies
1. Total Amount of Compensation Paid to Officers, Employees and Others (SMBC consolidated, April 1, 2015 to March 31, 2016)
Millions of yen
Amount of compensation
Amount of fixed compensation
Amount of variable
compensation
Total
Total
Base salary
Stock
options
Other
benefits
Total
Bonuses
Retirement
allowance
Other
benefits
Number of
officers/
employees
and others
Officers (excluding outside
directors and corporate
auditors) ����������������������������
Employees and others ��������
23
81
1,431
6,685
1,204
3,121
1,056
3,067
144
49
4
4
210
3,179
210
3,179
16
—
—
385
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥193 million in deferred compensation accrued during the fiscal year (officers: ¥144 million; employees and others: ¥49
million).
3. The total amount of variable compensation includes ¥598 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥598
million).
4. Stock options are classified as fixed compensation because the number of stock options granted depends on the individual’s position.
5. The exercise period of stock option is shown in the table below.
Under the stock option agreement, the exercise of stock options is deferred until the retirement date, regardless of the exercise period:
Company name
1st series of stock acquisition rights of SMFG ����������������������������
2nd series of stock acquisition rights of SMFG ��������������������������
3rd series of stock acquisition rights of SMFG ���������������������������
4th series of stock acquisition rights of SMFG ���������������������������
5th series of stock acquisition rights of SMFG ���������������������������
6th series of stock acquisition rights of SMFG ���������������������������
Stock option rights exercise period
August 13, 2010 to August 12, 2040
August 16, 2011 to August 15, 2041
August 15, 2012 to August 14, 2042
August 14, 2013 to August 13, 2043
August 15, 2014 to August 14, 2044
August 18, 2015 to August 17, 2045
6. Payment of the following compensation, including the above, has been deferred:
Millions of yen
Type of compensation, etc�
1st series of stock acquisition rights of SMFG ����������������������������
2nd series of stock acquisition rights of SMFG ��������������������������
3rd series of stock acquisition rights of SMFG ���������������������������
4th series of stock acquisition rights of SMFG ���������������������������
5th series of stock acquisition rights of SMFG ���������������������������
March 31, 2016
49
151
151
110
148
Payment during the fiscal year
—
—
—
—
—
2. Total Amount of Compensation Paid to Officers, Employees and Others (SMBC non-consolidated, April 1, 2015 to March 31, 2016)
Millions of yen
Amount of compensation
Amount of fixed compensation
Amount of variable
compensation
Total
Total
Base salary
Stock
options
Other
benefits
Total
Bonuses
Retirement
allowance
Other
benefits
Number of
officers/
employees
and others
Officers (excluding outside
directors and corporate
auditors) ����������������������������
Employees and others ��������
23
75
1,431
6,089
1,204
2,863
1,056
2,808
144
49
4
4
210
2,840
210
2,840
16
—
—
385
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥193 million in deferred compensation accrued during the fiscal year (officers: ¥144 million; employees and others: ¥49
million).
3. The total amount of variable compensation includes ¥504 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥504
million).
4. Stock options are classified as fixed compensation because the number of stock options granted depends on the individual’s position.
5. The exercise period of stock option is shown in the table below.
Under the stock option agreement, the exercise of stock options is deferred until the retirement date, regardless of the exercise period:
Company name
1st series of stock acquisition rights of SMFG ����������������������������
2nd series of stock acquisition rights of SMFG ��������������������������
3rd series of stock acquisition rights of SMFG ���������������������������
4th series of stock acquisition rights of SMFG ���������������������������
5th series of stock acquisition rights of SMFG ���������������������������
6th series of stock acquisition rights of SMFG ���������������������������
Stock option rights exercise period
August 13, 2010 to August 12, 2040
August 16, 2011 to August 15, 2041
August 15, 2012 to August 14, 2042
August 14, 2013 to August 13, 2043
August 15, 2014 to August 14, 2044
August 18, 2015 to August 17, 2045
6. Payment of the following compensation, including the above, has been deferred:
Millions of yen
Type of compensation, etc�
1st series of stock acquisition rights of SMFG ����������������������������
2nd series of stock acquisition rights of SMFG ��������������������������
3rd series of stock acquisition rights of SMFG ���������������������������
4th series of stock acquisition rights of SMFG ���������������������������
5th series of stock acquisition rights of SMFG ���������������������������
March 31, 2016
49
151
151
110
148
Payment during the fiscal year
—
—
—
—
—
■ Other Information Regarding Compensation Structures of SMFG and its Group Companies
Not applicable
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