2017
ANNUAL REPORT
YEAR ENDED MARCH 31, 2017
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 2016 (April 2016 to March 2017)
Some subsequent information is also included.
Organizations covered: Sumitomo Mitsui Financial Group and
its subsidiaries and affiliates
Published
August 2017
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; incurrence of significant credit-related costs; our
ability to successfully implement our business strategy through our subsidiaries, affiliates and alliance partners; and
exposure to new risks as we expand the scope of our business. 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 on Form 20-F and other docu-
ments submitted to the U.S. Securities and Exchange Commission, as well as our earnings press releases, for a
more detailed description of the risks and uncertainties that may affect our financial conditions and our operating
results, and investors’ decisions.
2 SMFG Overview
2 SMFG Group Outline
44 Corporate Infrastructure
46 Corporate Governance
Contents
4 Financial and Non-Financial Highlights
48 Outside Director Interview
6 SMFG’s Value Creation Process
50 SMFG Directors
52 Risk Management
8 Message from the Group CEO
56 Compliance
18 Message from the Group CFO
58
Internal Audit System
22 Business Strategy
23 Business Unit Outline
24 Retail Business Unit
28 Wholesale Business Unit
32
International Business Unit
36 Global Markets Business Unit
40 Special Feature: Digitalization
42 Support for Mid-Sized Corporations
and SMEs, Vitalization of
Local Regions in Japan
59 Customer Satisfaction (CS) and
Quality Improvement
60 Human Resources
62 Corporate Social Responsibility
(CSR)
66 Financial Review
70 Sponsorship / Websites
71 Appendix I
115 Appendix II
1
2017 Annual Report
SMFG Overview
SMFG Group Outline
Path of the Group’s Rise to Strength
Established in December 2002
2001
2002
2003
2004
2005
2006
2007
2008
2009
Sumitomo Mitsui Banking
Corporation is formed
Sumitomo Mitsui Card Company and SMBC
Leasing (Current Sumitomo Mitsui Finance and
Leasing) become wholly owned subsidiaries
SMBC Friend Securities
becomes wholly owned
subsidiary
Vietnam Exim Bank becomes
equity method affiliate
Japan Research Institute becomes
wholly owned subsidiary
Promise (Current SMBC Consumer Finance)
becomes equity method affiliate
Becomes wholly owned subsidiary in 2012
Sumitomo Mitsui Finance and Leasing is formed from
merger of SMBC Leasing and Sumisho Lease
Nikko Cordial Securities
(Current SMBC Nikko Securities)
joins SMFG
Cedyna is formed
(Equity method affiliate)
Becomes wholly owned
subsidiary in 2011
Portion of Consolidated Gross
Profit Attributable to Group
Companies Other Than SMBC
Major Group Companies (As of March 31, 2017)
Banking
Fiscal 2016
38%
Number of retail
accounts
Foreign currency
deposits
Approx. 27million
Approx. ¥920 billion
(SMBC)
(SMBC Trust)
Number of corporate loan
clients
Approx. 84,000
(SMBC)
Fiscal 2002
18%
2
2017 Annual Report Major Group Companies (As of March 31, 2017)
2010
2011
2012
2013
2014
2015
2016
2017
Royal Bank of Scotland’s aircraft leasing
business is acquired and integrated into
SMFG (Current SMBC Aviation Capital)
Societe Generale Private Banking Japan joins
SMFG Group (Current SMBC Trust Bank)
Bank Tabungan Pensiunan Nasional (BTPN),
of Indonesia, becomes equity method affiliate
Flagship Rail Services, of the United States,
joins SMFG (Current SMBC Rail Services)
PT Oto Multiartha and PT Summit Oto Finance,
of Indonesia, become equity method affiliates
GE Group’s leasing operations in Japan are
integrated into SMFG (Current SMFL Capital)
Mitsui Sumitomo Asset Management
becomes wholly owned subsidiary
American Railcar Leasing, of the
United States, joins SMFG
The Bank of East Asia, of Hong Kong, becomes equity method affiliate
ACLEDA Bank, of Cambodia, becomes equity method affiliate
Citibank Japan’s retail banking operations are integrated
into SMBC Trust Bank (Current SMBC Trust Bank PRESTIA)
Leasing
Credit Cards and Consumer Finance
Operating assets
Approx. ¥3.1trillion
Securities
(Scheduled to merge in 2018)
Number of brokerage accounts
Approx. 3million
(Total for 2 companies)
Number of
cardholders
Approx. 42million
(Total for 2 companies)
Number of consumer
finance customers
Approx. 2.1million
(Consolidated, includes
overseas customers)
Other Business
3
2017 Annual Report SMFG Overview
Financial and Non-Financial Highlights (Fiscal 2016)
(SMFG consolidated basis unless stated otherwise)
Fiscal 2016 Performance
Consolidated gross profit
¥2,920.7billion
(Billions of yen)
Profit attributable to
owners of parent
¥706.5 billion
ROE*
9.1%
(%)
4,000
3,000
2,000
1,000
0
2,920.7
706.5
’12
’13
’14
’15
’16
(FY)
20
15
10
5
0
9.1
’12
’13
’14
’15
’16
(FY)
Consolidated gross profit
Profit attributable to owners of parent
* Calculated using stockholders’ equity as the denominator
Overhead ratio
62.1%
(%)
80
60
40
20
0
62.1
’12
’13
’14
’15
’16
(FY)
Common Equity Tier 1 capital ratio*
12.2%
(%)
20
15
10
5
0
12.2
’12
’13
’14
’15
’16
(FYE)
* Basel III fully-loaded basis, based on the definition applicable at the end of
fiscal 2018
Dividend per share
Credit ratings (As of June 30, 2017)
¥150
(Yen)
200
Commemorative
dividend
150
’12
’13
’14
’15
’16
(FY)
150
100
50
0
4
SMFG
SMBC
Long-term Short-term Long-term Short-term
Moody’s
S&P
Fitch
R&I
JCR
A1
A-
A
A+
AA-
P-1
A1
—
F1
—
—
A
A
AA-
AA
P-1
A-1
F1
a-1+
J-1+
2017 Annual Report Domestic Business
Number of offices
506 main office and branches (SMBC)
124 branches (SMBC Nikko Securities)
Number of ATMs (including partner ATMs)
Approx. 50,000 (SMBC)
Retail business customers (SMFG, adjusted
to account for duplicated customers)
Approx. 43 million
Number of corporate loan clients
Approx. 84,000 (SMBC)
International Business
Number of overseas offices*
126 offices in 39 countries and regions
* Figures represent offices of major group companies.
Those scheduled to be closed are excluded.
Overseas banking profit ratio
Approx. 32%
(Managerial accounting basis, consolidated net business profit)
Environment, Social, Governance
(ESG)
Assessment Loans / Private Placement Bonds*
Approx. ¥1.7 trillion (SMBC)
* Cumulative, from commencement of financing to March 31, 2017
Number of participants at financial and economic
education programs organized by SMFG companies
Approx. 130,000 (cumulative number)
Number of staff participating in voluntary activities
Approx. 9,000 (cumulative number)
Number of directors and outside directors
(As of June 30, 2017)
17 directors
Of whom 7 are outside directors (SMFG)
Inclusion in SRI indexes
SNAM
Sustainability Index
2017
Human Resources
Number of employees
Approx. 80,000
Number and ratio of female managers
911
18.8% (SMBC)
Male recipients of childcare leave
332 (SMBC)
Ratio of GM positions with locally hired employees
33% (SMBC) (As of April 30, 2017)
5
2017 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
Team SMFG
6
2017 Annual Report
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
Stable financial base
SMFG’s Value Creation Process
SMFG, guided by “Our Mission,” strives to
achieve sustainable corporate value growth.
Value Creation
Process
Business Strategy
P.22
Vision
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.44
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
7
2017 Annual Report Message from the Group CEO
Takeshi Kunibe
Director President and Group CEO
Sumitomo Mitsui Financial Group, Inc.
SMFG’s on-the-ground capabilities, spirit of innovation,
and speed are the key characteristics of our corporate DNA.
By further evolving these characteristics, we will
become a top tier global financial group.
8
2017 Annual Report We extend our sincerest appreciation to our stakeholders for the continued support and patronage.
In April 2017, SMFG launched “SMFG Next Stage,” its new three-year Medium-Term
Management Plan under a new group-wide operational structure. As Group CEO,
I would like to take this opportunity to share with you my thoughts and expectations
in regards to the plan.
Introduction
The challenging business environment for financial institutions is expected to continue with the Bank of
Japan’s negative interest rate policy and the implementation of tighter international financial regulations.
From a political perspective, protectionism tendencies in some countries and geopolitical risks are also
likely to add to the climate of uncertainty.
When we turn our eyes to Japan, we expect to see retail customers shifting from cash savings to asset
building and adopting digital/cashless solutions, and corporate customers accelerating their overseas
expansion. Globally, we anticipate the comprehensive reorganization of industries along with a rise in
infrastructure investment in Asia.
It was against this backdrop that we launched “SMFG Next Stage,” our new Medium-Term Management
Plan, in April 2017. It was also at this time that we undertook a comprehensive overhaul of SMFG’s corporate
governance system coupled with structural reforms. SMFG was transformed into a Company with Three
Committees, and introduced Group-wide business units and the CxO system. With these changes, we
entered into the next stage of realizing our mid- to long-term vision: “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.”
I have had the privilege of being appointed Group CEO under this new structure, and I view my new
responsibilities with both great dedication and pride. I stand firmly committed to meeting the expectations
of our stakeholders by uniting the collective strengths of the Group, and forging ahead with structural reforms
so that we may realize sustainable growth and further increase corporate value.
Review of the Previous Medium-Term Management Plan (Fiscal 2014–2016)
Before discussing “SMFG Next Stage,” I would like to go over the previous three-year Medium-Term
Management Plan, which represented the first stage of our efforts to realize our mid- to long-term vision.
Under the previous Medium-Term Management Plan, we sought to develop and evolve client-centric busi-
ness models for our main domestic and international businesses, and build a platform for realizing Asia-centric
operations and capture growth opportunities. We were able to achieve solid success in these efforts. We also
steadily accumulated profits, and were thus able to meet our target Common Equity Tier 1 capital ratio.
On the other hand, in terms of profit, the business environment proved to be more difficult than anticipated
three years ago, due to factors such as the Bank of Japan’s negative interest rate policy and the slowdown of
the Asian economy. As a result, growth in top-line profit proved to be sluggish. In response to changes in
the business environment, we revised our strategy to focus on bottom-line profit partway through fiscal 2015,
a move that entailed implementing stronger controls on expenses/costs. However, we were still unable to
achieve our targets for (a) growth rate of consolidated gross profit and (b) consolidated overhead ratio,
due in part to upfront investments in business model reform.
9
2017 Annual Report
Message from the Group CEO
Steady progress in business strategy
Business model reform
based on customer needs
• Retail AuM (three-year) +12%
• Average loan balance for Wholesale Banking Unit (three-year) +9%
Asia-centric strategy
• Expanded business with core Asian clients
• Increased synergies with investing companies, particularly in Indonesia
Evolving business model
in international business
• Promoted cross-selling with core western clients
• Established high margin portfolio: e.g. acquisition of GE LBO business*
* Sumitomo Mitsui Finance and Leasing acquired the General Electric Group’s Leasing
Business in Japan on April 1, 2016.
Financial Targets
CET1 capital ratio*1,2
Consolidated net income
RORA*1
ROE
Target
10%
1%
10%
Consolidated gross
profit growth rate*3
+15%
Excluding inorganic growth: +10%
Fiscal 2016
12.2%
(10.0%)
1.0%
9.1%
+0.8%
Overhead ratio (OHR)
Mid-50%
62.1%
(three-year: +7.9%)
*1 Figures are based on current RwA
*2 Figures in parentheses exclude net unrealized gains on other securities
*3 The consolidated gross profit growth rate represents the rate of change in comparison with fiscal 2013
New Medium-Term Management Plan (Fiscal 2017–2019)
“SMFG Next Stage”
The new Medium-Term Management Plan, “SMFG Next Stage,” represents the second
stage of our efforts to realize our mid-long term vision 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 combining the Group’s strengths with a more focused business management,
we aim to be the financial institution of choice for our customers, to achieve sustainable
growth and to enhance corporate value by providing value-added products and services.
10
2017 Annual Report Overview of Medium-Term Management Plan (Fiscal 2017–2019)
To achieve sustainable growth by
combining the Group’s strengths with
more focused business management
1
2
3
Discipline
Disciplined business management
Focus
Focus on our strengths to generate growth
Integration Integration across the Group and globally to achieve sustainable growth
Fiscal 2019 Financial Targets
Capital
Efficiency
Cost
Efficiency
Financial
Soundness
ROE
OHR
7–8%
Maintain at least 7% notwithstanding
accumulation of capital
P.18
1% reduction compared
with fiscal 2016
Reduce to around 60% at the earliest
opportunity (fiscal 2016: 62.1%)
For more about financial targets,
please see page 18 and thereafter.
CET1 ratio*1,2
10%
Maintain capital in line with likely raised
requirement*1 (fiscal 2016: 8.3%)
*1 Calculated with RwA inflated by 25% compared to the current level based on our assumption of the final impact of Basel III reforms
*2 CET1: excludes net unrealized gains on other securities
RwA: excludes RwA associated with net unrealized gains on stocks
Shareholder Return Policy
• Adopt a progressive dividend policy*3 targeting payout ratio of 40%
• Dividend per share forecast for fiscal 2017 is 160 yen, a 10 yen increase year on year
• Policy for share buybacks will be laid out after the finalization of Basel III reforms
*3 Progressive dividend policy means not to reduce dividends, and will maintain or increase dividends
Position of the new medium-term management plan
New Medium-Term Management Plan
Mid- to long-term vision
1
2
3
Discipline
Focus
Integration
To be a global financial group that leads growth
in Japan and Asia by earning the highest trust
of our customers
Previous Medium-Term Management Plan
• Top-line growth
• Upfront investments for future growth
• Reform domestic and international
business models
• Globalization and group cooperation of
management, organizations, and HR
11
2017 Annual Report Message from the Group CEO
Based on the aforementioned uncertainties in the business environment, and the emer-
gence of new global and domestic trends, “SMFG Next Stage” puts forth three core
policies: Discipline, Focus, and Integration. The plan also calls for us to promote digitaliza-
tion in all areas. I will now explain each of these core policies in depth.
Disciplined Business Management
Transformation of Business/Asset Portfolios and the Quality of our Earnings Base
In order to realize sustainable growth in bottom-line profit and improve return on equity,
we will bolster profitability by placing even greater emphasis on capital, asset, and cost
efficiencies. At the same time, we will promote healthy risk taking and sound credit cost
control. We will maximize returns through the optimized allocation of limited management
resources by adopting a disciplined approach to management, investments, expenses/
costs, and business operations.
When formulating the Medium-Term Management Plan, we first established two axes,
the first being our competitive advantage in the respective business and the second being
the business growth potential for us. We then divided this grid into four quadrants and
reviewed the businesses in our portfolio based on the quadrants. The Seven Core Business
Areas to which we would prioritize the allocation of resources were selected through this
process. The upper-right “Grow” quadrant represents businesses with growth potential and
in which SMFG has a competitive advantage. These businesses will be allocated resources
as growth drivers. The upper-left “Enhance” quadrant houses businesses in which SMFG
has a competitive advantage, but has limited growth potential. Resources will be allocated
to these businesses in a suitable manner, and we will increase profitability by maximizing
intra-Group synergies and enhancing efficiency on a group-wide basis. The “Build” quad-
rant on the lower-right indicates businesses to which SMFG was a late comer. We will be
allocating resources to these businesses with the aim of realizing future growth by establish-
ing highly distinctive business models. The lower-left “Transform” quadrant contains our
domestic retail and wholesale businesses, in which our competitors are domestic regional
banks and so are subject to domestic capital adequacy standards only. We will be revising
the business models of the operations in this quadrant.
S
M
F
G
’
s
c
o
m
p
e
t
i
t
i
v
e
a
d
v
a
n
t
a
g
e
Business portfolio transformation
Enhance
Grow
Mortgage loans
Domestic retail business
Credit card
Wealth management
Businesses
competing with
domestic regional
banks
Transform
Japan mid-sized enterprises
Global products
Global large corporations
Asia-centric
Sales & Trading
Trust banking / Asset management
Build
Business growth for SMFG
12
2017 Annual Report
In regards to our asset portfolio, we will maintain the present volume of risk-weighted
assets as calculated per current regulatory standards given the increase of such assets due
to the application of more stringent international financial regulations. At the same time,
we will improve profitability by rebalancing our asset portfolio to enhance the quality of our
earnings base. We will keep risk-weighted assets at the same level on an organic basis. We
will allocate resources to the Seven Core Business Areas, while at the same time reduce
low-margin assets so that we may improve the overall quality of our portfolio. Furthermore,
we will engage in the inorganic reduction of risk-weighted assets.
Transformation of quality of RwA
(JPY tn)
Japan
International
Treasury and others
Reduce strategic shareholdings
Improve quality of lending portfolio
Asset increase in
line with previous
Medium-Term
Management Plan
Securities, leases,
cards, consumer
finance, etc.
Asset transition
based on overall
profitability
Portfolio control
Regulatory
impact*
70.6
Mar. 2017
Results
Mar. 2020
* Made under assumption that RwA will be inflated by 25% compared to current levels
S&T and
others
Regulatory
impact*
Inorganic
reductions
Mar. 2020
organic basis
Improving Productivity and Efficiency
Meanwhile, we will boost productivity and the efficiency of operations by promoting digitali-
zation, practicing the Group-based administration of operations, and reorganizing retail
branches and Group businesses. Measures to curtail expenses such as the consolidation
of Group companies’ infrastructure will be implemented. We will also move ahead with
the reorganization of retail branches to improve the productivity of our retail business.
Furthermore, we aim to enhance efficiency by centralizing shared functions through the
reorganization of Group businesses, including the integration of SMBC Nikko Securities
and SMBC Friend Securities. We are targeting annual cost savings of ¥50 billion from these
measures and ¥100 billion in the medium-term, along with the reduction effect of 4,000
positions. We will redeploy effected personnel to strategically important business areas in
order to improve profitability while keeping labor costs under control.
13
2017 Annual Report
Message from the Group CEO
Key initiatives
Business reform to
improve efficiency
Retail branch
reorganization
Reorganization of
group companies
Annual cost reduction
3 years during Medium-Term Management Plan: JPY 50 billion plus
JPY 20 bn
Group-wide productivity Improvements
JPY 20 bn
Retail branch reorganization
JPY 10 bn
Merger of securities subsidiaries
Aiming for a
mid-term cost
reduction of
JPY 100 bn
Headcount streamlining
4,000 positions*
as the result of improving productivity and efficiency
(2,000 core workers)
Staff relocation and enhancement (strategic business fields, overseas, etc.)
* Core positions are on a 3 year basis, other positions are on a 4 year basis
Focus on Our Strengths to Generate Growth
Focus on Seven Core Business Areas
You can see in the diagram below our Seven Core Business Areas. We are already strong in
the businesses in 1 through 5. We will further reinforce our domestic retail and wholesale
businesses, where we have a competitive advantage and generate stable earnings. We will
also selectively implement growth strategies that focus on SMFG’s strengths in our overseas
operations and global product lines. Businesses 6 and 7 are still small, but have significant
growth potential. We will therefore seek to determine specific fields within these businesses
in which we will step up activities to cultivate new strengths
to drive future growth.
Concept
Strategic Focus
Enhance
Enhance business
base in domestic
market
Grow
Sustainable growth
of US/EU businesses
Make Asia our second
mother market
Build
Build our new
strengths for
future growth
1
2
3
4
5
6
7
Hold the number one retail banking franchise in Japan
Build on our lead position in the Japanese medium-sized
enterprise market
Increase market share in Corporate & Investment Banking in
key global markets
Establish a top-tier position in product lines where we are
competitive globally
Accelerate our “Asia-centric” strategy
Strengthen sales & trading capability
Develop asset-light businesses: trust banking and asset
management
D
i
g
i
t
a
l
i
z
a
t
i
o
n
P.22
For more about business strategies,
please see page 22 and thereafter.
14
2017 Annual Report
P.46
For more about corporate
governance, please see page 46.
P.52
For more about risk appetite
management, please see page 52.
Integration across the Group and Globally to Achieve Sustainable Growth
Management that Maximizes Business Potential
Under the newly introduced group-wide business units and CxO system, we will work to
maximize the potential of our businesses on both a Group and global basis. Specifically,
group-wide business units will facilitate the sharing of strategies among Group companies
and enable us to improve our ability to provide products and services on a group-wide basis
so that we may accurately respond to the diverse needs of our broad customer base. The
CxO system, which established positions such as the Chief Strategy Officer, Chief Financial
Officer, Chief Human Resources Officer, and Chief Information Officer, will allow for the
sharing of management resources among Group companies, such as the active exchange
of personnel, and will enable the optimal allocation of resources on a group-wide basis.
At the same time, we will enhance Group-based planning and management functions
to control investments in Human Resources (HR) and IT, in addition to carrying-out a
digitalization strategy. As management controls, we implemented return on equity and risk
appetite management on a business unit basis. We will also develop more sophisticated
business management information systems.
SMFG’s Corporate Governance Framework
Company with Three Committees
Board of Directors
Nomination Committee
Compensation Committee
Risk Committee
Audit Committee
Supervisory
Introducing CxO system and group-wide business units
Group Management Committee
SMFG
President
SMBC
President
Nikko
President
Major subsidiaries
President
(Reference) List of CXO titles
CEO (Chief Executive Officer)
CFO (F: Financial)
CSO (S: Strategy)
CRO (R: Risk)
CIO (I: Information)
CCO (C: Compliance)
CHRO (HR: Human Resources)
CDIO (DI: Digital Innovation)
CAE (Chief Audit Executive)
15
Head of Business UnitBusiness units (Retail, Wholesale, International, Global Markets)CxOHead office functions2017 Annual Report Message from the Group CEO
Digitalization
The digitalization of society is advancing at a rapid pace. Amid this trend, SMFG is actively
adopting new technologies and promoting digitalization in various areas of its business so
that we may enhance the customer experience, generate new businesses, improve produc-
tivity and efficiency, and upgrade management infrastructure.
Examples of our efforts on this front include the provision of cutting-edge services for
retail and corporate customers that utilize digital technologies to enhance the customer
experience, such as the introduction of paperless transactions. Furthermore, we will gener-
ate new businesses, for example by offering biometric authentication platforms as a
“Platformer.” We will also introduce public cloud services and advance work style reform in
order to boost productivity and efficiency. In addition, we will introduce state-of-the-art IT
infrastructure so that we may accurately track business management data, based on which
we will work to enhance management practices.
Digitalization
Enhancing the
customer experience
Generating new
businesses
Improving productivity
and efficiency
Upgrading management
infrastructure
Cashless
payments
Platform
RPA
(Robotic Process Automation)
MIS
(Management
Information System)
Smartphone
applications
B2B
Workstyle reform
(public cloud)
Cyber security
Smartphones
SNS
Biometric
authentication
AI
API
IoT
Big data
Blockchain
Environment, Social, and Governance (ESG)
In June 2017, SMFG transitioned from a Company with a Board of Corporate Auditors to
a Company with Three Committees. The purpose of this move was to establish a corporate
governance system that is aligned with the standards required of a Global Systemically
Important Financial Institution and to strengthen the supervisory function of the Board
of Directors.
In addition, we revised the executive compensation systems of SMFG and Sumitomo
Mitsui Banking Corporation to ensure that management is well aligned with the shareholder
perspective. As part of this change, we introduced a stock-based compensation system that
utilizes restricted stock. This new system will strengthen linkage of executive compensation
with short-term and mid- to long-term performance, and thereby provide proper incentives to
pursue heightened performance while encouraging executives to hold stock in the Company.
P.40
For more about digitalization,
please see page 40.
16
2017 Annual Report
Furthermore, SMFG has identified the “Environment,” Next Generation,” and “Community”
as priority issues to be addressed over the mid- to long-term from a Corporate Social Respon-
sibility (CSR) perspective. Through ongoing initiatives revolving around these issues, we are
contributing to the development of society. The promotion of diversity and inclusion is also
a priority for management. We have been actively introducing initiatives to promote female
participation in the workplace and stepped up hiring of local employees outside of Japan
in line with the globalization of our business. Through such efforts we seek to develop an
organization that provides ample opportunities for a diverse work force.
In Closing
The considerable changes we are seeing on a global scale are giving rise to an unparalleled
paradigm shift. The new Medium-Term Management Plan, “SMFG Next Stage”, was forged
in the midst of this upheaval. The timing of the plan’s establishment and our decision to
tackle new challenges are symbolic of our commitment to responding to changing customer
needs, by further uniting the strengths of the Group. It also represents our recognition of the
fact that structural reforms are necessary to address the implementation of more stringent
international financial regulations and transition to an earnings base with higher capital effi-
ciency. I am confident that, when each individual member of the Group comes together and
combines their respective strengths, we will be able to overcome any obstacle we may face.
We will, of course, continue to proactively adjust our internal systems and strategies in
response to external changes. At the same time, however, we will always remain true to the
transcendental values of the Company. Never losing sight of our core value - Customer
First, we will exercise the on-the-ground capabilities, spirit of innovation, and speed that
characterize SMFG’s corporate DNA while further evolving these key characteristics to
become the financial institution of our customers’ choice. This approach will remain
unchanged. My mission as Group CEO is to lead SMFG so that we may exceed the goals
put forth in the new Medium-Term Management Plan and achieve sustainable growth in
corporate value. We will accomplish this by becoming a top tier global financial group that
pursues quality in every aspect of our business, is trusted by our customers and society,
and has an unrivaled footprint in Asia.
I would like to ask for the continued understanding and support of all our stakeholders.
August 2017
Takeshi Kunibe
Director President and Group CEO
Sumitomo Mitsui Financial Group, Inc.
P.62
For more about CSR,
please see page 62.
P.60
For more about human resources,
please see page 60.
17
2017 Annual Report
Message from the Group CFO
Jun Ohta
Group CFO
Director Deputy President and Executive Officer
Review of Fiscal 2016
In fiscal 2016, consolidated gross profit increased by ¥16.8 billion year-on-year, to ¥2,920.7 billion. Although we felt the
adverse effects of the Bank of Japan’s negative interest rate policy, we were able to offset this downward pressure on revenue
with higher profits from SMBC Nikko Securities Inc., which benefited from an upturn in the markets.
General and administrative expenses were up by ¥87.6 billion year-on-year, to ¥1,812.4 billion, and total credit cost rose by
¥61.6 billion, to ¥164.4 billion. However, the absence of an one-off cost recorded in the previous fiscal year resulted in ordinary
profit increasing by ¥20.6 billion, to ¥1,005.9 billion.
Profit attributable to owners of parent increased by ¥59.8 billion year-on-year, to ¥706.5 billion, due in part to the tax benefits
associated with the implementation of the consolidated corporate-tax system in fiscal 2017.
For a detailed review of our business results and financials, please refer to page 66.
Financial Targets
Taking into consideration the current business environment, SMFG is working to improve capital, asset, and cost efficiencies in order
to become a top tier financial group. We have thus established financial targets for return on equity (ROE), overhead ratio, and
Common Equity Tier 1 capital ratio (CET1 ratio), to guide us in our efforts to improve profitability and secure financial soundness.
Capital Efficiency ROE
7–8%
Maintain at least 7% notwithstanding accumulation of capital
Cost Efficiency
OHR
1% reduction compared with fiscal 2016 Reduce to around 60% at the earliest opportunity (fiscal 2016: 62.1%)
Financial Soundness CET1 ratio*1,2 10%
Maintain capital in line with likely raised requirement*1 (fiscal 2016: 8.3%)
*1 Calculated with RwA inflated by 25% compared to the current level based on our assumption of the final impact of Basel III reforms
*2 CET1: excludes net unrealized gains on other securities
RwA: excludes RwA associated with net unrealized gains on stocks
18
2017 Annual Report Return on Equity
Our target ROE under the Medium-Term Management Plan
is 7% to 8%, with 7% set as the minimum acceptable level.
We were able to achieve an ROE in fiscal 2016 of 9.1%, or
7.8% after the exclusion of one-off increases to profit such
as the implementation of the consolidated corporate-tax
system. However, given the increase in risk-weighted assets
resulting from the implementation of tighter international
financial regulations, we recognize the necessity of accumu-
lating capital. Furthermore, we estimate SMFG’s bottom-line
profit to be roughly ¥600 billion when extraordinary factors
are excluded. Over the next three years, we expect further
downward pressure to be placed on earnings. Factors
generating this pressure include the reduced profitability
of domestic loans due to the Bank of Japan continuing its
negative interest rate policy, intensifying competition, and
higher foreign currency funding costs. Nevertheless, we
remain committed to overcoming such challenges and
growing bottom-line profit by focusing on our core business
areas and reforming cost structures.
We will not allow ourselves to be satisfied by merely
reaching the target ROE of 7% to 8% given our pursuit of
improvements in profitability and efficiency. Rather, we will
ready ourselves to actively pursue upsides when business
environment turns favorable, perhaps due to the exit of the
Bank of Japan’s negative interest rate policy or the relaxing
of international financial regulations, to realize even higher
levels of ROE.
ROE*1
(%)
9
8
7
6
After eliminating
special factors *2
7.8%
Pursue upsides when
business environment
turns favorable
Financial targets
7–8%
Bottom line
’16
’19
(FY)
*1 On a stockholders’ equity basis
*2 Excluding special factors, such as the effects of implementing the consolidated
corporate-tax system
Overhead Ratio
In fiscal 2019, SMFG aims to have decreased its overhead
ratio by approximately 1% from the fiscal 2016 figure of
62.1%. Our overhead ratio rose during the previous
Medium-Term Management Plan as we made upfront
investments to pursue growth in top-line profit, while growth
proved to be sluggish due to the slowdown of emerging
market economies and the Bank of Japan’s negative interest
rate policy. We sought to remedy this situation by imple-
menting stricter controls on expenses/costs midway through
fiscal 2015, and we are seeing the benefits of these efforts.
In fiscal 2017, our overhead ratio is expected to rise slightly
due to an increase in revenue-linked variable costs
stemming from growth in our securities and credit card
businesses, as well as the amortization of past IT system
investments. Nonetheless, we will work to reverse this
upward trend at the earliest possible stage and establish its
downward trend during the next three years by selectively
making strategic investments in initiatives that develop
businesses and improve productivity, for example the
digitization of operations, while at the same time engaging
in group-wide efforts to reduce costs by increasing the
efficiency of our operations, and reorganizing retail branches
and Group businesses. Following the implementation of
such initiatives, the next step will be to reduce our overhead
ratio to approximately 60% at the earliest possible date, in or
after fiscal 2020.
Overhead ratio
(%)
70
65
60
55
50
Previous
Mid-term Plan
New
Mid-term Plan
Improvement over fiscal 2016
62.1
Down to 60%
at the earliest
opportunity
55.7
54.2
Impact including
acquisition of Citibank
Japan’s retail banking
business
’13
’16
’19
(FY)
19
2017 Annual Report Message from the Group CFO
Common Equity Tier 1 Capital Ratio
The target CET1 ratio has been set at 10% based on the
assumption that Basel III regulation will be finalized in fiscal
2020. This ratio is calculated by dividing Common Equity
Tier 1 capital, less net unrealized gains on other securities,
by risk-weighted assets, less risk-weighted assets associated
with unrealized gains on stocks.
The finalization of Basel III reforms is expected to result in
approximately a 25% increase in SMFG’s risk-weighted
assets from its current levels. Accordingly, we aim to secure
a sufficient level of financial soundness one year prior to the
enactment of finalized Basel III reforms, or, in other words,
by the final year of the Medium-Term Management Plan. The
CET1 ratio target of 10% was derived based on the results of
internal stress tests so that we will still be able to maintain the
required CET1 ratio of 8% even in a once in a decade stress
event. Our CET1 ratio calculated as of March 31, 2017 based
on Post-Basel III reforms basis was 8.3%. Going forward,
we will seek to secure financial soundness by controlling
risk-weighted assets, including the inorganic reduction of
such assets, and by steadily accumulating profits.
CET1 ratio
(%)
CET1 ratio
Net unrealized gains on
other securities
15
12
9
6
3
0
10.3
8.7
’13
Risk-weighted assets (RWA) (JPY tn)
61.3
12.0
9.0
’14
65.9
11.9
9.9
’15
65.9
12.2
10.0
’16
70.6
Post-Basel III
reforms basis
8.3
’16
(FYE)
88.6
Target
10%
Accumulation of CET1 ratio
• Accumulation of retained
earnings
+around 50 bp / year
• Regional banks subsidiaries
turned into equity method
affiliates
+40bp–50bp
Capital Policy
I will now explain SMFG’s capital policy.
Through our basic capital policy, we seek to realize sustainable growth in shareholder value by balancing “securing financial
soundness,” “enhancing shareholder returns,” and “investing for growth.”
Securing financial
soundness
CET 1 ratio Target*1: 10%
Progressive dividend policy
Payout ratio
• Target 40%
Sustainable
growth of
corporate value
ROE target*2
7–8%
Investment criteria
• Fits with our strategy
• ROE*3 of over 8% after synergies and
excluding amortization of goodwill
• Risk is manageable
Enhancing
shareholder returns
Investing
for growth
*1 Calculated with RwA inflated by 25% compared to the current level based on our assumption of the final impact of Basel III reforms. CET1: excludes net unrealized gains on other securities.
RwA: excludes RwA associated with gains on stocks CET1 ratio on a Basel III fully-loaded basis (including net unrealized gains on other securities), exceeds CET1 ratio post Basel III reforms basis by 4%
*2 On a stockholders’ equity basis *3 Managerial accounting basis with RwA calculated assuming Basel III reforms are finalized
20
2017 Annual Report Securing Financial Soundness
As I mentioned earlier, we are targeting a CET1 ratio of
approximately 10% based on the anticipated final impact of
tightened international financial regulations. We expect to
achieve the targeted figure through the disciplined reform of
our business and asset portfolios by which we will maintain
the present amount of risk-weighted assets as calculated
per current regulatory standards, while at the same time
we will rebalance our assets to a high margin portfolio and
accumulate profits.
We will continue to reduce our strategic shareholdings
to comply with Japan’s Corporate Governance Code, in
addition to mitigating the negative impact of stock price
fluctuations on our capital and the application of tighter
international financial regulations.
Enhancing Shareholder Returns
In order to enhance shareholder returns we have adopted a
progressive dividend policy, by which I mean that there will
be no reduction in dividends and will either maintain or
increase dividends and will target a payout ratio of 40%. To
date, we have continued to increase the dividend per share
in a stable manner. Based on our understanding that we
have established a business foundation that will allow us to
consistently secure bottom-line profit of ¥600 billion; we
have decided to further increase the distribution of profits to
shareholders through dividends. Our first step will be to
increase dividends for fiscal 2017 with a forecast of ¥160
per share, a ¥10 increase year-on-year.
Our policy for share buybacks will be determined after the
finalization of Basel III reforms.
Investing for Growth
We have set our investment criteria in line with the Core
Policies of Discipline and Focus set out in the Medium-Term
Management Plan. Specifically, (a) investments must be
consistent with SMFG’s strategies, (b) with an ROE of over
8% (after synergies and excluding amortization of goodwill),
and (c) risk manageable.
We look forward to receiving your continued support as we
will devote our utmost efforts to realize sustainable growth in
shareholder value.
Dividends per share
Strategic shareholdings and reduction plan
(SMFG consolidated basis)
(JPY)
200
150
100
50
0
Payout
ratio*1
150
150
160
140
10
110
120
100
’11
’12
’13
’14
’15
’16
Ordinary dividend
Commemorative dividend
’17
(estimate)
(FY)
(JPY tn)
8
6
4
2
0
6.40
6.55
28%
27%
7.14
Reduction plan (announced Nov. 2015)
24%
Reduce
the ratio by
half within
5 years
Toward
a level
appropriate
for G-SIFIs
1.80
1.79
1.69
To 14% by around 2020
’15/9
’16/3
’17/3
CET1 (Basel III fully-loaded basis, excluding net unrealized gains on other
securities)
26.8% 21.3% 20.3% 26.2% 32.7% 29.9% 35.8%*2
Book value of domestic listed stocks within other securities
Ratio of stocks to CET1 capital
*1 Consolidated payout ratio
*2 Calculated based on fiscal 2017 consolidated net income forecast (¥630 billion)
and dividend forecast (¥160 per share) and on the total number of issues shares
on March 31, 2017
Reduction results for fiscal 2016
approx. JPY 100 bn
Consent of sales from clients
(outstanding Mar. 2017)
approx. JPY 100 bn
21
2017 Annual Report
Business Strategy
Makoto Takashima
President and CEO,
Sumitomo Mitsui Banking Corporation
Takeshi Kunibe
Director President and
Group CEO,
Sumitomo Mitsui Financial Group, Inc.
Yoshihiko Shimizu
President and CEO,
SMBC Nikko Securities Inc.
23 Business Unit Outline
24 Retail Business Unit
28 Wholesale Business Unit
32
International Business Unit
36 Global Markets Business Unit
40 Special Feature: Digitalization
42 Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
22
2017 Annual Report Business Strategy
Business Unit Outline
Breakdown of Consolidated Net Business Profit by Business Unit
Fiscal 2016
¥1,427.3 billion
Retail Business Unit
P.24
20%
Wholesale Business Unit
P.28
33%
International Business Unit
P.32
26%
Global Markets Business Unit
P.36
21%
Projections of the Medium-Term Management Plan by Business Unit
ROE
Net business profit
(JPY bn)
RwA
Fiscal 2019
plan
Fiscal 2016
comparison
Fiscal 2019
plan
Fiscal 2016
comparison
Three-year
change
Retail
Business Unit
Wholesale
Business Unit
International
Business Unit
Global Markets
Business Unit
7%
10%
9%
39%
285
+15
480
+15
415
+50
330
+20
*1 ROE for each unit is managerial accounting basis with RwA calculated assuming Basel III reforms are finalized. ROE for the International Business Unit
excludes the mid- to long-term foreign currency funding costs. ROE for the Global Market Business Unit does not include interest-rate risk associated to
the banking book
*2 Fiscal 2016 comparisons for each unit are after adjustments for interest rate and exchange rate impacts
23
2017 Annual Report
Business Strategy
Retail Business Unit
Yukihiko Onishi
Senior Managing Executive Officer
Head of Retail Business Unit
Overview of Business Unit
The Retail Business Unit offers a wide range of products and services, including wealth management, settlement services, and
consumer finance, in order to address the financial needs of all individual customers. Responding to environmental changes
including the acceleration of the shift from savings to asset building and the rapid digitalization fueled by the spread of smart
phones, we will strive to become the most trusted and No. 1 comprehensive financial service institution.
Strengths
• Holds top-tier companies in the banking, securities, credit card, and consumer finance industries
• Serves approximately 43 million individual customers on a group-wide basis
• Ability to respond to customer needs with the bank-securities retail integration strategy, SMBC DEBIT, and other initiatives
advanced through collaboration utilizing the characteristics of Group companies
Breakdown of Consolidated Net Business Profit
Major Operating Companies
Fiscal 2016
¥285.7 billion
Retail
Business Unit
20%
24
Operating Companies
Business Characteristics
SMBC
Serves wide range of financial needs including deposits,
loans, and wealth management for 27 million account
holders
SMBC Trust Bank
No. 1 in retail foreign currency deposits (PRESTIA)
SMBC Nikko Securities
Sumitomo Mitsui
Card Company
Cedyna
One of Japan’s top 3 full-service securities firms, promoting
the bank and securities retail business advanced since
fiscal 2014
Pioneer in provision of Visa-brand credit cards in Japan
Development of integrated settlement solutions including
credit cards and installment services
SMBC Consumer Finance
Holds the leading market share in the consumer loans and
guarantee business
2017 Annual Report Medium-Term Management Plan
Business Environment and Challenges
The Retail Business Unit is facing a difficult business environment
Basic Policies and Directives
Taking admantage of our strengths, which are SMFG’s comprehensive
as a result of the declining population in Japan and the persistence
capabilities and business scale, we will build the retail business into
of low interest rates. At the same time, business opportunities are
a business that achieves stable and sustainable growth. Specifically,
expanding in certain fields as indicated by the growth of house-
we will leverage our consulting capability and advanced digitalization
holds’ financial assets, the shift from savings to asset building, and
to improve customer satisfaction in pursuit of improved efficiency
digitalization driven by the spread of the Internet and smartphones.
and profitability. In addition, the Retail Business Unit will utilize
The SMFG companies, which hold top-tier status in each of their
digitalization as a means to lower its break-even point while boldly
fields, will cooperate with each other to take advantage of such
advancing in growing fields in order to become Japan’s No. 1 retail
opportunities.
finance institution.
Business Scale of the Retail Business Unit (Fiscal 2016)
Usage of Cashless Settlement
AUM Balance
(JPY tn)
Investment products
Yen deposits
Foreign currency deposits
Credit card sales handled (JPY tn)
Balance of unsecured card loans (JPY tn)
Origination of housing loans (JPY tn)
Gross profit (JPY tn)
(JPY tn)
80
60
40
20
0
45
44
1.4
15
1.8
1.1
1.3
Government target in “Future
Investment Strategy 2017”
(%)
40
30
20
10
0
’10
’11
’12
’13
’14
’15
’16
’27
(CY)
Credit card
Debit card
Electronic money
Percentage of cashless settlement (right axis)
Source: The Cabinet Office, the Japan Consumer Credit Association, the Japan Debit Card
Promotion Association, and the Bank of Japan
Increase in Balance of Investment Assets
(SMBC and SMBC Nikko Securities)
Credit Card Sales Handled
(Sumitomo Mitsui Card Company and Cedyna)
(JPY bn)
(JPY bn)
(JPY tn)
+450
+200
+150
+100
+50
0
–50
–100
4Q
1Q
1Q
2Q
3Q
’13
3Q
2Q
’14
4Q
1Q
4Q
3Q
2Q
’15
Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.
’16
Increase in balance of investment assets (left axis)
Increase in balance of investment assets (aggregated, right axis)
+2,500
+2,000
+1,500
+1,000
+500
0
–500
–1,000
(FY)
15
10
5
0
’00
’04
’08
’12
’16
(FY)
25
2017 Annual Report
Retail Business Unit
Priority Strategies
Enhance Wealth Management Business through
Bank-Securities Integration
We will further evolve the bank-securities retail integration strategy
implemented through coordination between SMBC and SMBC Nikko
Securities by leveraging the unique strengths of both companies. In
order to address our customers’ wealth management needs, we will
promote medium-to-long term diversified investment opportunities
to our customers as our basic approach through the bank- securities
integration.
Transform Business Model through Digitalization
and Group Integration
We will promote the digitalization in the services we provide to
our customers and our business operation to become the most
advanced digital bank in Japan while also being regarded as
an innovative bank on a global basis. At the same time, Group
integration will be pursued in various fields, such as in the settle-
ment service field through collaboration leveraging the strengths
of SMBC, Sumitomo Mitsui Card Company, and Cedyna.
Reform of Cost Structures
At SMBC branches, we are promoting three reforms at once,
“changing the way we offer services to our customers,” “changing
the administration process,” and “changing the concept of
branches.” The scope of these reforms will be expanded to all
branches over the next three years to enable us to reduce costs
while providing customers with
convenient and high-quality
services.
26
Paperless service counter
Balance of Stock-Based Assets
(SMBC and SMBC Nikko Securities)
(JPY tn)
15
+ JPY 2.8 tn
10
5
0
’16
’19
(FYE)
Utilization Rate for Digital Channels (SMBC)*
(%)
45
30
15
0
+ 23%
’16
’19
(FY)
* Clients using digital channels / (clients using physical branches + clients using digital channels)
Introducing Next-Generation Branches
Introduction of
next-generation
branches
Fiscal 2017
Fiscal 2018
Fiscal 2019
100
280
430
Completed
Digitalization of
processes
Digitalization
of interfaces
Increase use of straight-
through processing with
internal processes
JPY 20 bn plus
Cost reduction
Fiscal 2021: JPY 30 bn
(reduce expenses associated
with in-person banking by 20%)
2017 Annual Report Review of Fiscal 2016
In our wealth management business, we stepped up our collabora-
and various smartphone applications as well as starting service for
tion between SMBC and SMBC Nikko Securities. We made
Apple Pay. Branches and call centers worked to improve customer
promotion of medium- to long-term diversified investment opportuni-
satisfaction, and these efforts are steadily producing results. Further-
ties to address our customers’ needs of stable investments in order
more, we sought to provide new value by responding to a wide range
to protect their financial assets under the prolonged ultra-low interest
of needs of business owners involving both corporate and private
rate environment. Meanwhile, in the settlement and digital service
interests, by responding to the wealth management, inheritance and
fields, we focused on improving customer convenience through
business succession needs.
concerted Group efforts, which included the launch of SMBC DEBIT
Topics
SMBC DEBIT
The SMBC DEBIT card was launched in fiscal 2016 as one of
the collaborative initiatives between SMBC and Sumitomo Mitsui
Card Company for addressing cashless payment needs. This
Visa debit card can be used at any Visa affiliate in the world,
with payments being immediately deducted from its registered
account. No annual fees are required.
SMBC Network App Smartphone Application
In order to enhance the customer experience, we introduced
“SMBC Network App” smartphone application, which allows
our customers to easily and seamlessly view information on
transactions with SMBC as well as with Sumitomo Mitsui Card
Company and SMBC Nikko Securities.
Recognition of Initiatives for
Improving Customer Satisfaction
In fiscal 2016, SMBC ranked No.1
overall for the 12th Annual Retail
Banking Survey,*1 SMBC Nikko
Securities received the first-place
award in Best Customer Support
of The Year 2016,*2 and SMBC
Consumer Finance became the first
nonbank-sector company to obtain
COPC® CSP*3 certification for four
consecutive years.
*1 Survey of 117 banks nationwide conducted by Nikkei Inc. and the Nikkei
Research Inc.
*2 Customer support award sponsored by Japan Institute of Information
Technology
*3 International quality standard for call center operations
27
2017 Annual Report Business Strategy
Wholesale Business Unit
Manabu Narita
Deputy President and Executive Officer
Head of Wholesale Business Unit
Overview of Business Unit
The Wholesale Business Unit provides financing, investment management, risk hedging, and settlement services primarily for
large- and mid-sized corporate clients in Japan. The Unit also provides financial solutions that respond to wide-ranging client
needs in relation to M&A, advisory, and leasing.
Strengths
• Speed in identifying and understanding customer needs, and providing financial solutions in respond to these needs
• The spirit of positive challenge inspiring employees to exercise creativity in developing new services and products to
grow together with customers
• On-site capabilities born out of the organic union of frontline organizations with high sales proficiency and
corporate organizations specializing in various areas
Breakdown of Consolidated Net Business Profit
Major Operating Companies
Fiscal 2016
¥473.1 billion
Wholesale
Business Unit
33%
Operating Companies
Business Characteristics
SMBC
SMBC Trust Bank
Banking transactions for Japanese companies
located in Japan and East Asia
Intermediation, asset management, consulting,
and other real estate-related services
Sumitomo Mitsui Finance and Leasing Leasing transactions for domestic companies
SMBC Nikko Securities
Securities transactions for large domestic
companies and financial institutions
28
2017 Annual Report Medium-Term Management Plan
Business Environment and Challenges
Characterized by the sluggish economic growth rates seen around
Basic Policies and Directives
As its basic policy for the period of the new medium-term
the world as well as the continuation of monetary easing measures in
management plan, the Wholesale Business Unit has put forth
Japan, the current business environment for the Wholesale Business
“grow with our corporate clients, and contribute to the development
Unit is difficult to navigate in.
of the Japanese economy.” Based on this policy, we will respond
In this environment, we managed to sustain an upward trend
to customers’ diversifying business strategies and management
in loan balance during the period of the previous medium-term
issues by providing solutions custom-tailored to their business
management plan. This was because we were able to respond to
characteristics and growth stage.
the cross-border and other acquisition financing needs of large-scale
By providing customers with solutions they deem to have high
corporations as well as the business succession needs through our
value and that address their diverse needs, we aim to grow together
“one-to-one” approach.
with our customers.
However, loan spreads continue to decline due to the persistence
Through the newly introduced group-wide business units, the
of Japan’s negative interest rate policy and intensified competition
Wholesale Business Unit will leverage SMFG-based collaboration
with other banks.
to approach customers from various angles and provide services
Loan Balance (SMBC)*1, 2
(JPY tn)
（兆円）
16
15
14
13
12
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
’13
’14
’15
’16
(FY)
Mid-sized corporations and SMEs (Corporate Banking Division)
Large corporations (Global Corporate Banking Division)
Loan Spreads (SMBC)*1, 5
(%)
1.4
1.2
1.0
0.8
0.6
0.4
through integrated group-wide operation.
Gross Profit (SMBC)*3, 4
Cooperative Revenue (SMBC)
(JPY bn)
700
600
500
400
0
(JPY bn)
100
90
80
70
0
’13
’16
(FY)
’13
’16
(FY)
Asset-related earnings
Flow earnings
SMBC Nikko Securities
Sumitomo Mitsui Finance and Leasing
SMBC Trust Bank
League Tables (April 2016–March 2017)*6
Global equity & equity-related
(book runner, underwriting amount)*7, 8
JPY denominated bonds
(lead manager, underwriting amount)*7, 9
Rank
Mkt Share
No. 2
19.0%
No. 3
17.2%
Financial advisor (M&A, No. of deals)*7, 10
No. 2
4.5%
Mar. 13
Sep. 13
Mar. 14
Sep. 14
Mar. 15
Sep. 15
Mar. 16
Sep. 16
Mar. 17
IPO (lead manager, No. of deals)*11
No. 4
16.5%
Mid-sized corporations and SMEs (Corporate Banking Division,
Small and Medium Enterprises Banking Division)
Large corporations (Global Corporate Banking Division)
*1 Managerial accounting basis. Excludes loans to the Japanese government, etc.
We revised managerial accounting rules since Apr. 2014. Figures for fiscal 2013 were
recalculated based on the new rules
*2 Quarterly average
*3 Total of profit from the Wholesale Business Unit and companies under Unit control and
cooperative revenue
*4 Asset-related earnings: Interest income related to loans and deposits
Flow earnings: Non-interest income including fees
*5 Monthly average loan spread of existing loans
*6 SMBC Nikko Securities for Global equity & equity-related, JPY denominated bonds and
IPO. SMFG for Financial advisor
*7 Source: SMBC Nikko Securities, based on data from Thomson Reuters
*8 Japanese corporate related only. Includes overseas offices
*9 Consisting of corporate bonds, FILP agency bonds, municipality bonds for proportional shares
as lead manager, and samurai bonds
*10 Japanese corporate related only. Group basis
*11 Excludes REIT IPO. Source: Thomson Reuters
29
2017 Annual Report
Wholesale Business Unit
Priority Strategies
Increase Market Share in Corporate & Investment
Banking in Key Global Markets
We are witnessing global and dynamic business activities among
large corporate clients. The Wholesale Business Unit will cater to
such corporations by leveraging the collective strength of SMFG
Group companies to reinforce its systems for collaboration. As a
united “Team SMFG,” we will provide customers with corporate
value-improving solutions with the aim of improving customer satis-
faction along with SMFG’s market share.
We will also build upon our G-CIB* model in Japan and overseas
to deploy an approach that links banking and securities initiatives
and domestic and overseas initiatives and thereby maximizing earn-
ings as a united “Team SMFG.”
* G-CIB: Global-Corporate and Investment Banking
Cross-Border M&A Projects
Draw Up Hypothesis
Post-Merger
Integration
Large
Global
Clients
Financial and Growth
Strategies / Various
Solution Proposals
Transaction Banking
Bridge Financing
Permanent Financing
Build on Our Lead Position in the Japanese
Medium-Sized Enterprise Market
In the mid-sized enterprise market, an area of our strength, the
Wholesale Business Unit will further hone its competitive edge by
creating a virtuous cycle through the provision of various solutions
matched to customer growth stages.
Key fields include support for start-up companies and growing
Discover
Support growth
Further growth (IPO, M&A)
SMFG’s Seamless Support
Incubation
Japan
Research
Institute
B
u
s
i
n
e
s
s
s
i
z
e
Venture
Investment
Venture
Loan
IPO Support
M&A
SMBC
Venture
Capital
SMBC
SMBC Nikko
Securities
industries, a private banking (PB) approach, and enhance corporate
Alliance Support (Open Innovation)
value (collaborating with PE fund). In these areas, the united “Team
SMFG” will supply multifaceted solutions to contribute to the
creation of stable earnings while enhancing competitiveness with
regard to productivity and efficiency.
Collaboration
Building Network with Third Parties
Seeds
Start-up
Middle
Later
Growth Stage
Major Key Performance Indicators and Maintenance of
High Efficiency
SMFG has defined its market share in Japanese corporate bonds,
the number of IPO lead arranger deals, and other key performance
indicators to guide it in advancing its two priority strategies of
“increase market share in Corporate & Investment Banking in key
global markets” and “build on our lead position in the Japanese
KPI
Fiscal 2019 plan
Fiscal 2016
comparison
Market share in Japanese corporate
bonds (lead arranger)
Number of IPO lead arranger deals
Number of M&A advisory deals
20.0%
+2.6%
No. 1
No. 1
No. 4
No. 1
No. 2
No. 1
medium-sized enterprise market.” With these guidelines in place,
Maintenance of High Efficiency
Fiscal 2019 plan
Fiscal 2016
comparison
the companies comprising the Wholesale Business Unit will coordi-
nate even more closely with other companies in order to enhance
the Unit’s business through integrated operation.
Gross profit*
JPY 795 bn
+ JPY 27 bn
Net business profit*
JPY 480 bn
+ JPY 15 bn
In addition, profitability will be improved by practicing sound risk
ROE
10%
taking and credit cost control while maintaining the high levels of
efficiency that constitute a strength of the Wholesale Business Unit.
* Fiscal 2016 comparisons are after adjustments for interest rate and exchange
rate impacts
30
2017 Annual Report
Review of Fiscal 2016
Fiscal 2016 represented a turning point as it was the third year of
and asset-related earnings decreased in the midst of the fierce com-
the domestic operational reform that was commenced in fiscal 2014
petition that arose from this environment. However, we were able to
as well as the final year of the previous medium-term management
expand fee-based businesses through coordination between SMBC
plan. The Wholesale Banking Unit was united in its efforts during
and SMBC Nikko Securities, which was a factor behind the Whole-
this important year. Looking back at fiscal 2016, we faced a highly
sale Business Unit achieving consolidated gross profit of ¥775.6
opaque business environment created by the slow growth rates
billion and consolidated net business profit of ¥473.1 billion.*
around the business world and ongoing monetary easing in Japan,
* Fiscal 2016 numbers shown in the new group-wide business units basis
Topics
Support for Overseas Business Development
SMBC uses seminars and other channels to provide clients with
alliances between venture businesses and large corporates, we
host events such as the “Mirai Open Innovation Meetup” and the
information about global economic trends, the foreign exchange
“Mirai 2017,” an accelerator program arranged by the cross-
market, and investment conditions in specific countries. Clients
industry consortium III (Triple I). At the same time, we aim to
considering business overseas are encouraged to come to us at
assist in the cultivation of a “venture creation ecosystem” in
an early stage so that we can provide tailored information on local
Japan by promoting ties with leading venture capital providers,
laws and regulations and on Japanese companies already pres-
universities, and research institutes.
ent in the country. For clients who already have business
overseas, our Japan and overseas business units collaborate to
provide high-quality solutions in such areas as business expan-
sion and reorganization. We also provide wide-ranging advice on
Collaboration between SMBC and
SMBC Nikko Securities
To provide swift, one-stop service for responding to the wide-
foreign trade and conduct seminars on practical aspects to sup-
ranging financial needs of corporate clients, SMBC and SMBC
port clients in foreign exchange transactions.
Seminar on foreign exchange
market outlook and current global
economic conditions
Seminar on economic and trade
policies of Trump administration
in the United States
Support for New Ventures, New Business Development,
and Growth Companies
We offer support in accordance with clients’ stage of growth;
SMBC Venture Capital provides venture investment, SMBC
provides financing, and SMBC Nikko Securities provides support
for public share offerings. Taking account of the growing need for
Mirai Open Innovation Meetup
Mirai 2017
Nikko Securities have established bank-securities dual-role
departments in certain corporate banking departments. In fiscal
2016, Tokyo Corporate Banking Department VIII and Tokyo
Corporate Banking Department XI of SMBC and Corporate
Clients IX and Corporate Clients X of SMBC Nikko Securities,
newly become dual-role departments, in addition to the existing
dual-role departments, Tokyo Corporate Banking Department IX
of SMBC and Corporate Clients VIII of SMBC Nikko Securities.
In bank-securities dual-role operations, collaboration between
SMBC and SMBC Nikko Securities will be deepened under a
rigorous legal compliance structure to provide the most ideal
financial services in response to corporate clients’ diverse needs.
Clients
Banking
Services
SMBC
Securities
Services
SMBC Nikko Securities
Tokyo Corporate Banking
Depts. VIII, IX, & XI
Transaction Venues
(Corporate Clients, etc.)
Dual-role
Corporate Clients
VIII, IX, & X
Collaboration
31
2017 Annual Report Business Strategy
International Business Unit
Yasuyuki Kawasaki
Deputy President and Executive Officer
Head of International Business Unit
Overview of Business Unit
The International Business Unit is a growth driver for SMFG. The Unit supports the global businesses of a diverse range of
clients, such as Japanese companies operating overseas, non-Japanese companies, financial institutions, and government
agencies and public corporations of various countries.
Strengths
• A global network that is capable of adapting to the distinctive market characteristics of each respective region
• A product lineup with a global top-tier presence
• A unique Asia strategy based on a medium- to long-term perspective
Breakdown of Consolidated Net Business Profit
Major Operating Companies
Fiscal 2016
¥364.1 billion
International
Business Unit
26%
Operating Companies*1
Business Characteristics
SMBC
SMBC Trust Bank
Sumitomo Mitsui Finance and Leasing
SMBC Nikko Securities
*1 Includes overseas subsidiaries
*2 SMBC Aviation Capital Limited
Banking transactions with Japanese and
non-Japanese companies operating overseas
utilizing our global network
Foreign-currency denominated loan
transactions
Global vendor financing and leasing trans actions
with Japanese and non-Japanese companies
operating overseas (including AC*2)
Full-line securities transactions conducted
overseas, such as bond underwriting, sales
and trading.
32
2017 Annual Report Medium-Term Management Plan
Business Environment and Challenges
The business environment for financial institutions continues to be
Basic Policies and Directives
The International Business Unit has defined the three basic policies
unclear and uncertain due to such factors as Brexit, a new Presiden-
with the principles of Discipline, Focus, and Integration.
tial administration in the U.S., and the slowdown in emerging market
economies.
Furthermore, due to the effects of international financial
regulations, such as TLAC requirements* and the Basel Capital
Accords, as well as regulatory tightening in Europe, the U.S., and
• Promote key initiatives to the “Next Stage”:
Further integrating the banking, securities and leasing businesses;
strengthening the asset finance business and our origination & distribution
(“O&D”) capabilities; and pursuing the “Asia-centric” strategy
• Strengthen the business base including the Asian retail business that
other countries, the business environment for financial institutions
is expected to be our growth area for the next decade
is expected to remain challenging.
On the other hand, we will ensure that we capture business
opportunities arising from positive trends such as the continued
• Pursue bottom-line growth and enhance “capital”, “asset” and “cost”
efficiencies by disciplined management of credit risk, expenses and liquidity
growth of the U.S. economy, the medium- to long-term expansion of
By adhering to the above basic policies, we will continue to fulfill
the middle class in Asia, the expanding global commercial flow, and
our role as a growth driver for SMFG.
corporate restructuring needs.
* TLAC (Total Loss Absorbing Capacity) requirements: The obligation for global
systemically important banks (G-SIBs) to maintain certain levels of capital and
specified liabilities to hold adequate loss-absorbing capacity
Overseas Loan Balance*1, 2
Overseas Deposit Balance*1, 2
(USD bn)
300
200
100
0
181
45
62
74
’14
195
52
72
71
’15
(USD bn)
300
200
100
0
12
210
76
121
’14
211
53
84
75
’16
(FYE)
17
240
70
153
’15
7
244
58
180
’16
(FYE)
Asia
Americas
EMEA
Deposits (includes deposits from central banks)
CDs, CP (3 months or more)
Overseas Loan Spread*1, 3
CDs, CP (less than 3 months)
Portfolio Structure (Current)
(%)
1.4
1.2
1.0
0.8
0.6
0.4
Japanese /
non-Japanese
large corporate
clients
Approx. 60%
Asset
finance, etc.
Approx. 20%
PF • TF
Approx. 20%
Promote cross-selling
Asset finance, etc.
• Aircraft leasing and financing
• North America railcar leasing
• LBO financing
• Subscription financing, others
PF • TF
• Project finance
• Trade finance
’08/9
’09/9
’10/9
’11/9
’12/9
’13/9
’14/9
’15/9
’16/9
’17/3
*1 Managerial accounting basis. Sum of SMBC, SMBC Europe and SMBC (China). Balance as of Mar. 2017 includes balance of SMBC Canada Branch which was newly opened in Nov. 2016 and took
over business of wholly owned subsidiary SMBC of Canada. *2 Converted into USD at respective period-end exchange rates *3 Monthly average loan spread of existing loans
33
2017 Annual Report
International Business Unit
Priority Strategies
Increase Market Share in Corporate & Investment
Banking in Key Global Markets
Accelerate Bank-Securities Integration
In businesses targeting large corporations in the Americas and
Gross Profit Target from Non-Japanese Corporations
(The Americas and EMEA)
EMEA, we will further enhance bank-securities integration, and sales
and trading (S&T). By assigning staff to specific industry sectors and
(USD mn)
1,500
countries/regions in the Product Unit, which handles a range of
transactions such as securities and derivatives, we will further
enhance our expertise and provide customers with higher quality
business solutions.
We will pursue a business model that emphasizes bottom-line
growth and efficiency by strategically allocating resources to
customer segments in which we can expect to win cross-selling
opportunities.
Product Sectors where We Hold Strengths
Establishment of a Top-Tier Position and an O&D
Business Model
We will build an explicit business portfolio to achieve sustainable
growth in areas where we have strength, including asset finance
(aircraft and railcar leasing), subscription finance,*1 and middle
market LBO*2.
We will also pursue an O&D*3 business model to further enhance
the asset and capital efficiencies of its portfolio and solidify our
top-tier position in the industry.
*1 Subscription finance: Bridge finance provided, for example, to real estate funds
*2 LBO (leveraged buyout): An M&A method used, for example, by private equity
funds
*3 O&D: Origination and distribution
Accelerate Our “Asia-centric Strategy”
Deepen Relationships with Core Clients and Take
Advantage of Mid- to Long-Term Growth in Asia
In Asia, we will seek to deepen our relationships with both prime
local companies and promising growing companies while promoting
the cross-selling of services with the focus being on our transaction
banking business.
At the same time, we will develop full-line operations in Indonesia
and other parts of Asia in addition to promoting digital retail banking
as a growth base for the next decade.
1,000
500
0
’16
’19
(FY)
SMBC
SMBC Nikko Securities
Gross Profit Target of Assets that Our Group Hold Strength
17
(USD mn)
1,500
1,000
500
0
’16
’19
(FY)
Aircraft leasing
Railcar leasing
Subscription
Middle LBO
Gross Profit Target from Core Clients (Asia)
(USD mn)
1,000
900
800
0
34
’16
’19
(FY)
2017 Annual Report Review of Fiscal 2016
In fiscal 2016, we proactively developed businesses in which SMFG
ability to respond to customer needs with regard to M&A-related
exhibits competitive advantages, such as aircraft and railcar leasing,
financing, bond underwriting, and other financial functions.
and subscription finance while nimbly managing its portfolio in
Overseas deposits reached a record high, reflecting our constant
response to changes in the business environment. Furthermore, we
efforts to increase deposits from the perspective of securing stable
sought to engage in a wider range of transactions by enhancing our
funding.
Topics
Expansion of Our Global Network
We are expanding our global network to enhance customer
Asset Finance
The acquisition of American Railcar Leasing LLC, the sixth-largest
convenience and strengthen our reach in emerging market
railcar leasing company in the U.S., was completed in June 2017.
economies and other growth markets. In March 2017 we
SMFG will continue developing its asset finance business, which
opened the Mumbai Branch in India and the Silicon Valley
is an area of strength for the Group.
Representative Office in the United States.
Digital Banking in Asia
We collaborated with PT Bank Tabungan Pensiunan Nasional
Tbk (BTPN), an affiliate in Indonesia, to launch “Jenius,”
a smartphone-based digital banking service targeting middle
class customers and high-net-worth individuals. The
digitalization of our operations has enabled us to provide
innovative financial services to the people of Indonesia.
Smartphone-based digital banking
Started Aug 2016
280,000 customers
(as of June 2017)
35
2017 Annual Report Business Strategy
Global Markets Business Unit
Hiroshi Munemasa
Managing Executive Officer
Head of Global Markets Business Unit
Overview of Business Unit
The Global Markets Business Unit offers solutions through foreign exchange products, derivatives, bonds, stocks, and other
marketable financial products and also undertakes asset liability management (ALM) operations, which help comprehensively
control balance sheet liquidity risks and interest rate risks.
Strengths
• Ability to provide solutions to customers in a timely manner by amassing global market expertise
• Portfolio management approach that entails proactive monitoring of market changes and quick and appropriate
asset rebalancing
Breakdown of Consolidated Net Business Profit
Major Operating Companies
Operating Companies
Business Characteristics
Fiscal 2016
¥304.4 billion
Global Markets
Business Unit
21%
SMBC
SMBC Nikko Securities
Market operation bases in Tokyo, New York,
Singapore, Hong Kong, and other locations
enabling round-the-clock response to market
needs through global coordination
Providing stocks, bonds, and other products
to wide range of investors through robust
domestic customer base, growing scope of
operations on a global scale
36
2017 Annual Report (JPY)
150
130
110
90
70
Medium-Term Management Plan
Business Environment and Challenges
We anticipate the further persistence of opaque, uncertain, and
Basic Policies and Directives
We will establish a SMFG brand that demonstrates the ability to
unstable market conditions due to factors such as monetary policies
respond to unexpected incidents which is backed up by a high level
in developed countries, economic trends in emerging countries, and
of market sensitivity and is resilient even in the downside phase in
rising global political and geopolitical risks.
the global market-related operations. At the same time, we will
In this environment, there is a need to provide sophisticated
achieve profitability and stability through a nimble and dynamic
solutions to address customers’ hedging and asset management
portfolio rebalance based on market conditions.
needs and also to conduct ALM operations that effectively respond
Furthermore, SMFG companies will share the know-how they have
to market changes.
acquired as major market participants by providing solutions to their
clients. They will also achieve cost synergies and speed through
integration of the common operations within the Group, including
product development and compliance with regulations.
USD/JPY, Nikkei Stock Average Index, Dow Jones Industrial Average
Annual Equity Brokerage Amounts (SMBC Nikko Securities)
(JPY / U.S.D.)
(JPY tn)
25,000
30
20,000
15,000
10,000
5,000
(CY)
20
10
0
’14
’15
’16
(FY)
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
JPY/USD (left axis)
Nikkei Stock Average (right axis)
Dow Jones Industrial Average (right axis)
Long-Term Government Bond Yields in Japan, the United States, and Germany
Balance of Japanese Government Bonds* (SMBC)
(%)
6.0
5.0
4.0
3.0
2.0
1.0
0
–1.0
(JPY tn)
25
20
15
10
5
0
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
(CY)
’11
’12
’13
’14
’15
’16
(FYE)
Japan
United States
Germany
* Japanese government bonds categorized as other securities
37
2017 Annual Report
Global Markets Business Unit
Priority Strategies
Market Sensitive Nimble Portfolio Management
By conducting various scenario analyses by dealers around the
globe, we will strive to find opportunities to optimize our risk-rewards.
We will identify signs of market change to take advantage of profit
opportunities through proactive monitoring and bold but well-
calculated market operations.
Providing Market-Oriented Solutions—S&T Operations
We will provide detailed information on market environments
and economic trends to address customers’ hedging and asset
management needs. In addition, we will expand our product lineup
in foreign exchange, derivative, bond, stock, and other products
and supply timely solutions to increase customer satisfaction and
Group earnings.
Other focuses include improving the convenience of various
electronic transactions and actively encouraging use of such trans-
actions to respond to the needs of a wider range of customers.
SMBC dealing room
S&T Profit Target
(JPY bn)
350
+ JPY 65.0 bn
300
250
0
* Managerial accounting basis
’16
’19
(FY)
Strengthening Foreign Currency Funding Capabilities
To support the overseas businesses of SMFG, we will pursue
improving stability in foreign currency funding by diversifying
funding methods and expanding the scope of investors we target.
At the same time, we will appropriately control our balance sheet
in response to the international financial regulations.
Strengthening Foreign Currency Funding
Capabilities Centered on the Asia-Pacific Region
New Initiatives in Fiscal 2016
Thai baht-denominated senior debt
Australian dollar-denominated TLAC bonds*1
Emerging currency-denominated NCDs*2
(Indonesian rupiah, Malaysian ringgit, etc.)
*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 Negotiable certificates of deposit
38
2017 Annual Report Review of Fiscal 2016
The market proved instable in fiscal 2016 in the midst of various
Currently, more than 19,000 clients are utilizing i-Deal, our elec-
important global events, including Brexit, the U.S. presidential
tronic foreign exchange execution platform available via the Internet.
election, and the first U.S. Federal Reserve interest rate hike in a
We are continuously improving the functionality of this platform.
year. Nonetheless, we were able to secure steady profits through a
In regard to foreign currency funding, in addition to issuing senior
nimble portfolio rebalance focused mainly stock index funds.
debt including TLAC bonds, we are expanding our range of methods
In S&T operations, we provided solutions and information to
to fund local currencies centered on Asia and Oceania.
customers developing global businesses through domestic-overseas
integrated operation and steadily bolstered our lineup of asset
management products matched to investor needs.
Electronic foreign exchange execution platform for corporate clients
i-Deal
Foreign overseas remittance and trading transaction service
Global e-Trade service
System
linkage
Topics
Various Seminars for Customers
The Global Markets Business Unit provides customers with infor-
mation on economic trends and market environments.
In fiscal 2016, we were highly active in holding seminars for
customers, and we also conducted other initiatives for supporting
the diverse market transactions of domestic and overseas corpo-
rations and investors.
Going forward, SMFG will take advantage of its varied channels
and expertise to more swiftly supply customers with highly valu-
able information.
Executive Conference held by
SMBC Nikko Securities (Tokyo)
FX Client Event held by SMBC
(New York)
39
2017 Annual Report
Special Feature
Digitalization
As digitalization progresses rapidly around the world, an IT strategy is one of our key management strategies.
SMFG has appointed a Chief Digital Innovation Officer (CDIO) to implement an IT strategy that incorporates
various technologies with four focuses: “enhancing the customer experience,” “generating new businesses,”
“improving productivity and efficiency,” and “upgrading management infrastructure.”
By utilizing the latest digital technologies, SMFG will supply customers with convenient and easy-to-use services
while also creating unparalleled experiences for customers and new business opportunities through the provision
of advanced services and platforms.
Enhancing the Customer Experience
Generating New Businesses
Contactless IC Debit Card with Settlement
Service Function
This card is the first in Japan
to be equipped with two touch
sensors functions (iD and
Visa payWave).
It can also be used at
710,000 locations in Japan
and 71 countries around the
world.
Koko-Iko! Customer Referral
Service Using CLO* Method
This service achieves the maximum customer referral
effect for affiliates by sending cardholders timely
information on benefits available nearby, based on
cardholders’ demographic information, card usage
history, and smartphone GPS location data.
*CLO: Card-linked offer
Biometric Authentication Platform Service
This platform service is operated by a new company
established with NTT DATA Corporation and Daon, Inc.,
and is the first SMFG business firstly approved under
the Banking Act revision.
Benefits of Users
No need to
manage IDs for
every service
Benefits of
Providers
No need to
build and own
authentication
function
Equipment Operation Monitoring Service
Developed jointly with Sumitomo Corporation and
Sumitomo Mitsui Finance and Leasing, this service utilize
data collected from sensors to track equipment efficiency,
optimize facilities, and provide sharing functions.
Equipment
operating data
Analyze /
Provide
Push notifications are sent by
application when cardholders
pass near an affiliate
Benefits are available when
cardholders purchase with a
Sumitomo Mitsui credit card
Sensor
Registration
is made via
application
40
Tracking,
sharing,
etc.
Equipment
2017 Annual Report
SMFG is setting up next-generation workplaces utilizing Robotic Process Automation (RPA) and a public cloud to improve
productivity and efficiency and advance workstyle reforms.
We also intend to make management control more visible and adopt more data-oriented, sophisticated management tools.
Improving Productivity and Efficiency
Upgrading Management Infrastructure
Operational Efficiency through the Introduction
of RPA
SMFG has been improving efficiency of back office
function of branches and head office operations.
Management Dashboards
• Display alerts, such as non-achievement of plans
• Narrow down products and regions to quickly identify
the source of problems
RPA
Check
Identify products
and regions
Customer
Teller
Data
authentication
Data entry
Teller
Customer
Saving time
Reduction in clerical errors
Display alerts
Data usage for timely business management
Next-Generation Workplace
Anytime, anywhere
• Accessible from outside to the intranet and file servers
• Approve transactions via smartphones
• Hold meetings via smartphones
Enhancement of Open Innovation System
SMFG is establishing new bases in Japan and overseas that
are tasked with collaborating with start-up companies and
other organizations to create new businesses.
Mobile
CRM
Seal
authentication
Open Innovation base
Scheduled to open in Shibuya-ku, Tokyo in fall 2017
Examples of
filled-out
documents
Web
crawling
Voice
recording
Promotion of Collaboration Events
SMFG held the MIRAI HACKATHON,
an event with the concept of creating
new businesses and futures where
people are linked through financial
application programming interface. We are working to trans-
form ideas that won awards at this event, into real businesses.
41
2017 Annual Report Business Strategy
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Support Provision of Funds to 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,
alongside consultation on personal asset management,
loans, inheritance, and asset succession.
Collaboration with Local Credit Guarantee
Corporations
SMBC offers Business Select Loans, a loan service that
offers unsecured and unguaranteed financing, and also
provides jointly guaranteed loans through collaboration with
local credit guarantee corporations, enabling it to meet a
diverse range of funding needs.
Going forward, we will continue offering services to fund
and support the management of the mid-sized corporations
and SMEs that form the backbone of the Japanese economy.
Credit Guarantee Corporation Name
TOKYO GUARANTEE
Tie-up A / B
Credit Guarantee
Corporation of Osaka
Business Succession
Guarantee
Credit Guarantee
Corporation of Hyogo-Ken
Hiyaku
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
42
2017 Annual Report 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.
Involvement in Regional Stimulus
Regional stimulus is a key theme for the Japanese govern-
ment. Related “regional comprehensive strategy” plans
drawn up by local government entities are moving to their
implementation stage.
It is becoming important for regions to exercise their
comprehensive strength in advancing stimulus measures.
There are thus high expectations for the contributions that
financial institutions can make by leveraging their wide-
reaching information networks.
SMFG has entered into cooperation agreements with local
government entities as part of its efforts to assist in local
industrial development. Based on these agreements, we are
making contributions to regional stimulus from various angles
based on the specific issues and needs of individual local
government entities across Japan.
We will continue to work with
local government entities and
regional financial institutions
across Japan, drawing on
the SMFG network to contribute
to local economies through
regional stimulus.
Ceremony commemorating the
industrial development cooperation
agreement concluded between
the city of Kobe and SMFG
Measures for Finance Facilitation
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
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
4. Provide appropriate and thorough explanations to
clients in consultations and applications for new
loans or modification of loan conditions
7. Respond appropriately in respect of business
manager guarantees in accordance with the
“Guidelines for Guarantees for Business Managers”
43
2017 Annual Report
Corporate Infrastructure
46 Corporate Governance
48 Outside Director Interview
50 SMFG Directors
52 Risk Management
56 Compliance
58
Internal Audit System
59 Customer Satisfaction (CS) and
Quality Improvement
60 Human Resources
62 Corporate Social Responsibility (CSR)
66 Financial Review
44
2017 Annual Report 45
2017 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 action
guidelines to be referred to for corporate governance by
Group officers and employees.
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
SMFG transitioned to a company with three statutory
committees from a company with a board of corporate
auditors, following approval at our ordinary general meeting
of shareholders held on June 29, 2017. The following
corporate governance system was adopted as a result.
Board of Directors
The Board of Directors delegates a large portion of decisions
on the execution of the operations to corporate executive
officers, excluding those issues legally required to be
decided by the Board of Directors, thereby enabling it to
better focus on supervising the exercise of duties by execu-
tive officers and directors. The chairman of SMFG, who does
Transition to a Company with Three Statutory Committees
SMFG had previously employed a board of corporate auditors governance system. In order to further enhance our
solid corporate governance system, we transitioned to a company with three statutory committees, which is globally
recognized and is aligned with international banking regulations and supervision, following approval at our ordinary
general meeting of shareholders held on June 29, 2017.
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’
and directors’ execution of duties
Internal Committees (Voluntarily)
Internal Committees (Mandatory)
Nominating
Committee
Compensation
Committee
Risk
Committee
Audit
Committee
June
2017
Nomination
Committee
Compensation
Committee
(Voluntarily)
Risk Committee
Audit
Committee
Management Committee
(Inside directors + Executive officers)
Management Committee
Business execution decisions*
Link
Reporting line
(including
personnel right
of consent)
Departments
Internal Audit Dept.
Departments
Internal Audit Dept.
* Excludes areas designated by laws and ordinances
as the jurisdiction of the Board of Directors
46
2017 Annual Report
not have business execution responsibilities, serves as the
chairman of the Board of Directors, and ten of the 17 direc-
tors also do not have business execution responsibilities at
SMFG or its subsidiaries, with seven of these 10 directors
being outside directors (as of June 29, 2017). This member-
ship ensures an objective stance toward supervising the
exercise of duties by executive officers and directors.
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 with other
members including executive officers and other officers des-
ignated by the president. The President of SMFG considers
important matters relating to the execution of business in
accordance with the basic policies set by the board of directors
and based on discussions held by the committee members.
Internal Committee Composition
Internal Committees
The Board of Directors has established four internal
committees; the Nominating Committee, the Compensation
Committee, and the Audit Committee are required by the
Companies Act of Japan whereas the Risk Committee has
been established voluntarily. All internal committees consist
of a majority of outside directors, except the Risk Committee
in which the majority comprises outside directors and
outside experts, and are thus able to engage in objective
discussions from a perspective that is divorced from
business execution.
The Nominating Committee, the Compensation
Committee, and the Audit Committee are also chaired by
outside directors, adding an extra degree of transparency
in discussions.
: Chairman
: Member
Nomination
Committee
(1 inside director,
5 outside directors)
Compensation
Committee
(2 inside director,
4 outside directors)
Audit
Committee
(2 inside director,
3 outside directors)
Risk
Committee
(1 inside director,
4 outside directors
and outside experts)
Masayuki Matsumoto
Outside director
Arthur M. Mitchell
Outside director
Shozo Yamazaki
Outside director
Masaharu Kohno
Outside director
Yoshinobu Tsutsui
Outside director
Katsuyoshi Shinbo
Outside director
Eriko Sakurai
Koichi Miyata
Takeshi Kunibe
Jun Ohta
Outside director
Chairman of the Board
Director
President
Director
D eputy President and
Executive Officer
Toshiyuki Teramoto
Toru Mikami
Director
Director
Hirohide Yamaguchi*1 Outside expert
Nobuyuki Kinoshita*2
Outside expert
*1 Chairman of the Advisory Board of Nikko Research Center, Inc., former Deputy Governor of the Bank of Japan
*2 Senior Advisor, Aflac Japan
47
2017 Annual Report Corporate Infrastructure
Outside Director Interview
Eriko Sakurai
Director
Sumitomo Mitsui Financial Group, Inc.
Bio
1987
Joined Dow Corning Corporation
2008
Director of Dow Corning Toray Co., Ltd.
2009
Chairman and Chief Executive Officer of
Dow Corning Toray Co., Ltd. (to present)
2011
Regional President -Japan/Korea of Dow Corning Corporation
2015
President and Representative Director of
Dow Corning Holding Japan Co., Ltd. (to present)
Director of Sumitomo Mitsui Financial Group, Inc. (to present)
Q
What kinds of discussions were held for the new
Medium-Term Management Plan? Also, what are
your expectations for the plan?
In SMFG’s history of roughly 15 years, the new Medium-
Term Management Plan will come to represent an important
turning point because it will be the first Medium-Term
Management Plan for the “new SMFG” after introducing
the group-wide business units.
When discussing about the group-wide business units,
we started from very fundamental questions such as “why
we need to establish the new system now?” and each direc-
tor actively exchanged opinions. Even before SMFG
implemented the system, companies within the Group had
been actively cooperating with each other including the bank
and securities companies. The introduction of group-wide
business units will strengthen the ties between the Group
companies and allow us to make proposals to our customers
more quickly and broadly to meet their diverse needs. This
means that SMFG can take advantage of more business
opportunities, so I have expectations of growth for SMFG.
We also discussed in detail about the transformation of
business portfolio by visualizing where our strengths lie and
in what areas we want to grow. As an executive of a U.S.
based company, I feel that holding a diverse portfolio while
carefully selecting the focus of initiatives is a powerful asset
to meet very wide range of customers’ needs.
A challenge SMFG faces under the new Medium-Term
Management Plan is to generate group-wide synergies.
I am convinced that these synergies are vital to the success
of SMFG in the next stage and would like to support this
development.
Q
What do you keep in mind when you perform your
duties as an outside director?
At first, I always voice my views at the board meetings from
the perspectives of key stakeholders. Shareholder perspec-
tives are the important ones to represent, and in addition,
I try to bring the perspectives from the individual users of
financial services, and also from the corporate customers.
I also try to bring the global perspectives, as the global
business situations and standards keep raising the bar for
the financial services.
Being a CEO of the company, I know that internal discus-
sions can easily lose the broader perspectives no matter
48
2017 Annual Report
what we make efforts. That's why outside directors can
bring the value to the discussion table, by asking the right
questions – sometimes very simple and fundamental ques-
tions. Even though the end result could be the same, the
important thing is that we have enough discussions from the
broader perspectives, and confirm our visions and strategies
make sense to our business and to our stakeholders. We
never hesitated to ask, and we will never.
Second is to continue learning. When I first assumed the
position of outside director, my image towards SMFG was
very limited. I had a strong image of SMFG being a “Bank”
and being “domestic”. And with this limited view, I would not
have been able to fulfill my duties as an outside director. By
given the opportunity to talk to the top management of the
Group companies and the heads of business units, I was
able to learn that SMFG is operating in an incredibly broad
range of fields on a global basis. I am thus very grateful that
everyone at SMFG has been very open and providing infor-
mation to me. Furthermore, as an individual, I try to hold a
customer’s perspective, by trying out SMFG’s services and
smartphone applications.
In June 2017, SMFG transformed into a Company with
Three Committees from a Company with a Board of Corpo-
rate Auditors. This move did not represent a significant
change because SMFG was already managed under a gov-
ernance framework with discretionary internal committees
and independent outside directors. However, as the new
framework separates functions of “business execution” and
“supervision” more clearly, outside directors are now
expected to discuss decisions related to business execution
from a broader and more overarching perspective. There-
fore, I feel a renewed commitment to my role, recognizing
that I need to deepen my own insight.
Q
What do you think will be most important to increase
the corporate value of SMFG going forward?
I believe human resources are the origins of SMFG’s
corporate value. Of course, human resources are also
important in the manufacturing industry. However, the
more I learn about the financial industry, including the very
strict regulations it faces and the difficultly in developing
prominent innovation, the more it became apparent that
“cultivating human resources” is the key to differentiation.
I believe it is crucial that our customers feel that they
worked with highly competent people and would want to
work with them again.
In my more than two years of experience as an outside
director at SMFG, I have learned that the Group houses
countless ambitious employees, who are sensible, intelligent
and have the desire to contribute to society. At the same
time, I have heard from global companies giving praise to
SMFG for its speed and superior teamwork. Building upon
these strengths to steadily create results from both financial
and non-financial perspectives will, in the end, enable
SMFG to grow profits and contribute to society. I believe
this process will also improve SMFG’s corporate value
and encourage shareholders to become long-term fans
of the Group.
Therefore, as an outside director, I would like to ensure
SMFG provides a working environment that motivates its
employees and an environment where they can fully exer-
cise their talents and generate various ideas, by offering
advice when necessary.
Support System for Outside Directors
SMFG views outside directors as representatives of
various stakeholders including shareholders, and
assign individuals that has a broad-ranging insight
and plentiful experience from their endeavors in
various fields.
SMFG expects outside directors to offer advice based
on their insight that contributes to the sustainable
growth and the increase of corporate value of SMFG.
Outside directors are regularly provided with opportuni-
ties to learn from external lecturers and share views
with officers to ensure that they are able to fulfill their
role and carry out their duties in an effective manner.
In addition, study sessions are held for new outside
directors on subjects such as company profile, business
plans and medium-term management plan, corporate
governance, and overview of major business units.
49
2017 Annual Report
Corporate Infrastructure
SMFG Directors
(As of June 29, 2017)
Koichi Miyata
Chairman of the Board
Chairman of the Board at SMBC
Takeshi Kunibe
Director
President (Representative Executive
Officer) and Group CEO
Makoto Takashima
Director
President and CEO at SMBC
Jun Ohta
Director
Deputy President and Executive Officer
(Representative Executive Officer)
Group CFO, Group CSO and Group CDIO
Toshikazu Yaku
Director
Senior Managing Executive Officer
Group CCO and Group CHRO
Director and Senior Managing
Executive Officer at SMBC
Toru Mikami
Director
Kozo Ogino
Director
Deputy President and Executive Officer
Group CRO
Director and Deputy President at SMBC
Katsunori Tanizaki
Director
Senior Managing Executive Officer
Group CIO
Director and Senior Managing Executive
Officer at SMBC
Director at The Japan Research Institute,
Limited
Toshiyuki Teramoto
Director
Corporate Auditor at SMBC
Tetsuya Kubo
Director
Representative Director-Chairman of
SMBC Nikko Securities Inc.
50
2017 Annual Report Masayuki Matsumoto
Director
Special Advisor of
the Central Japan Railway Company
Arthur M. Mitchell
Director
Attorney at law, admitted in New York,
the U.S.A.
Foreign Attorney in Japan
Shozo Yamazaki
Director
Certified public accountant
Masaharu Kohno
Director
Former diplomat
Yoshinobu Tsutsui
Director
President of Nippon Life
Insurance Company
Katsuyoshi Shinbo
Director
Attorney at law
Eriko Sakurai
Director
Chairman and Chief Executive Officer
of Dow Corning Toray Co., Ltd.
Note: Messrs. and Ms. Matsumoto, Mitchell, Yamazaki, Kohno, Tsutsui, Shinbo and Sakurai satisfy the requirements for an “outside director” under the Companies Act.
Please see page 99 for SMBC directors and corporate auditors.
51
2017 Annual Report Corporate Infrastructure
Risk Management
Our Basic Position
Major changes in the business environment for financial
institutions, including economic, financial, and regulatory
conditions, have increased the importance of promoting
appropriate risk-taking practices at SMFG—a diversified
financial services company—as it develops its businesses
and pursues its 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.
SMFG conducts business operations based on its over-
arching Risk Appetite Framework (RAF).
SMFG Risk Appetite Framework
The SMFG Group introduced RAF to ensure that risk and
return levels are appropriate. RAF clarifies the types and
levels of risk that we are willing to take on or are prepared to
tolerate in order to grow profits based on an accurate under-
standing of the operating environment and the inherent risks
(risk appetite). RAF also contains provisions for controlling
group-wide risk. Accordingly, RAF provides a central pillar of
business management alongside business strategy.
Our basic position and risk appetite specifics are set out in
an internal document for group-wide use.
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 various risk categories. 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
common equity Tier 1 (CET1) ratio, the leverage ratio,
and several other indicators have been established as
Risk Appetite Measures.
Individual risk appetites have been established for specific
business units or strategies as necessary based on the
overall risk appetite of SMFG.
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 testing
Two pivots of our
business management
52
Soundness
Risk Appetite Statement
C
a
t
e
g
o
r
i
e
s
Profitability
Liquidity
Credit
Market
Operational
Conduct*2
• A qualitative explanation of our
approach to risk taking and risk
management for various risk
categories
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
Risk Appetite Measures
• Quantitative Risk Appetite Measures
that function as benchmarks for
risks that we are considering taking
and for risk/return*1
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 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.
*2 Conduct Risk Management
SMFG positions conduct risk as one category of risk appetite. Conduct
risk is the risk that our conduct negatively affects customers, market
integrity, or effective competition. This risk is managed by implementing
preventive measures through RAF.
2017 Annual Report
Operation of Risk Appetite Framework
The process of setting risk appetite for each fiscal year
begins with discussions and the sharing of information on
the current and future business environment and risks by
the Management Committee and the Board of Directors.
Risks that threaten to severely impact management are
identified as Top Risks. Risk appetite is then decided on
the basis of risk analyses (stress testing) that illustrate the
impact if a risk should be realized. Business strategies and
policies for the conduct of business are drawn up on the
basis of risk appetite decisions.
The outlooks for the operating environment and risks,
including Top Risks, are continuously updated over the
course of the fiscal year’s business and the risk appetite
situation is monitored regularly through the medium of
Risk Appetite Measures and other controls. Risk Appetite
Measures and business strategies are revised as necessary.
Three risk management levels are set for Risk Appetite
Measures, which are monitored accordingly.
Authority and Responsibilities Regarding RAF
Function
Organization
Authority and Responsibilities
Board of Directors
Approval of risk appetite
Oversight
Risk Committee
Deliberation on matters related to RAF
implementation and provision of advice
to the Board of Directors
Management
Committee
Decision of risk appetite
Business
Execution
Risk Management
Committee
Updating of outlooks for the operating
environment and risks during fiscal year
Monitoring of risk appetite situation
Revision of risk appetite
Comprehensive Risk Management
As shown in the table below, the risks needing to be man-
aged on a group-wide basis have been defined as (1) credit
risk, (2) market risk, (3) liquidity risk, and (4) operational
risk. Risks are managed based on their characteristics.
In addition, necessary guidance is provided to Group
companies in identifying categories of risk they need to
address in their particular businesses. These risk categories
are continuously reviewed and new ones may be added in
response to changes in the operating environment.
Thorough assessments of the operating environment
and risks, including Top Risks, are carried out to ensure
effective operation of RAF, after which risks are managed
systematically through frameworks for risk analysis via stress
testing and risk capital management.
Top Risks
SMFG identifies those risks that threaten to significantly
impact management as Top Risks.
The selection of Top Risks involves comprehensive
screening of risk factors, evaluation of each risk scenario’s
possibility of occurrence and potential impact on manage-
ment, and discussion by the Risk Management Committee
and the Management Committee. Top Risks are utilized to
enhance risk management by being incorporated into dis-
cussions of RAF and the formulation of business strategies
and into the creation of risk scenarios for stress testing.
Please see page 77 for Top Risks of SMFG.
Risk Management Categories
Risk Management Framework
Risk 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.
Operational Risk
Operational risk is the possibility of losses arising from inadequate or failed internal processes, people,
and systems or from external events.
ALM
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 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.
Management by Risk Type
Conduct risk, etc. —
53
2017 Annual Report
Risk Management
Stress Testing
At SMFG, we use stress testing for the development and
implementation of forward-looking business strategies,
seeking to analyze and comprehend the impact on SMFG’s
businesses of changes in economic or market conditions.
In our stress testing, we formulate multiple risk scenarios
based on the aforementioned Top Risks, discussions with
experts and related departments, and macroeconomic
indicators such as GDP, stock prices, interest rates, and
foreign exchange rates.
When developing business strategies, we formulate
scenarios assuming stressed business environments such
as serious economic recessions and market disruption to
assess risk-taking capabilities at SMFG and verify whether
adequate soundness can be maintained under stress.
In addition, SMFG conducts detailed stress testing of
credit risk, market risk, and liquidity risk, based on which
it develops and revises strategies for risk taking.
Risk Capital Management
In managing credit risk, market risk, and operational risk
affecting the entire Group, we apply a uniform standard,
risk capital*1 based on value at risk (VaR),*2 for use in
monitoring and managing risks. This standard is applied
while taking into account the characteristics of each risk and
of the businesses of Group companies. Specific risk capital
measures include setting upper limits for risk exposure
based on group-wide and business unit risk appetite and
group-wide management constitution. Each business unit
operates business operation within that limit. Through these
precautions, we practice management that maintains an
appropriate balance between risks and returns based on a
comprehensive perspective and secure sufficient financial
soundness.
*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 that can be expected to occur with a certain degree of
probability when holding a financial asset portfolio for a given amount of time.
Stress Testing Process
(1) Scenario Design
compiling information on SMFG’s Top Risks and the views of related departments
Scenarios are designed by the Corporate Risk Management Department after
on such factors as future global trends.
(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 for analysis of the impact
on such indicators as the CET1.
(4) Confirmation by the
Management Committee
At the Management Committee, business strategies are examined based on analyses
of risk impact amounts and then verified from the perspective of capital adequacy.
54
2017 Annual Report
SMFG’s Risk Management System
Top management plays an active role in the risk manage-
ment process out of recognition for the importance of risk
management. The group-wide basic policies for risk man-
agement are determined by the Management Committee
before being authorized by the Board of Directors.
In line with these basic policies for risk management, the
functions for managing major risks are consolidated within
the Risk Management Unit, which is independent from
business units, and we seek to refine our risk management
system through such means as enhancing comprehensive
reviews of each risk category. In addition, the Internal Audit
Unit conducts internal audits on the status of risk manage-
ment to verify that risk is appropriately managed.
Risk management systems are in place at individual Group
companies that have been established based on the charac-
teristics of their particular businesses and in accordance
with the basic policies. Furthermore, SMFG is sharing infor-
mation on group-wide risk management and strengthening
related systems through the Group CRO Committee, which
consists of the Group CRO and risk management representa-
tives from strategically important Group companies.
SMFG’s Risk Management System
Risk Committee
The Risk Committee is an internal committee of the Board
of Directors, composed of outside directors as well as
experts from inside and outside of the Company who
possess specialized insight.
The Risk Committee meets regularly to discuss risk
management topics, including Top Risks and RAF, from a
specialist viewpoint. The results are reported to the Board
of Directors as necessary.
Risk Management Committee
Chaired by the Group CRO and membered by representa-
tives from risk management divisions and business units,
the Risk Management Committee is tasked with compiling
and sharing information related to group-wide risk manage-
ment and discussing this information as necessary.
The committee discusses risks, RAF, and other matters
related to all areas of risk management and reports its
findings to the Management Committee.
Holding Company SMFG
Board of Directors
Risk Committee
Audit Committee
Management Committee
Group CRO
Corporate Risk
Management Dept.
Market Risk
Liquidity Risk
Risk Management Committee
ALM Committee
Credit Risk Committee
Operations Planning Dept.
IT Planning Dept.
General Affairs Dept.
Operational Risk
Human Resources Dept.
Credit & Investment
Planning Dept.
Credit Risk
General Affairs Dept. / Public Relations Dept.
Administrative Services Dept.
R
i
s
k
M
a
n
a
g
e
m
e
n
t
U
n
i
t
Guidance in drafting basic policies
Monitoring
Report
Group Companies
External Audit
Internal Audit Dept.
O
p
e
r
a
t
i
o
n
a
l
R
i
s
k
Processing Risk
System Risk
Legal Risk
Human Resources Risk
Reputational Risk
Tangible Asset Risk
55
2017 Annual Report
Corporate Infrastructure
Compliance
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.
Compliance Management
SMFG seeks to maintain a compliance system that provides
appropriate instructions, guidance, and monitoring for
compliance to ensure sound and proper business operations
across the Group. Measures have been put in place to pre-
vent misconduct and quickly detect inappropriate activities
that have occurred to implement corrective measures.
As the holding company, SMFG has established the
Compliance Committee, which is chaired by the Group Chief
Compliance Officer (Group CCO) responsible for overseeing
matters related to compliance. This committee comprehen-
sively examines and discusses SMFG’s various work
processes from the perspective of compliance.
In addition, SMFG formulated the Group Compliance
Program to provide a concrete action plan for practicing
compliance on a group-wide level. SMBC and other Group
companies develop their own compliance programs based
on the Group program and take other steps to effectively
install compliance frameworks.
SMFG discusses and receives reports on compliance-
related matters from Group companies, providing
suggestions and guidance as necessary to ensure
compliance throughout the Group.
Response to Anti-social Forces
SMFG has set down a basic policy stipulating that all Group
companies must unite in establishing and maintaining a
system that ensures that the Group allows no relationship
whatsoever with anti-social forces or related individuals.
Specifically, the Group strives to ensure that no business
transactions are made with anti-social forces or individuals.
All contractual documents or terms and conditions must
include contracts and terms of transactions clauses regarding
the exclusion of anti-social forces from any business relation-
ship, and in the event that it is discovered subsequent to
the commencement of a deal or trading relationship that
the opposite party belongs to or is affiliated with an anti-
social force, we undertake appropriate remedial action by
contacting an outside institution specializing in such matters.
Basic Policy for Anti-Social Forces
1. Completely sever any connections or relations with
anti-social forces.
2. Repudiate any unjustifiable claims, and do not engage
in any “backroom” deals whatsoever.
Further, promptly take legal actions as necessary.
3. Appropriately respond to any antisocial forces
as an organization by cooperating with outside
professional agencies.
Compliance Systems at SMFG
Holding Company SMFG
Board of Directors
Management Committee
Group CCO
Audit Committee
Audit Dept.
Supervise /
Audit
Compliance Committee
Business
Execution
Department Overseeing Compliance (General Affairs Dept.)
Group Companies
56
2017 Annual Report
Customer Information Management
SMFG has established Group policies that set forth guide-
lines for the entire Group regarding proper protection and
use of customer information. All Group companies adhere
to these policies in developing frameworks for managing
customer information.
SMBC and other Group companies formulate and disclose
privacy policies for their measures regarding the proper
protection and use of customer information and numbers.
Management systems are established based on these policies.
outside their company. In addition, SMBC and other Group
companies have established internal reporting systems for
their employees.
The SMFG Accounting and Auditing Hotline is aimed at
strengthening the Group’s self-correction function by
encouraging 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.
Internal Reporting Systems and Hotline for Inap-
propriate Accounting and Auditing Activities
The SMFG Group Alarm Line is intended to promote self-
correction through early detection and rectification of actions
that may violate laws and regulations. All Group employees
can use this internal means of reporting from inside and
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
smfghotline@iwatagodo.com
E-mail address:
• 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 activities.
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 Finan-
cial 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
(Japan) 03-3669-9833
Fax:
Mondays through Fridays
Business hours:
(except public and bank holidays)
9:00 am to 5:00 pm
57
2017 Annual Report Corporate Infrastructure
Internal Audit System
Overview of the Group’s Internal Audit System
At SMFG, the holding company, the Audit Department has
been established as an internal auditing division that is
positioned under the Audit Committee and is independent
from business units and compliance and risk management
divisions. In addition, the chief audit executive oversees
SMFG’s group-wide auditing activities.
Based on the Group Internal Audit Charter and the Basic
Audit Policy and Plan formulated by the Audit Committee
and the Board of Directors, the Audit Division verifies the
appropriateness and effectiveness of internal control sys-
tems, including those elements related to compliance and
risk management. This duty is accomplished through inter-
nal audits of Company divisions and Group companies
aimed at ensuring the appropriateness of Group operations
and the soundness of assets.
In addition, the appropriateness and effectiveness of inter-
nal control systems at Group companies are verified through
oversight of internal audit functions at these companies and
through ongoing monitoring of the status of internal audit
implementation. Major audit findings are regularly reported
to the Audit Committee, the Board of Directors, and the
Group Management Committee. Also, the department is
working to strengthen cooperation with accounting auditors
through frequent exchanges information for appropriate
audit practices
Internal Audit System
Enhancement of the Quality and Effectiveness 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 extends 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 audit offers that information to Group companies,
organizes training programs, and promotes the obtaining
of international certification as an auditor.
Moreover, the Audit Department seeks to enhance
group-wide audit processes through quality assessments of
internal audits based on the IIA standards and on exemplary
initiatives by G-SIFIs.
* 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.
Board of Directors
Management Committee
Communication line
Business units subject to auditing
Audit Committee
Reporting line
(including personnel
right of consent)
Chief Audit Executive
All Departments
Internal
Audits
Internal Audit Dept.
Business units subject to auditing
Auditing
Monitoring
Head Office / Business Units
Internal
Audits
Internal Audit Unit
Holding
Company
SMFG
Group
Companies
58
2017 Annual Report
Corporate Infrastructure
Customer Satisfaction and Quality Improvement
CS and Quality Improvement Initiatives
Training for Deepening Understanding of
Universal Manners
SMFG conducts employee training designed to deepen
understanding with regard to universal manners and
dementia. We thereby aim to foster employees who are
able to understand and be considerate of people different
from them and think and act from the perspectives of
various other people, including senior citizens and
differently abled individuals.
With regard to dementia, external experts provide basic
information on this illness while also offering guidance on
how to approach customers suffering from it.
Videos on how to cater to the needs of various individuals in branch
Customer Using
Wheelchairs
Senior Citizens
Materials from seminar for deepening understanding regarding dementia
What do
you mean?
Oh, I forgot!
Our Basic Position
SMFG Group companies are united in their efforts for
customer satisfaction (CS) and quality improvement in line
with “Our Mission,” which states “We grow and prosper
together with our customers, by providing services of
greater value to them.”
CS and Quality Improvement System
The Group CS Committee at holding company SMFG has
been meeting periodically to verify and exchange information
regarding feedback from customers and measures for pro-
moting CS from the perspective of facilitating cooperation
across the entire Group.
In fiscal 2017, SMFG established the CS Improvement
Subcommittee as well as the CS Improvement Committee
to function alongside the aforementioned Group CS
Committee from the perspective of advancing initiatives
and reinforcing management systems related to customer-
oriented business conduct. External experts are invited
to serve as advisors at meetings of the CS Improvement
subcommittee, where information is exchanged on how
to fully entrench a customer- oriented mind-set.
Customer-Oriented Business Initiative
Based on the Principles for Customer-Oriented Business
Conduct released by the Financial Services Agency on
March 30, 2017, SMFG has revised “Our Commitment to
Fiduciary Duties” and formulated its Basic Policy for Cus-
tomer-Orientated Business Conduct.
For information on the Basic Policy for Customer-Orientated
Business Conduct, please see pages 91 and 92.
Incorporation of Customer Feedback into Management
Holding Company SMFG
Group Companies
CS improvement
Committee
Report
Instruct
CS Improvement
Subcommittee
Report / Share
Verify
Information
gathering
Analysis
Customer
Feedback
Improvement
activities
Declaration of Compliance with ISO 10002
SMFG and SMBC Consumer Finance have declared their intent to comply with the ISO 10002 (JIS Q 10002) international standard
with regard to their processes for incorporating customer feedback into management.
59
2017 Annual Report
Corporate Infrastructure
Human Resources
Human Resources Strategy under the Medium-Term Management Plan
1
2
3
Discipline
Disciplined business management
Optimization of headcount and personnel expenses,
and proper deployment of the human resources
Focus
Focus on our strengths to generate growth
Integration
Integration across the Group and globally
to achieve sustainable growth
Hire and develop talents to lead the strategy
Producing workplace environment to support
diversified human resources
Optimization of Headcount and Personnel Expenses,
and Proper Deployment of the Human Resource
Optimization of Headcount and Personnel Expenses
SMFG aims to optimize headcount and personnel expenses through
enhancing headcount management and personnel expenses man-
agement as well as implementing company-wide efforts to increase
productivity and operational efficiency.
Proper Deployment of the Human Resource
SMFG aims proper deployment of human resources through group-
wide personnel movement based on the business strategy and
employees’ skill, experience and career development. At the same
time, SMFG develops new job-position and focus on education of
employee in order to implement group-wide personnel movement
smoothly.
Hire and Develop Talents to Lead the Strategy
Allocation of Human Resources to Strategic Growth Fields
SMFG is allocating human resources to strategic growth fields through
both personnel relocations and the hiring of mid-career individuals.
Stage-Based Human Resources Development
SMFG categorizes the stages of development of our employees and
Human resources development programs are in place for each stage.
Stage
Initiatives
Mid-level Employees
• Planned employee rotation plans
Cultivation of Future Leaders
(8th year–16th year)
• Identification of necessary skills and experience
Developing Global Talent
As our business globalizes rapidly, we are committed to strengthen
our employees’ global business capabilities. For example, we provide
various unique global training programs for both Japan hired and
overseas hired employees, including a leadership program organized
in collaboration with a world-leading business school. We also
support employees’ language trainings to encourage active
communications across borders.
In addition, we promote cross-border transfers and secondment of
employees around the world, for both business and training purposes.
Through these initiatives, there are increasing number of overseas
hired employees who have worked in Japan, contributing to globalize
our domestic offices.
By creating an environment where employees with different back-
grounds work together and inspire each other, we pursue to provide
services of greater value to our customers.
Foster Workplace Environment That Is Conducive
to the Efforts of Diverse Human Resources
Promotion of Diversity
SMFG is fostering a workplace
environment that will enable diverse
human resources to work in diverse
manners on the broad field in SMFG
Through SMFG’s joint recruiting
activities, we implement hiring
practices regardless of gender,
nationality, and age, seeing only
applicants’ characters and aptitudes,
and training deliberately aimed at acquiring these
to actively hire individuals with highly
Junior Employees
(1st year–7th year)
Development of Junior Employees
• Enhancement of on-the-job training through
establishment of basic principles of working for
SMFG and instructor systems
• Management skills training for managers
specialized skills.
SMFG’s joint hiring event poster
60
2017 Annual Report
• Empowerment of Female Employees
We hold SMFG joint women’s career forums each year for young
Improvement of Motivation and Engagement
SMFG develops frameworks for disseminating its Five Values, which
female employees with the aim of giving them a clear focus in their
serve as its shared code of conduct, and for supporting employees
work at an early stage. In addition, SMFG is focused on cultivating
in tackling new challenges. We thereby seek to improve the motiva-
female leaders through its career development support programs,
tion of all Group employees and make them feel more engaged with
which include leadership training and mentor systems targeting
their work so that they are able to deliver higher performances.
mid-level female employees.
In addition, we implement group-wide surveys of employees,
SMFG’s initiatives for empowering female employees have earned
which we call “financial group employee surveys,” to maintain an
recognition from external institutions.
understanding of employee motivation levels, which is incorporated
Inclusion in Nadeshiko Brand selection
compiled jointly by the Ministry of
Economy, Trade and Industry and
the Tokyo Stock Exchange
Sumitomo Mitsui Financial Group, Inc.
Receipt of “Platinum Kurumin”
certification from the Ministry of
Health, Labour and Welfare
Sumitomo Mitsui Banking Corporation,
The Japan Research Institute, Limited
into human resource measures.
Uniting a Diverse Team of Employees
Receipt of 2017 Catalyst Distinction
Sumitomo Mitsui Banking Corporation
• Working Style Reform
When we hire employees with diverse backgrounds, we cannot
expect everyone to be able to fully exercise their talents under the
same working style. Accordingly, reforms to working style will be
the centerpiece of our efforts to promote diversity. Through these
reforms, we will drastically revise operating processes, allow
employees flexibility with regard to working locations and times,
and take steps to prevent excessive overtime.
As one initiative to promote working style reforms, SMBC began
presenting working style reform awards to head office divisions in
fiscal 2015. These awards
recognize divisions imple-
menting superior initiatives
based on the details of these
initiatives and the extent to
which they were able to
reduce overtime.
Working style reform award ceremony
• Employment of Differently Able Individuals
SMBC Nikko Securities employs leading differently abled athletes
who take part in competitions and give lectures in Japan and
overseas to foster understanding with regard to differently
abled individuals.
Takeshi Kunibe
Director President and Group CEO
Sumitomo Mitsui Financial Group, Inc.
When part-time employees are included, SMFG has around
100,000 employees positioned in roughly 40 countries
around the world. The SMFG Group comprises various
companies, and each company is very unique. In the same
manner, our employees are all unique, with differing genders,
ages, nationalities, and values. These diverse human
resources are our greatest asset.
Creating new value is imperative to survival in the highly
volatile operating environment. As we strive to create such
value, we must begin by aligning our diverse employees,
who come from various backgrounds, along the same vector
and having them share fresh and innovative ideas that are
unfettered by tradition.
It is not easy to respect diversity while also fostering a sense
of team unity. SMFG works to accomplish this through its Five
Values, which put forth a set of values and action guidelines
shared by all employees. If every employee remains constantly
aware of the fact that they are a member of SMFG and roots
their individuality in the Five Values, this diversity will become
a wellspring of power for the Group. By uniting our diverse
team of employees in this manner, we aim to ensure that
SMFG continues to be a strong company on into the future.
61
2017 Annual Report
Corporate Infrastructure
Corporate Social Responsibility (CSR)
SMFG’s Definition of CSR
In the conduct of its business activities, SMFG fulfills its
social responsibilities by contributing to the sustainable
development of the entire society by offering higher 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.
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/
Aiming to Contribute to the Sustained
Development of the Entire Society
Society today is confronting numerous and wide-ranging
issues, including global warming, rapid population growth,
and low birthrates and aging populations in developed coun-
tries. 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 in order to contribute
to the sustainable development of the entire society.
Basic CSR Policies
SMFG has a CSR definition and “business ethics” which is a
common philosophy for CSR, to make the position of CSR
clear and promote CSR effectively.
Moreover, the Group CSR Department has been set up
within the Corporate Planning Department, and CSR com-
mittee is held periodically to facilitate improvements in CSR
initiatives by discussing matters related to group-wide CSR
activities. Such activities are advanced based on SMFG’s
definition of CSR, which constitutes our basic CSR policies,
and our priority issues.
Please follow the link to read about our CSR “business ethics.”
http://www.smfg.co.jp/english/responsibility/smfgcsr/
Priority Issues (Materiality)
Environment
Next Generation
Community
The Vision We Aspire for 2030
A financial group that contributes to the
The Vision We Aspire for 2030
A financial group that contributes to
The Vision We Aspire for 2030
A financial group that provides safety and
preservation of the global environment;
the development of all people’s skills,
security to all, in order to contribute to the
the foundation for the lives of all, in order
particularly by spreading and entrenching
creation of communities in which everyone
to help realize a sustainable society
financial literacy, to create a more
can participate
empowering future
Issues We Should Address
• Promotion of environmental businesses
Issues We Should Address
• Support for growth industries
Issues We Should Address
• Contribution to achieving and developing
• Management of environmental risks
• Resolution of social issues in emerging
safe and secure communities
• Reduction of environmental impacts
countries
• Promotion of social inclusion in
• Promotion of financial literacy education
collaboration with NGOs and NPOs
for all generations
• Support for reconstruction in areas
impacted by large-scale natural disasters
62
2017 Annual Report
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.
Please follow the link to read about our Group Environmental
Policy.
http://www.smfg.co.jp/english/responsibility/management/index.html
Environmental Management System
Based on ISO 14001 Certification
In 1998, SMBC became the first Japanese
bank to obtain ISO 14001* certification.
With the holding company SMFG serving as
the registered company, eight major Group
companies have acquired this certification.
* International standard for environmental management systems
ISO 14001
certification
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
businesses.” 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. In addition, we began receiving third-party
verifications for our environmental data from fiscal 2016.
Initiatives to reduce impacts on the environment are being
advanced across the Group. For example, SMBC makes
bank passbooks viewable online and provides electronic loan
documents, while Sumitomo Mitsui Card Company offers
billing statements in electronic format. Furthermore, SMBC’s
Ginza Branch was reopened
inside the GINZA SIX com-
mercial complex in April 2017
as a new, next-generation
branch allowing for all
procedures to be performed
in a paperless manner.
SMBC’s Ginza Branch after reopening
Management of Environmental Risks
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.
Promoting Environmental Businesses
SMFG positions environmental businesses as a means to
preserve and improve the global environment through its
core business operations. Examples include support activi-
ties carried out through coordination between the different
business models of each Group companies, such as support
for environmental infrastructure improvement projects and
renewable energy projects in emerging countries. In addi-
tion, SMFG promotes environmental financing through the
issuance of green bonds and the sales of eco funds.
We are also providing information to customers via various
means, such as the SAFE
environmental magazine
and our participation in the
Eco-Pro (International Exhi-
bition on Environment and
Energy) exhibition.
Support for utilizing renewable energy
SMBC Environmental Assessment Loan /
Private Placement Bond Performance*
(Trillions of yen)
2.0
1.5
1.0
0.5
0
’09
’10
’11
’12
’13
’14
’15
’16
(FY)
* Aggregate total from commencement of financing to March 31, 2017
63
2017 Annual Report
Corporate Social Responsibility (CSR)
Initiatives Targeted at Social Issues in Asia
From March 2015, SMBC and PT Bank Sumitomo Mitsui
Indonesia has cooperated with Indonesian major Djarum
Group’s Foundation for facilitating CSR activities in Indone-
sia. We have donated training equipment to respective
vocational schools in the sphere of education.
SMBC became the first Japanese company to sign an
agreement with the Japan Committee for UNICEF in 2015.
The agreement concerns training program for school teach-
ers in Myanmar, to contribute to educational improvement.
Training using state-of-the-art ship
simulator
Education support activities in
Myanmar
Global Human Resources Development
The SMBC Foundation for International Cooperation
provides scholarships to students from Asia, attending
graduate schools in Japan whom may contribute to the
economic development of emerging countries in the future.
The foundation also provides subsidies to research that
undertake projects contributing to economic development
of emerging countries.
The SMBC Global Foundation, based in the United States,
has also provided scholarships to more than 6,000 university
students in Asian countries since 1994. It supports educa-
tional trips to Japan, and other programs by volunteers
from SMBC. The foundation also matches donations from
our employees.
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. We are also engaged in the improve-
ment of financial literacy and the development of markets
that support healthy economic growth in emerging countries.
By using our financial expertise, we contribute to creating a
vibrant society where the next generation can flourish.
Improvements to Financial Literacy
SMFG Group companies unite to provide financial and
economic education based on their respective business
models. SMBC and SMBC Nikko Securities accept student’s
visits while SMBC Consumer Finance organizes financial
and economic educational seminars for college students and
those who have entered the workforce. The Group provided
financial and economic education and career education to
approximately 130,000 individuals in fiscal 2016.
What Does a Bank Do?, and JUNIOR SAFE, a book and
magazine both targeted for children about the environment
has received the 10th Kid’s Design award of excellence
(by Minister of State for Consumer Affairs and Food Safety).
Our activities include the provision of the Hello Money; a
smartphone application helping children managing their
allowances, co-sponsorship of the KidZania work experience
theme park, and supporting Finance Park educational
programs for middle school students.
Iwaki Juku career education program,
Iwaki City, Fukushima Prefecture
Bank work experience program for
elementary school students
JUNIOR SAFE children’s magazine
Bank work experience attraction at
KidZania
64
2017 Annual Report Community
Our Basic Position
In addition to the social contribution of through our daily
business, SMFG strives to be a good corporate citizen and
fulfill its social responsibilities by undertaking a wide variety
of activities to help society prosper.
Initiatives to Assist the Elderly and People with
Cognitive Impairment and Disabilities
As of March 31, 2017, SMFG had trained approximately
10,000 staff members as cognitive impairment supporters.
In addition, SMBC encourages employees to acquire
care service assistant
qualifications and is
developing its branches
in a manner that ensures
the elderly and people with
disabilities can use them
with ease.
Cognitive impairment supporter
training seminar
Acquisition of Qualifications by Employees
(Thousand people)
15
10
5
0
’14
’15
’16
(FY)
Care service assistant
Cognitive impairment supporter
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 salaries
for donations to charitable organizations. In fiscal 2016,
donations were made to 34 organizations working on the
resolution of social issues, and approximately 430 volunteers
by executives, employees and their families, participated
directly in the activities of these organizations.
In addition, we held various volunteer activity programs
open to Group employees
and conducted the SMFG
Pro Bono Project, a pro bono
activity program through
which employees use their
professional knowledge and
skills to contribute to the
public good.
Pro bono activities in which employees
use their skills to contribute to the
public good
Donation Targets and Supported Activities
Domestic: Childcare support activities, child abuse prevention
activities, support for the independence of people with
disabilities, environmental education activities, etc.
Overseas: Support for afforestation activities in Thailand and
Cambodia, support for educational activities at schools
in Vietnam, the Philippines, and South Africa, etc.
Support for Areas Affected by Natural Disasters
Since May 2011, SMFG employees and members of their
families have been participating in voluntary activities
in areas affected by the Great East Japan Earthquake.
In addition, employees volunteered in the areas affected
by the Kumamoto earthquakes during fiscal 2016.
As of March 31, 2017,
more than 1,000 executives,
employees, and family
members had taken part
in volunteer activities in
the Tohoku region and
Kumamoto Prefecture.
Volunteer activity in earthquake-
stricken area
65
2017 Annual Report
Corporate Infrastructure
Financial Review
Operating Results
Income Summary (SMFG Consolidated)
Year ended March 31
2016 (A)
2017 (B)
(Billions of yen)
Increase
(decrease)
(B) – (A)
Consolidated gross profit
2,904.0
2,920.7
16.8
G eneral and administrative
expenses
E quity in gains (losses)
of affiliates
(1,724.8)
(1,812.4)
(87.6)
(36.2)
24.6
60.7
Consolidated net business profit
1,142.9
1,132.9
Total credit cost
(102.8)
(164.4)
(10.1)
(61.6)
(14.0)
106.2
20.6
69.0
(123.9)
985.3
55.0
(17.6)
1,005.9
646.7
706.5
59.8
Gains (losses) on stocks
Others
Ordinary profit
P rofit attributable to owners
of parent
(Reference) Income Summary (SMBC Non-consolidated) (Billions of yen)
Year ended March 31
2016 (A)
2017 (B)
Gross banking profit
1,534.3
1,663.7
Expenses*1
Banking profit*2
Credit cost
Gains (losses) on stocks
Others
Ordinary profit
Net income
(805.5)
728.8
3.2
35.3
(19.4)
747.9
609.2
(816.9)
846.7
(61.1)
115.1
(36.6)
864.0
681.8
*1 Excluding non-recurring losses
*2 Before provision for general reserve for possible loan losses
Increase
(decrease)
(B) – (A)
129.4
(11.5)
117.9
(64.3)
79.7
(17.2)
116.1
72.6
Consolidated gross profit / Consolidated net
business profit / Profit attributable to owners
of parent (SMFG Consolidated)
(Trillions of yen)
4
3
2.79
2.90
2.98
2.90
2.92
2
1
0
1.17
1.24
1.31
1.14
1.13
0.79
0.84
0.75
0.65
0.71
’12
’13
’14
’15
’16
(FY)
Consolidated gross profit
Profit attributable to owners of parent
Consolidated net business profit
66
Consolidated net business profit
Consolidated gross profit increased by ¥16.8 billion year-on-
year to ¥2,920.7 billion. The primary reasons were an
increase in profit of SMBC Nikko Securities Inc. by regarding
as rallies in the market conditions and profit contribution of
SMFL Capital Company, Limited which has been included in
the scope of consolidation from fiscal 2016, despite of an
impact of negative interest rates.
General and administrative expenses increased by ¥87.6
billion year-on-year to ¥1,812.4 billion, due to ongoing invest-
ments to enhance top-line profit growth and the effects from
system investments in the past years, despite of strengthen-
ing of cost control in the entire group. Equity in gains (losses)
of affiliates increased by ¥60.7 billion year-on-year to ¥24.6
billion. This was mainly because an impairment loss on
goodwill was recognized for BTPN in the previous fiscal
year, which is not recognized in this fiscal year.
As a result, consolidated net business profit decreased by
¥10.1 billion year-on-year to ¥1,132.9 billion.
Credit cost
Total credit cost increased by ¥61.6 billion year-on-year to
¥164.4 billion. This was mainly due to additional reserves for
possible loan losses with worsened business results of
SMBC’s obligor with large exposure.
Gains (losses) on stocks
Gains (losses) on stocks decreased by ¥14.0 billion year-on-
year to ¥55.0 billion.
Ordinary profit
In addition to the above items, Others increased by ¥106.2
billion, resulting in losses of ¥17.6 billion. This was mainly
due to provision for reserve for losses on interest repayment
in the previous fiscal year, which is not recognized in this
fiscal year and for other reasons. As a result, Ordinary profit
increased by ¥20.6 billion year-on-year to ¥1,005.9 billion.
Profit attributable to owners of parent
Profit attributable to owners of parent increased by ¥59.8
billion year-on-year to ¥706.5 billion due to an increase in
deferred tax assets recoverable in the future with application
of the consolidated corporate-tax system from fiscal year
ending March 31, 2018 (fiscal 2017).
2017 Annual Report Financial Position
Consolidated Balance Sheet (SMFG Consolidated)
(Billions of yen)
Increase
(decrease)
(B) – (A)
March 31
Assets
2016 (A)
2017 (B)
186,585.8
197,791.6
11,205.8
Loans and bills discounted
75,066.1
80,237.3
5,171.2
Securities
25,264.4
24,631.8
(632.7)
Liabilities
176,138.2
186,557.3
10,419.2
Deposits
110,668.8
117,830.2
7,161.4
N egotiable certificates
of deposit
14,250.4
11,880.9
(2,369.5)
Net assets
10,447.7
11,234.3
786.6
NPLs based on the Financial Reconstruction Act
(SMFG Consolidated)
March 31
2016 (A)
2017 (B)
(Billions of yen)
Increase
(decrease)
(B) – (A)
NPLs based on the Financial
Reconstruction Act (A)
992.7
927.7
(65.1)
Normal assets
85,579.4
91,575.2
5,995.8
Total (B)
86,572.2
92,502.9
5,930.7
NPL ratio (A/B)
1.15%
1.00%
(0.15)%
Unrealized Gains (Losses) on Other Securities
(SMFG Consolidated)*
2016
2017
(Billions of yen)
Increase
(decrease)
Loans and bills discounted
Loans and bills discounted increased by ¥5,171.2 billion
year-on-year to ¥80,237.3 billion. This increase was mainly
due to increases in both domestic and overseas loans and
bills discounted of SMBC.
Deposits
Deposits increased by ¥7,161.4 billion year-on-year to
¥117,830.2 billion. This increase was mainly due to
increases in both individual and corporate deposits in Japan.
Negotiable certificates of deposit decreased by ¥2,369.5
billion year-on-year to ¥11,880.9 billion.
NPLs based on the Financial Reconstruction Act
NPLs based on the Financial Reconstruction Act decreased
by ¥65.1 billion year-on-year to ¥927.7 billion. As a result,
NPL ratio decreased by 0.15 percentage points year-on-year
to 1.00%.
Securities
Securities decreased by ¥632.7 billion year-on-year to
¥24,631.8 billion. Net unrealized gains on other securities
increased by ¥281.2 billion year-on-year to ¥2,188.7 billion.
Consolidated Balance Sheet (SMFG Consolidated)
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)
(Trillions of yen)
Consolidated total assets
186.6
Stocks
3,511.9
1,573.0
3,757.8
1,921.9
348.9
Bonds
10,893.1
109.2
10,181.4
60.4
(48.8)
Others
8,728.5
225.3
9,677.7
206.5
(18.9)
Total
23,133.4
1,907.5
23,616.8
2,188.7
281.2
* The figures above include unrealized gains (losses) on negotiable certificates of
deposit in “Cash and due from banks” and “Deposits with banks” and benefi-
ciary claims on loan trusts in “Monetary claims bought,” etc.
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
Consolidated total assets
197.8
Cash and
due from
banks
46.9
Loans
and bills
discounted
80.2
Securities
24.6
Others
46.1
Deposits
117.8
11.9
Others
56.8
Negotiable
certificates
of deposit
10.4
Net assets
11.2
Net assets
March 31, 2016
March 31, 2017
67
2017 Annual Report Financial Review
Capital
Consolidated capital ratio (international standard)
(SMFG Consolidated)
March 31
2016 (A)
2017 (B)
(Billions of yen)
Increase
(decrease)
(B) – (A)
Capital
Common equity Tier 1 capital increased by ¥812.0 billion
year-on-year to ¥8,608.5 billion, and total capital increased
by ¥737.7 billion year-on-year to ¥11,973.7 billion, due to
an increase in profit attributable to owners of parent.
Common equity Tier 1 capital
7,796.5
8,608.5
812.0
Additional Tier 1 capital
1,235.2
1,337.7
102.5
Tier 1 capital
Tier 2 capital
9,031.7
9,946.2
914.5
2,204.3
2,027.5
(176.8)
Total capital
11,235.9
11,973.7
737.7
Risk weighted assets
66,011.6
70,683.5
4,671.9
Common equity Tier 1 capital ratio
11.81%
12.17%
0.36%
Tier 1 capital ratio
13.68%
14.07%
0.39%
Total capital ratio
17.02%
16.93%
(0.09)%
Basel III fully-loaded basis
(Based on the definition as of March 31, 2019)
Common equity Tier 1 capital
7,901.0
8,678.7
777.7
Common equity Tier 1 capital ratio
11.9%
12.2%
0.3%
(Excludes net unrealized gains
(losses) on other securities)
9.9%
10.0%
0.1%
Risk weighted assets
Risk weighted assets increased by ¥4,671.9 billion year-
on-year to ¥70,683.5 billion. The increase was mainly
due to assets investments in both domestic and overseas
operations, an influence that SMFL Capital Company
became a consolidated subsidiary of SMFG from fiscal
2016, and for other reasons.
Capital ratio
The common equity Tier 1 ratio increased by 0.36 percentage
points year-on-year to 12.17%, and the total capital ratio
decreased by 0.09 percentage points year-on-year to 16.93%.
Calculated on a Basel III fully-loaded basis (based on
the definition as of March 31, 2019), the common equity
Tier 1 ratio increased by 0.3 percentage points year-on-year
to 12.2%
Common equity Tier 1 ratio
(fully-loaded basis, SMFG consolidated)
(Trillions of yen)
10
7.5
8.6
12.0
11.9
7.92
7.90
1.79
1.35
10.3
6.37
5.37
0.95
5
0.76
(%)
12
12.2
8.68
1.54
9
6
3
0
2.5
0
’12
’13
’14
’15
’16
(FYE)
Common equity Tier 1 capital
of which, net unrealized gains (losses) on other securities) (left axis)
(
Common equity Tier 1 ratio (right axis)
68
2017 Annual Report Dividend
Our basic policy was to achieve a sustainable increase in
shareholder 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 basic policy, SMFG decided the ordinary
dividend per share on common stock was ¥150 in fiscal
2016, the same as in the previous fiscal year.
Ordinary dividend per share
(Yen)
(%)
200
150
100
50
0
Commemorative
dividend
120
10
120
21.3*
20.3
150
150
32.7
29.9
140
26.2
’12
’13
’14
’15
’16
(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)
69
2017 Annual Report
Sponsorship
SMFG sponsors various sports events.
SMBC Nippon Series (Professional Baseball in Japan)
Japan National Rugby Team
SMBC Singapore Open
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)
70
2017 Annual Report Appendix I
CONTENTS
Group Companies ............................................ 72
Corporate Data ................................................. 97
Risk Management ............................................. 77
Sumitomo Mitsui Financial Group, Inc.
Sumitomo Mitsui Financial Group’s Basic Policy
for Customer-Orientated Business Conduct ..... 91
Directors and Executive Officers .................. 97
SMFG Organization ...................................... 98
Employees ......................................................... 93
Sumitomo Mitsui Banking Corporation
Main Work-Life Balance Support System .......... 96
Board of Directors, Corporate Auditors
and Executive Officers .................................. 99
SMBC Organization .................................... 102
Principal Subsidiaries and Affiliates ................ 104
Principal Domestic Subsidiaries ................. 104
Principal Overseas Subsidiaries ................. 105
Principal Affiliates ........................................ 106
International Directory .................................... 107
71
2017 Annual Report Group Companies (as of March 31, 2017)
The companies of the Sumitomo Mitsui
Financial Group (SMFG) primarily conduct
commercial banking through the following
financial services: leasing, securities, con-
sumer finance, system development data
processing, and asset management.
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:
1. Management of banking subsidiaries and other
companies that can be treated as subsidiaries
under the stipulations of Japan’s Banking Act as
well as the performance of ancillary functions
2. Functions that can be performed by bank holding
companies under the stipulations of Japan’s
Banking Act
Establishment: December 2, 2002
Head Office: 1-2, Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan
Chairman of the Board: Koichi Miyata
(Appointed on April 1, 2017)
President: Takeshi Kunibe
(Appointed as President on April 1, 2017,
Appointed as President and Group Chief
Executive Officer on June 29, 2017)
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.
www.smfg.co.jp/english/
Credit Ratings (as of June 30, 2017)
Moody’s
Standard & Poor’s
Fitch Ratings
R&I
JCR
Long-term Short-term
A1
A–
A
A+
AA–
P–1
—
F1
—
—
Financial Information
(Consolidated basis, years ended March 31)
2017
Billions of yen
2015
2016
2014
1,005�8
For the Year:
Ordinary income �������� ¥ 5,133�2 ¥ 4,772�1 ¥ 4,851�2 ¥ 4,641�8
Ordinary profit���������
1,432�3
Profit attributable to
owners of parent �����
At Year-End:
Net assets �������������� ¥ 11,234�2 ¥ 10,447�6 ¥ 10,696�2 ¥ 9,005�0
Total assets ������������ 197,791�6 186,585�8 183,442�5 161,534�3
1,321�1
753�6
646�6
985�2
706�5
835�3
SUMITOMO MITSUI Banking Corporation
www.smbc.co.jp/global/index.html
Sumitomo Mitsui Banking Corporation
(“SMBC”) was established in April 2001
through the merger of two leading banks 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 expedi-
tious 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.
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: Makoto Takashima
(Appointed on April 1, 2017)
(Concurrent Director at Sumitomo
Mitsui Financial Group)
Number of Employees: 29,283
Number of branches and other business locations:
2,094*
In Japan:
Branches:
506
(Including 46 specialized deposit account branches)
431
Sub-branches:
1
Banking agencies:
23
Offices handling non-banking business:
1,133
Automated service centers:
41
18
20
3
* 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.
Overseas:
Branches:
Sub-branches:
Representative offices:
72
Credit Ratings (as of June 30, 2017)
Moody’s
Standard & Poor’s
Fitch Ratings
R&I
JCR
Long-term Short-term
A1
A
A
AA–
AA
P–1
A–1
F1
a–1+
J–1+
Financial Information
(Consolidated basis, years ended March 31)
2017
Billions of yen
2015
2016
2014
For the Year:
Ordinary income ������� ¥ 3,014�4 ¥ 3,059�0 ¥ 3,199�4 ¥ 3,105�9
1,298�7
Ordinary profit ��������
Net income �������������
785�6
At Year-End:
Net assets �������������� ¥ 8,908�1 ¥ 9,446�1 ¥ 10,036�0 ¥ 8,640�7
Total assets ������������ 180,946�6 180,408�6 177,559�1 155,824�1
1,198�9
736�9
930�3
680�1
829�4
543�1
2017 Annual Report
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 and CEO: Hidetoshi Furukawa
Number of Employees: 2,064
Number of branches: In Japan: 37
(Including Internet Branch and Sub-Branches)
www.smbctb.co.jp/en
Financial Information (Years ended March 31)
Billions of yen
2016
2015
2017
For the Year:
Ordinary income �������������������������� ¥ 39�9
(15�8)
Ordinary profit (loss) ���������������������
Net income (loss) �������������������������
(4�1)
At Year-End:
Total assets ��������������������������������� ¥2,710�8
¥ 20�5
(9�5)
(10�8)
¥ 7�3
(1�1)
(1�3)
¥2,517�2
¥224�2
SMBC Trust Bank was founded in February
1986. As well as our corporate trust oper-
ations, we have worked to develop
personalized retail banking and asset man-
agement operations 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 following 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 capabil-
ities and solid organizational skills of the
Sumitomo Mitsui Financial Group.
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,
President and CEO: Masaki Tachibana
Chuo-ku, Osaka
Number of Employees: 3,492
(Appointed on June 27, 2017)
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.
www.smfl.co.jp/english/
Credit Ratings (as of June 30, 2017)
R&I
JCR
Long-term Short-term
A+
AA–
a–1
J–1+
Financial Information
(Consolidated basis, years ended March 31)
2017
Billions of yen
2015
2016
2014
For the Year:
Leasing transaction
volume ���������������������
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Profit attributable to
owners of parent �������
At Year-End:
Total assets ��������������
¥2,192�6
1,420�8
89�0
90�4
¥1,994�8
1,147�8
79�6
81�0
¥1,865�8
1,152�0
84�8
86�9
¥1,767�0
1,037�2
75�6
77�2
50�4
45�5
45�8
41�2
¥5,601�6
¥4,736�8
¥4,601�0
¥4,176�3
73
2017 Annual Report 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 lead-
ing Japanese full-line securities company
capable of offering high quality financial
products and services globally.
www.smbcnikko.co.jp/en
Company Name: SMBC Nikko Securities Inc.
Business Profile: Securities
Establishment: June 15, 2009
Head Office: 3-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo
President and CEO: Yoshihiko Shimizu
Number of Employees: 8,807
Credit Ratings (as of June 30, 2017)
Moody’s
Standard & Poor’s
R&I
JCR
Long-term Short-term
A1
A
AA–
AA
P–1
A–1
a–1+
—
2014
¥ 333�4
96�6
97�1
61�4
¥ 332�6
89�1
93�2
62�5
¥9,231�8
¥7,125�5
Financial Information (Years ended March 31)
2017
Billions of yen
2015
2016
For the Year:
Operating revenue ����� ¥ 334�4 ¥ 297�9
46�9
Operating income������
48�3
Ordinary profit�����������
Net income ���������������
33�1
At Year-End:
Total assets �������������� ¥11,536�9 ¥10,346�2
69�0
70�5
39�4
www.smbc-friend.co.jp
(Japanese only)
SMBC Friend Securities Co., Ltd., is a
full-service securities firm with a business
focused mainly on retail clients. SMBC Friend
Securities provides highly efficient nation-
wide network operations offering services
closely tailored to the needs of its clients and
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.
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 and CEO: Koichi Danno
Number of Employees: 1,755
Financial Information (Years ended March 31)
For the Year:
Ordinary income �������
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2017
¥ 42�4
4�7
5�7
0�7
Billions of yen
2015
2016
¥ 43�0
4�1
5�2
3�2
¥ 50�0
9�8
10�4
7�4
2014
¥ 57�7
15�0
15�3
10�0
¥319�7
¥305�6
¥353�2
¥338�3
SMBC Nikko Securities and SMBC Friend Securities are scheduled to merge in January 2018 assuming approval is received
from the relevant authorities.
74
2017 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.
www.smbc-card.com
(Japanese only)
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, Imabashi,
Credit Ratings (as of June 30, 2017)
R&I
JCR
Long-term Short-term
AA–
AA–
a–1+
J–1+
Chuo-ku, Osaka
Financial Information (Years ended March 31)
President and CEO: Ken Kubo
Number of Employees: 2,460
2017
Billions of yen
2015
2016
2014
For the Year:
Revenue from credit
card operations ��������� ¥12,262�7 ¥11,360�6 ¥10,091�0
198�4
223�4
Operating revenue �����
41�9
34�7
Operating profit ���������
42�0
34�5
Ordinary profit�����������
Net income ���������������
25�9
24�4
At Year-End:
Total assets �������������� ¥ 1,500�7 ¥ 1,356�3 ¥ 1,271�7
Number of
cardholders
(in thousands) �����������
210�1
40�5
40�5
26�6
23,490
24,239
25,731
¥9,131�5
191�4
43�6
43�7
23�4
¥1,218�4
22,994
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 and CEO: Satoru Nakanishi
Number of Employees: 3,339
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 Company.
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.
www.cedyna.co.jp/english/
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
Number of
cardholders
(in thousands) �����������
2017
¥ 152�1
7�0
7�1
14�2
Billions of yen
2015
2016
¥ 149�9
0�4
0�4
0�2
¥ 149�8
1�0
1�1
24�4
2014
¥ 160�0
10�7
11�2
16�3
¥2,112�5
¥2,037�8
¥1,957�5
¥1,977�9
16,650
17,020
17,633
18,412
75
2017 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 and CEO: Ryoji Yukino
Number of Employees: 2,267
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.
Cooperation:
SHOCHIKU Co., Ltd.,
Kabuki-za Co., Ltd.
Credit Ratings (as of June 30, 2017)
R&I
JCR
Long-term Short-term
A
A–
—
—
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit (loss) ��
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2017
¥186�2
51�6
51�8
100�8
Billions of yen
2015
2016
¥178�3
(72�3)
(72�3)
(72�1)
¥168�6
3�7
3�7
1�5
2014
¥164�7
15�9
15�5
19�0
¥925�8
¥858�5
¥833�3
¥821�5
www.jri.co.jp/english/
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 pro-
cessing, 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 and CEO: Masahiro Fuchizaki
Number of Employees: 2,442
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2017
¥132�9
2�2
2�0
1�5
Billions of yen
2015
2016
¥125�0
2�2
1�8
1�3
¥111�1
1�7
1�5
0�5
2014
¥106�0
1�7
1�5
0�7
¥103�2
¥101�8
¥ 93�0
¥ 89�5
www.smam-jp.com/english/
Company Name: Sumitomo Mitsui Asset
Management Company, Limited
Business Profile: Investment management
(discretionary/advisory) and
investment trust fund management
Establishment: July 15, 1985
Head Office: 2-5-1 Atago, Minato-ku, Tokyo
President and CEO: Takashi Matsushita
Number of Employees: 642
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2017
Billions of yen
2015
2016
2014
¥39�1
4�5
4�6
3�5
¥41�7
5�5
5�5
4�0
¥36�1
3�7
3�7
1�9
¥36�3
4�7
4�7
3�3
¥46�5
¥45�1
¥42�1
¥41�0
Sumitomo Mitsui Asset Management Com-
pany Limited (SMAM), as one of the
Japanese top-tier asset managers, contrib-
utes to clients’ wealth building with highest
quality products and services. Since July
2016, the company has been a consolidated
company of SMFG.
SMAM has always placed “Customer-
oriented Business Conduct” at the center of
its day-to-day business activities as seen in
the fact the company ahead of other Japa-
nese asset managers expressed “Our
Commitment to Fiduciary Duties.” For the
future, SMAM will continue to fulfill its respon-
sibilities by improvement of quality and speed
of business process as well as development
of products and services enhancing Quality of
Life of our clients. Above all, it is our mission to
accelerate shifts from savings to wealth build-
ing with further satisfaction of our clients.
76
2017 Annual Report Risk Management
Basic Approach
As risks in the financial services increase in diversity and complexity,
Implementation of the Basel Capital Accord
The Basel III regulatory framework was established on March 31,
risk management—identifying, measuring, and controlling risks—
2013, based on the lessons learned from the global financial crisis
has never been more important in the management of a financial
that spanned from 2008 to 2009. This framework consists of cap-
holding company.
ital, leverage, and liquidity ratios designed to maintain sound oper-
SMFG has established group-wide basic policies for risk man-
ating standards for internationally active banks. SMFG calculates its
agement to put forth concrete directives for appropriately managing
ratios in accordance with the standards for Japanese banks.
risks on a group-wide basis. Adhering to these policies, we identify
The Financial Stability Board (FSB) designates Global
the location and the types of risk to be managed in accordance with
Systematically Important Banks (G-SIBs) and arranges them into
strategic goals and business structures and strive to manage each
one of five bucket categories. Banks designated as G-SIBs are obli-
risk appropriately based on its characteristics.
gated to maintain even higher capital ratios based on their bucket
1. Comprehensive Risk Management
SMFG takes a comprehensive and systematic approach to risk
management, with risk analysis by stress testing and risk capital
management following the ascertainment of environment and risk
(1.0% to 3.5% higher than the standard obligation). As of March
31, 2017, SMFG was designated as a bucket 1 G-SIB and was
obligated to achieve a phased increase in its capital ratio to raise
it above the standard obligation by the lowest amount required of
views, including Top Risks (see page 53).
G-SIBs (1.0%).
Top Risks
The major Top Risks recognized by SMFG and examples of the
scenarios that could potentially result from these risks are listed in
the table below (see page 53 for information on methods of utilizing
Top Risks).
2. Risk Management System
At SMFG, top management plays an active role in the risk manage-
ment process out of recognition for the importance of risk manage-
ment. The group-wide basic policies for risk management are to be
determined by the Management Committee before being authorized
by the Board of Directors. In addition, SMFG has appointed the
Group CRO that is tasked with promoting appropriate risk manage-
ment by developing an understanding of and managing risks in an
integrated manner on a group-wide basis.
Group companies have established risk management systems
based on their business characteristics (see page 55).
In addition, the Basel Committee on Banking Supervision is
engaged in ongoing discussions regarding the revision of risk asset
calculation methods as well as the revision of minimum capital
levels (so-called “capital floors”) and other capital ratio regulations.
Furthermore, unique financial regulations are being introduced in major
countries and regions. In light of these developments, SMFG has
identified trends in international financial regulations as one of its Top
Risks. We will thus monitor the direction of these discussions, mea-
sure the potential impact on our operations, and respond accordingly.
Appropriate revisions to regulations for financial institutions can
contribute to stability in the financial system, but excessive regu-
lation can result in constraints on the intermediary function of the
institutions, which in turn can adversely impact the real economy.
SMFG is therefore pursuing a cooperative approach with the relevant
authorities and other financial institutions, making its views known to
contribute to the development of appropriate regulatory frameworks.
Top Risks
Global political and economic trends
Geopolitical risks faced around the world
(including terrorism)
Monetary policy and economic trends in Japan Deterioration of financial institutions’ earnings resulting from further application of negative interest rate policies by the Bank of
Example Risk Scenarios
Slowdown in the global economy resulting from increased opaqueness in the U.S. or European political climates, stagnancy in
the economies of China or emerging countries, sharp resource price movements, etc.
Slowdown in the economies of specific countries resulting from the increased geopolitical risks associated with the Korean
peninsula, domestic or overseas acts of terrorism, etc.
Trends in international financial regulations
Lack of reliability in relation to foreign currency
procurement
Legal or compliance-related incidents
Japan; economic slowdown or increased financial instability in Japan resulting from yen appreciation, sluggish foreign
demand, poor market conditions, etc.
Higher capital or liquidity requirements due to the institution of stricter international financial regulations; implementation and
enforcement of unique or stricter regulations in principal countries
Lack of reliability or efficiency with regard to foreign currency procurement due to operating environment changes including
rising foreign currency procurement costs or cash outflows at major institutions holding foreign currency deposits
Damage to reputation due to incurring government penalties, fines, other sanctions as a result of incidents stemming from
misconduct, etc.
Difficulty in securing human resources to work in strategic or specialized fields or in maintaining a sufficient base of diverse
employees
Deterioration of conditions at major borrowers Weakening of the Company’s financial base as a result of deterioration of conditions at major borrowers
Lack of human resources necessary for
enacting strategies (lack of personnel numbers,
individuals with specialized skills, etc.)
Ceased operation of information systems
due to cyber attacks
Changes in competitive climate due to
emergence of FinTech or other new
technologies
Earthquakes and other natural disasters
Difficulty in maintaining business continuity due to ceased operation or destruction of information systems following cyber
attacks, etc.
Decreased profitability due to significant erosion of the Company’s market share or necessity of incurring costs that place
downward pressure on performance as a result of intensified competition following entry into the financial industry by
companies from other industries
Halting of operations of business partners as a result of supply chain disruptions, system failures, etc.
Adverse impacts on the Company’s profits from store closures, system failures, etc.
Note: The above is only a portion of the risks recognized by SMFG. It is possible that the materialization of risks other than those listed above could have a significant impact on the Company’s management.
77
2017 Annual Report
Risk-Weighted Assets
Risk-weighted assets subject to the Basel Capital Accord totaled
(3) Credit Policy
SMFG’s Group credit policy comprises clearly stated universal and
¥70,683.5 billion as of March 31, 2017, up ¥4,671.9 billion from
basic operating concepts, policies, and standards for credit oper-
March 31, 2016. The main factors behind the increase in risk-
ations, in accordance with our business mission and rules of con-
weighted assets were a rise in the balance of credits to corporates
duct.SMFG is promoting the understanding of and strict adherence
and increases in equity and fund market prices and positions (credit
to its Group credit policy among all its managers and employees.
risk), an increase in trading positions and a revision in the method-
By fostering a culture of appropriate levels of risk-taking and pro-
ology for risk quantification to reflect recent market circumstances
viding high-value-added financial services, SMFG aims to enhance
such as negative interest rate in Japan (market risk).
shareholder value and play a key contributory role in the community.
■ Risk-Weighted Assets as of March 31, 2017
(Trillions of yen)
March 31,
2016
March 31,
2017
Increase
61.2
1.5
3.3
66.0
64.4
2.8
3.5
70.7
+3.2
+1.3
+0.2
+4.7
Credit risk
Market risk
Operational risk
Total
Credit Risk
2. Credit Risk Management System
At SMFG, the Group CRO formulates credit risk management
policies each year based on the group-wide basic policies for risk
management. Meanwhile, the Credit & Investment Planning
Department is responsible for the comprehensive management of
credit risk. This department drafts and administers credit risk regula-
tions, including the Group credit policies, manages non- performing
loans (NPLs), and performs other aspects of credit portfolio manage-
ment. The Company has also established the Credit Risk Committee
to serve as a body for deliberating on matters related to group-wide
credit portfolios.
1. Basic Approach to Credit Risk Management
At SMBC, the core bank of SMFG, the Credit & Investment
(1) Definition of Credit Risk
Credit risk is the possibility of a loss arising from a credit event, such
Planning Department within the Risk Management Unit furnishes the
credit risk management system and is thus responsible for the com-
as deterioration in the financial condition of a borrower, that causes
prehensive management of credit risk. This department drafts and
an asset (including off-balance sheet transactions) to lose value or
administers credit policies, the internal rating system, credit authority
become worthless.
(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
the corresponding losses on operations can be overwhelming.
The purposes 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. Doing so leads to a loan portfolio that achieves high
returns on capital and assets.
guidelines, and credit application guidelines, and also manages
NPLs and performs other aspects of credit portfolio management.
The department also cooperates with the Corporate Risk
Management Department in quantifying credit risk (risk capital and
risk-weighted assets) and controls the bank’s entire credit risk.
Further, the Credit Portfolio Management Department within the
Credit & Investment Planning Department has been strengthening
its active portfolio management function for stable credit portfolios
mainly through credit derivatives and the sales of loans.
The credit departments within each business unit conduct credit
risk management, along with the branches, for loans handled by
their units and manage their units’ portfolios. The credit approval
authority is determined based on the credit amount and internal
grades, while credit departments focus on the analysis and manage-
ment of customers and transactions with relatively high credit risk.
The Credit Administration Department is responsible for han-
dling NPLs of borrowers classified as potentially bankrupt or lower,
and draws up plans for their workouts, including write-offs. It works
to efficiently reduce the amount of NPLs through Group company
SMBC Servicer Co., Ltd., which engages in related services, and by
such means as the sell-off of claims.
Through industrial and sector-specific surveys and studies of
individual companies, the Corporate Research Department works to
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.
78
2017 Annual Report
The Internal Audit Unit, operating independently of the business
and qualitative factors to derive the obligor grade. In the event that
units, audits asset quality, the accuracy of gradings and self-assess-
the borrower is domiciled overseas, internal ratings for credit are
ment, and the state of credit risk management, and reports the results
made after taking into consideration country rank, which represents
directly to the Board of Directors and the Management Committee.
an assessment of the credit quality of each country, based on its
SMBC has established the Credit Risk Committee as a con-
political and economic situation as well as its current account bal-
sultative body to round out its oversight system for undertaking
ance and external debt.
flexible and efficient control of credit risks, and ensuring the overall
The borrower categories used in self-assessment are consistent
soundness of the bank’s loan operations.
with the obligor grade categories. Obligor grades and facility grades
3. Credit Risk Management Methods
(1) Credit Risk Assessment and Quantification
At SMFG, to effectively manage the risk involved in individual loans
as well as the credit portfolio as a whole, we first acknowledge that
every loan entails credit risks, assess the credit risk posed by each
borrower and loan using an internal rating system, and quantify that
risk for control purposes.
(a) Internal Rating System
There is an internal rating system for each asset control category
established according to portfolio characteristics. For example,
credits to corporates are assigned an “obligor grade,” which indi-
cates the borrower’s creditworthiness, and/or “facility grade,” which
indicates the collectibility of assets taking into account transaction
conditions, such as guarantee/collateral, credit period, and tenor.
An obligor grade is determined by first assigning a financial grade
using a financial strength grading model and data obtained from the
obligor’s financial statements. The financial grade is then adjusted
taking into account the actual state of the obligor’s balance sheet
■SMBC’s Obligor Grading System
Obligor Grade
Domestic
(C&I), etc.
Overseas
(C&I), etc.
Definition
are reviewed once a year, and whenever necessary, such as when
there are changes in the credit situation. There are also grading
systems for loans to individuals and project finance and other struc-
tured finance tailored according to the risk characteristics of these
types of assets.
The Credit & Investment Planning Department centrally man-
ages the internal rating systems and properly designs, operates,
supervises, and validates the grading models.
It validates the grading models of main assets following the proce-
dures manual (including those for statistical validation) once a year
to ensure their effectiveness and suitability.
(b) Quantification of Credit Risk
Credit risk quantification refers to the process of estimating the
degree of credit risk of a portfolio or individual loan taking into
account not just the obligor’s Probability of Default (PD) but also the
concentration of risk in a specific customer or industry and the loss
impact of fluctuations in the value of collateral, such as real estate
and securities.
Borrower
Category
Financial Reconstruction Act
Based Disclosure Category
Normal
Borrowers
Normal
Assets
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
J1
J2
J3
J4
J5
J6
J7
G1
G2
G3
G4
G5
G6
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
(Borrowers Requiring Caution identified as Substandard Borrowers)
Substandard Borrowers
Substandard Loans
J8
J9
G8
G9
Currently not bankrupt, but experiencing business difficulties, making insufficient
progress in restructuring, and highly likely to go bankrupt
Though not yet legally or formally bankrupt, has serious business difficulties and rehabilitation
is unlikely; thus, effectively bankrupt
J10
G10
Legally or formally bankrupt
Potentially
Bankrupt Borrowers
Effectively
Bankrupt Borrowers
Bankrupt
Borrowers
Doubtful
Assets
Bankrupt and
Quasi-Bankrupt
Assets
79
2017 Annual Report
Specifically, first, the PD by grade, Loss Given Default (LGD),
decision based on an objective examination of all relevant factors.
credit quality correlation among obligors, and other parameter
Increasing the understandability to customers of loan conditions
values are estimated using historical data of obligors and facilities
and approval standards for specific borrowing purposes and loan
stored in a database to calculate the credit risk. Then, based on
categories is a part of SMBC’s ongoing review of lending practices,
these parameters, we run a simulation of simultaneous default using
which includes the revision of loan contract forms with the chief aim
the Monte Carlo method to calculate our maximum loss exposure to
of clarifying lending conditions utilizing financial covenants.
the estimated amount of the maximum losses that may be incurred.
To respond proactively and promptly to customers’ funding
Based on these quantitative results, we allocate risk capital.
needs—particularly those of SMEs—we employ a standardized
Risk quantification is also executed for purposes such as to
credit risk assessment process for SMEs that uses a credit-scoring
determine the portfolio’s risk concentration, or to simulate economic
model. With this process, we are building a regime for efficiently
movements (stress tests), and the results are used for making
marketing our Business Select Loan and other SME loans.
optimal decisions across the whole range of business operations,
In the field of housing loans for individuals, we employ a credit
including formulating business plans and providing a standard
assessment model based on credit data amassed and analyzed
against which individual credit applications are assessed.
by SMBC over many years. This model enables our loan officers
(2) Framework for Managing Individual Loans
SMFG strives to maintain a sound portfolio through appropriate
to efficiently make rational decisions on housing loan applications
and to reply to the customers without delay. It also facilitates the
effective management of credit risk as well as the flexible setting of
credit assessments and monitoring conducted over credit periods.
interest rates.
The following framework is used for managing individual loans at
SMBC, the core bank of SMFG.
(a) Credit Assessment
At SMBC, credit assessment of corporate loans involves a variety
of financial analyses, including cash flow, to predict an enterprise’s
capability of loan repayment and its growth prospects. These quan-
titative measures, when combined with qualitative analyses of indus-
trial trends, the enterprise’s R&D capabilities, the competitiveness
of its products or services, and its management caliber, result in a
comprehensive credit assessment. The loan application is analyzed
in terms of the intended utilization of the funds and the repayment
schedule. Thus, SMBC is able to arrive at an accurate and fair credit
We also provide loans to individuals who rent out properties
such as apartments. The loan applications are subjected to a
precise credit risk assessment process utilizing a risk assessment
model that factors in the projected revenue from the rental busi-
ness. We also provide advice to such customers on how to revise
their business plans.
(b) Credit Monitoring System
At SMBC, in addition to analyzing loans at the application stage, the
Credit Monitoring System is utilized to maintain an understanding
of the circumstances surrounding the obligor in order to reassess
obligor grades and review self-assessment and credit policies so
that problems can be detected at an early stage and quick and
■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
80
2017 Annual Report
effective action can be taken. The system includes periodic moni-
(4) Self-Assessment, Asset Write-Offs and Provisions,
toring carried out each time an obligor enterprise discloses financial
and Disclosure of Problem Assets
results as well as continuous monitoring performed each time credit
(a) Self-Assessment
conditions change, as indicated in the diagram below.
Self-assessment is a preparatory task for ensuring SMFG’s asset
(3) Framework for Credit Portfolio Management
In addition to managing individual loans, SMFG applies the follow-
ing basic policies to the management of the entire credit portfolio
to maintain and improve its soundness and profitability over the
medium to long term.
(a) Risk-Taking within the Scope of Capital
To keep credit risk exposure at a permissible level relative to capital,
SMFG sets a credit risk capital limit for internal control purposes.
Under this limit, sub-limits are set for each business unit. This limit
quality and calculating the appropriate level of write-offs and
provisions. Each asset is assessed individually for its security and
collectibility. Depending on the borrower’s current situation, the
borrower is assigned to one of five categories: Normal Borrowers,
Borrowers Requiring Caution, Potentially Bankrupt Borrowers,
Effectively Bankrupt Borrowers, and Bankrupt Borrowers. Based on
the borrower’s category, claims on the borrower are classified into
Classification I, II, III, and IV assets according to their default and
impairment risk levels, taking into account such factors as collateral
is based on the risk appetite of each business unit as well as its
and guarantees.
portfolio plans.
(b) Controlling Concentration Risk
As the equity capital of SMFG may be materially impaired in the
event that the credit concentration risk becomes apparent, we
implement measures to manage credit toward industrial sectors
with excessive risk concentration and introduce large exposure
limit lines and conduct intensive loan review for obligors with large
exposure.
To manage country risk, we also have credit limit guidelines
based on each country’s creditworthiness.
(c) Researching Borrowers More Rigorously and Balancing Risk
and Returns
SMBC, the core bank of SMFG, conducts rigorous self-
assessments of asset quality using criteria based on the Financial
Inspection Manual of the Financial Services Agency and the
Practical Guideline published by the Japanese Institute of Certified
Public Accountants. Self-assessment is the latter stage of the obli-
gor grading process for determining the borrower’s ability to fulfill
debt obligations, and the obligor grade criteria are consistent with
the categories used in self-assessment. As part of our efforts to bol-
ster risk management throughout SMFG, consolidated subsidiaries
carry out self-assessment in substantially the same manner.
Borrower Categories, Defined
Against a backdrop of drastic change in the business environment,
SMFG rigorously researches borrower companies’ actual condi-
Normal Borrowers
Borrowers with good earnings performances and no
significant financial problems
tions. It runs credit operations on the basic principle of earning
Borrowers Requiring Caution
Borrowers identified for close monitoring
returns that are commensurate with the credit risk involved, and
Potentially Bankrupt Borrowers
makes every effort to reduce credit and capital costs as well as
Effectively Bankrupt Borrowers
general and administrative expenses.
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
(d) Preventing and Reducing Non-Performing Loans
Bankrupt Borrowers
Borrowers that have been legally or formally declared bankrupt
On NPLs and potential NPLs, SMFG carries out regular loan reviews
to clarify handling policies and action plans, enabling it to swiftly
Asset Classifications, Defined
implement measures to prevent deterioration of borrowers’ busi-
ness situations, support business recoveries, collect on loans, and
enhance loan security.
(e) Actively Managing Portfolios
SMBC makes active use of credit derivatives, loan asset sales, and
other instruments to proactively and flexibly manage its portfolios to
stabilize credit risk.
Classification I
Classification II
Classification III
Assets not classified under Classifications II, III, or IV
Assets perceived to have an above-average risk of
uncollectibility
Assets for which final collection or asset value is very
doubtful and which pose a high risk of incurring a loss
Classification IV
Assets assessed as uncollectible or worthless
81
2017 Annual Report
(b) Asset Write-Offs and Provisions
In cases in which claims have been determined to be uncollectible
or deemed to be uncollectible, write-offs signify the recognition of
losses on the account books with respect to such claims. Write-
offs can be made either in the form of loss recognition by offsetting
uncollectible amounts against corresponding balance sheet items,
referred to as a direct write-off, or else by recognition of a loan
loss provision on a contra-asset account in the amount deemed
uncollectible, referred to as an indirect write-off. Recognition of
indirect write-offs is generally known as provision for the reserve for
possible loan losses.
The write-off and provision standards and procedures for each
self-assessment borrower category at SMBC, the core bank of
SMFG, are shown below.
As part of our overall measures to strengthen credit risk
management throughout SMFG, all consolidated subsidiaries
use substantially the same standards as SMBC for write-offs and
provisions.
SMBC’s Standards for Write-Offs and Provisions
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
“provision for the general reserve for possible loan losses�”
These assets are divided into groups according to the level
of default risk� Amounts are recorded as provisions for the
general reserve in proportion to the expected losses based
on the historical bankruptcy rate of each group� The groups
are “claims on Substandard Borrowers” and “claims on other
Borrowers Requiring Caution�” The latter group is further
subdivided according to the borrower’s financial position,
credit situation, and other factors� Further, when cash flows
can be estimated reasonably accurately, the discounted
cash flow (DCF) method is applied mainly to large claims for
calculating the provision amount�
A provision for the specific reserve for possible loan losses
is made for the portion of Classification III assets (calculated
for each borrower) not secured by collateral, guarantee, or
other means� Further, when cash flows can be estimated
reasonably accurately, the DCF method is applied mainly to
large claims for calculating the provision amount�
Classification III asset and Classification IV asset amounts
for each borrower are calculated, and the full amount of
Classification IV assets (deemed to be uncollectible or of no
value) is written off in principle and provision for the specific
reserve is made for the full amount of Classification III assets�
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 rea-
sonably accurately. SMBC then makes provisions equivalent to the
excess of the book value of the claims over the said cash inflow
discounted by the initial contractual interest rate or the effective
interest rate at the time of origination. One of the major advantages
of the DCF method over conventional methods of calculating the
provision amount is that it enables effective evaluation of each indi-
vidual 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 bank-
ruptcy, SMBC makes every effort to utilize up-to-date and correct
data to realize the most accurate estimates possible.
(c) Disclosure of Problem Assets
Problem assets are loans and other claims of which recovery of either
principal or interest appears doubtful and are disclosed in accordance
with the Banking Act (in which they are referred to as “risk-monitored
loans”) and the Financial Reconstruction Act (in which they are
referred to as “problem assets”). Problem assets are classified based
on the borrower categories assigned during self-assessment.
For detailed information on results of self-assessments, asset
write-offs and provisions, and disclosure of problem assets at
March 31, 2017, please refer to page 265.
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 by 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 risks and appropriately manage the risk
of losses.
82
2017 Annual Report
Market and Liquidity Risks
discuss ALM operation policies.
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 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.
(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; and clearly separating front-office,
middle-office, and back-office operations to establish a highly effi-
cient system of mutual checks and balances.
Verification of the effectiveness of this risk management system
is conducted through regular internal audits implemented by the
independent Audit Department.
3. Market and Liquidity Risk Management Methods
(1) Market Risk Management
SMFG manages market risk by setting maximum limits for value at
risk (VaR) and maximum loss based on business policies pertaining
to market transactions. These limits are set within the risk capital
limit, which is determined taking into account the Group’s share-
holders’ equity and other principal indicators of the Group’s financial
position and management resources.
Market risk can be divided into various factors: foreign exchange
rates, interest rates, equity prices, and option risks. SMFG 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, the risk of interest rate fluctuation differs sub-
stantially by how to recognize the dates for the maturity of demand
deposits (current accounts and ordinary deposit accounts that can
be withdrawn at any time) and how to estimate the time of cancella-
tion prior to maturity of time deposits and consumer loans.
2. Market and Liquidity Risk Management System
In accordance with the group-wide basic policies for risk man-
At SMBC, the maturity of demand deposits that are expected
to be left with the bank for a prolonged period is regarded to be up
agement decided upon by the Management Committee, SMFG
to five years (2.5 years on average). The cancellation prior to the
determines important matters relating to the management of market
maturity of time deposits and consumer loans is estimated based
and liquidity risks, such as basic policies and risk limits, in order
on historical data.
to manage these risks. The ALM Committee meets four times
(a) Market Risks
a year, in principle, to report on the state of market and liquidity
a. Trading activities
risk management and to discuss ALM operation policies. The
Trading activities are market operations that gain profits by taking
Corporate Risk Management Department, which is independent
advantage of fluctuations of market prices in the short term or price
from the business units that directly handle market transactions,
differences among markets. At SMFG, we assess and manage the
manages market and liquidity risks in an integrated manner. This
market risk of trading activities on a daily basis by utilizing VaR and
department not only monitors the current risk situations but also
other tools.
reports regularly to the Management Committee and the Board of
The following table shows the VaR results of the Group’s trading
Directors. Furthermore, the ALM Committee at SMBC, the core
activities during fiscal 2016. The overall VaR for SMFG is rising due
bank of SMFG, meets on a monthly basis to examine reports on
to increase in our investment positions and a change in the internal
the state of observance of limits on market and liquidity risks and to
VaR model that was implemented in April 2016.
■ VaR for Trading Activities
SMFG (consolidated)
Interest rates
Foreign exchange
Equities, commodities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2017
23.6
16.7
1.6
5.9
September 30, 2016
18.9
14.5
1.5
4.1
3.9
2.1
18.4
2.0
fiscal 2016
Maximum
34.0
27.9
3.9
8.3
22.6
6.4
Minimum
13.1
10.3
1.2
2.3
3.9
1.8
Average
21.4
16.1
1.9
4.8
11.8
3.1
(Billions of yen)
March 31, 2016
11.0
8.1
1.1
2.5
10.4
1.3
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)].
83
2017 Annual Report
b. Banking activities
The following table shows the VaR results of the Group’s bank-
Banking activities are market operations which gain profits by con-
ing activities during fiscal 2016. The overall VaR for SMFG is rising
trolling interest rates and term period for assets (loans, bonds, etc.)
due to increase in our investment positions and a change in the
and liabilities (deposits, etc.). At SMFG, in the same way as in the
internal VaR model that was implemented in April 2016.
case of trading activities, we assess and manage the market risk of
banking activities on a daily basis, utilizing VaR and other tools.
■ VaR for Banking Activities
SMFG (consolidated)
Interest rates
Equities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2017
47.4
30.6
34.3
September 30, 2016
48.1
31.8
33.6
44.1
36.4
44.9
37.4
fiscal 2016
Maximum
53.2
37.3
38.9
49.9
42.6
Minimum
40.2
26.4
24.8
37.8
30.8
Average
46.1
30.0
32.2
43.0
35.8
(Billions of yen)
March 31, 2016
34.0
18.7
27.5
33.6
29.0
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 strategic purposes.
(b) Market Risk Volume Calculation Model
a. Presuppositions and limits of model
b. Validity verification process
i Outline of validity verification
In SMFG’s internal VaR model, various market fluctuation scenarios
SMFG uses back-testing as a method for verification of the valid-
are drawn up on the basis of past data, and the historical simulation
ity of the internal model. VaR figures calculated by the internal
method is used to run profit-and-loss movement simulations that
model are compared with actual portfolio profit-and-loss figures
enable us to forecast probable maximum losses. The appropriate-
on a given day to compute an appropriate VaR level and confirm
ness of the model is later verified through back-testing.
the adequacy of risk capital management.
However, as back-testing cannot take into account major
ii Back-testing results
market fluctuations that have not actually occurred historically, we
The results of back-testing on SMFG’s trading book conducted in
supplement this method with the use of stress testing.
fiscal 2016 are shown below. A data point under the diagonal line
This internal model employed by SMFG undergoes regular
indicates a loss exceeding VaR for that day. No such data points
auditing by an independent auditing firm to ensure that it operates
were observed. It can therefore be said that SMFG’s VaR model
appropriately.
(one-sided confidence interval of 99.0%) has sufficient accuracy.
■Back-Testing Results (Trading Book)
SMFG (consolidated)
SMBC (consolidated)
SMBC (non-consolidated)
Actual Profit or Loss (¥ billion)
2.0
4.0
8.0
6.0
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
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
84
2017 Annual Report
c. Indicators substitute for the back-testing method
(e) Management of Stocks Held for Strategic Purposes
SMFG employs, as a method substitute for the back-testing
SMFG establishes risk allowance limits on stocks held for strategic
method, the VaR wherein presumptions for the model, such as
purposes and monitors the observance of these limits in order to
observation periods, change.
d. Changes in model from fiscal 2015
control stock price fluctuation risk appropriately. More specifically,
VaR (1 year holding period) computed from profit-and-loss simula-
Back-testing in fiscal 2015 resulted in several occasions in which
tions based on historical market fluctuation data and aggregated
losses exceeded VaR. Moreover, the current model was deemed
fluctuation in market price from the beginning of the fiscal year are
unable to sufficiently reflect market fluctuations. For these reasons,
subject to the risk capital limit management and monitored on a
we refined the risk factors used in this model at the beginning of fis-
daily basis.
cal 2016. Back-testing results under the new model are improving,
To diminish the impact of stock price declines on capital, SMFG
as indicted in b. above.
(c) Stress Testing
has drawn up plans for reducing equity holdings from the perspec-
tive of securing the financial base necessary to sufficiently exercise
The market occasionally undergoes extreme fluctuations that
intermediary functions, even under high-stress environments that
exceed projections. To manage market risk, therefore, it is important
to run simulations of unforeseen situations that may occur in finan-
cial markets (stress testing). SMFG 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 Pillar 2 of the
Basel Framework.
Decline in economic value as of March 31, 2017, was around
1% of total capital, substantially below the 20% criterion.
■ Decline in Economic Value Based on Outlier Framework
(Billions of yen)
SMBC (consolidated)
SMBC (non-consolidated)
March 31, 2016 March 31, 2017 March 31, 2016 March 31, 2017
208.2
41.2
150.5
77.2
186.6
37.0
118.8
75.1
109.8
50.8
99.6
28.0
40.1
8.8
38.7
6.7
Total
Impact of Yen
interest rates
Impact of U�S� dollar
interest rates
Impact of Euro
interest rates
Percentage of total capital
2.0%
1.5%
1.8%
1.2%
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).
create substantial decline in stock prices. In accordance with these
plans, SMFG is seeking to reduce its holdings*1 to a common equity
Tier1 (CET1)*2 ratio of 14% over approximately five years from
September 2015, when the level was 28%.
*1: Refers to Group holdings of stocks listed in Japan
*2: Based on full implementation under the Basel III framework
■ Composition, by Industry, of Listed Equity Portfolio
(%)
25
20
15
10
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SMFG Portfolio
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85
2017 Annual Report
(2) Liquidity Risk Management
At SMFG, liquidity risk is regarded as one of the major risks.
amount of funding required when liquidity risk is realized. SMFG also
monitors quantitative indicators (Liquidity Coverage Ratio, etc.) of
SMFG’s liquidity risk management is based on a framework consist-
the levels of risk exposure to be assumed. Meanwhile, SMBC car-
ing of setting upper limits for funding gaps, maintaining supplemen-
ries out quantitative management of alert indications based on early
tary liquidity, and establishing contingency plans.
warning indicators established to assist the bank in promptly and
A funding gap is defined as the maturity mismatch between the
systematically detecting liquidity risks. Additionally, supplementary
source of funds and use of funds and shows forthcoming funding
liquidity is maintained by holding assets, such as U.S. government
requirements. SMFG manages this funding gap properly by setting
bonds, which can be immediately converted to cash, or establishing
limits on the size of the gap and limiting reliance on short-term fund-
borrowing facilities that can be used in an emergency in order to
ing. These limits are set in place on both a Group company basis
secure the funding sources necessary to maintain liquidity and to
and an individual branch basis and take into account funding status,
raise the required funds smoothly even during market disruption.
cash management planning, economic environments, and individual
Furthermore, contingency plans are developed at each Group
currency characteristics, among other factors. Additionally, funding
company to respond to the materialization of liquidity risks by
gap limits are set for individual currencies if necessary. SMFG moni-
creating detailed action plans such as lowering the upper limit for
tors the state of observance of funding gap limits on a daily basis.
the funding gap based on the projected situation (i.e., normal, con-
Further, stress tests are regularly carried out by simulating the
cerned, or critical) and the respective circumstances.
impact triggered, for example, by deposit outflows or difficulties
in money market funding, in order to appraise and manage the
Operational Risk
1. Basic Approach to Operational Risk Management
(1) Definition of Operational Risk
Operational risk is the risk of loss arising from inadequate or failed
and tangible asset risk—consists of the following seven event types
that may lead to the risk of loss defined in the Basel Capital Accord:
(1) internal fraud, (2) external fraud, (3) employment practices and
workplace safety, (4) clients, products, and business practices, (5)
damage to physical assets, (6) business disruption and system
internal processes, people, and systems or from external events.
failures, and (7) execution, delivery, and process management.
Specifically, the risk —which, in addition to processing risk and sys-
tem risk, covers legal risk, human resources risk, reputational risk,
Risk Category*
Definition
Department in charge
Operational risk
The risk of loss arising from inadequate or failed internal processes, people, and systems or from external events. Corporate Risk Management
Department
Processing risk
The risk of losses arising from negligent processing by directors and employees, and from accidents or misconducts. Operations Planning Department
System risk
The risk arising from nonconformity to the business strategies, inappropriate technologies applied, changes to the
development plan and delay in development when building an information system, and the risk of loss incurred
due to the breakdown including those caused by cyber attack, malfunction, deficiency, or unauthorized use
(unauthorized alteration, destruction, duplication, and leakage of the information).
IT Planning Department
Legal risk
Risks of compensation of damages arising from insufficient legal consideration or breach of contract, or a
surcharge, a forfeit or an administrative fine for infringing the laws and regulations.
General Affairs Department
Human resources risk The risk of loss arising from inappropriate labor practices, poor working environments, discriminatory conduct, an
Human Resources Department
outflow or loss of human resources, or deterioration in employee morale.
Reputational risk
The risk of loss arising from deterioration in reputation as a consequence of the spread of rumors or media reports
of the actual risk events.
General Affairs Department,
Public Relations Department
Tangible asset risk
The risk of loss arising from damage to tangible assets or deterioration in the operational environment caused by
disasters or inadequate asset maintenance.
Administrative Services
Department
* Refinement of operational risk subcategories
SMFG has taken steps to clarify the definitions and the departments in charge of certain operational risk subcategories, specifically, legal risk, human resources
risk, reputational risk, and tangible asset risk, in order to realize more effective management of non-financial and other risks.
86
2017 Annual Report
(2) Fundamental Principles for Operational Risk Management
SMFG has set forth the policies on Operational Risk Management
3. Operational Risk Management Methodology
As previously defined, operational risks cover a wide range of
to define the basic rules to be observed in the conduct of oper-
cases, including the risks of losses due to errors in operation,
ational risk management across the entire Group. Under these
system failures, and natural disasters. Also, operational risk events
policies, SMFG has been working to enhance the operational risk
can occur virtually anywhere and everywhere. Thus, it is essential
management framework across the whole Group by establishing
to check whether material operational risks have been overlooked,
an effective system for identifying, assessing, controlling, and mon-
monitor the overall status of risks, and manage and control them.
itoring material operational risks as well as a system for addressing
To this end, it is necessary to be able to quantify risks using a
risks that have materialized and implementing emergency response
measurement methodology that can be applied to all types of oper-
measures. Based on the framework of the Basel Capital Accord,
ational risks and to comprehensively and comparatively capture the
SMFG has been continuously pursuing sophisticated quantification
status of and changes in potential operational risks in business pro-
of operational risks and advanced group-wide management.
cesses. Also, from the viewpoint of internal control, the measure-
2. Operational Risk Management System
Based on the group-wide basic policies for risk management
established by SMFG, Group companies construct operational risk
management system.
At SMFG, the Management Committee makes decisions
on important matters such as basic policies for operational risk
management, and these decisions are authorized by the Board of
Directors. In addition, the Corporate Risk Management Department
oversees the overall management of operational risks and works
together with departments responsible for the subcategories such
as processing risks and system risks to establish a system for com-
prehensively managing operational risks.
As a brief overview, this system operates by collecting and
analyzing internal loss data from Group companies. In addition,
the system entails comprehensively specifying scenarios involving
operational risks based on the operational procedures of companies
that have adopted the Advanced Measurement Approach (AMA) on
a 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. For those scenarios having high
severities, risk mitigation plans will be developed and the implemen-
tation status of such risk mitigation plans will be monitored by the
Corporate Risk Management Department. Furthermore, operational
risks are quantified and quantitatively managed by utilizing the col-
lected internal loss data and scenarios.
Regular reports are issued to the Group CRO on internal loss
data, scenario risk severity information, and the status of risk
mitigation. In addition, the Risk Management Committee, a cross-
organizational committee established within SMFG, discusses
measures for mitigating risks. Through these and other efforts,
SMFG is striving to ensure effective risk management. Moreover,
SMFG’s independent Internal Audit Department conducts periodic
internal audits to verify that the Group’s operational risk manage-
ment system is functioning properly.
ment methodology used to create risk mitigation measures must be
such that the implementation of the measures quantitatively reduces
operational risks.
At the end of March 2008, SMFG adopted the AMA set forth by
the Basel Capital Accord for calculating the operational risk equiva-
lent amount. The approach has been utilized for the management of
operational risks since then.
Specifically, a model to which internal loss data and scenario anal-
ysis results are input has been introduced to calculate the operational
risk equivalent amount and risk asset amounts. In addition, steps are
taken to ensure the objectivity, accuracy, and comprehensiveness
of scenario evaluations by utilizing external loss data and Business
Environment and Internal Control Factors in verification processes.
The quantification model produces the distribution of loss
frequency and loss severity based on the internal loss data and
scenario analysis results, 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 various combinations of frequen-
cies and amounts of losses according to the Monte Carlo simulation
method. In addition, the model 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 losses on repayment of excess interest of cer-
tain subsidiaries engaged in consumer finance operations, expected
losses are deducted from the maximum amount of operational risk
loss when calculating the operational risk equivalent amount.
Operational risk equivalent amount in respect of the tangible
asset damages arising from earthquakes is measured using the
probability data of earthquake occurrence in each part of Japan and
the distribution of loss amount from those earthquake occurrences.
The measurement units are SMFG consolidated basis, SMBC
consolidated basis, and SMBC non-consolidated basis. The opera-
tional risk equivalent amount based on the AMA is calculated as the
simple aggregate of the amount of the seven event types set forth
by the Basel Capital Accord and of tangible asset damages arising
87
2017 Annual Report
from earthquakes. However, in the case of SMFG consolidated
according to the Basic Indicator Approach (BIA), and the oper-
basis, the risk of losses on repayment of excess interest is added
ational risk equivalent amount for SMFG consolidated basis and
on. The measurement accuracy is ensured through a framework
SMBC consolidated basis are calculated by consolidating such
of regularly conducted verifications of the quantification models
amounts calculated based on the BIA with the operational risk
pre- and post-measurement.
equivalent amount calculated based on the AMA.
Meanwhile, the operational risk equivalent amounts of other
Group companies that do not apply the AMA are calculated
■ Basic Framework of Operational Risk Measurement
Internal Loss Data
Data
input
Distribution of Loss Frequency
Calculation of Operational Risk Equivalent Amount Using Quantification Model
External Loss Data
Verifi-
cation
Scenario
Analysis
Results
Business Environment and
Internal Control Factors
(
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c
u
r
r
e
n
c
e
0.20
0.15
0.10
0.05
0
0
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.30
0.25
0.20
0.15
0.10
0.05
0
0
5
10
15
20
25
30
Number of incidents/year
Distribution of Loss Severity
2
4
6
8
10
Loss per incident
Aggregated Loss Distribution
Frequency x Severity
(
f
r
e
q
u
e
n
c
y
)
P
r
o
b
a
b
i
l
i
t
y
o
f
o
c
c
u
r
r
e
n
c
e
0.4
0.3
0.2
0.1
0
99.9%
Aggregated annual loss amount
4. Processing Risk Management
Processing risk is the risk of losses arising from negligent processing
then approved by the Board of Directors. The status of processing
risk management is reported to the Management Committee and
by directors and employees, and from accidents or misconducts.
the Board of Directors regularly and when necessary. These and
SMFG has clarified the divisions responsible for the oversight
other steps are taken to ensure that we can provide customers with
functions for processing risk management, and we are working to
high-quality services.
raise the level of sophistication of our management of processing risk
Based on the group-wide basic policies for risk management,
across the whole Group by establishing systems for managing the
Group companies promote appropriate operating practices by
processing risks faced by Group companies, ensuring in-office inspec-
establishing operating rules and regulations, systematizing trans-
tion, minimizing losses in the event of processing risk materialization
action processing, receiving guidance from business divisions, and
by drafting exhaustive contingency plans, and carrying out thorough
inspecting conditions related to transaction processing.
quantification of the risk under management as basic principles.
Basic policies for processing risk management and other
important matters are decided by the Management Committee and
88
2017 Annual Report
5. System Risk Management
System risk is the risk arising from nonconformity to the business
strategies, inappropriate technologies applied, changes to the
productivity and efficiency, improve upon management infrastruc-
ture, and otherwise promote digitalization in a wide range of fields.
Systems are in place for managing the risks projected to arise from
development plan and delay in development when building an infor-
such activities.
mation system, and the risk of loss incurred due to the breakdown
including those caused by cyber attack, malfunction, deficiency or
unauthorized use (unauthorized alteration, destruction, duplication
and leakage of the information).
SMBC operates its risk management system by conducting risk
assessments based on the Financial Services Agency’s Financial
Inspection Manual and the Security Guidelines published by the
Center for Financial Industry Information Systems (FISC) and by
SMFG has set the following as basic principles: recognizing
enhancing safety measures based on the results of these assess-
information systems as an essential part of management strategy
taking into account advances in IT, minimizing system risk by
drafting regulations and specific management standards, (including
a security policy) and establishing contingency plans to minimize
losses if a system risk materializes. A risk management system has
thus been put in place to ensure adequate risk management.
Taking into account the growing sophistication and diversifica-
tion of cyber attacks seen on a global scale, the increasing social
impact from the damage inflicted by such attacks, and the risk
to our reputation and external ratings, we continue to strengthen
cyber security management through deployment of governance
measures; technological measures for the identification, prevention,
and detection of attacks; and cyber attack response measures.
ments. Systems troubles at banks have the potential to heavily
impact society. In addition, system risks are diversifying due to
advances in IT and the expansion of business fields. Recognizing
these facts, we have numerous measures in place for system trou-
ble prevention, including constant maintenance to ensure stable
and uninterrupted operation, duplication of various systems and
infrastructure, and a disaster-prevention system placed in computer
centers in eastern and western Japan. To maintain the confiden-
tiality of customer data and prevent leaks of information, sensitive
information is encrypted, unauthorized external access is blocked,
and all other possible measures are taken to secure data. We also
have contingency plans for unforeseen circumstances and hold
training sessions as necessary to ensure full preparedness in the
In addition, we actively incorporate various new technologies to
event of an emergency.
improve convenience for customers, create new businesses, boost
89
2017 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.
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
The types and levels of risk that SMFG is willing to take on or tolerate to
drive earnings growth.
Risk capital
The amount of capital required to cover the theoretical maximum
potential loss arising from risks of business operations. It differs from the
minimum regulatory capital requirements, and it is being used in the risk
management framework voluntarily developed by financial institutions for
the purpose of internal management.
Risk factor
Anything which may become a factor for risk. In the case of market risk,
it would be the share price or interest rate; in the case of credit risk, it
would be the default rate or economic environment.
Risk-weighted assets
• Credit risk
Total assets (lending exposures, including credit equivalent amount of
off-balance sheet transactions, etc.) which is reevaluated according to
the level of credit risk.
• Operational risk
Amount derived by dividing the operational risk equivalent amount by
8%.
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 that can be expected to occur with a certain degree
of probability when holding a financial asset portfolio for a given amount
of time.
90
2017 Annual Report Sumitomo Mitsui Financial Group’s Basic Policy
for Customer-Orientated Business Conduct
Sumitomo Mitsui Financial Group, Inc. (SMFG), and its Group com-
panies*1 have formulated the Basic Policy for Customer-Orientated
relation to its sales practices for interest rate swaps. We are thus
committed to preventing the reoccurrence of such malpractice.
Business Conduct for their domestic asset management and
Accordingly, SMFG has adopted a customer-oriented perspective in
asset formulation businesses, based on which they are promoting
pursuing sustainability throughout its management, internal control,
customer- orientated business conduct.
and compliance systems. Through these and other efforts, we have
This policy informs our basic stance of emphasizing the dispers-
endeavored to regain trust from customers and from society as
ing of investments over the medium to long term through which we
a whole.
seek to support customers in stable asset formulation. Also based
Furthermore, the Customer Satisfaction (CS) Improvement Sub-
on this policy, SMFG and its Group companies aim to contribute
to the development of capital markets that provide companies with
committee has been set up to incorporate customer input into
management. The opinions of external experts*2 are utilized in meet-
the funds they need to grow and to economic growth through their
ings of this committee as discussions on and verification of initiatives
asset management and asset formulation businesses.
at Group companies are carried out to promote the exercise of a
1. SMFG’s Customer-Orientated Business Conduct
In “Our Mission,” it is stated that “We grow and prosper together with
customer-oriented perspective on a group-wide basis. In addition,
the CS Improvement Committee, which is membered by officers
sitting on the Group Management Committee, convenes to hold
our customers, by providing services of greater value to them.” To
regular discussions on customer-orientated business conduct.
give form to this principle, we have defined our Five Values, a list of
We are convinced that the ongoing quest to provide quality
five key words that represent the values and action guidelines shared
products and services based on customer needs and desires will
by executives and employees in Japan and overseas. “Customer
contribute to economic growth and subsequently growth for SMFG.
First” (always think and act based on a customer- orientated per-
Everyone at SMFG will thus carry out their duties in an earnest and
spective) is at the top of this list. SMFG continues to push forward
just manner while exercising a high degree of specialized knowledge
with various initiatives in accordance with these values and action
and good business ethics. The Group will never let up in its efforts to
guidelines.
ensure that it always thinks and acts based on a customer- oriented
SMFG is fully aware of the severity of the government penalties
perspective in the truest sense as it strives to generate the greatest
imposed on Sumitomo Mitsui Banking Corporation in April 2006 in
profits for its customers.
Five Values
Customer First
Always think and act based on
a customer-oriented perspective
Proactive and Innovative
Create new value from a
forward-looking perspective
Speed
Exercise speed in making decisions
and carrying out duties
Quality
Seek quality from all angles
Team SMFG
Act as a team to create
the best possible results
91
2017 Annual Report
2. Initiatives for Promoting Customer-Orientated
Business Conduct
(5) Frameworks for Properly Motivating Employees
Always thinking and acting based on a customer-oriented per-
SMFG will implement the following initiatives to entrench the princi-
spective in the truest sense requires our employees to be properly
ples of customer-orientated business conduct into its activities.
motivated so that they can remain dedicated and effective in their
(1) Provision of Products and Services Suited to
the Customer
When drawing up and underwriting financial products, we will act
with an accurate understanding of customer needs, determining the
ideal target customer group based on the risks and complexity of
the products, in order properly develop and select products.
We will also help customers to find the ideal products and services.
Our first step in this process will be to learn about our customers,
inquiring into their needs and goals. We will next look at their level of
knowledge, investment experience, and asset portfolios so that we
can propose the best possible products and services for them.
If we think that a product may not be ideally suited to a customer’s
needs based on its characteristics or risks, we will discuss this
matter with the customer as necessary and refrain from proposing
such products when doing so is inappropriate.
work. SMFG thus develops its performance evaluation systems
from a long-term perspective with the aim of encouraging customer-
oriented sales activities. At the same time, we are expanding our
range of training programs for promoting earnest and just work
practices and higher levels of business ethics.
SMFG and its Group companies aim to facilitate the shift from sav-
ings to asset holding seen in Japan through such initiatives.
Furthermore, we will periodically disclose information on initiatives
by SMFG and its Group companies based on this policy with the
aim of facilitating understanding regarding these initiatives among
customers. In addition, the status of initiatives and their results will
be verified so that initiatives can be revised as necessary to improve
upon operating practices. Information regarding these verifications
and revisions will be disclosed.
(2) Easy-to-Understand Explanation of Important
*1: Group companies applicable under this policy:
Sumitomo Mitsui Banking Corporation; SMBC Trust Bank Ltd.;
SMBC Nikko Securities Inc.; SMBC Friend Securities Co., Ltd.;
Sumitomo Mitsui Asset Management Company, Limited;
THE MINATO BANK, LTD.; Kansai Urban Banking Corporation
*2: External experts* are invited to meetings of the CS Improvement Sub-
committee to provide advice and suggestions with the aim of incorporating
a wide range of perspectives into management that includes and goes
beyond input and requests from customers.
* External experts (in alphabetical order)
Name
Position
Emeritus Professor, University of Tokyo,
and Professor, Gakushuin University
Law School
Advisor, Consumer Affairs Agency
(former Secretary-General of the
Consumer Affairs Agency)
Kumiko Bando
Taku Umezawa
Partner, Nagashima Ohno & Tsunematsu
the quality of products and services and to supply various types
Professor Hideki Kanda
Information
The amount of information provided to customers on the charac-
teristics, risks, and fees of the products we handle as well as on
the economic climate and market trends will be enhanced to help
customers make informed decisions. Furthermore, we will strive to
explain this information in an easy-to-understand manner.
(3) Clarification of Fees
SMFG receives fees from customers for the products and services
it provides out of consideration for the need to develop and improve
of information as well as for processing- and infrastructure-related
expenses. We will seek to provide thorough explanations of these
fees that are as easy to understand as possible.
(4) Management of Conflicts of Interests
Performing duties in an earnest and just manner based on a
customer- oriented perspective entails managing any potential
conflicts of interests to ensure that our operations are truly customer
oriented.
Based on the Management Policy Concerning Conflicts of
Interest in SMFG, we have defined the types of conflicts of interest
requiring management as well as the types of transactions that
tend to present conflicts of interests and procedures for identifying
these transactions, methods and systems for managing conflicts
of interest, and the scope of Group companies at which conflicts of
interest should be managed. In this manner, we take steps to ensure
that conflicts of interest are properly managed and therefore do not
impede the interests of customers.
92
2017 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)**
*
2015
2016
2017
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�
27,904
13,261
47.52%
14,643
52.48%
37 yrs 1 mos�
40 yrs 7 mos�
33 yrs 11 mos�
13 yrs 0 mos�
15 yrs 9 mos�
10 yrs 5 mos�
567
743
911
2.07%
2.14%
2.28%
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 locally hired employees at overseas branches�
** As of March 1 of respective years
2017
April 1***
Number of new hires
1,347
Number of newly employed female graduates
842
Ratio of newly employed females to total new employees 70.7% 65.1% 62.5%
*** Retroactive revisions have been made to previous fiscal years due to change
2016
1,916
1,248
2015
1,813
1,282
in calculation methodology�
Fiscal
Number of employees taking parental leave
2014
1,513
2015
2,188
2016
2,236
Number of career hires
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
*
<85> <466> <332>
153
117
88
2016
2017
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
1,930
875
45.34%
1,055
54.66%
41 yrs 1 mos�
44 yrs 5 mos�
40 yrs 2 mos�
8 yrs 7 mos�
8 yrs 7 mos�
8 yrs 11 mos�
97
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
2016
2017
24
13
54.2%
56
26
46.4%
Fiscal
Number of employees taking parental leave
2015
2016
106
<1>
60
95
<1>
322
Number of career hires
Note: Numbers are shown from fiscal 2015 as there were changes due to the
integration of Citibank Japan’s retail banking business in November 2015�
ώ Sumitomo Mitsui Finance and Leasing
2016
March 31
Number of employees*
2015
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�
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�
2017
1,712
1,089
63.61%
623
36.39%
41 yrs 1 mos�
43 yrs 0 mos�
37 yrs 9 mos�
15 yrs 6 mos�
17 yrs 3 mos�
12 yrs 4 mos�
4
17
19
2.22%
2.18%
2.32%
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)�
** Retroactive revisions have been made to previous fiscal years due to change
in calculation methodology�
*** As of March 1 of respective years
2017
April 1
Number of new hires
44
Number of newly employed female graduates
17
Ratio of newly employed females to total new employees 26.8% 37.2% 38.6%
41
11
43
16
2015
2016
Fiscal
Number of employees taking parental leave
2014
58
<0>
2015
68
<0>
2016
135
<56>
ώ SMBC Nikko Securities
March 31
Number of employees*
2015
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�
2016
2017
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�
8,938
5,529
61.86%
3,409
38.14%
39 yrs 7 mos�
40 yrs 5 mos�
37 yrs 10 mos�
12 yrs 10 mos�
13 yrs 2 mos�
12 yrs 5 mos�
114
139
154
1.94%
2.24%
2.25%
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� The following list of employees is deducted
from the total number of employees: executive officers, part-time employees,
employees of temporary employment agencies, and locally hired employees at
overseas branches�
** As of March 1 of respective years
2017
April 1
Number of new hires***
516
Number of newly employed female graduates
285
Ratio of newly employed females to total new employees 46.2% 45.5% 55.2%
*** Professional employees (Classes I–II), FA, and specialists
617
285
593
270
2015
2016
Fiscal
Number of employees taking parental leave
2014
289
<12>
2015
316
<15>
2016
302
<17>
93
2017 Annual Report ώ SMBC Friend Securities
March 31
Number of employees*
2015
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service
2016
2017
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�
1,791
1,264
70.58%
527
29.42%
38 yrs 5 mos�
40 yrs 4 mos�
33 yrs 9 mos�
14 yrs 7 mos�
16 yrs 3 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 locally hired employees at overseas branches�
2017
April 1
Number of new hires
109
Number of newly employed female graduates**
43
Ratio of newly employed females to total new employees 39.4% 48.5% 39.4%
** Both non-area specified and area specified staff
180
71
239
116
2015
2016
Fiscal
Number of employees taking parental leave
2014
28
<0>
2015
48
<6>
2016
69
<1>
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)***
*
2015
2016
2017
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�
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�
2,450
1,151
46.98%
1,299
53.02%
38 yrs 10 mos�
40 yrs 11 mos�
36 yrs 11 mos�
14 yrs 5 mos�
15 yrs 9 mos�
13 yrs 4 mos�
26
30
40
2.24%
2.30%
2.32%
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 locally hired employees at
overseas branches�
** Total of senior staff and group managers (including credit officers)
*** Computed based on single month of March
2017
April 1
Number of new hires
86
Number of newly employed female graduates
46
Ratio of newly employed females to total new employees 54.2% 57.7% 53.5%
2016
78
45
2015
72
39
2016
Fiscal
Number of employees taking parental leave****
172
<19>
Number of career hires
21
**** Retroactive revisions have been made to previous fiscal years due to change
2014
151
<13>
22
2015
174
<14>
23
in calculation methodology�
94
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)**
*
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�
2017
3,389
1,998
58.96%
1,391
41.04%
42 yrs 1 mos�
44 yrs 6 mos�
38 yrs 8 mos�
18 yrs 0 mos�
20 yrs 2 mos�
14 yrs 11 mos�
38
48
62
2.06%
2.10%
2.14%
Excluding employees seconded from other companies, employees on short-
term contracts and part-time employees�
** As of March 1 of respective years
2017
April 1
Number of new hires
58
Number of newly employed female graduates
23
Ratio of newly employed females to total new employees 62.1% 59.6% 39.7%
2016
114
68
2015
87
54
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�
2016
141
2015
155
2014
142
<2>
0
<2>
35
<1>
24
ώ SMBC Consumer Finance
2015
March 31
Number of employees*
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�
2017
2,874
1,624
56.51%
1,250
43.49%
39 yrs 7 mos�
41 yrs 4 mos�
37 yrs 3 mos�
12 yrs 4 mos�
15 yrs 0 mos�
8 yrs 10 mos�
49
76
96
2.09%
2.12%
2.23%
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, locally hired employees at overseas branches, executive
officers, part-time employees, and employees of temporary employment agencies�
** As of February 28 of respective years
2017
April 1
Number of new hires
49
Number of newly employed female graduates
27
Ratio of newly employed females to total new employees 61.2% 56.4% 55.1%
2016
55
31
2015
49
30
Fiscal
Number of employees taking parental leave***
Number of career hires
*** Including employees who retired during the fiscal year
2014
66
<1>
3
2015
81
<1>
8
2016
84
<1>
1
2017 Annual Report ώ Japan Research Institute
March 31
Number of employees*
2015
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)**
*
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�
2016
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�
2017
2,464
1,836
74.51%
628
25.49%
40 yrs 6 mos�
41 yrs 1 mos�
38 yrs 9 mos�
11 yrs 6 mos�
11 yrs 9 mos�
10 yrs 8 mos�
2�00%
2�14%
2�68%
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 locally hired employees at overseas branches�
** As of March 31 of respective years
2017
April 1
Number of new hires
103
Number of newly employed female graduates***
32
Ratio of newly employed females to total new employees 26.7% 34.7% 31.1%
*** Including only Sogoshoku employees� Ippanshoku employees are excluded�
2015
86
23
2016
118
41
Fiscal
Number of employees taking parental leave
2014
49
<12>
2015
53
<10>
2016
69
<24>
ώ Sumitomo Mitsui Asset Management
March 31
Number of employees*
2017
Male
Percentage of total
Female
Percentage of total
Average age
Male
Female
Average years of service**
Male
Female
582
421
72.34%
161
27.66%
44 yrs 4 mos�
46 yrs 2 mos�
39 yrs 6 mos�
7 yrs 9 mos�
8 yrs 0 mos�
6 yrs 11 mos�
8
Number of women in
managerial positions
*
The number of full-time employees� The following list of employees is deducted
from the total number of employees: executive officers, employees of temporary
employment agencies, and locally hired employees at overseas branches�
** New employees joining due to mergers are calculated based on the merger date
April 1
Number of new hires
Number of newly employed female graduates
Ratio of newly employed females to total new employees
2017
10
5
50.0%
Fiscal
Number of employees taking parental leave
Number of career hires
Note: Information for Sumitomo Mitsui Asset Management Company, Limited,
is displayed from fiscal 2016 as this company became a consolidated
subsidiary of SMFG in July 2016�
2016
15
<0>
24
• The combined employment ratio for persons with disabilities for the above
10 companies was 2�21% as of March 2017�
95
2017 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)
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
SMBC
Restrictions on
overtime
Until March 31 of the
6th grade
Exemption from
late-night work
Until March 31 of the
6th grade
SMBC Trust Bank
1 year or maximum of
18 months in case of
inability to place in
daycare center
Up to 26 months if other
conditions are met
Until the entry into junior high
school (5 days per annum per
child; 10 days for two or more
children)
Employees can work shortened
hours equivalent to working
a minimum of 6 hours per
day until child’s entry into
elementary school
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 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
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)
Employees can reduce daily
working hours to between
6 hours and 6 hours 50
minutes until March 31 of
the 3rd grade
SMBC Friend
Securities
Until March 31 of the
3rd grade
Until March 31 of the
3rd grade
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 choose to
reduce daily working hours
by 30, 60, or 90 minutes or
reduce the number of days
worked a week until March 31
of child’s 3rd-grade year
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)�
Until the entry into
elementary school
Until the entry into
elementary school
Cedyna
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)
Employees can choose to
reduce daily working hours
to a minimum of 6 hours
(and a maximum of 8 hours)
through the adjustment of
starting or ending times
by 30-minute blocks until
March 31 of the 3rd-grade
Until the entry into
elementary school
Until the entry into
elementary school
SMBC Consumer
Finance
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
Japan Research
Institute
1 year or maximum of
36 months in case of
inability to place in
daycare center
Until the entry of child into
elementary school (5 days per
annum per child; 10 days for
two or more children)
Employees can reduce daily
working hours to 5 or 6 hours
or 6 hours and 30 minutes
until child completes 3rd grade
of elementary school
Sumitomo Mitsui
Asset Management
Until child completes
3rd grade of
elementary school
Until child completes
3rd grade of elementary
school
96
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
• Half day leave
• Flexibility in the work place
• Flextime System
• Flexibility in working hours
• Flexibility in the work place
• Paternity leave (3 days)
• Leave for nursing care
• Shorter working hours allowed for nursing care
• Nursing care leave
• 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 daycare center
• 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
• Childcare subsidies
• Discounted rates for daycare center
• Staggered working hours (working in shifts)
• Work relocations
• Maternity leave
• Work relocations
• Staggered working hours
• Half-day paid leave
• Special leave (for spouse’s childbirth)
• Childcare subsidies
• Nursing care leave, days off for nursing care
• Shorter working hours for nursing care
• Rehiring former employees
• 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)
• Leave for providing nursing care or taking care
of sick children (by the hour)
• 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)
• Rollover of unused paid vacation days to
subsequent years
• Childcare subsidies
• Telecommuting
• 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
• Leave for childbirth by spouse
• Leave for taking care of sick children
• Leave for nursing care
• Staggered working hours for childcare or nursing
care purposes
• Special-case usage of annual leave in half-day
increments
• Telecommuting
2017 Annual Report Corporate Data
Sumitomo Mitsui Financial Group, Inc.
■ Directors and Executive Officers (as of June 30, 2017)
DIRECTORS AND CORPORATE
EXECUTIVE OFFICERS
Chairman of the Board
Koichi Miyata
Director President
(Representative Executive Officer)
Takeshi Kunibe
Group CEO
Director
Makoto Takashima
EXECUTIVE OFFICERS
Deputy President and Executive Officer
Fumiaki Kurahara
Deputy Head of Wholesale Business Unit
Executive Officers
Yukio Noda
Group Deputy CCO
Senior Managing Executive Officers
Hitoshi Ishii
Deputy Head of Wholesale Business Unit
Gotaro Michihiro
Private Banking Planning Dept.
Shosuke Mori
Deputy Head of International Business Unit
Director Deputy President and Executive Officer
Managing Executive Officers
Kozo Ogino
Group CRO
Corporate Risk Management Dept.,
Credit & Investment Planning Dept.
Youichi Mori
Group Deputy CIO
Kohei Hirota
Deputy Head of Wholesale Business Unit
Director Deputy President and Executive Officer
(Representative Executive Officer)
Hiroshi Mishima
Deputy Head of Global Markets Business Unit
Jun Ohta
Group CFO, Group CSO and Group CDIO
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Subsidiaries & Affiliates Dept.,
IT Innovation Dept.
Data Management Dept.
Transaction Business Planning Dept.
Director Senior Managing Executive Officers
Katsunori Tanizaki
Group CIO
IT Planning Dept., Data Management Dept., Operations
Planning Dept.
IT Innovation Dept.
Toshikazu Yaku
Group CCO and Group CHRO
Human Resources Dept., Quality Management Dept.,
General Affairs Dept., Administrative Services Dept.
Directors
Toshiyuki Teramoto
Toru Mikami
Tetsuya Kubo
Masayuki Matsumoto (1)
Arthur M. Mitchell (1)
Shozo Yamazaki (1)
Masaharu Kohno (1)
Yoshinobu Tsutsui (1)
Katsuyoshi Shinbo (1)
Eriko Sakurai (1)
Deputy President and Executive Officers
Manabu Narita
Head of Wholesale Business Unit
Yasuyuki Kawasaki
Head of International Business Unit
Senior Managing Executive Officer
Yukihiko Onishi
Head of Retail Business Unit
Managing Executive Officer
Hiroshi Munemasa
Head of Global Markets Business Unit
(1) Messrs. and Ms. Matsumoto, Mitchell, Yamazaki, Kohno, Tsutsui,
Shinbo and Sakurai satisfy the requirements for an “outside director”
under the Companies Act.
Akira Inoue
Group Deputy CRO
Takehisa Ikeda
Wholesale Business Unit
Ryohei Kaneko
Deputy Head of Retail Business Unit
Hisanori Kokuga
Head of East Asia Division
Naoki Tamura
Deputy Head of Retail Business Unit
CHOW Ying Hoong
Deputy Head of Asia Pacific Division
Naoya Ishida
Wholesale Business Unit
Toshihiro Isshiki
General Manager, Operations Planning Dept.
Hiroaki Toyoda
Deputy Head of Retail Business Unit
Haruyuki Nagata
Financial Accounting Dept.
Ryuji Nishisaki
Head of Asia Pacific Division
Kenichi Hosomi
Deputy Head of International Business Unit
Takashi Aiki
Group Deputy CIO and Group Deputy CDIO
Tetsuro Imaeda
Head of Europe, Middle East and Africa Division
Nobuyuki Kawabata
Head of Americas Division
Toru Sawada
General Manager, General Affairs Dept.
Eiichi Sekiguchi
Wholesale Business Unit
Naoki Takahashi
Deputy Head of Wholesale Business Unit
Toru Nakashima
General Manager, Corporate Planning Dept.
Muneo Kanamaru
General Manager, Human Resources Dept.
Toshihiro Sato
General Manager, Planning Dept.,
Global Markets Business Unit
Mitsuhiro Akiyama
Deputy Head of International Business Unit
Ryo Suzuki
Deputy Head of Americas Division
Yaoki Tsutsumi
Group Deputy CFO
Toshiaki Nakai
General Manager, Credit & Investment Planning Dept.
Kazuhiro Notsu
Group Deputy CSO
Masayoshi Furusho
Group Deputy CHRO
Rie Asayama
General Manager, Quality Management Dept.
Hideo Goto
General Manager, Planning Dept., Wholesale Business Unit
Shoji Masuda
General Manager, IT Planning Dept.
Yukiko Yoritaka
General Manager, Training Institute, Human Resources Dept.
Takaki Ono
General Manager, Planning Dept., Wholesale Business Unit
Kotaro Hagiwara
General Manager, Corporate Planning Dept.
Yoshihiro Hyakutome
General Manager, Planning Dept.,
International Business Unit
Kenji Hirao
General Manager, Public Relations Dept.
Takeshi Mikami
General Manager, Financial Accounting Dept.
Takashi Yamashita
Retail Business Unit
(Planning Dept., Retail Business Unit)
Keiichiro Nakamura
General Manager, Planning Dept., Europe, Middle East
and Africa Division
[REFERENCE]
Group CxO/Head of Business Units
(as of June 30, 2017)
Head of Business Units
Head of Wholesale
Business Unit
Manabu Narita
Head of International
Business Unit
Yasuyuki Kawasaki
Head of Retail Business Unit
Yukihiko Onishi
Head of Global Markets
Business Unit
Hiroshi Munemasa
Group CxO
Group CEO
Takeshi Kunibe
Group CRO
Kozo Ogino
Group CFO,
Group CSO and
Group CDIO
Jun Ohta
Group CIO
Katsunori Tanizaki
Group CCO and
Group CHRO
Toshikazu Yaku
Group CAE
Shinichiro Tani
97
2017 Annual Report SMFG Organization (as of June 30, 2017)
Board of
Directors
Nominating
Committee
Shareholders’
Meeting
Compensation
Committee
Group
Management
Committee
Audit
Committee
Risk
Committee
Audit
Committee
Office
Public Relations Dept.
Retail Business Unit
Corporate Planning Dept.
Investor Relations Dept.
Corporate Treasury Dept.
Financial Research Dept.
CSR Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Financial Accounting Dept.
Equity Portfolio Management Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Training Institute
Diversity and Inclusion Dept.
Global Human Resources Dept.
Quality Management Dept.
IT Innovation Dept.
Planning Dept., Retail Business Unit
Retail Marketing Dept.
Retail IT Strategy Dept.
Consumer Finance & Transaction
Business Dept.
Private Banking Planning Dept.
Transaction Business Planning Dept.
Wholesale Business Unit
Planning Dept., Wholesale Business Unit
Private Banking Planning Dept.
Transaction Business Planning Dept.
International Business Unit
*1
*2
*1
*2
Planning Dept., International
Business Unit
Global Portfolio Strategy Dept.,
International Business Unit
Business Development Dept.,
International Business Unit
Silicon Valley Digital Innovation Lab.
Americas Division
Data Management Dept.
Corporate Risk Management Dept.
Risk Management Information Dept.
Credit & Investment Planning Dept.
General Affairs Dept.
Anti Money Laundering &
Financial Crime Prevention Dept.
Legal Dept.
Administrative Services Dept.
Secretariat
Corporate Real Estate
Management Dept.
Cost Control Dept.
Operations Planning Dept.
Audit Dept.
Planning Dept.,
Americas Division
Risk Management
Dept., Americas
Division
Planning Dept.,
Europe, Middle East
and Africa Division
Planning Dept.,
Asia Pacific Division
Asia Growing
Markets Dept.
Planning Dept.,
East Asia Division
Europe, Middle
East and Africa
Division
Asia Pacific
Division
East Asia Division
Transaction Business Planning Dept.
*2
Global Markets Business Unit
Planning Dept., Global Markets
Business Unit
Global Markets Engineering Dept.
*1 Belongs to both Retail Banking Unit and Wholesale Banking Unit.
*2 Belongs to Retail Banking Unit, Wholesale Banking Unit and International Banking Unit.
98
2017 Annual Report Sumitomo Mitsui Banking Corporation
■ Board of Directors, Corporate Auditors and Executive Officers (as of June 30, 2017)
BOARD OF DIRECTORS
CORPORATE AUDITORS
Yuichi Shimane
Yozo Takigawa
Rokuro Tsuruta (2)
Hiroshi Takahashi (2)
Masaaki Oka (2)
Toshiyuki Teramoto
(2) Messrs. Tsuruta, Takahashi and Oka satisfy the requirements for an “outside corporate
auditor” under the Companies Act.
Chairman of the Board
Koichi Miyata
President and Chief Executive Officer (Representative Director)
Makoto Takashima*
Director and Deputy Presidents (Representative Directors)
Kozo Ogino*
Risk Management Unit(Corporate Risk Management Dept.,
Credit & Investment Planning Dept.)
Human Resources Dept., Human Resources Development Dept.
Manabu Narita*
Co-Head of Wholesale Banking Unit (Planning Dept., Wholesale Banking
Unit, Strategic Corporate Business Dept., Public & Financial Institutions
Banking Dept., Wholesale Banking Unit)
Yasuyuki Kawasaki*
Head of International Banking Unit
Fumiaki Kurahara*
Co-Head of Wholesale Banking Unit
Head of Global Corporate Banking Division
Director and Senior Managing Executive Officers
Katsunori Tanizaki*
IT Planning Dept., Data Management Dept., Operations Planning Dept.,
Operations Support Dept., Inter-Market Settlement Dept.
IT Innovation Dept.
Masahiko Oshima*
Public Relations Dept., Corporate Planning Dept., Financial Accounting
Dept., Subsidiaries & Affiliates Dept., IT Innovation Dept.
Transaction Business Division
Data Management Dept.
Naoki Ono*
Internal Audit Dept., Credit Review Dept.
Toshikazu Yaku*
Human Resources Dept., Human Resources Development Dept., Quality
Management Dept., General Affairs Dept., Administrative Services Dept.
Directors
Satoshi Itoh (1)
Kuniaki Nomura (1)
Sonosuke Kadonaga (1)
* These Directors are appointed as Executive Officers also.
(1) Messrs. Itoh, Nomura and Kadonaga satisfy the requirements for an “outside director” under
the Companies Act.
99
2017 Annual Report DEPUTY CHAIRMAN
Yujiro Ito
Located at Osaka
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Atsuhiko Inoue
Deputy Head of Wholesale Banking Unit
(Credit Administration Dept., Corporate Credit Dept.)
Corporate Research Dept.
Deputy Head of Financial Solutions Unit (Trust Services Dept.)
Hitoshi Ishii
Deputy Head of Wholesale Banking Unit
Head of Corporate Banking Division
Yukihiko Onishi
Head of Retail Banking Unit
Koichi Noda
Head of Financial Solutions Unit
Gotaro Michihiro
Head of Corporate Advisory Division
Deputy Head of Wholesale Banking Unit
(Strategic Corporate Business Dept.)
Private Advisory Division
Global Advisory Dept.
Shosuke Mori
Deputy Head of International Banking Unit
Kimio Matsuura
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Managing Executive Officers
Ryohei Kaneko
Deputy Head of Retail Banking Unit
Hisanori Kokuga
Head of East Asia Division
Global Advisory Dept.
Chairman of Sumitomo Mitsui Banking Corporation (China) Limited
Naoki Tamura
Deputy Head of Retail Banking Unit
Toshihiro Isshiki
General Manager, Operations Planning Dept.
Haruyuki Nagata
Financial Accounting Dept.
Ryuji Nishisaki
Head of The Asia Pacific Division and Asia Growing Markets Division
Akihiro Fukutome
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Hiroshi Munemasa
Head of Treasury Unit
Keiji Kakumoto
Osaka Corporate Banking Division
(Osaka Corporate Banking Depts. I, II and III)
Kenichi Hosomi
Deputy Head of International Banking Unit
Hitoshi Minami
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, III, IX and X)
Nobuyuki Kawabata
Head of The Americas Division
Toru Sawada
General Manager, General Affairs Dept.
Toru Nakashima
Corporate Planning Dept.
CHOW Ying Hoong
Deputy Head of Asia Growing Markets Division
Tetsuro Imaeda
Head of Europe, Middle East and Africa Division
CEO of Sumitomo Mitsui Banking Corporation Europe Limited
Eiji Omori
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, V, VII and VIII)
Atsushi Takada
Head of Kobe Middle Market Banking Division
Fumiharu Kozuka
General Manager, Corporate Credit Dept.
Eiichi Sekiguchi
Deputy Head of Wholesale Banking Unit (in charge of East Japan)
Kengo Nakagawa
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. IV, VI, XI and XII)
Muneo Kanamaru
General Manager, Human Resources Dept.
Teiko Kudo
Deputy Head of Wholesale Banking Unit
(Growth Business Development Dept.)
Deputy Head of Financial Solutions Unit
(Growth Industry Cluster Dept.)
Toshihiro Sato
Deputy Head of Treasury Unit
Executive Officers
William Karl
General Manager, Real Estate Finance Dept., Americas Division
Stanislas Roger
Deputy Head of Europe, Middle East and Africa Division
Ryo Suzuki
Deputy Head of The Americas Division
100
2017 Annual Report Toshiaki Nakai
General Manager, Credit & Investment Planning Dept.
Takaki Ono
General Manager, Planning Dept., Wholesale Banking Unit
Takashi Arima
Head of Kyoto Hokuriku Middle Market Banking Division and
General Manager, Kyoto Corporate Business Office-I
Iwao Kawaharada
Head of Osaka Daiichi Middle Market Banking Division and
Chushikoku Middle Market Banking Division
Hiroyoshi Korosue
Country Head of Thailand and General Manager, Bangkok Branch
Masaaki Sasai
Deputy Head of Financial Solutions Unit
Reiji Domoto
General Manager, Osaka Corporate Banking Dept. I
Yusuke Hirako
Head of Higashinihon Daiyon Middle Market Banking Division
Narumitsu Yoshioka
President of Sumitomo Mitsui Banking Corporation (China) Limited and
Deputy Head of East Asia Division
Rie Asayama
General Manager, Quality Management Dept.
Kotaro Hagiwara
General Manager, Corporate Planning Dept.
Yoshihiro Hyakutome
General Manager, Planning Dept., International Banking Unit
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
Shuji Yabe
Deputy Head of International Banking Unit (Credit Depts., Americas
Division, Europe, Middle East and Africa Division, Asia Pacific Division,
East Asia Division and International Banking Unit)
Masatsugu Kojima
Head of Higashinihon Daigo Middle Market Banking Division
Hiroshi Yakame
General Manager, Tokyo Corporate Banking Dept. V
Akira Ueda
Head of Higashinihon Daiichi Middle Market Banking Division
Shinichiro Watanabe
General Manager, Global Aviation and Maritime Finance Department
Masamichi Koike
General Manager, Planning Dept., Treasury Unit
Hideo Goto
General Manager, Planning Dept., Wholesale Banking 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 Higashinihon Daisan Middle Market Banking Division
Hiroyuki Miyajima
Deputy Head of Wholesale Banking Unit (Credit Dept. II, Wholesale
Banking Unit)
Deputy Head of Retail Banking Unit (Credit Dept., Retail Banking Unit)
Masataka Asagami
Head of Higashinihon Daini 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 and Western MNC Dept., Asia
Hideo Ohara
Deputy Head of Retail Banking Unit (in charge of West Japan)
Yoshiaki Kageyama
General Manager, Corporate Banking Dept.-I, Europe, Middle East
and Africa Division
Hiroyuki Kamimoto
Deputy Head of Corporate Advisory Division
Masanao Nakao
General Manager, Tokyo Corporate Banking Dept. XI
Kenji Hirao
General Manager, Public Relations Dept.
Koji Matsumoto
General Manager, Planning Dept., Financial Solutions Unit
Keiichiro Nakamura
General Manager, Planning Dept., Europe, Middle East and Africa Division
Nobuaki Nakamura
General Manager, Trading Dept.
Kiichiro Hondo
General Manager, Strategic Corporate Business Dept.
Fumito Yoshioka
General Manager, Tokyo Corporate Banking Dept. IV
Alan Krouk
General Manager, Global FIG Department and Institutional Client Dept.,
Americas Division
101
2017 Annual Report SMBC Organization
(as of June 30, 2017)
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.
Productivity Management 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.
IT Innovation Dept.
Data Management Dept.
Retail
Banking Unit
Area Main Office
Wholesale
Banking Unit
*4
*6
*5
Corporate Banking Division
Middle Market Banking Division
Global Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Corporate Banking Dept.
Private Banking Dept.*8
East Asia Division
Americas Division
Europe, Middle East and Africa Division
Asia Pacific Division
Shareholders’
Meeting
Board of
Directors
Management
Committee
Corporate Auditors/
Corporate Auditors/
Board of Corporate Auditors
Board of Corporate Auditors
Office of Corporate Auditors
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.
Anti Money Laundering & Financial
Crime Prevention Department
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
Financial
Solutions Unit
102
Planning Dept., Retail Banking Unit
Retail Compliance Dept.
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business 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
Area Support Dept.
Retail IT Strategy 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
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept. I, Wholesale Banking Unit
Credit Dept. II, Wholesale Banking Unit
Credit Administration Dept.
Growth Business Development Dept.
M&A Advisory Services Dept.
Real Estate Finance Dept.*1
Planning Dept., East Asia Division
Planning Dept., International Banking Unit
IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Business Development Dept., International Banking Unit
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
Credit Dept., East Asia Division
Asia Growing Markets Division
Asia Retail Innovation Dept.
Credit Dept., International Banking Unit
Environment Analysis Dept., International Banking Unit
Corporate Solutions Dept., Asia*3
Planning Dept., Treasury Unit
Global Markets Engineering Dept.
Global Credit Investment Dept.
Treasury Dept.
International Treasury Dept.
Trading Dept.
Treasury Marketing Dept.
Financial Products Dept.
Securities Direct Sales Dept.
Treasury Dept., Asia Pacific Division
Planning Dept., Financial Solutions Unit
Structured Finance Dept.
Shipping Finance Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.*1
Merchant Banking Dept.
Distribution Dept.
Growth Industry Cluster Dept.*2
Trust Services Dept.
Trust Business Operations Dept.
Investment Banking Dept., Asia
Corporate Solutions Dept., Asia *3
Branch
Private Banking Dept.*8
Consumer Loan Promotion Office
Loan Promotion Office
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Retail Credit Business Office
Global Transaction Office*7
E-Transaction Business Center*7
Business Promotion Office
Corporate Business Office
Strategic Finance Promotion Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office*7
E-Transaction Business Center*7
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 Financial Solutions Unit and Wholesale Banking Unit.
*2 Belongs to both Financial Solutions Unit and Wholesale Banking Unit (Corporate Advisory Division).
*3 Belongs to both International Banking Unit and Financial Solutions 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 Solution Dept.
(cid:127) Defined Contribution Dept.
*6 (cid:127) Transaction Business Division
(cid:127) Transaction Business Planning Dept.
(cid:127) Transaction Products Development 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.
*8 (cid:127) Belongs to both Retail Banking Unit and Wholesale Banking Unit.
Branch Service Office
Head/Main Service Office
Public Institutions Operations Office
Souzoku-office Sub-Branch
Operations Service Office
2017 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.
Productivity Management 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.
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.
Anti Money Laundering & Financial
Crime Prevention Department
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
Financial
Solutions Unit
Planning Dept., Retail Banking Unit
Retail Compliance Dept.
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business 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
Area Support Dept.
Retail IT Strategy 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
Corporate Credit Dept.
Structured Finance Credit Dept.
Credit Dept. I, Wholesale Banking Unit
Credit Dept. II, Wholesale Banking Unit
Credit Administration Dept.
Growth Business Development Dept.
M&A Advisory Services Dept.
Real Estate Finance Dept.*1
Planning Dept., East Asia Division
Planning Dept., International Banking Unit
IT & Business Administration Planning Dept.
Aviation & Maritime Strategy Dept.
Global Portfolio Strategy Dept.
Business Development Dept., International Banking Unit
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
Credit Dept., East Asia Division
Asia Growing Markets Division
Asia Retail Innovation Dept.
Credit Dept., International Banking Unit
Environment Analysis Dept., International Banking Unit
Corporate Solutions Dept., Asia*3
Planning Dept., Treasury Unit
Global Markets Engineering Dept.
Global Credit Investment Dept.
Treasury Dept.
International Treasury Dept.
Trading Dept.
Treasury Marketing Dept.
Financial Products Dept.
Securities Direct Sales Dept.
Treasury Dept., Asia Pacific Division
Planning Dept., Financial Solutions Unit
Structured Finance Dept.
Shipping Finance Dept.
Debt Finance Dept.
Investment Banking Services Dept.
Real Estate Finance Dept.*1
Merchant Banking Dept.
Distribution Dept.
Growth Industry Cluster Dept.*2
Trust Services Dept.
Trust Business Operations Dept.
Investment Banking Dept., Asia
Corporate Solutions Dept., Asia *3
Area Main Office
*5
Corporate Banking Division
Middle Market Banking Division
*4
*6
Branch
Private Banking Dept.*8
Consumer Loan Promotion Office
Loan Promotion Office
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Retail Credit Business Office
Global Transaction Office*7
E-Transaction Business Center*7
Business Promotion Office
Corporate Business Office
Strategic Finance Promotion Office
Credit Business Office
Real Estate Corporate Business Office
Public Institutions Business Office
Global Transaction Office*7
E-Transaction Business Center*7
Global Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Corporate Banking Dept.
Private Banking Dept.*8
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 Financial Solutions Unit and Wholesale Banking Unit.
*2 Belongs to both Financial Solutions Unit and Wholesale Banking Unit (Corporate Advisory Division).
*3 Belongs to both International Banking Unit and Financial Solutions 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 Solution Dept.
(cid:127) Defined Contribution Dept.
*6 (cid:127) Transaction Business Division
(cid:127) Transaction Business Planning Dept.
(cid:127) Transaction Products Development 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.
*8 (cid:127) Belongs to both Retail Banking Unit and Wholesale Banking Unit.
Branch Service Office
Head/Main Service Office
Public Institutions Operations Office
Souzoku-office Sub-Branch
Operations Service Office
103
Shareholders’
Meeting
Board of
Directors
Management
Committee
Corporate Auditors/
Corporate Auditors/
Board of Corporate Auditors
Board of Corporate Auditors
Office of Corporate Auditors
2017 Annual Report
Principal Subsidiaries and Affiliates (as of March 31, 2017)
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
SMBC Trust Bank Ltd.
87,550
0
(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
Dec. 1, 2002
Investment advisory
15,000
10,000
27,270
34,000
82,843
140,737
10,000
60
100
100
0
0
(65.99)
(100)
100
100
2,000
60
27,484
47,039
187,720
100
49,859
7,700
71,705
20,000
2,054
450
10
490
500
1,100
1,600
100,010
1,000
500
100
90
10
10
100
30
30
20
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
(46.42) 45.09 (1.33)
Sep. 6, 1949
Commercial banking
(60.15)
49.36 (0.35)
Jul. 1, 1922
Commercial banking
(100)
(100)
100
(51)
(100)
(100)
0
(99.99)
Jul. 14, 1976
Credit guarantee
—
—
41
—
—
Sep. 1, 1999
Leasing
Oct. 1, 2008
Business management
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)
(51)
(40)
—
100
51
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
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
Feb. 3, 2003
Banking clerical work
Feb. 1, 1984
Banking clerical work
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
Sumitomo Mitsui Asset Management
Company, Limited
THE MINATO BANK, LTD.
Kansai Urban Banking Corporation
SMBC Guarantee Co., Ltd.
SMFL Capital Co., Ltd.
SMFG Card & Credit, Inc.
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 Administration and Operations
Service Co., Ltd.
SMBC Property Research Service Co., Ltd.
104
2017 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
Banco Sumitomo Mitsui
Brasileiro S.A.
JSC Sumitomo Mitsui Rus Bank
U.K.
China
U.S.A.
Brazil
Russia
PT Bank Sumitomo Mitsui Indonesia
Indonesia
US$3,200 million
CNY10.0 billion
US$80.786 million
R$758.819 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
Cayman Islands
US$8 million
British Virgin Islands
US$4,800
SMBC DIP Limited
SFVI Limited
SMBC, S.A.P.I. DE C.V.,
SOFOM, E.N.R.
SMBC International Finance N.V.
Mexico
Curaçao
SMFG Preferred Capital USD 1 Limited
Cayman Islands
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
MXN910 million
US$200,000
US$350,000
£100,000
¥135,000 million
US$1,350 million
£250 million
¥286,000 million
¥268,400 million
SMBC Preferred Capital USD 1 Limited
Cayman Islands
US$13.506 million
SMBC Preferred Capital GBP 1 Limited
Cayman Islands
SMBC Preferred Capital JPY 1 Limited
Cayman Islands
£4.545 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
(100)
(100)
(100)
(100)
100
100
100
100
Mar. 5, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
Jun. 26, 1962
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)
96.19
(3.81)
Nov. 9, 1990
Leasing, investments
(90)
(100)
30
Aug. 14, 1997
Leasing
0
(100)
May 11, 2011
Leasing
(100)
77.65
(2.35)
Aug. 8, 1990
Securities, investments
(100)
84.84
Mar. 13, 1990
Derivatives and investments,
securities services
(100)
90
(10)
Dec. 4, 1986
Derivatives and investments
(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
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
2017 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$510.6 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
The Japan Net Bank, Limited
PT Bank Tabungan Pensiunan Nasional Tbk
PT Oto Multiartha
PT Summit Oto Finance
Issued Capital
(Millions of Yen)
37,250
Rp116,805 million
Rp928,707 million
Rp2,442,060 million
Vietnam Export Import Commercial Joint Stock Bank
VND12,526.947 billion
ACLEDA Bank Plc.
The Bank of East Asia, Limited
US$307 million
HKD35,490 million
Sumitomo Mitsui Auto Service Company, Limited
POCKET CARD CO., LTD.
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
Daiwa SB Investments Ltd.
6,950
14,374
5,000
600
2,000
China Post & Capital Fund Management Co., Ltd.
CNY300 million
Daiwa Securities SMBC Principal
Investments Co., Ltd.
MSD Investment, Ltd.
100
49
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
0
0
0
0
0
0
0
0
0
0
0
0
0
(41.16)
(40.66)
(35.10)
(35.10)
(15.07)
(18.25)
(19.60)
33.99
41.16
40.66
35.10
35.10
15.07
18.25
19.59
—
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
(50)
(49)
43.96
(24)
(40)
—
49
—
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
Apr. 24, 2012
Investment management
Feb. 1, 2010
Investments, fund management
(33.33)
(33.33)
Sep. 1, 2015
Investments
106
2017 Annual Report International Directory (as of June 30, 2017)
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 11047, 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
Mumbai Branch
Unit No. 601, 6th Floor, Platina Building,
Plot No. C-59, G Block, Bandra Kurla
Complex, Bandra (East), Mumbai 400051,
Maharashtra, India
Tel: 91 (22) 6229-5000
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 (28) 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 (24) 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
Yangon Branch Thilawa Front Office
Room No. 103, Administration Building,
Corner of Thilawa Development Road
and Dagon - Thilawa Road, Thilawa SEZ,
Thanlyin Township, Yangon, Myanmar
Tel: 95 (1) 2309100
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
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
107
2017 Annual Report 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
Menara BTPN, 35th-37th Floor,
Jl. Dr. Ide Anak Agung Gde Agung
Kav. 5.5-5.6, Jakarta 12950, Indonesia
Tel: 62 (21) 8086-2500
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
6th Floor, Unit 600, Rufino Building,
6784 Ayala Avenue cor. V. A. Rufino
Street, Legaspi Village, Makati City,
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 (28) 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
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
108
2017 Annual Report 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.
10th Floor, Gopher Center,
757 Mengzi 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.
Suite 16D, Level 16, Vista Tower,
The Intermark No. 348, Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
Tel: 60 (3) 2710-0170
PT. SMFL Leasing Indonesia
Menara BTPN, 31st Floor,
Jl. Dr. Ide Anak Agung Gde Agung,
Kav. 5.5 - 5.6, Mega Kuningan,
Jakarta Selatan 12950, Indonesia
Tel: 62 (21) 8062-8710
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
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
109
2017 Annual Report Sumitomo Mitsui Asset Management
Company, Limited
Shanghai Representative Office
Suite1002, 10F, CITIC Square,
1168 Nanjing Road West, Shanghai
200041, The People’s Republic of China
Tel: 86 (21) 5292-5960
Sumitomo Mitsui Asset Management
(Hong Kong) Limited
24th Floor, Shanghai Commercial Bank
Tower, 12 Queen’s Road Central,
Hong Kong
Tel: 852-2521-8883
UOB-SM Asset Management Pte. Ltd.
80 Raffles Place #15-22, UOB Plaza2,
Singapore 048624
Tel: 65-6589-3850
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
Canada Branch
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
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, TX 77002, U.S.A.
Tel: 1 (713) 277-3500
Silicon Valley Representative Office
101 Jefferson Drive, Menlo Park,
CA 94025, U.S.A.
Tel: 1 (650) 460-1669
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
Isidora Goyenechea 3000,
Suite 2102, Las Condes,
Santiago, Chile
Tel: 56 (2) 2896-8440
SMBC Nikko Securities America, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5300
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
666 Third Avenue,
New York, NY 10017, U.S.A.
Tel: 1 (212) 224-5201
Sumitomo Mitsui Asset Management
(New York) Inc.
300 Park Avenue, 16th Floor,
New York, NY 10022, U.S.A.
Tel: 1 (212) 418-3030
SMBC Principal Subsidiaries/
Affiliates SMFG Network
Europe, Middle-East
and Africa
Manufacturers Bank
515 South Figueroa Street,
Los Angeles, CA 90071, U.S.A.
Tel: 1 (213) 489-6200
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 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
DIFC Branch-Dubai
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
110
2017 Annual Report Sumitomo Mitsui Asset Management
(London) Limited
3rd Floor, 90 Basinghall Street, London
EC2V 5AY, U.K.
Tel: 44 (20) 7397-3970
SMBC Aviation Capital Limited
IFSC House, IFSC, Dublin 1, Ireland
Tel: 353 (1) 859-9000
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 1518858117, 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, 123112
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
111
2017 Annual Report *SMBCE: Sumitomo Mitsui Banking Corporation Europe Limited
Overseas service network (as of June 30, 2017)
Total: 75
(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
DIFC Branch-Dubai
Doha QFC Office
Abu Dhabi Representative Office
Mumbai Branch
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)
Shanghai Pilot Free Trade Zone Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Guangzhou Branch
Shanghai Puxi Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Hangzhou Branch
Changshu Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Chongqing Branch
Suzhou Industrial Park Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shenzhen Branch
■ 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
■ Sumitomo Mitsui Banking Corporation (China) Limited
Kunshan Sub-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
■ Mumbai Branch
■ Bangkok Branch
■ Chonburi Branch
■ Ho Chi Minh City Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Yangon Branch Thilawa Front Office
■ 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
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ ACLEDA Bank Plc.
112
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
Beijing Branch
Manufacturers Bank
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Houston Representative Office
Canada Branch
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
Yangon Branch
Thilawa Front Office
SMBC Metro Investment Corp.
Manila Branch
Bangkok Branch
SBCS Co., Limited
Chonburi Branch
ACLEDA Bank Plc.
Phnom Penh Representative Office
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
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
PT Oto Multiartha
PT Summit Oto Finance
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
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
■ Canada Branch
■ Cayman Branch
■ Houston Representative Office
■ Silicon Valley Representative Office
■ Mexico City Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ Manufacturers Bank
■ 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, Middle East and Africa
■ Sumitomo Mitsui Banking Corporation
■ DIFC Branch-Dubai
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
2017 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
DIFC Branch-Dubai
Doha QFC Office
Abu Dhabi Representative Office
Mumbai Branch
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
■ Ho Chi Minh City Branch
Head Office (Shanghai)
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
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Puxi Sub-Branch
Changshu Sub-Branch
Suzhou Industrial Park Sub-Branch
Tianjin Binhai Sub-Branch
Guangzhou Branch
Hangzhou Branch
Chongqing Branch
Shenzhen Branch
Shenyang Branch
Suzhou Branch
Dalian Branch
Tianjin Branch
Beijing 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
Kunshan Sub-Branch
■ Hong Kong Branch
■ Taipei Branch
■ Seoul Branch
■ Singapore Branch
■ Sydney Branch
■ Perth Branch
■ New Delhi Branch
■ Mumbai Branch
■ Bangkok Branch
■ Chonburi Branch
■ Hanoi Branch
■ Manila Branch
■ Yangon Branch
■ Labuan Branch
■ Yangon Branch Thilawa Front Office
■ Labuan Branch Kuala Lumpur Office
■ Ulaanbaatar Representative Office
■ Phnom Penh Representative Office
■ SMBC Capital Markets (Asia) Limited
■ 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
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ ACLEDA Bank Plc.
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ PT Bank Sumitomo Mitsui Indonesia
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ SMBC Nikko Capital Markets Limited (Sydney Office)
Overseas service network (as of June 30, 2017)
Total: 75
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
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.
Canada Branch
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Houston Representative Office
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
Yangon Branch
Thilawa Front Office
Bangkok Branch
SBCS Co., Limited
Chonburi Branch
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
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
PT Oto Multiartha
PT Summit Oto Finance
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
■ Canada Branch
■ Cayman Branch
■ Houston Representative Office
■ Silicon Valley Representative Office
■ Mexico City Representative Office
■ Santiago Representative Office
■ Bogota Representative Office
■ Lima Representative Office
■ Manufacturers Bank
■ 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
■ DIFC Branch-Dubai
■ 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
2017 Annual Report 114
2017 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)
195
196
202
205
208
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)
249
250
253
255
259
261
266
268
270
271
Trust Assets and Liabilities (Non-consolidated) 273
Basel III Information
Basel III Information
SMFG
SMBC
Capital Ratio Information (Consolidated)
211
Capital Ratio Information (Consolidated)
274
Leverage Ratio Information (Consolidated) 245
Leverage Ratio Information (Consolidated) 281
Liquidity Coverage Ratio Information
(Consolidated)
246
Liquidity Coverage Ratio Information
(Consolidated)
282
Indicators for assessing Global Systemically
Important Banks (G-SIBs)
248
Capital Ratio Information (Non-consolidated) 284
Liquidity Coverage Ratio Information (Non-
consolidated)
292
Compensation
SMFG
SMBC
Compensation (Consolidated)
296
Compensation
299
006_0800801372908.indd 115
115
2017/08/02 14:19:47
2017 Annual Report Financial Highlights
Sumitomo Mitsui Financial Group (Consolidated)
Year ended March 31
For the Year:
2017
2016
Ordinary income ����������������������������������������������������������� ¥ 5,133,245
Ordinary profit ��������������������������������������������������������������
1,005,855
Profit attributable to owners of parent �������������������������
706,519
Comprehensive income �����������������������������������������������
966,057
¥ 4,772,100
985,284
646,687
178,328
At Year-End:
Millions of yen
2015
¥ 4,851,202
1,321,156
753,610
2,063,510
2014
2013
¥ 4,641,880
1,432,332
835,357
1,303,295
¥ 4,326,424
1,073,745
794,059
1,458,107
Total net assets ������������������������������������������������������������ ¥ 11,234,286
Total assets ������������������������������������������������������������������
197,791,611
Total capital ratio (International Standard) �������������������
Tier 1 capital ratio (International Standard) ������������������
Common equity Tier 1 capital ratio
16.93%
14.07%
(International Standard) ���������������������������������������������
Number of employees ��������������������������������������������������
12.17%
77,205
¥ 10,447,669
186,585,842
¥ 10,696,271
183,442,585
¥ 9,005,019
161,534,387
¥ 8,443,218
148,696,800
17�02%
13�68%
11�81%
73,652
16�58%
12�89%
11�30%
68,739
15�51%
12�19%
10�63%
66,475
14�71%
10�93%
9�38%
64,635
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_0800801372908.indd 116
2017/08/07 14:04:32
SMFG2017 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
2016
2017
*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
*8 ¥ 46,865,538
1,872,144
899,897
*8
*8
*1, *2, *8, *15
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*8
*8, *10, *11,*12
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
8,760,390
4,420,377
6,755,428
3,439
24,631,792
80,237,322
1,723,867
2,395,597
7,355,845
3,101,642
2,086,391
381,378
489,167
7,186
20,575
116,942
946,506
431,833
318,578
185
195,909
314,922
63,001
Millions of
U�S� dollars
2017
$ 417,734
16,687
8,021
78,085
39,401
60,214
31
219,554
715,191
15,366
21,353
65,566
27,646
18,597
3,399
4,360
64
183
1,042
8,437
3,849
2,840
2
1,746
2,807
562
7,519,635
(625,019)
¥186,585,842
8,090,111
(646,215)
¥197,791,611
72,111
(5,760)
$1,763,006
010_0800801372908.indd 117
117
2017/08/07 14:04:33
SMFG2017 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
2016
2017
Millions of
U�S� dollars
2017
*8
*8
*8
*8
*8, *13
*14
*8
*10
*8
*10
¥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
*8
*8
*8
*8, *13
*14
*8
*10
*8
*10
¥117,830,210
11,880,937
2,088,019
2,715,752
$1,050,274
105,900
18,611
24,207
7,444,655
2,311,542
4,704,931
10,786,713
683,252
1,125,600
8,129,232
1,180,976
6,880,273
77,375
3,045
59,110
2,347
21,744
15,464
156,775
1,745
335,908
31,596
8,090,111
186,557,325
2,337,895
757,346
5,036,756
(12,913)
8,119,085
1,542,308
(42,077)
38,109
65,078
9,034
66,358
20,604
41,937
96,147
6,090
10,033
72,460
10,527
61,327
690
27
527
21
194
138
1,397
16
2,994
282
72,111
1,662,869
20,839
6,751
44,895
(115)
72,369
13,747
(375)
340
580
81
1,612,453
3,482
1,499,264
11,234,286
¥197,791,611
14,373
31
13,364
100,136
$1,763,006
118
010_0800801372908.indd 118
2017/08/07 14:04:33
SMFG2017 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 ��������������������������������������������������������������������������������������
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 ������������������������������������������������������
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
2016
2017
Millions of
U�S� dollars
2017
¥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
*1
*2
*3
¥5,133,245
1,912,027
1,384,119
259,840
12,205
18,886
12,172
48,040
70,227
106,534
3,797
1,195,452
237,394
1,583,316
257,847
883,657
441,811
201,257
14,089
187,167
4,127,389
553,394
189,204
67,232
5,491
16,281
4,631
15,510
39,528
118
144,755
70,641
182,104
1,275,747
128,468
832,749
314,529
1,812,433
303,710
75,915
227,795
1,005,855
$45,755
17,043
12,337
2,316
109
168
108
428
626
950
34
10,656
2,116
14,113
2,298
7,876
3,938
1,794
126
1,668
36,789
4,933
1,686
599
49
145
41
138
352
1
1,290
630
1,623
11,371
1,145
7,423
2,804
16,155
2,707
677
2,030
8,966
010_0800801372908.indd 119
119
2017/08/07 14:04:33
SMFG2017 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 ����������������������������������������������������
2016
¥
Millions of yen
3,911
3,714
138
0
58
9,026
4,289
4,362
*4
*5
*5
374
980,170
244,223
(19,175)
225,047
755,123
108,435
¥ 646,687
2017
¥
30,960
1,552
—
82
29,325
57,511
7,720
49,460
329
979,305
265,045
(94,093)
170,951
808,353
101,834
¥ 706,519
Millions of
U�S� dollars
2017
$
276
14
—
1
261
513
69
441
3
8,729
2,362
(839)
1,524
7,205
908
$ 6,298
120
010_0800801372908.indd 120
2017/08/07 14:04:33
SMFG2017 Annual Report Consolidated Statements of Comprehensive Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Millions of yen
2016
2017
Millions of
U�S� dollars
2017
*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 ������
*1
¥ 755,123
(576,794)
(444,981)
82,552
1,705
(92,121)
(121,933)
(2,016)
178,328
103,599
74,728
¥808,353
157,703
201,653
(93,989)
(6)
(12,699)
81,193
(18,448)
966,057
860,806
105,250
$7,205
1,406
1,797
(838)
(0)
(113)
724
(164)
8,611
7,673
938
010_0800801372908.indd 121
121
2017/08/07 14:04:33
SMFG2017 Annual Report Consolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
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’
(443,359)
equity in the fiscal year ���������������������������������������������
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
122
010_0800801372908.indd 122
2017/08/07 14:04:33
SMFG2017 Annual Report Consolidated Statements of Changes in Net Assets
Year ended March 31, 2017
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Millions of yen
Stockholders’ equity
Retained
earnings
¥4,534,472
Capital
surplus
¥757,306
Treasury
stock
Total
¥(175,381) ¥7,454,294
(205,083)
706,519
(100)
162,567
(2)
42
25
13
(288)
(4)
(200)
1,300
(205,083)
706,519
(100)
162,564
42
25
13
(288)
(4)
(200)
1,300
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
—
Balance at the end of the fiscal year ������������������������������� ¥2,337,895
40
¥757,346
502,283
¥5,036,756
162,467
664,791
¥ (12,913) ¥8,119,085
Year ended March 31, 2017
Balance at the beginning of the fiscal year ��������������������� ¥1,347,689
Changes in the fiscal year
Net unrealized
gains (losses)
on other
securities
Millions of yen
Accumulated other comprehensive income
Net deferred
gains (losses)
on hedges
¥ 55,130
Land
revaluation
excess
¥39,416
Foreign
currency
translation
adjustments
¥ 87,042
Accumulated
remeasurements
of defined
benefit plans
Total
¥(69,811) ¥1,459,467
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
equity in the fiscal year ���������������������������������������������
194,619
Net changes in the fiscal year �����������������������������������������
194,619
Balance at the end of the fiscal year ������������������������������� ¥1,542,308
(97,208)
(97,208)
¥(42,077)
(1,306)
(1,306)
¥38,109
(21,964)
(21,964)
¥ 65,078
78,845
78,845
¥ 9,034
152,985
152,985
¥1,612,453
Year ended March 31, 2017
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of yen
Non-
controlling
interests
Total
net assets
¥2,884
¥1,531,022 ¥10,447,669
(205,083)
706,519
(100)
162,564
42
25
13
(288)
(4)
(200)
1,300
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
598
598
¥3,482
(31,758)
(31,758)
121,825
786,616
¥1,499,264 ¥11,234,286
010_0800801372908.indd 123
123
2017/08/07 14:04:33
SMFG2017 Annual Report Millions of U�S� dollars
Stockholders’ equity
Retained
earnings
Capital
surplus
$6,750
$40,418
Treasury
stock
$(1,563)
Capital
stock
$20,839
(1)
1,449
(0)
0
(1,828)
6,298
0
0
(3)
(0)
(2)
12
Total
$66,443
(1,828)
6,298
(1)
1,449
0
0
0
(3)
(0)
(2)
12
—
$20,839
0
$6,751
4,477
$44,895
1,448
$ (115)
5,926
$72,369
Millions of U�S� dollars
Accumulated other comprehensive income
Net unrealized
gains (losses)
on other
securities
$12,013
Net deferred
gains (losses)
on hedges
$ 491
Land
revaluation
excess
$351
Foreign
currency
translation
adjustments
$776
Accumulated
remeasurements
of defined
benefit plans
$(622)
Total
$13,009
Consolidated Statements of Changes in Net Assets
Year ended March 31, 2017
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
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, 2017
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
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 �������������������������������
1,735
1,735
$13,747
(866)
(866)
$(375)
(12)
(12)
$340
(196)
(196)
$580
703
703
$ 81
1,364
1,364
$14,373
Year ended March 31, 2017
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 �����������������
Decrease due to decrease in affiliates accounted for
by the equity method �����������������������������������������������
Reversal of land revaluation excess ���������������������������
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of U�S� dollars
Non-
controlling
interests
$13,647
$26
Total
net assets
$ 93,125
(1,828)
6,298
(1)
1,449
0
0
0
(3)
(0)
(2)
12
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
5
5
$31
(283)
(283)
$13,364
1,086
7,011
$100,136
124
010_0800801372908.indd 124
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SMFG2017 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 (gains) losses of affiliates �����������������������������������������������������
Net change in reserve for possible loan losses ����������������������������������
Net change in reserve for employee bonuses ������������������������������������
Net change in reserve for executive bonuses ������������������������������������
Net change in 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) losses on securities ����������������������������������������������������������
Net (gains) losses from money held in trust ���������������������������������������
Net exchange (gains) losses ��������������������������������������������������������������
Net (gains) losses from disposal of fixed assets ��������������������������������
Net change in trading assets �������������������������������������������������������������
Net change in trading liabilities ����������������������������������������������������������
Net change in loans and bills discounted ������������������������������������������
Net change in deposits ����������������������������������������������������������������������
Net change in negotiable certificates of deposit ��������������������������������
Net change in borrowed money (excluding subordinated
borrowings) ���������������������������������������������������������������������������������������
Net change in deposits with banks ����������������������������������������������������
Net change in call loans and bills bought and others ������������������������
Net change in receivables under securities borrowing transactions��
Net change in call money and bills sold and others ��������������������������
Net change in commercial paper �������������������������������������������������������
Net change in payables under securities lending transactions ����������
Net change in foreign exchanges (assets) �����������������������������������������
Net change in foreign exchanges (liabilities) ��������������������������������������
Net change in lease receivables and investment assets ��������������������
Net change in short-term bonds (liabilities) ���������������������������������������
Issuance and redemption of bonds (excluding subordinated bonds) �����
Net change in due to trust account ����������������������������������������������������
Interest received ���������������������������������������������������������������������������������
Interest paid ���������������������������������������������������������������������������������������
Other, net ��������������������������������������������������������������������������������������������
Subtotal ����������������������������������������������������������������������������������������������
Income taxes paid ������������������������������������������������������������������������������
Net cash provided by (used in) operating activities ��������������������������������
Millions of yen
2016
2017
Millions of
U�S� dollars
2017
¥ 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)
¥ 979,305
274,988
49,460
29,272
—
(29,325)
(24,552)
21,620
7,765
584
(47,173)
145
2,076
(1,514)
(71,789)
(1,912,027)
553,394
(98,190)
(0)
16,280
6,167
1,260,408
(1,364,902)
(5,197,594)
7,287,109
(2,367,722)
1,800,886
837,507
(1,198,782)
(787,472)
1,895,762
(654,552)
2,135,651
(144,713)
(400,001)
(53,854)
(145,700)
1,109,521
236,434
1,911,477
(536,129)
(523,175)
4,856,646
(342,268)
4,514,377
$ 8,729
2,451
441
261
—
(261)
(219)
193
69
5
(420)
1
19
(13)
(640)
(17,043)
4,933
(875)
(0)
145
55
11,235
(12,166)
(46,328)
64,953
(21,105)
16,052
7,465
(10,685)
(7,019)
16,898
(5,834)
19,036
(1,290)
(3,565)
(480)
(1,299)
9,890
2,107
17,038
(4,779)
(4,663)
43,289
(3,051)
40,239
010_0800801372908.indd 125
125
2017/08/07 14:04:33
SMFG2017 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 �����������������������
Repayment of subordinated borrowings ��������������������������������������������
Proceeds from issuance of subordinated bonds and bonds with
Redemption 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 ������������������������������������������
Purchases 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 provided by (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
Millions of yen
2016
2017
¥(27,007,243)
22,537,031
7,992,771
(1)
1,925
(529,264)
147,995
(158,779)
223
(860)
2,251,106
*2
¥(21,215,546)
13,611,842
8,852,923
(1)
1,744
(495,823)
169,423
(145,290)
636
—
—
(652)
*3
(199,755)
6,698
5,240,950
18,000
(39,696)
(182,617)
(211,952)
(142,000)
(74,891)
(191)
54
1,193
581,347
—
(11,000)
394,495
(371,640)
(205,078)
(86,886)
(66,458)
(100)
179,757
(6)
(4)
162
(55,995)
(99,579)
3,958,066
33,598,680
390
(166,524)
(10,555)
4,918,645
37,556,806
Millions of
U�S� dollars
2017
$(189,104)
121,328
78,910
(0)
16
(4,419)
1,510
(1,295)
6
—
—
(1,781)
11
5,182
—
(98)
3,516
(3,313)
(1,828)
(774)
(592)
(1)
1,602
(0)
3
(1,484)
(94)
43,842
334,761
stock acquisition rights ��������������������������������������������������������������������
577,142
subsidiaries in consolidation �����������������������������������������������������������������
59
2,943
26
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
—
¥ 37,556,806
(1)
¥ 42,478,393
*1
(0)
$ 378,629
126
010_0800801372908.indd 126
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SMFG2017 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, 2017 which was ¥112.19 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_0800801372908.indd 127
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2017/08/07 14:04:33
SMFG2017 Annual Report As of and for the years ended March 31, 2016 and 2017
(Significant accounting policies for preparing consolidated financial statements)
1. Scope of consolidation
(1) Consolidated subsidiaries
The number of consolidated subsidiaries at March 31, 2017 is 354.
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
Sumitomo Mitsui Asset Management Company, Limited (“SMAM”)
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, 2017 are as follows:
SMAM, SMFL Capital Company, Limited and 60 other companies were newly included in the scope of consolidation as a result of
the acquisition of stocks and for other reasons.
SAKURA CARD CO., Ltd. and 48 other companies were excluded from the scope of consolidation as they ceased to be subsidiaries
due to merger and for other reasons.
(2) Unconsolidated subsidiaries
Principal company:
SBCS Co., Ltd.
169 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, 2017 is 5.
Principal company:
SBCS Co., Ltd.
(2) Affiliates accounted for by the equity method
The number of equity method affiliates accounted for by the equity method at March 31, 2017 is 49.
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, 2017 are as follows:
2 companies newly became equity method affiliates due to an increase in the percentage of their voting rights and for other reasons.
SMAM and 6 other companies were excluded from the scope of equity method affiliates as they became subsidiaries due to
acquisition of stocks and for other reasons.
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(3) Unconsolidated subsidiaries that are not accounted for by the equity method
169 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, 2017 are as follows:
1
9
1
7
3
3
156
16
8
150
May 31...................................
June 30 ..................................
July 31 ...................................
September 30 .........................
October 31 .............................
November 30 .........................
December 31 ..........................
January 31 .............................
February 28 ............................
March 31 ...............................
(2) The subsidiaries with balance sheets dated May 31, June 30, July 31, September 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” on the consolidated statements of income.
Securities and monetary claims purchased for trading purposes are stated at the fiscal year-end market value, and financial derivatives
such as swaps, futures and options are stated at amounts that would be settled if the transactions were terminated at the consolidated
balance sheet date.
“Trading income” and “Trading losses” include interest received or paid during the fiscal year. The year-on-year valuation differences
of securities and monetary claims are also recorded in the above-mentioned accounts. As for the derivatives, assuming that the
settlement will be made in cash, the year-on-year valuation differences are also recorded in the above-mentioned accounts.
(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.”
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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SMFG2017 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 (5 to 10 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, 2016 and 2017 were ¥301,983 million and ¥288,145 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.
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SMFG2017 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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SMFG2017 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.
(Changes in accounting policies)
In accordance with the revision to the Corporation Tax Act, some domestic consolidated subsidiaries apply the “Practical Solution on a change
in depreciation method due to Tax Reform 2016” (ASBJ Practical Issues Task Force No.32, issued on June 17, 2016) and changed the
depreciation method for accompanying facilities to buildings and structures acquired on or after April 1, 2016 from the declining-balance
method to the straight-line method, starting from the fiscal year ended March 31, 2017. Effects of this change to Ordinary Profit and Income
before income taxes during the fiscal year ended March 31, 2017 are immaterial.
(Additional information)
Recoverability of Deferred Tax Assets
SMFG applies the “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No.26 issued on March 28, 2016)
from the fiscal year ended March 31, 2017.
Adoption of the consolidated corporate-tax system
SMFG applies the “Practical Solution on Tentative Treatment of Tax Effect Accounting under Consolidated Taxation System (Part 1)” (ASBJ
Practical Issues Task Force No.5, issued on January 16, 2015) and “Practical Solution on Tentative Treatment of Tax Effect Accounting under
Consolidated Taxation System (Part 2)” (ASBJ Practical Issues Task Force No.7, issued on January 16, 2015) from fiscal year ended March 31,
2017 on the premise that SMFG file a tax return as a consolidated entity, since the Commissioner of the National Tax Agency has approved the
adoption of the consolidated corporate-tax system by SMFG and some consolidated subsidiaries starting from fiscal year ended March 31, 2018.
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SMFG2017 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, 2016 and 2017 were as follows:
March 31
Japanese stocks .................................................................................................................
Investments ......................................................................................................................
2016
¥609,830
592
2017
¥603,177
1,371
Millions of yen
Japanese stocks of jointly controlled entities were as follows:
March 31
Japanese stocks of jointly controlled entities .....................................................................
2016
¥104,779
2017
¥93,717
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, 2016 and 2017 were as follows:
March 31
Japanese government bonds in “Securities” .......................................................................
2016
¥900
2017
¥905
Millions of yen
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, 2016 and 2017 were as follows:
March 31
Securities pledged .............................................................................................................
Securities held without being disposed .............................................................................
2016
¥5,245,608
3,152,831
2017
¥5,977,541
3,112,106
Millions of yen
*3 Bankrupt loans and non-accrual loans
Bankrupt loans and non-accrual loans at March 31, 2016 and 2017 were as follows:
March 31
Bankrupt loans .................................................................................................................
Non-accrual loans .............................................................................................................
2016
¥ 44,748
594,077
2017
¥ 34,441
558,855
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, 2016 and 2017 were as follows:
March 31
Past due loans (3 months or more) ....................................................................................
2016
¥19,845
2017
¥22,434
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, 2016 and 2017 were as follows:
March 31
Restructured loans ............................................................................................................
2016
¥266,698
2017
¥252,790
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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SMFG2017 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, 2016 and
2017 were as follows:
March 31
Risk-monitored loans .......................................................................................................
2016
¥925,370
2017
¥868,521
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, 2016 and 2017 were as follows:
March 31
Bills discounted ................................................................................................................
2016
¥820,990
2017
¥802,664
Millions of yen
*8 Assets pledged as collateral
Assets pledged as collateral at March 31, 2016 and 2017 consisted of the following:
March 31, 2016
Assets pledged as collateral:
Millions of yen March 31, 2017
Millions of yen
Assets pledged as collateral:
Cash and due from banks ..................................... ¥ 75,954
Call loans and bills bought ..................................
433,224
49,961
Monetary claims bought ......................................
Trading assets ......................................................
2,531,750
5,560,230
Securities .............................................................
2,609,736
Loans and bills discounted ...................................
Lease receivables and investment assets ................
2,467
9,557
Tangible fixed assets ............................................
Other assets (installment account receivable,
etc.) ...................................................................
135
Cash and due from banks ..................................... ¥ 72,981
Monetary claims bought ......................................
29,021
Trading assets ......................................................
2,315,475
3,544,026
Securities .............................................................
8,239,227
Loans and bills discounted ...................................
Lease receivables and investment assets ................
4,303
Tangible fixed assets ............................................
9,112
Other assets (installment account receivable,
etc.) ...................................................................
564
Liabilities corresponding to assets pledged as collateral:
Liabilities corresponding to assets pledged as collateral:
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
Deposits ..............................................................
Payables under repurchase agreements .................
Payables under securities lending transactions .....
Borrowed money .................................................
Other liabilities ...................................................
Acceptances and guarantees .................................
37,944
1,436,571
6,072,016
6,922,810
24,752
193,294
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, 2016 and 2017:
March 31, 2016
Cash and due from banks .......................................... ¥ 12,731
13,026
Trading assets ...........................................................
6,284,022
Securities ..................................................................
Millions of yen March 31, 2017
Millions of yen
Cash and due from banks .......................................... ¥ 12,688
Trading assets ...........................................................
111,189
7,617,741
Securities ..................................................................
1,593,035
Loans and bills discounted ........................................
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SMFG2017 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, 2016
Collateral money deposited for financial instruments ....
Surety deposits .........................................................
Margins of futures markets .......................................
Other margins ..........................................................
Millions of yen March 31, 2017
Millions of yen
Collateral money deposited for financial instruments .... ¥1,264,271
¥873,964
114,293
Surety deposits .........................................................
114,976
61,086
47,015 Margins of futures markets .......................................
32,119
Other margins ..........................................................
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, 2016 and 2017 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
2016
¥57,798,996
2017
¥62,035,638
42,315,486
46,185,404
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 equity method affiliates also revalued its own land for business activities in accordance with the Act. SMFG’s share of the net
unrealized gains and 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 equity method 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 equity method 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, 2016 and 2017 were as follows:
March 31
Accumulated depreciation ................................................................................................
2016
¥977,479
2017
¥1,129,612
Millions of yen
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SMFG2017 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, 2016 and 2017 were as follows:
March 31
Deferred gain on tangible fixed assets deductible for tax purposes .....................................
[The consolidated fiscal year concerned] .......................................................................
2016
¥62,665
[—]
2017
¥63,213
[1,813]
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, 2016 and 2017 were as follows:
March 31
Subordinated borrowings ..................................................................................................
2016
¥295,199
2017
¥284,200
Millions of yen
*14 Subordinated bonds
The balance of subordinated bonds included in “Bonds” at March 31, 2016 and 2017 were as follows:
March 31
Subordinated bonds ..........................................................................................................
2016
¥2,142,286
2017
¥2,158,167
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, 2016 and 2017 were as follows:
March 31
Guaranteed amount to privately-placed bonds ..................................................................
2016
¥2,004,096
2017
¥1,974,118
Millions of yen
136
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SMFG2017 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, 2016 and 2017 included the following:
Year ended March 31, 2016
Gains on sales of stocks .............................................
Millions of yen Year ended March 31, 2017
¥100,302
Gains on sales of stocks .............................................
Millions of yen
¥80,307
*2 General and administrative expenses
“General and administrative expenses” for the fiscal years ended March 31, 2016 and 2017 included the following:
Year ended March 31, 2016
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen Year ended March 31, 2017
¥626,149
207
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen
¥669,496
89
*3 Other expenses
“Other expenses” for the fiscal years ended March 31, 2016 and 2017 included the following:
Year ended March 31, 2016
Write-off of loans......................................................
Provision for reserve for losses on interest
repayment ..............................................................
Equity in losses of affiliates .......................................
Millions of yen Year ended March 31, 2017
¥ 74,180
140,264
36,196
Write-off of loans......................................................
Write-off of stocks and others ...................................
Loss on sales of non-accrual loans ..............................
Millions of yen
¥87,792
14,859
13,204
*4 Other extraordinary gains
“Other extraordinary gains” for the fiscal year ended March 31, 2017 was 29,325 million yen due to gains on step acquisitions.
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements *5 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, 2016 and 2017.
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.
Other ...........................................................Branch (1 item)
Land and buildings, etc.
Corporate asset (1 item)
Idle assets (24 items)
Idle assets (11items)
Others (4 items)
Year ended March 31, 2017
Area
Purpose of use
Type
Tokyo metropolitan area ...............................Branches (11 items)
Land and buildings, etc.
Corporate assets (10 items)
Idle assets (57 items)
Others (6 items)
Kinki area ....................................................Branches (16 items)
Land and buildings, etc.
Corporate asset (1 item)
Idle assets (36 items)
Others (2 items)
Other ...........................................................Branches (7 items)
Land and buildings, etc.
—
Idle assets (15 items)
Others (10 items)
—
Goodwill
Millions of yen
Impairment loss
¥ 45
2,265
0
649
349
628
6
416
0
Millions of yen
Impairment loss
¥ 518
371
3,650
58
285
32
893
1
274
292
86
42,995
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.
The unit of goodwill is mainly based on each consolidated subsidiary. All unamortized balance of goodwill for the fiscal year ended
March 31, 2017 was included in “Extraordinary losses” as “Losses on impairment of fixed assets” since there are indicators that amount of
goodwill relating to SMBC Friend may not be recoverable. The recoverable amount is calculated using net realizable value which is
determined based on revalued corporate value.
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SMFG2017 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:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
Before adjustments to tax effect ..............................................................................
Tax effect ................................................................................................................
Net unrealized gains (losses) on other securities ......................................................
Net deferred gains (losses) on hedges:
Amount arising during the fiscal year ..........................................................................
Reclassification adjustments ........................................................................................
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:
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 .....................................................................
Millions of yen
2016
2017
¥(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)
¥ 426,339
(144,428)
281,910
(80,256)
201,653
(175,291)
39,212
(136,079)
42,089
(93,989)
—
—
—
(6)
(6)
(12,699)
—
(12,699)
—
(12,699)
61,564
54,960
116,525
(35,332)
81,193
(17,517)
(930)
(18,448)
—
(18,448)
¥ 157,703
(Notes to consolidated statements of changes in net assets)
Fiscal year ended March 31, 2016
1. Type and number of shares issued and treasury stock
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.
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SMFG2017 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
Date of resolution
Ordinary General Meeting of Shareholders
held on June 29, 2016 ................................ Common stock
Type of shares
Fiscal year ended March 31, 2017
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
¥112,804
¥80 March 31, 2015
June 26, 2015
105,753
75
September 30, 2015 December 3, 2015
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
Year ended March 31, 2017
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
—
—
—
—
1,414,055,625
1,414,055,625
Treasury stock
Common stock ....................................
Total ...............................................
46,830,882
46,830,882
24,993
24,993
42,826,992
42,826,992
4,028,883
4,028,883
1,2
Notes: 1. Increase of 24,993 shares in the number of treasury common stock was due to purchases of fractional shares.
2. Decrease of 42,826,992 shares in the number of treasury common stock includes decrease of 6,128 shares due to sales of fractional shares and exercise of stock options
and decrease of 42,820,864 shares due to sale of stocks of SMFG held by SMBC and its banking subsidiaries.
2. Information on stock acquisition rights
Year ended March 31, 2017
SMFG
Consolidated subsidiaries ......
Total ................................
Details of stock
acquisition rights
Stock acquisition
rights as stock
options
—
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
—
—
—
—
—
—
¥3,206
276
¥3,482
140
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
3. Information on dividends
(1) Dividends paid in the fiscal year
Date of resolution
Ordinary General Meeting of Shareholders
held on June 29, 2016 ................................ Common stock
Meeting of the Board of Directors held on
November 11, 2016 ................................... 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
¥105,753
¥75 March 31, 2016
June 29, 2016
105,752
75
September 30, 2016 December 2, 2016
Date of resolution
Ordinary General Meeting of Shareholders
held on June 29, 2017 ................................ Common stock
Type of shares
Millions of yen, except per share amount
Cash
dividends
¥105,752
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥75 March 31, 2017
June 30, 2017
(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 .................................................................................................
2016
¥42,789,236
(5,232,430)
¥37,556,806
2017
¥46,865,538
(4,387,144)
¥42,478,393
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
follows;
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
*3 The major components of assets and liabilities for entities newly consolidated by stock acquisition and for other reasons
The major components of assets and liabilities at the commencement of consolidation due to stock acquisition of SMFL Capital Company,
Limited (former name: GE Japan LLC) and 5 other companies by SMFL’s stock acquisition and the relation between the acquisition cost of
shares and expenditure to acquire were as follows;
Year ended March 31, 2017
Assets ...............................................................................................................................
Lease receivables and investment assets ........................................................................
Liabilities .........................................................................................................................
Borrowed money .........................................................................................................
Non-controlling interests .................................................................................................
Goodwill ..........................................................................................................................
Acquisition cost of 6 companies ........................................................................................
Cash and cash equivalents included in acquired assets of 6 companies ...............................
Expenditure for acquisition of 6 companies .......................................................................
Millions of yen
¥ 669,763
394,459
(502,042)
(436,526)
(393)
13,632
180,959
(1,015)
¥ 179,944
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements The major components of assets and liabilities at the commencement of consolidation due to consolidating SMAM and 7 other
companies by SMBC’s stock acquisition and the relation between the acquisition cost of shares and expenditure to acquire were as follows;
Year ended March 31, 2017
Assets ...............................................................................................................................
Securities .....................................................................................................................
Liabilities .........................................................................................................................
Non-controlling interests .................................................................................................
Goodwill ..........................................................................................................................
Acquisition cost of 8 companies ........................................................................................
Cash and cash equivalents included in acquired assets of 8 companies ...............................
Fair value of SMAM’s common stocks immediately prior to the business combination ......
Expenditure for acquisition of 8 companies .......................................................................
Millions of yen
¥ 50,524
13,466
(12,516)
(15,203)
38,053
60,858
(474)
(40,572)
¥ 19,811
(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
2016
¥1,239,009
120,223
(215,850)
¥1,143,383
2017
¥1,575,535
141,815
(219,854)
¥1,497,496
2) The scheduled collections of lease payments receivable related to lease receivables and investment assets are as follows:
2016
2017
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
¥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
Lease payments receivable
related to lease receivables
¥ 307,509
218,544
153,983
111,720
55,302
186,669
¥1,033,730
Lease payments receivable
related to investment
assets
¥ 423,147
342,384
272,786
190,488
116,975
229,752
¥1,575,535
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, 2016 and 2017 were
¥1,759 million and ¥1,688 million, respectively, more than it would have been if such transactions had been treated in a similar way
to sales of the underlying assets.
142
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
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 .............................................................................................................................
2016
¥ 42,254
213,401
¥255,656
2017
¥ 44,745
254,258
¥299,004
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 .............................................................................................................................
2016
¥ 186,113
1,218,850
¥1,404,963
2017
¥ 215,329
1,275,289
¥1,490,618
Future lease payments receivable on operating leases which were not cancelable at March 31, 2016 and 2017 amounting to ¥0
million and ¥0 million, respectively, on the lessor side were pledged as collateral for borrowings.
Millions of yen
(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.”
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(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
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.
144
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements 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.
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, 2017, total VaR of SMBC and its major consolidated subsidiaries was ¥47.4 billion for the banking activities,
¥23.6 billion for the trading activities and ¥1,544.5 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.
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements 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.
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, 2016 and
2017 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, 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.
146
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
March 31, 2017
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
¥ 46,856,755
1,870,376
899,897
8,759,837
4,415,287
3,778,798
3,439
1,173,423
22,412,795
80,237,322
(360,465)
79,876,857
1,716,259
2,387,292
¥174,151,021
¥117,830,210
11,880,937
2,088,019
2,715,752
7,444,655
2,311,542
2,071,583
10,786,713
683,252
1,125,600
8,129,232
1,180,976
¥168,248,478
Millions of yen
Fair value
¥ 46,863,245
1,872,041
901,214
8,761,000
4,428,894
3,778,798
3,439
1,180,318
22,412,795
81,964,043
1,717,458
2,483,992
¥176,367,243
¥117,826,321
11,886,844
2,088,066
2,715,752
7,444,655
2,311,536
2,071,583
10,794,049
683,252
1,125,590
8,333,946
1,180,976
¥168,462,576
Hedge accounting not applied ..............................................
Hedge accounting applied ....................................................
Total ..........................................................................................
¥ 272,439
[162,498]
¥ 109,940
¥ 272,439
[162,498]
¥ 109,940
Net unrealized
gains (losses)
¥ 6,490
1,665
1,316
1,163
13,606
—
—
6,895
—
2,087,186
1,198
96,699
¥2,216,221
¥(3,888)
5,906
47
—
—
(6)
—
7,335
—
(9)
204,713
—
¥ 214,097
¥
¥
—
—
—
*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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SMFG2017 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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SMFG2017 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
2016
2017
Monetary claims bought without market prices *1 ...................................................
¥ 2,460
¥ 2,460
Securities:
Unlisted stocks, etc. *2 *4 ........................................................................................
Investments in partnership, etc. *3 *4 ......................................................................
Total .............................................................................................................................
157,382
248,921
¥408,764
176,818
264,205
¥443,485
*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 ¥7,618 million and ¥9,869 million were written-off in the fiscal year ended March 31, 2016 and 2017, respectively.
(4) Redemption schedule of monetary claims and securities with maturities
Millions of yen
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
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.
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
March 31, 2017
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
¥45,684,741
1,824,664
832,583
8,754,840
3,456,614
3,530,979
791,800
790,000
1,800
—
—
2,739,178
79,000
4,822
515,524
2,139,831
18,502,646
1,704,057
660,683
¥84,951,811
Millions of yen
After 1 year
through 5 years
¥ 34,913
46,118
67,314
5,550
599,502
11,390,925
380,836
370,000
5,626
5,210
—
11,010,089
6,789,300
28,545
1,493,515
2,698,728
33,099,462
12,397
1,272,477
¥46,528,660
After 5 years
through 10 years
¥ 21,577
1,360
—
—
59,428
2,658,678
—
—
—
—
—
2,658,678
220,400
49,538
609,414
1,779,326
12,842,320
—
171,960
¥15,755,326
After 10 years
¥ 1,136
—
—
—
266,599
1,353,291
—
—
—
—
—
1,353,291
147,000
26
145,798
1,060,466
8,943,328
—
117,548
¥10,681,905
*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: ¥2 million, Securities: ¥7,340 million, Loans and bills discounted:
¥542,240 million, Foreign exchanges: ¥7,413 million, Lease receivables and investment assets: ¥31,113 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥6,306,217 million at March 31, 2017.
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
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
150
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
March 31, 2017
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
¥113,529,261
11,514,609
2,088,019
2,715,752
7,444,655
2,311,542
7,802,225
683,252
1,125,600
1,113,373
1,180,976
¥151,509,270
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥3,562,082
363,542
—
—
—
—
1,475,260
—
—
3,756,532
—
¥9,157,417
After 5 years
through 10 years
¥ 252,345
2,785
—
—
—
—
1,095,556
—
—
2,436,522
—
¥3,787,208
After 10 years
¥ 486,521
0
—
—
—
—
413,670
—
—
825,462
—
¥1,725,655
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SMFG2017 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
2016
¥(32,241)
2017
¥(56,814)
2. Bonds classified as held-to-maturity
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:
March 31, 2017
Bonds with unrealized gains:
Bonds with unrealized losses:
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 .............................................................................................................
Consolidated balance
sheet amount
¥2,241,546
16,460
5,202
—
2,263,208
—
4,389
—
—
4,389
¥2,267,598
Consolidated balance
sheet amount
¥1,160,754
7,463
5,205
—
1,173,423
—
—
—
—
—
¥1,173,423
Millions of yen
Fair value
¥2,258,065
16,485
5,230
—
2,279,780
—
4,385
—
—
4,385
¥2,284,166
Millions of yen
Fair value
¥1,167,616
7,474
5,227
—
1,180,318
—
—
—
—
—
¥1,180,318
Net unrealized
gains (losses)
¥16,518
25
27
—
16,572
—
(3)
—
—
(3)
¥16,568
Net unrealized
gains (losses)
¥6,861
11
22
—
6,895
—
—
—
—
—
¥6,895
152
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
3. Other securities
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.
March 31, 2017
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
¥ 3,468,261
8,052,272
5,660,891
12,242
2,379,138
4,233,661
15,754,194
142,601
2,129,124
1,633,041
70,537
425,545
5,147,417
7,419,143
¥23,173,338
Millions of yen
Acquisition cost
¥ 1,531,248
7,981,171
5,629,640
12,165
2,339,365
3,879,509
13,391,929
157,742
2,139,848
1,639,835
71,086
428,927
5,295,109
7,592,700
¥20,984,630
Net unrealized
gains (losses)
¥1,937,012
71,100
31,251
76
39,772
354,152
2,362,265
(15,140)
(10,724)
(6,793)
(548)
(3,381)
(147,691)
(173,556)
¥2,188,708
Notes: 1. There is no net unrealized gains (losses) on other securities shown above for the fiscal year ended March 31, 2017 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, 2017
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥146,906
296,578
¥443,485
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements 4. Held-to-maturity bonds sold during the fiscal year
Fiscal year ended March 31, 2016
There are no corresponding transactions.
Fiscal year ended March 31, 2017
There are no corresponding transactions.
5. Other securities sold during the fiscal year
Year ended March 31, 2016
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Year ended March 31, 2017
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Sales amount
¥ 161,735
12,304,977
12,079,605
61,407
163,963
10,175,242
¥22,641,955
Sales amount
¥ 179,108
7,331,730
7,171,992
24,678
135,059
6,384,241
¥13,895,079
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)
Millions of yen
Gains on sales
Losses on sales
¥ 70,660
27,719
27,202
19
496
55,618
¥153,998
¥ (8,676)
(6,727)
(6,330)
(57)
(339)
(20,032)
¥(35,436)
6. Change of classification of securities
Fiscal year ended March 31, 2016
There are no significant corresponding transactions to be disclosed.
Fiscal year ended March 31, 2017
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, 2016 and 2017 were ¥4,838 million and ¥8,592 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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SMFG2017 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, 2016
There are no corresponding transactions.
Fiscal year ended March 31, 2017
There are no corresponding transactions.
2. Money held in trust classified as held-to-maturity
Fiscal year ended March 31, 2016
There are no corresponding transactions.
Fiscal year ended March 31, 2017
There are no corresponding transactions.
3. Other money held in trust
March 31, 2016
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥5,163
March 31, 2017
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥3,439
Millions of yen
Acquisition cost
¥5,163
Millions of yen
Acquisition cost
¥3,439
Net unrealized
gains (losses)
—
Net unrealized
gains (losses)
—
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements (Notes to net unrealized gains (losses) on other securities)
The breakdown of “Net unrealized gains (losses) on other securities” reported on the consolidated balance sheets is as shown below:
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.
March 31, 2017
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
¥2,189,003
2,189,003
—
584,401
1,604,602
62,511
218
¥1,542,308
Notes: 1. There is no net unrealized gains (losses) on other securities shown above for the fiscal year ended March 31, 2017 recognized in the earnings by applying fair value hedge
accounting.
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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SMFG2017 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, 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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
March 31, 2017
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 39,837,289
34,841,230
¥ 3,213,205
3,262,040
¥ 3,982
(1,580)
¥ 3,982
(1,580)
Interest rate options:
Sold ............................................................................
Bought .......................................................................
718,513
33,980,612
204,206
15,937,968
(240)
6,504
(240)
6,504
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 ..............
11,433,074
11,301,863
394,190,398
182,815,914
176,422,223
34,784,385
19,570
5,009
322,989,184
149,614,851
147,558,435
25,704,222
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
5,239,445
4,247,277
3,217,041
2,688,847
Caps:
Sold ............................................................................
Bought .......................................................................
34,315,074
9,224,573
21,689,220
6,854,953
Floors:
Sold ............................................................................
Bought .......................................................................
623,227
967,498
Other:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,173,711
7,182,812
/
323,811
943,700
759,423
5,947,819
/
(2,018)
1,953
118,372
3,440,828
(3,338,573)
9,465
(4,722)
(733)
(30,630)
5,479
(705)
1,685
(2,018)
1,953
118,372
3,440,828
(3,338,573)
9,465
(4,722)
(733)
(30,630)
5,479
(705)
1,685
2,081
13,001
¥ 112,429
2,081
13,001
¥ 112,429
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.
158
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(2) Currency derivatives
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.
March 31, 2017
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 1,559
701
¥ —
—
¥ (18)
0
¥ (18)
0
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
36,267,949
27,100,479
246,213
32,616
669,791
793,518
74,917,450
2,478,270
2,289,036
/
636,245
751,472
7,537,097
1,404,036
1,280,452
/
(3,328)
3,594
(77,907)
(87,132)
79,065
¥160,485
(3,328)
3,594
(77,907)
(86,625)
78,559
¥(53,110)
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(3) Equity derivatives
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.
March 31, 2017
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥738,963
333,271
Equity price index options:
Sold ............................................................................
Bought .......................................................................
516,415
495,812
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 ................................................................................
264,806
265,834
—
15,677
¥ —
17,149
271,916
211,696
215,549
215,026
—
303
¥ 10,580
(39)
(41,434)
21,651
(23,648)
24,398
—
156
¥ 10,580
(39)
(41,434)
21,651
(23,648)
24,398
—
156
101,785
91,030
(8,670)
(8,670)
204,793
/
183,842
/
15,460
¥ (1,544)
15,460
¥ (1,544)
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(4) Bond derivatives
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.
March 31, 2017
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥2,201,646
1,665,948
¥ —
—
Bond futures options:
Sold ............................................................................
Bought .......................................................................
283,595
29,100
Over-the-counter
Bond forward contract:
Sold ............................................................................
Bought .......................................................................
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
2,051
—
212,475
320,867
/
—
—
—
—
—
104,888
/
¥(5,334)
6,633
(124)
24
25
—
(341)
774
¥ 1,657
¥(5,334)
6,633
(124)
24
25
—
(341)
774
¥ 1,657
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(5) Commodity derivatives
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.
March 31, 2017
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥13,929
14,638
¥ —
—
¥ 75
(100)
¥ 75
(100)
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 ................................................................................
57,683
56,396
2,444
15,401
12,477
/
27,606
25,795
2,116
14,168
12,039
/
8,191
(6,551)
(40)
(726)
70
¥ 920
8,191
(6,551)
(40)
(726)
70
¥ 920
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(6) Credit derivative transactions
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.
March 31, 2017
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥555,356
732,991
/
¥412,834
522,137
/
¥ 7,277
(8,786)
¥(1,509)
¥ 7,277
(8,786)
¥(1,509)
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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SMFG2017 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, 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 ....................................................
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 hedged items such as borrowed money disclosed in “(Notes to financial instruments)
2. Fair value of financial instruments.”
164
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
March 31, 2017
Hedge accounting
method
Deferral hedge
method
Recognition of gain or
loss on the hedged items
Special treatment for
interest rate swaps
Type of derivative
Interest futures:
Sold .....................................................
Bought ................................................
Interest rate swaps:
Receivable fixed rate/payable floating
rate ....................................................
Receivable floating rate/payable fixed
rate ....................................................
Interest rate swaptions:
Sold .....................................................
Bought ................................................
Interest rate swaps:
Receivable fixed rate/payable floating
rate ....................................................
Receivable floating rate/payable fixed
rate ....................................................
Interest rate swaps:
Receivable floating rate/payable fixed
rate ....................................................
Total ..........................................................
Principal items
hedged
Interest-earning/bearing
financial assets/liabilities
such as loans and bills
discounted, other securities,
deposits and negotiable
certificates of deposit
Loans and bills discounted,
corporate bonds
Loans and bills discounted,
borrowed money, corporate
bonds
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥ 5,853,880
—
¥ 4,263,220
—
¥ (643)
—
34,269,289
30,639,419
119,862
19,875,014
17,418,379
(97,711)
129,018
—
129,018
—
(1,623)
—
56,095
56,095
(2,046)
135,303
125,572
(2,743)
38,192
/
34,442
/
(Note 3)
¥ 15,094
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 hedged items such as borrowed money disclosed in “(Notes to financial instruments)
2. Fair value of financial instruments.”
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(2) Currency derivatives
March 31, 2016
Hedge accounting
method
Deferral hedge
method
Type of derivative
Principal items hedged
Currency swaps ................................ Foreign currency denominated loans and
Total
¥9,600,108
Over 1 year
¥4,735,539
Fair value
¥(364,414)
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign exchange, etc.
8,052
—
158
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
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 the borrowed money that are subject to the hedge. Therefore, such fair value is
included in the fair value of the relevant hedged items such as borrowed money disclosed in “(Notes to financial instruments) 2. Fair value of financial instruments.”
March 31, 2017
Hedge accounting
method
Deferral hedge
method
Recognition of gain or
loss on the hedged items
Allocation method
Millions of yen
Contract amount
Type of derivative
Principal items hedged
Currency swaps ................................ Foreign currency denominated loans and
Total
¥6,226,217
Over 1 year
¥3,431,683
Fair value
¥(181,138)
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign exchange, etc.
5,363
—
106
Currency swaps ................................ Loans and bills discounted, foreign
117,797
80,427
3,439
Currency swaps ................................ Borrowed money
Total ................................................
exchange
47,081
/
42,493
/
(Note 3)
¥(177,593)
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 the borrowed money that are subject to the hedge. Therefore, such fair value is
included in the fair value of the relevant hedged items such as borrowed money disclosed in “(Notes to financial instruments) 2. Fair value of financial instruments.”
166
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
(3) Equity derivatives
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 ..............................................................
Millions of yen
Contract amount
Total
Over 1 year
Fair value
—
9,929
/
—
—
/
—
315
¥315
Note: Fair value is calculated using discounted present value.
Fiscal year ended March 31, 2017
There are no corresponding transactions.
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SMFG2017 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 .........................................................
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 ..............................................................
2016
¥1,083,109
34,653
11,735
114,691
(51,724)
(31)
13,477
(3,438)
¥1,202,471
(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 ........................................................................................
2016
¥1,421,268
39,543
(91,563)
45,233
(66,589)
12,281
(2,998)
¥1,357,175
2017
¥1,202,471
41,098
4,984
(21,509)
(52,901)
(3)
7,125
(1,528)
¥1,179,737
2017
¥1,357,175
39,975
40,016
44,574
(42,387)
—
(3,805)
¥1,435,548
(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
2016
¥(1,166,606)
1,357,175
190,568
(35,864)
¥ 154,704
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 ................
2016
¥203,274
(48,570)
¥154,704
2017
¥(1,134,322)
1,435,548
301,226
(45,414)
¥ 255,811
2017
¥314,922
(59,110)
¥255,811
168
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SMFG2017 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
2016
2017
¥ 34,653
11,735
(39,543)
31,956
(179)
4,672
¥ 43,294
¥ 41,098
4,984
(39,975)
55,123
(162)
6,536
¥ 67,605
(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 .............................................................................................................................
2016
¥ 148
174,270
¥174,418
2017
¥ 159
(116,685)
¥(116,525)
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 .............................................................................................................................
2016
¥ (808)
104,633
¥103,824
2017
¥ (648)
(12,052)
¥(12,700)
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 ......................................................................................................................
General account of life insurance ..............................................................................
Other ......................................................................................................................
Total ........................................................................................................................
2016
2017
61.3%
27.3%
4.4%
7.0%
100.0%
60.4%
23.2%
4.4%
12.0%
100.0%
Note: The retirement benefit trusts set up for employee pension plans and lump-sum severance indemnity plans account for 34.0% and 34.8% of the total plan assets at
March 31, 2016 and 2017, 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, 2016
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Year ended March 31, 2017
Percentages
(0.1)% to 1.5% Domestic consolidated subsidiaries ........................
3.3% to 12.8% Overseas consolidated subsidiaries .........................
Percentages
(0.1)% to 0.8%
2.5% to 11.3%
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements 2) Long-term expected rate of return on plan assets
Year ended March 31, 2016
Domestic consolidated subsidiaries ........................
Overseas consolidated subsidiaries .........................
Percentages
Year ended March 31, 2017
0% to 4.3% Domestic consolidated subsidiaries ........................
3.5% to 12.8% Overseas consolidated subsidiaries .........................
Percentages
0% to 4.0%
2.5% to 11.3%
3. Defined contribution plan
Fiscal year ended March 31, 2016
The amount required to be contributed by the consolidated subsidiaries is ¥7,060 million.
Fiscal year ended March 31, 2017
The amount required to be contributed by the consolidated subsidiaries is ¥9,787 million.
170
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SMFG2017 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, 2016 and 2017
are as follows:
Year ended March 31
General and administrative expenses ...................................................................................
Millions of yen
2016
¥652
2017
¥638
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, 2016 and
2017 are as follows:
Year ended March 31
Other income .....................................................................................................................
Millions of yen
2016
¥6
2017
¥ 19
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
Date of resolution
Title and number of
grantees ...........................
Number of
stock options* .................
July 30, 2014
July 31, 2015
July 26, 2016
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
Directors of SMFG 8
Corporate auditors of SMFG 3
Executive officers of SMFG 5
Directors, corporate auditors and
executive officers of SMBC 73
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
Common shares
201,200
August 15, 2016
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, 2016 to the
closing of the ordinary general
meeting of shareholders of
SMFG for the fiscal year ended
March 31, 2017
August 15, 2016 to
August 14, 2046
* 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 July 26, 2016
29,000
—
—
2,200
26,800
60,600
2,200
2,700
—
60,100
131,200
—
—
41,100
90,100
128,400
41,100
1,700
—
167,800
146,300
—
—
14,800
131,500
121,800
14,800
—
—
136,600
89,500
—
—
2,800
86,700
24,900
2,800
—
—
27,700
109,700
—
—
10,500
99,200
10,600
10,500
—
—
21,100
132,400
—
1,200
8,600
122,600
—
8,600
—
—
8,600
—
201,200
—
—
201,200
—
—
—
—
—
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 July 26, 2016
¥ 1
—
4,159
¥ 1
4,337
2,215
¥ 1
—
4,904
¥ 1
4,500
1,872
¥ 1
—
3,661
¥ 1
—
2,042
¥ 1
—
2,811
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SMFG2017 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 remaining term *2 ...................................................
Expected dividends *3 .........................................................................
Risk-free interest rate *4 ......................................................................
July 26, 2016
32.20%
4 years
¥150 per share
(0.17)%
*1. Calculated based on the actual stock prices during 4 years from August 16, 2012 to August 15, 2016.
*2. The average expected remaining term 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, 2017 of the date of grant.
*4. Japanese government bond yield corresponding to the average expected remaining term.
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, 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
June 28, 2007
Officers not doubling
as directors 14
Employees 48
Common shares
11,200
July 31, 2007
N.A.
N.A.
June 29, 2009
to June 28, 2017
Date of resolution
Title and number of grantees .......
Number of stock options* ...........
Grant date ...................................
Condition for vesting ...................
Requisite service period ...............
Exercise period ............................
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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SMFG2017 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 29,
2006
June 29,
2006
June 28,
2007
June 28,
2007
June 27,
2008
June 26,
2009
Number of stock options
—
—
—
—
—
6,200
—
—
6,200
—
—
—
—
—
—
4,000
—
—
4,000
—
—
—
—
—
—
7,800
—
—
1,600
6,200
—
—
—
—
—
5,100
—
—
100
5,000
—
—
—
—
—
20,000
—
—
3,800
16,200
—
—
—
—
—
28,800
—
—
3,800
25,000
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,
2006
¥4,900
—
1,380
June 29,
2006
¥4,900
—
1,380
June 28,
2007
¥4,610
—
960
June 28,
2007
¥4,610
—
960
June 27,
2008
¥3,020
—
370
June 26,
2009
¥1,930
—
510
Yen
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* .................
Grant date .........................
Condition for vesting .........
Requisite service period .....
Exercise period ..................
June 28, 2012
June 27, 2013
June 27, 2014
Directors 7
Executive Officers 12
Directors 7
Executive Officers 12
Directors 7
Executive Officers 16
Common shares
36,800
July 20, 2012
Stock acquisition right holders may
exercise stock acquisition rights from the
day when they are relieved of their
positions either as a director or executive
officer of MINATO.
June 28, 2012 to the closing of the
ordinary general meeting of shareholders
of MINATO for the fiscal year ended
March 31, 2013.
July 21, 2012 to
July 20, 2042
Common shares
33,400
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
32,000
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
174
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
Date of resolution
Title and number of
grantees ...........................
Number of
stock options* .................
Grant date .........................
Condition for vesting .........
Requisite service period .....
Exercise period ..................
June 26, 2015
June 29, 2016
Directors 7
Executive Officers 17
Common shares
20,000
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
Directors 7
Executive Officers 17
Common shares
38,000
July 21, 2016
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 29, 2016 to the closing of the
ordinary general meeting of shareholders
of MINATO for the fiscal year ended
March 31, 2017.
July 22, 2016 to
July 21, 2046
* 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, 2016.
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
June 28, 2012 June 27, 2013 June 27, 2014 June 26, 2015 June 29, 2016
13,100
—
—
—
13,100
21,400
—
2,500
—
18,900
14,200
—
—
—
14,200
18,600
—
2,900
—
15,700
18,600
—
—
1,200
17,400
11,600
1,200
1,900
—
10,900
17,600
—
—
600
17,000
1,900
600
—
—
2,500
—
38,000
1,000
3,600
33,400
—
3,600
—
—
3,600
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, 2016.
(b) Price information
Date of resolution
Exercise price ................................................
Average exercise price ...................................
Fair value at the grant date ...........................
June 28, 2012 June 27, 2013 June 27, 2014 June 26, 2015 June 29, 2016
¥ 1
—
1,530
¥ 1
2,343
1,660
¥ 1
2,343
1,810
¥ 1
—
3,090
¥ 1
2,343
1,320
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SMFG2017 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 remaining term*2 ....................................................
Expected dividends*3 ..........................................................................
Risk-free interest rate*4 .......................................................................
June 29, 2016
33.31%
2 years
¥5 per share
(0.33)%
*1 Calculated based on the actual stock prices during 2 years from July 22, 2014 to July 21, 2016.
*2 The average expected remaining term 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, 2016.
*4 Japanese government bond yield corresponding to the average expected remaining term.
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.
176
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements (Notes to deferred tax assets and liabilities)
1. Significant components of deferred tax assets and liabilities
March 31, 2016
Deferred tax assets:
Millions of yen March 31, 2017
Deferred tax assets:
Millions of yen
Net operating loss carryforwards ............................ ¥ 319,801
Reserve for possible loan losses and write-off of
246,676
loans ....................................................................
115,451
Write-off of securities ............................................
70,267
Reserve for losses on interest repayment.................
33,116
Net defined benefit liability ...................................
Other ....................................................................
223,969
Subtotal ................................................................. 1,009,283
(517,459)
Valuation allowance ...............................................
Total deferred tax assets ..............................................
491,823
Deferred tax liabilities:
(498,610)
Net unrealized gains on other securities .................
Gains on securities contributed to employee
(33,593)
retirement benefits trust ......................................
(19,284)
Undistributed earnings of subsidiaries ...................
Other ....................................................................
(162,694)
Total deferred tax liabilities ........................................
(714,182)
Net deferred tax assets (liabilities) .............................. ¥ (222,358)
Net operating loss carryforwards ............................ ¥ 450,959
Reserve for possible loan losses and write-off of
249,877
loans ....................................................................
59,304
Write-off of securities ............................................
48,170
Reserve for losses on interest repayment.................
39,755
Net defined benefit liability ...................................
Other ....................................................................
208,634
Subtotal ................................................................. 1,056,702
(493,247)
Valuation allowance ...............................................
Total deferred tax assets ..............................................
563,454
Deferred tax liabilities:
(586,254)
Net unrealized gains on other securities .................
Gains on securities contributed to employee
(33,130)
retirement benefits trust ......................................
(21,084)
Undistributed earnings of subsidiaries ...................
Other ....................................................................
(195,892)
Total deferred tax liabilities ........................................
(836,361)
Net deferred tax assets (liabilities) .............................. ¥ (272,906)
As a result of applying the accounting treatments based on the adoption of the consolidated corporate-tax system applying from the fiscal
year ending March 31, 2018 by SMFG and some consolidated subsidiaries, total deferred tax assets increased by ¥115,147 million mainly
due to decreasing of valuation allowance.
2. Significant components of difference between the statutory tax rate used by SMFG and the effective income tax rate
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%
March 31, 2017
Statutory tax rate ........................................................
Valuation allowance ...............................................
Difference between SMFG and overseas
consolidated subsidiaries ......................................
Difference of gains on step acquisition ...................
Dividends exempted for income tax purposes.........
Impairment losses of goodwill ..............................
Foreign tax ...........................................................
Other ....................................................................
Effective income tax rate .............................................
Percentages
30.86%
(12.80)
(2.29)
(0.92)
(0.87)
1.35
1.15
0.98
17.46%
(Notes to asset retirement obligations)
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
Fiscal year ended March 31, 2017
There is no significant information to be disclosed.
(Notes to real estate for rent)
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
Fiscal year ended March 31, 2017
There is no significant information to be disclosed.
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SMFG2017 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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SMFG2017 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, 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 respective companies.
“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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
Millions of yen
Commercial banking
SMBC
Year ended March 31, 2017
Sub-total
Gross profit ......................... ¥1,663,654
Interest income ............... 1,138,939
524,715
Non-interest income .......
(816,942)
Expenses, etc. ......................
(100,552)
Depreciation ..................
Consolidated net
business profit .................... ¥ 846,711
Wholesale
Banking
Unit
¥ 528,376
271,137
257,239
(199,080)
(26,042)
SMBC
Retail
Banking
Unit
¥ 355,288
294,799
60,489
(350,888)
(37,227)
International
Banking
Unit
¥ 327,529
194,655
132,874
(128,834)
(12,494)
Treasury
Unit
¥272,419
144,201
128,218
(27,375)
(5,141)
Head office
account
¥ 180,042
234,147
(54,104)
(110,765)
(19,648)
Others
Total
¥ 296,137 ¥ 1,959,791
1,323,330
636,461
(1,063,936)
(112,493)
184,390
111,746
(246,994)
(11,940)
¥ 329,296
¥ 4,400
¥ 198,695
¥245,044
¥ 69,276
¥ 49,142 ¥ 895,854
SMFL
Year ended March 31, 2017
Gross profit ......................... ¥178,845
25,003
153,842
(82,620)
(3,719)
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Consolidated net
business profit .................... ¥ 96,225
SMCC
Year ended March 31, 2017
Gross profit ......................... ¥222,068
14,501
207,566
(172,977)
(16,974)
Interest income ...............
Non-interest income .......
Expenses, etc. ......................
Depreciation ...................
Leasing
Others
¥17,587
4,189
13,398
(6,815)
(6,266)
Millions of yen
Securities
Total
¥196,433
29,192
167,240
(89,435)
(9,985)
SMBC Nikko
¥ 351,220
4,588
346,632
(268,854)
(2,989)
SMBC Friend
¥ 43,334
1,581
41,753
(37,458)
(1,399)
Others
¥ (5,767)
1,441
(7,208)
(9,920)
(853)
Total
¥ 388,788
7,611
381,177
(316,233)
(5,242)
¥10,772
¥106,997
¥ 82,366
¥ 5,876
¥(15,687)
¥ 72,554
Millions of yen
Cedyna
¥168,365
23,569
144,796
(126,952)
(7,181)
Consumer Finance
SMBCCF
¥246,288
162,466
83,822
(104,836)
(6,981)
Others
¥ 3,737
(1,244)
4,981
(10,606)
(187)
Total
¥ 640,459
199,292
441,167
(415,372)
(31,324)
Other
Business
Grand
Total
¥(264,731) ¥ 2,920,742
1,358,632
(200,794)
1,562,109
(63,936)
(1,787,881)
97,097
(173,550)
(14,504)
Consolidated net
business profit ...................... ¥ 49,091
¥ 41,413
¥141,452
¥ (6,869)
¥ 225,086
¥(167,633) ¥ 1,132,860
Notes: 1. Figures shown in the parenthesis represent the loss.
2. Interest income in Commercial banking includes dividends income of ¥200,000 million from SMBC Nikko.
3. “SMFL” and “SMBCCF” represent consolidated figures of respective companies.
“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.
4. “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, 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
¥1,142,931
197,494
(355,141)
¥ 985,284
Note:
Figures shown in the parenthesis represent losses.
Year ended March 31, 2017
Consolidated net business profit ................................................................................................................................
Other ordinary income (excluding equity in gains of affiliates) ..................................................................................
Other ordinary expenses ...........................................................................................................................................
Ordinary profit on consolidated statements of income ...............................................................................................
Millions of yen
¥1,132,860
176,704
(303,710)
¥1,005,855
Note:
Figures shown in the parenthesis represent losses.
180
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
[Related information]
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
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, 2017
1. Information on each service
Commercial
banking
Leasing
Securities
Consumer
Finance
Other
business
Total
Millions of yen
Ordinary income to external
customers ...............................
¥2,506,619
¥823,448
¥385,513
¥1,218,269
¥199,394
¥5,133,245
Note: Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Geographic information
(1) Ordinary income
Japan
¥3,747,786
The Americas
¥493,079
Millions of yen
Europe and Middle East
¥461,876
Asia and Oceania
¥430,502
Total
¥5,133,245
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
¥1,621,388
The Americas
¥245,816
Millions of yen
Europe and Middle East
¥1,223,456
Asia and Oceania
¥10,981
Total
¥3,101,642
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SMFG2017 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 31,2016
Impairment loss .............................
Commercial
Banking
¥4,076
Leasing
Securities
¥—
¥241
Consumer finance
¥0
Other business
¥43
Total
¥4,362
Millions of yen
Year ended March 31,2017
Impairment loss .............................
Commercial
Banking
¥4,838
Leasing
Securities
¥—
¥44,491
Consumer finance
¥130
Other business
¥—
Total
¥49,460
Note:
Impairment loss of goodwill of ¥42,995 million relating to SMBC Friend is included in “Securities.”
Millions of yen
[Information on amortization of goodwill and unamortized balance by reportable segment]
Millions of yen
Year ended March 31, 2016
Amortization of goodwill ..............
Unamortized balance .....................
Year ended March 31, 2017
Amortization of goodwill ..............
Unamortized balance .....................
Commercial
Banking
¥ 3,237
34,262
Commercial
Banking
¥ 2,734
31,527
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
Millions of yen
Leasing
Securities
¥ 7,053
75,081
¥ 14,013
117,179
Consumer finance
¥ 4,019
58,140
Other business
¥ 1,450
36,649
Total
¥ 29,272
318,578
[Information on gains on negative goodwill by reportable segment]
Fiscal year ended March 31, 2016
There is no significant information to be disclosed.
Fiscal year ended March 31, 2017
There are no corresponding transactions.
[Information on total credit cost by reportable segment]
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.
Year ended March 31, 2017
Total credit cost .............................
Commercial
banking
¥58,968
Leasing
Securities
Consumer
finance
¥3,705
¥(97)
¥98,630
Other business
¥3,164
Total
¥164,371
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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SMFG2017 Annual ReportNotes to Consolidated Financial Statements [Information on related parties]
Fiscal year ended March 31, 2016
There is no significant corresponding information to be disclosed.
Fiscal year ended March 31, 2017
There is no significant corresponding information to be disclosed.
(Business Combination)
GE Japan GK became a consolidated subsidiary of SMFL
On April 1, 2016, SMFL, a consolidated subsidiary of SMFG, acquired all shares of GE Japan GK (“GE Japan”) under the contract agreed
with General Electric Company on December 15, 2015. As a result, GE Japan and its 5 leasing subsidiaries became consolidated subsidiaries of
SMFG. The outline of the business combination through acquisition is as described below.
On September 5, 2016, GE Japan changed its form to a joint stock corporation with limited liability (Kabushiki Kaisha) and its name to
SMFL Capital Company, Limited.
1. Outline of the business combination
(1) Name of the acquired company and details of its business
GE Japan GK (Leasing business)
(2) Main reasons for the business combination
SMFG aims at achieving further improvement in corporate value of SMFG and strengthening its top-class position in the domestic
leasing market, by leveraging business knowledge and resources from both SMFL and GE Japan.
(3) Date of the business combination
April 1, 2016
(4) Legal form of the business combination
Acquisition of shares
(5) Name of the entity after the business combination
Sumitomo Mitsui Financial Group, Inc.
(6) The ratio of acquired voting rights
100%
(7) Grounds for deciding on the acquirer
SMFL acquired all shares of GE Capital by cash.
2. Period of the acquired company’s financial result included in the consolidated financial statements of SMFG
From April 1, 2016 to March 31, 2017
3. Acquisition cost and consideration of the acquired company
Consideration
Acquisition cost
Cash
180,959 million yen
180,959 million yen
4. Major acquisition-related costs
Advisory fees, etc. 751 million yen
5. Amount of goodwill, reason for recognizing goodwill, amortization method and the period
(1) Amount of goodwill
13,632 million yen
(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 acquired and liabilities assumed on the date of the business combination
(1) Assets
Total assets:
Lease receivables and investment assets:
669,763 million yen
394,459 million yen
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements (2) Liabilities
Total liabilities:
Borrowed money:
502,042 million yen
436,526 million yen
7. 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
Assets related to customers
76,027 million yen
76,027 million yen
(11 years)
(11 years)
8. Approximate amount and their calculation method of impact on the consolidated statements of income for the fiscal year ended
March 31, 2017, assuming that the business combination had been completed at the beginning of the fiscal year
There are no corresponding amounts since the date of business combination was at the beginning of the period.
SMAM became a consolidated subsidiary of SMBC
On July 29, 2016, SMBC, a consolidated subsidiary of SMFG, acquired the common stocks of SMAM under the contract agreed with
Sumitomo Life Insurance Company, Mitsui Sumitomo Insurance Company, Limited and Mitsui Life Insurance Company Limited on May 12,
2016. As a result, SMAM and its 7 subsidiaries became consolidated subsidiaries of SMBC.
On October 1, 2016, SMFG received a dividend of the common stocks of SMAM from SMBC. As a result, SMAM became a directly owned
subsidiary of SMFG.
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
Sumitomo Mitsui Asset Management Company, Limited (Investment management business, Investment advisory and agency business)
(2) Main reasons for the business combination
As the asset management industry is expanding year by year, SMFG included SMAM in the scope of consolidation in order to encourage
the growth of SMAM by utilizing the management resource of SMFG Group, thereby strengthening the domestic asset management
business base at SMFG Group.
(3) Date of the business combination
July 29, 2016
(4) Legal form of the business combination
Acquisition of stocks
(5) Name of the entity after the business combination
Sumitomo Mitsui Financial Group, Inc.
(6) The ratio of acquired voting rights
Ratio of voting rights owned by SMBC immediately prior to the business combination
Ratio of voting rights acquired additionally by SMBC on the date of business combination
Ratio of voting rights after the acquisition
40%
20%
60%
(7) Grounds for deciding on the acquirer
SMBC acquired a majority of the voting rights of SMAM, resulting in SMAM becoming a consolidated subsidiary of SMBC.
2. Period of the acquired company’s financial result included in the consolidated financial statements of SMFG
From April 1, 2016 to March 31, 2017
Profit and losses related to SMAM arising from April 1, 2016 to June 30, 2016 were recorded as equity in gains (losses) of affiliates in the
consolidated statements of income since the deemed acquisition date is on July 1, 2016.
3. Acquisition cost and consideration of the acquired business
Fair value of common stocks of SMAM on the date of business combination owned by SMBC
immediately prior to the business combination
Consideration of common stocks of SMAM acquired additionally by SMBC on the date of the
business combination (cash)
Acquisition cost
40,572 million yen
20,286 million yen
60,858 million yen
184
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements 4. Difference between acquisition cost and total amount of acquisition cost of each transaction
Acquisition cost
Sum of acquisition costs of each transaction resulting in the acquisition
Difference (gains on step acquisitions)
60,858 million yen
31,532 million yen
29,325 million yen
5. Major acquisition-related costs
Advisory fees, etc. 8 million yen
6. Amount of goodwill, reason for recognizing goodwill, amortization method and the period
(1) Amount of goodwill
38,053 million yen
(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 period
Straight-line method over 20 years
7. Amounts of assets acquired and liabilities assumed on the date of the business combination
(1) Assets
Total assets:
Securities:
(2) Liabilities
Total liabilities:
50,524 million yen
13,466 million yen
12,516 million yen
8. 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
Assets related to market
Assets related to customers
13,908 million yen
4,288 million yen
9,620 million yen
(14 years)
(20 years)
(11 years)
9. Approximate amounts and their calculation method of impact on the consolidated statements of income for the fiscal year ended
March 31, 2017, 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.
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements (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
2016
¥6,519.60
472.99
472.67
2017
¥6,901.67
516.00
515.58
Millions of yen except number of shares
2016
2017
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) .................
¥ 646,687
—
¥ 646,687
1,367,228
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)
928
928
—
¥ 706,519
—
¥ 706,519
1,369,231
¥
(9)
(9)
1,092
1,092
—
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
2016
¥10,447,669
1,533,907
2,884
1,531,022
¥ 8,913,761
2017
¥11,234,286
1,502,747
3,482
1,499,264
¥ 9,731,538
1,367,224
1,410,026
(Significant Subsequent Events)
There is no significant subsequent event to be disclosed.
186
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements
[Consolidated supplementary financial schedules]
[Schedule of bonds]
Millions of yen
Company
SMFG
SMBC
(*1)
(*2)
(*3)
(*4)
(*5)
(*6)
(*7)
(*8)
Type of bonds
Straight bonds, payable in U.S. dollars
(Note 3) ...........................................
Straight bonds, payable in Euro
(Note 3) ...........................................
Straight bonds, payable in Australian
dollars (Note 3) ................................
Subordinated bonds, payable in Yen ...
Subordinated bonds, payable in Yen ...
Perpetual subordinated bonds, payable
in Yen ..............................................
Subordinated bonds, payable in U.S.
dollars (Note 3)
Straight bonds, payable in Yen
(Note 4) ...........................................
Straight bonds, payable in Yen
(Note 4) ...........................................
Date of
issuance
Mar.2016 ~
Mar.2017
Jun. 2016 ~
Jan. 2017
Sep. 2016 ~
Mar. 2017
Sep. 2014 ~
Sep. 2016
Sep. 2014 ~
Sep. 2016
Jul. 2015~
Jan. 2017
Apr.2, 2014
Aug. 2004 ~
Sep. 2004
Apr. 2011 ~
Apr. 2014
Straight bonds, payable in U.S. dollars
(Notes 3 and 4) ................................
Subordinated bonds, payable in U.S.
dollars (Note 3) ................................
Jul. 2011~
Jan. 2017
May. 28,
2015
Straight bonds, payable in Euro
(Notes 3 and 4) ................................
Jul. 2013 ~
Nov. 2015
Straight bonds, payable in Australian
dollars (Notes 3 and 4) .....................
Straight bonds, payable in Hong Kong
dollars (Note 3) ................................
Straight bonds, payable in Thai Baht
(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) ....................
Subordinated bonds, payable in Euro
(Note 3) ...........................................
Consolidated subsidiaries, straight
Jun. 2012 ~
Aug. 2015
Mar. 2015 ~
Apr. 2015
Nov. 2,
2016
Feb. 2007 ~
Dec. 2011
Nov. 2011 ~
Jan. 2013
Jun. 16,
2008
Mar.1,
2012
Nov. 9,
2010
bonds, payable in Yen
(Notes 2 and 4) ................................
Feb. 2011 ~
Mar. 2017
Consolidated subsidiaries, straight
bonds, payable in U.S. dollars
(Notes 2,3 and 4) ............................
Consolidated subsidiaries, straight
Apr. 2014 ~
Mar. 2017
At the beginning of
the fiscal year
450,480
($4,000,000 thousand)
—
—
255,815
153,531
300,000
196,717
($1,746,753 thousand)
35,000
[35,000]
359,992
[200,000]
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]
354,651
At the end of
the fiscal year
1,651,436
($14,720,000 thousand)
239,680
(€2,000,000 thousand)
93,961
(A$1,095,000 thousand)
366,335
287,878
449,897
195,697
($1,744,337 thousand)
—
159,998
[60,000]
2,344,158
($20,894,544 thousand)
[608,069]
73,484
($655,000 thousand)
418,561
(€3,492,666 thousand)
[179,760]
78,063
(A$909,720 thousand)
[11,155]
34,136
(HK$2,364,000 thousand)
11,410
(THB3,500,000 thousand)
463,982
[79,900]
2,000
168,794
($1,498,795 thousand)
94,421
(€740,733 thousand)
746,465
[139,660]
3,294
($32,530 thousand)
[886]
2,000
168,221
($1,499,434 thousand)
89,429
(€746,242 thousand)
786,802
[160,804]
15,028
($135,510 thousand)
[4,996]
Percentages
Interest
rate (Note 1) Collateral
Date of
maturity
Mar. 2021 ~
Mar. 2047
Jan. 2022 ~
Jun. 2026
Mar. 2022 ~
Sep. 2026
Sep. 2024 ~
May. 2030
Sep. 2024~
Sep. 2026
None
None
None
None
None
1.9879 ~
4.3
0.606 ~
1.546
3.065 ~
3.662
0.469 ~
1.328
0.3~
0.61
1.39~
2.88
None
Perpetual
4.436
None
Apr. 2, 2024
—
0.254 ~
0.33
1.21~
4.13
4.3
0~
2.75
2.97 ~
4.13
2.09 ~
2.92
2.09
1.43 ~
2.8
—
None
None
—
Oct. 2017 ~
Apr. 2019
Jun. 2017~
Mar. 2030
None May. 30,2045
None
None
None
None
None
Sep. 2017 ~
Jul. 2023
Jun. 2017 ~
Mar. 2025
Apr. 2020 ~
Apr. 2025
Nov. 4, 2019
Dec. 2017 ~
Dec.2026
2.564
None
Jun. 16, 2023
4.85
4
0.01 ~
20
0.01 ~
8
0.01~
3
None
Mar. 1, 2022
None
Nov. 9, 2020
None
None
None
Apr. 2017 ~
Mar. 2047
Apr. 2017 ~
Jan. 2037
Jan. 2019~
Aug. 2031
99,724
0.87
None
Feb, 28, 2023
bonds, payable in Australian dollars
(Notes 2 and 3) ...............................
Mar. 2016~
Mar. 2017
89
(A$1,040 thousand)
1,654
(A$19,280 thousand)
Consolidated subsidiaries, straight
bonds, payable in U.S. dollars
(Notes 2 and 3) ...............................
Consolidated subsidiaries, straight
bonds, payable in Renminbi
(Notes 2,3 and 4) .............................
Consolidated subsidiaries, straight
bonds, payable in Indonesia rupiah
(Notes 2,3 and 4) .............................
Consolidated subsidiaries,
subordinated bonds, payable in Yen
(Notes 2 and 4) ................................
Consolidated subsidiaries, short-term
bonds, payable in Yen
(Notes 2 and 4) ................................
Total .............................................................................
Jul. 15,
2016
May. 2014~
Mar. 2016
—
36,365
(RMB2,093,569 thousand)
[36,365]
Feb. 3,
2015
8,778
(IDR997,500,994 thousand)
54,000
($481,333 thousand)
2.65
None
Jul. 15, 2021
—
8,688
(IDR998,631,966 thousand)
[8,688]
—
—
—
9.85
None
Feb. 3, 2018
Mar. 1996~
Dec. 2012
Apr. 2015 ~
Mar. 2017
—
82,300
[11,250]
1,271,300
[1,271,300]
¥ 8,277,657
35,000
2.31 ~
4.15
1,125,600
[1,125,600]
¥ 9,254,832
0.00001 ~
0.065
—
None
None
—
Aug. 2019 ~
Jan. 2028
Apr. 2017 ~
Jun. 2017
—
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SMFG2017 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 and SMBC Nikko, 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 dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*4) This is a straight bond issued in U.S. dollar by SMBC Aviation Capital Limited, an overseas consolidated subsidiary.
(*5) This is a 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
¥2,238,973
More than 1 year
to 2 years
¥931,813
Millions of yen
More than 2 years
to 3 years
¥606,400
More than 3 years
to 4 years
¥929,195
More than 4 years
to 5 years
¥1,289,123
[Schedule of borrowings]
Classification
Borrowed money ..........................................
Other borrowings ....................................
Lease obligations ..........................................
Millions of yen
At the beginning of
the fiscal year
¥8,571,227
8,571,227
105,691
At the end of
the fiscal year
¥10,786,713
10,786,713
106,924
Percentages
Average
interest rate
0.68
0.68
4.61
Repayment Term
—
Jan. 2017 ~ Perpetual
Apr. 2017 ~ 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
¥7,802,225
25,831
More than 1
year to 2 years
¥357,610
23,562
Millions of yen
More than 2
years to 3 years
¥366,064
21,284
More than 3
years to 4 years
¥454,297
18,894
More than 4
years to 5 years
¥297,287
9,157
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 ........................................
¥3,017,404
At the beginning of
the fiscal year
At the end of
the fiscal year
¥2,311,542
Millions of yen
Percentages
Average
interest rate
0.79
Repayment Term
Apr. 2017 ~ Jan. 2018
[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.
188
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements [Others]
Quarterly consolidated financial information in the fiscal year ended March 31, 2017 is as follows;
Ordinary income ..........................................
Income before income taxes ..........................
Profit attributable to owners of parent ..........
Earnings per share ........................................
First quarter
consolidated
total period
¥1,197,817
273,115
184,285
134.79
Millions of yen (except Earnings per share)
Third quarter
Second quarter
consolidated
consolidated
total period
total period
¥2,402,177
541,066
359,198
262.72
¥3,757,570
837,213
544,679
398.38
Fiscal year ended March
31, 2017
¥5,133,245
979,305
706,519
516.00
Earnings per share ........................................
First quarter
consolidated
accounting period
¥134.79
Second quarter
consolidated
accounting period
¥127.93
Third quarter
consolidated
accounting period
¥135.66
Fourth quarter
consolidated
accounting period
¥117.67
Yen
010_0800801372908.indd 189
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements (Non-consolidated financial statements)
1. Non-consolidated balance sheets
March 31
Assets:
Current assets
Millions of yen
2016
2017
Millions of U�S�
dollars
2017
Cash and due from banks �������������������������������������������������������������������������
Prepaid expenses��������������������������������������������������������������������������������������
Accrued income ����������������������������������������������������������������������������������������
Accrued income tax refunds ���������������������������������������������������������������������
Deferred tax assets �����������������������������������������������������������������������������������
Other current assets ����������������������������������������������������������������������������������
Total current assets �����������������������������������������������������������������������������������
¥ 502,449
139
8,940
110,953
—
2,661
625,144
¥ 728,445
140
21,240
87,571
36,266
3,312
876,975
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 ���������������
Deferred tax assets
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
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
39
0
39
316
316
6,155,487
3,424,217
102
0
9,579,808
9,580,164
¥10,457,139
¥ 1,228,030
844
23,156
80
9
234
95
1,090
1,253,541
3,558,111
132,805
3,690,917
4,944,459
Capital stock ���������������������������������������������������������������������������������������������
Capital surplus
2,337,895
2,337,895
Capital reserve �������������������������������������������������������������������������������������
Other capital surplus����������������������������������������������������������������������������
Total capital surplus �����������������������������������������������������������������������������
1,559,374
24,332
1,583,706
1,559,374
24,327
1,583,701
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
1,331,100
1,361,520
(12,833)
5,270,289
2,635
5,272,925
¥8,187,559
30,420
1,570,369
1,600,789
(12,913)
5,509,473
3,206
5,512,680
¥10,457,139
$ 6,493
1
189
781
323
30
7,817
0
0
0
3
3
54,867
30,522
1
0
85,389
85,392
$93,209
$10,946
8
206
1
0
2
1
10
11,173
31,715
1,184
32,899
44,072
20,839
13,899
217
14,116
271
13,997
14,269
(115)
49,108
29
49,137
$93,209
190
010_0800801372908.indd 190
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SMFG2017 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-deferred ������������������������������������������������������������������������������������
Income taxes ��������������������������������������������������������������������������������������������������������
Net income �����������������������������������������������������������������������������������������������������������
Millions of yen
2016
2017
Millions of U�S�
dollars
2017
¥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
¥428,846
20,705
52,931
502,484
10,830
63,347
1,110
75,288
427,196
44
1
194
240
4,451
155
8,417
2
13,026
414,410
414,410
3
(36,368)
(36,365)
¥450,775
$3,822
185
472
4,479
97
565
10
671
3,808
0
0
2
2
40
1
75
0
116
3,694
3,694
0
(324)
(324)
$4,018
Per share data:
Earnings per share �����������������������������������������������������������������������������������������������
Earnings per share (diluted) ����������������������������������������������������������������������������������
Yen
2016
2017
U�S� dollars
2017
¥373�95
373�70
¥319.69
319.44
$2.85
2.85
010_0800801372908.indd 191
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SMFG2017 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, 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
¥(12,713)
Total
¥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)
¥(12,833)
308,592
¥5,270,289
549
549
¥2,635
549
309,142
¥5,272,925
192
010_0800801372908.indd 192
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements Millions of yen
Stockholders’ equity
Capital surplus
Retained earnings
Year ended March 31, 2017
Balance at the beginning of the fiscal year ��� ¥2,337,895
Capital
stock
Capital
reserve
¥1,559,374
Other capital
surplus
¥24,332
Total capital
surplus
¥1,583,706
Changes in the fiscal year:
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Net changes in items other than
(4)
(4)
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥1,331,100
Total retained
earnings
¥1,361,520
(211,506)
450,775
(211,506)
450,775
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
(4)
¥24,327
(4)
¥1,583,701
—
¥30,420
239,268
¥1,570,369
239,268
¥1,600,789
Year ended March 31, 2017
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
¥(12,833) ¥5,270,289
Stock
acquisition
rights
¥2,635
Total
net assets
¥5,272,925
(211,506)
450,775
(100)
15
(100)
19
(211,506)
450,775
(100)
15
(80)
239,183
¥(12,913) ¥5,509,473
571
571
¥3,206
571
239,755
¥5,512,680
010_0800801372908.indd 193
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SMFG2017 Annual ReportNotes to Consolidated Financial Statements Year ended March 31, 2017
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
$20,839
Capital
reserve
$13,899
Other capital
surplus
$217
Total capital
surplus
$14,116
Other retained earnings
Voluntary
reserve
Retained earnings
brought forward
$11,865
$271
Total retained
earnings
$12,136
(1,885)
4,018
(1,885)
4,018
(0)
(0)
—
$20,839
—
$13,899
(0)
$217
(0)
$14,116
—
$271
2,133
$13,997
2,133
$14,269
Year ended March 31, 2017
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
$(114)
(1)
0
Total
$46,976
(1,885)
4,018
(1)
0
Stock
acquisition
rights
$23
Total
net assets
$47,000
(1,885)
4,018
(1)
0
(1)
$(115)
2,132
$49,108
5
5
$29
5
2,137
$49,137
194
010_0800801372908.indd 194
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SMFG2017 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, 2017 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, 2017 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, 2017 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, 2017
Tokyo, Japan
010_0800801372908.indd 195
195
2017/08/07 14:04:36
SMFG2017 Annual Report Supplemental Information
Consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Millions of yen
2016
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 42,594,225
Call loans and bills bought �����������������������������������������������������������������������������������
1,291,365
494,949
Receivables under resale agreements �����������������������������������������������������������������
7,964,208
Receivables under securities borrowing transactions ������������������������������������������
4,183,995
Monetary claims bought ���������������������������������������������������������������������������������������
7,980,971
Trading assets ������������������������������������������������������������������������������������������������������
Money held in trust �����������������������������������������������������������������������������������������������
3
25,153,750
Securities ��������������������������������������������������������������������������������������������������������������
77,331,124
Loans and bills discounted ����������������������������������������������������������������������������������
1,577,167
Foreign exchanges �����������������������������������������������������������������������������������������������
269,429
Lease receivables and investment assets ������������������������������������������������������������
Other assets ���������������������������������������������������������������������������������������������������������
3,697,438
1,167,627
Tangible fixed assets ��������������������������������������������������������������������������������������������
206,419
Assets for rent �������������������������������������������������������������������������������������������������
357,116
Buildings ����������������������������������������������������������������������������������������������������������
Land ����������������������������������������������������������������������������������������������������������������
488,708
10,885
Lease assets ���������������������������������������������������������������������������������������������������
Construction in progress ���������������������������������������������������������������������������������
27,084
77,413
Other tangible fixed assets �����������������������������������������������������������������������������
526,112
Intangible fixed assets ������������������������������������������������������������������������������������������
Software ����������������������������������������������������������������������������������������������������������
299,159
160,067
Goodwill ����������������������������������������������������������������������������������������������������������
Lease assets ���������������������������������������������������������������������������������������������������
136
66,749
Other intangible fixed assets ���������������������������������������������������������������������������
198,637
Net defined benefit asset �������������������������������������������������������������������������������������
Deferred tax assets ����������������������������������������������������������������������������������������������
66,570
6,407,272
Customers’ liabilities for acceptances and guarantees ���������������������������������������
Reserve for possible loan losses ��������������������������������������������������������������������������
(496,178)
Total assets ���������������������������������������������������������������������������������������������������������� ¥180,408,672
2017
¥ 44,992,414
1,872,144
2,199,733
3,609,903
4,265,954
2,666,417
0
24,181,601
83,314,483
1,722,104
282,505
3,586,135
1,121,670
201,066
342,078
482,659
4,724
20,441
70,699
339,674
258,131
30,707
303
50,531
310,588
59,928
6,927,918
(506,515)
¥180,946,664
Millions of
U�S� dollars
2017
$ 401,038
16,687
19,607
32,177
38,024
23,767
0
215,542
742,620
15,350
2,518
31,965
9,998
1,792
3,049
4,302
42
182
630
3,028
2,301
274
3
450
2,768
534
61,752
(4,515)
$1,612,859
196
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2017 Annual ReportSMBCSupplemental Information (Continued)
Millions of yen
2016
March 31
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥111,238,673
14,740,434
Negotiable certificates of deposit ������������������������������������������������������������������������
1,220,455
Call money and bills sold �������������������������������������������������������������������������������������
1,761,822
Payables under repurchase agreements ��������������������������������������������������������������
5,309,003
Payables under securities lending transactions ���������������������������������������������������
Commercial paper ������������������������������������������������������������������������������������������������
3,018,218
6,105,982
Trading liabilities ���������������������������������������������������������������������������������������������������
8,058,848
Borrowed money ��������������������������������������������������������������������������������������������������
1,083,450
Foreign exchanges �����������������������������������������������������������������������������������������������
367,000
Short-term bonds �������������������������������������������������������������������������������������������������
Bonds �������������������������������������������������������������������������������������������������������������������
5,450,145
944,542
Due to trust account ���������������������������������������������������������������������������������������������
4,853,664
Other liabilities ������������������������������������������������������������������������������������������������������
54,925
Reserve for employee bonuses ����������������������������������������������������������������������������
Reserve for executive bonuses ����������������������������������������������������������������������������
1,767
17,844
Net defined benefit liability �����������������������������������������������������������������������������������
Reserve for executive retirement benefits ������������������������������������������������������������
743
1,249
Reserve for point service program �����������������������������������������������������������������������
16,979
Reserve for reimbursement of deposits ���������������������������������������������������������������
Reserve for losses on interest repayment ������������������������������������������������������������
234
1,129
Reserves under the special laws ��������������������������������������������������������������������������
Deferred tax liabilities �������������������������������������������������������������������������������������������
275,887
32,203
Deferred tax liabilities for land revaluation �����������������������������������������������������������
6,407,272
Acceptances and guarantees �������������������������������������������������������������������������������
170,962,478
Total liabilities ������������������������������������������������������������������������������������������������������
Net assets :
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
2,702,093
Capital surplus �����������������������������������������������������������������������������������������������������
Retained earnings ������������������������������������������������������������������������������������������������
2,909,898
(210,003)
Treasury stock ������������������������������������������������������������������������������������������������������
7,172,985
Total stockholders’ equity �����������������������������������������������������������������������������������
1,255,877
Net unrealized gains (losses) on other securities �������������������������������������������������
61,781
Net deferred gains (losses) on hedges �����������������������������������������������������������������
Land revaluation excess ���������������������������������������������������������������������������������������
39,348
58,693
Foreign currency translation adjustments ������������������������������������������������������������
(65,290)
Accumulated remeasurements of defined benefit plans ��������������������������������������
1,350,409
Total accumulated other comprehensive income ����������������������������������������������
249
Stock acquisition rights ����������������������������������������������������������������������������������������
922,549
Non-controlling interests ��������������������������������������������������������������������������������������
9,446,193
Total net assets ����������������������������������������������������������������������������������������������������
Total liabilities and net assets ����������������������������������������������������������������������������� ¥180,408,672
2017
¥118,424,659
12,595,937
844,519
2,737,947
3,190,161
2,312,289
2,131,143
11,981,546
718,940
—
3,987,749
1,180,976
4,524,079
34,990
922
16,788
867
1,189
15,464
40
—
378,740
31,596
6,927,918
172,038,471
1,770,996
1,958,660
3,045,979
(210,003)
6,565,632
1,397,396
(39,174)
38,041
35,589
10,773
1,442,626
276
899,656
8,908,192
¥180,946,664
Millions of
U�S� dollars
2017
$1,055,572
112,273
7,528
24,405
28,435
20,610
18,996
106,797
6,408
—
35,545
10,527
40,325
312
8
150
8
11
138
0
—
3,376
282
61,752
1,533,456
15,786
17,458
27,150
(1,872)
58,522
12,456
(349)
339
317
96
12,859
2
8,019
79,403
$1,612,859
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2017 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 ���������������������������������������������������������������������������������������������������
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 �������������������������������������������������������������������
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 �����������������������������������������������������������������
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
2017
¥3,014,455
1,668,533
1,215,517
254,119
12,210
23,639
6,471
47,157
8,031
101,386
3,698
725,920
140,398
245,246
16,469
20,365
208,411
230,658
4,139
226,519
2,185,035
531,108
189,117
67,238
5,593
16,775
4,176
15,510
78,309
24
93,354
61,007
169,653
82,079
2,639
11,861
67,578
1,247,126
155,067
49,458
105,609
829,419
1,452
1,452
—
—
9,832
4,907
4,866
58
821,039
159,828
60,932
220,760
600,279
57,079
¥ 543,199
Millions of
U�S� dollars
2017
$26,869
14,872
10,834
2,265
109
211
58
420
72
904
33
6,470
1,251
2,186
147
182
1,858
2,056
37
2,019
19,476
4,734
1,686
599
50
150
37
138
698
0
832
544
1,512
732
24
106
602
11,116
1,382
441
941
7,393
13
13
—
—
88
44
43
1
7,318
1,425
543
1,968
5,351
509
$ 4,842
198
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2017 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 �������������������
2016
¥ 745,788
(602,702)
(503,395)
89,188
1,705
(73,687)
(113,411)
(3,101)
143,086
104,454
38,631
2017
¥ 600,279
86,878
139,404
(101,794)
(6)
(10,930)
78,031
(17,826)
687,157
639,502
47,655
Millions of
U�S� dollars
2017
$ 5,351
774
1,243
(907)
(0)
(97)
696
(159)
6,125
5,700
425
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2017 Annual ReportSMBCSupplemental Information
Non-consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation
Millions of yen
2016
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 38,862,725
Call loans ��������������������������������������������������������������������������������������������������������������
899,594
Receivables under resale agreements �����������������������������������������������������������������
359,318
Receivables under securities borrowing transactions ������������������������������������������
2,798,855
Monetary claims bought ���������������������������������������������������������������������������������������
950,106
Trading assets ������������������������������������������������������������������������������������������������������
3,511,957
Securities ��������������������������������������������������������������������������������������������������������������
25,602,156
Loans and bills discounted ����������������������������������������������������������������������������������
69,276,735
Foreign exchanges �����������������������������������������������������������������������������������������������
1,558,252
Other assets ���������������������������������������������������������������������������������������������������������
2,131,869
Tangible fixed assets ��������������������������������������������������������������������������������������������
831,326
Intangible fixed assets ������������������������������������������������������������������������������������������
220,174
Prepaid pension cost �������������������������������������������������������������������������������������������
279,917
Customers’ liabilities for acceptances and guarantees ���������������������������������������
6,737,089
Reserve for possible loan losses ��������������������������������������������������������������������������
(357,186)
Reserve for possible losses on investments ��������������������������������������������������������
(21,465)
Total assets ���������������������������������������������������������������������������������������������������������� ¥153,641,430
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥ 98,839,722
Negotiable certificates of deposit ������������������������������������������������������������������������
14,428,338
Call money ������������������������������������������������������������������������������������������������������������
1,107,825
Payables under repurchase agreements ��������������������������������������������������������������
496,236
Payables under securities lending transactions ���������������������������������������������������
1,374,280
Commercial paper ������������������������������������������������������������������������������������������������
1,980,153
Trading liabilities ���������������������������������������������������������������������������������������������������
2,987,815
Borrowed money ��������������������������������������������������������������������������������������������������
7,868,311
Foreign exchanges �����������������������������������������������������������������������������������������������
1,131,796
Bonds �������������������������������������������������������������������������������������������������������������������
4,775,072
Due to trust account ���������������������������������������������������������������������������������������������
921,320
Other liabilities ������������������������������������������������������������������������������������������������������
2,924,495
Reserve for employee bonuses ����������������������������������������������������������������������������
13,869
Reserve for executive bonuses ����������������������������������������������������������������������������
566
Reserve for point service program �����������������������������������������������������������������������
1,086
Reserve for reimbursement of deposits ���������������������������������������������������������������
15,374
Deferred tax liabilities �������������������������������������������������������������������������������������������
249,427
Deferred tax liabilities for land revaluation �����������������������������������������������������������
31,837
Acceptances and guarantees �������������������������������������������������������������������������������
6,737,089
Total liabilities ������������������������������������������������������������������������������������������������������
145,884,620
Net assets:
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
Capital surplus �����������������������������������������������������������������������������������������������������
2,470,198
Retained earnings ������������������������������������������������������������������������������������������������
2,414,989
Treasury stock ������������������������������������������������������������������������������������������������������
(210,003)
Total stockholders’ equity �����������������������������������������������������������������������������������
6,446,181
Net unrealized gains (losses) on other securities �������������������������������������������������
1,233,910
Net deferred gains (losses) on hedges �����������������������������������������������������������������
48,706
Land revaluation excess ���������������������������������������������������������������������������������������
28,011
Total valuation and translation adjustments ������������������������������������������������������
1,310,628
Total net assets ����������������������������������������������������������������������������������������������������
7,756,810
Total liabilities and net assets ����������������������������������������������������������������������������� ¥153,641,430
2017
¥ 41,652,508
1,465,117
523,913
3,184,379
1,125,434
1,879,342
24,342,369
75,585,256
1,663,102
2,383,307
815,808
230,984
275,175
7,565,562
(389,726)
(20,808)
¥162,281,729
¥105,590,771
12,263,091
1,009,469
1,359,017
3,076,425
1,390,123
1,472,340
12,026,497
737,961
3,944,061
1,160,014
2,879,318
14,134
612
1,058
13,602
329,253
31,230
7,565,562
154,864,546
1,770,996
1,776,830
2,689,638
(210,003)
6,027,462
1,399,125
(36,110)
26,704
1,389,719
7,417,182
¥162,281,729
Millions of
U�S� dollars
2017
$ 371,268
13,059
4,670
28,384
10,032
16,751
216,974
673,725
14,824
21,243
7,272
2,059
2,453
67,435
(3,474)
(185)
$1,446,490
$ 941,178
109,306
8,998
12,114
27,422
12,391
13,124
107,198
6,578
35,155
10,340
25,665
126
5
9
121
2,935
278
67,435
1,380,377
15,786
15,838
23,974
(1,872)
53,725
12,471
(322)
238
12,387
66,113
$1,446,490
200
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2017 Annual ReportSMBCSupplemental Information
Non-consolidated Statements of Income (Unaudited)
Sumitomo Mitsui Banking Corporation
Year ended March 31
Millions of yen
2016
2017
Ordinary income ���������������������������������������������������������������������������������������������������
¥2,277,812
¥2,551,931
Interest income ������������������������������������������������������������������������������������������������
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���������������������������������������������������������������������������������������������������
980,604
326,077
2,589
527,316
66,593
123,606
135,338
1,635,774
1,021,022
488,294
2,111
532,948
60,022
145,570
175,504
Millions of
U�S� dollars
2017
$22,747
14,580
9,101
4,352
19
4,750
535
1,298
1,564
Ordinary expenses �����������������������������������������������������������������������������������������������
1,529,919
1,687,908
15,045
Interest expenses ��������������������������������������������������������������������������������������������
Interest on deposits �����������������������������������������������������������������������������������
Fees and commissions payments �������������������������������������������������������������������
Other operating expenses �������������������������������������������������������������������������������
General and administrative expenses �������������������������������������������������������������
Other expenses �����������������������������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Extraordinary gains �����������������������������������������������������������������������������������������������
Extraordinary losses ���������������������������������������������������������������������������������������������
Income before income taxes ��������������������������������������������������������������������������������
Income taxes - current �����������������������������������������������������������������������������������������
Income taxes - deferred ���������������������������������������������������������������������������������������
398,791
93,258
168,796
40,613
842,710
79,007
747,892
3,706
5,379
746,219
170,558
(33,509)
496,834
142,884
184,265
31,671
874,407
100,728
864,022
1,423
8,413
857,032
113,448
61,817
4,429
1,274
1,642
282
7,794
898
7,701
13
75
7,639
1,011
551
Net income �����������������������������������������������������������������������������������������������������������
¥ 609,171
¥ 681,767
$ 6,077
Per share data:
Earnings per share ��������������������������������������������������������������������������������������
¥5,733�46
¥6,416.73
Earnings per share (diluted) ������������������������������������������������������������������������
—
—
$57.20
—
Yen
2016
2017
U�S� dollars
2017
010_0800801372908.indd 201
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2017 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 ����������������������������������������������������� ¥1,169,655
Interest expenses ��������������������������������������������������
246,060
923,594
Net interest income ���������������������������������������������������
Trust fees �������������������������������������������������������������������
3,797
Fees and commissions �����������������������������������������
983,977
Fees and commissions payments ������������������������
144,470
839,506
Net fees and commissions ����������������������������������������
Trading income������������������������������������������������������
221,610
Trading losses �������������������������������������������������������
9,465
212,144
Net trading income ����������������������������������������������������
Other operating income ���������������������������������������� 1,256,723
Other operating expenses������������������������������������� 1,077,307
179,415
Net other operating income���������������������������������������
Millions of yen
2017
Overseas
operations Elimination
Total
¥827,003
319,440
507,563
—
224,712
40,224
184,488
42,858
17,607
25,250
327,406
199,409
127,997
¥(84,631) ¥1,912,027
553,394
1,358,632
3,797
1,195,452
182,104
1,013,348
237,394
—
237,394
1,583,316
1,275,747
307,568
(12,106)
(72,524)
—
(13,237)
(2,590)
(10,646)
(27,073)
(27,073)
—
(814)
(970)
155
Domestic
operations
¥1,241,523
268,976
972,546
3,681
946,124
97,907
848,216
221,701
5,655
216,045
1,059,947
939,328
120,619
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)
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 ���������������������������������������������� ¥ 87,746,070
55,634,086
17,693,281
76,166
36,530
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 ������������
7,827,996
984,203
1,801,420
Interest-bearing liabilities ������������������������������������������ ¥123,658,898
92,978,393
6,064,857
603,065
1,325,978
7,374,658
138,698
7,621,066
1,183,878
5,358,345
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 ��������������������������������������������������������������������
Millions of yen
2017
Interest
¥1,169,655
826,571
212,691
467
(10)
12,172
6,306
51,237
¥ 246,060
33,592
1,081
91
7,854
4,631
59
67,559
118
102,926
Average rate
1.33%
1.49
1.20
0.61
(0.03)
0.16
0.64
2.84
0.20%
0.04
0.02
0.02
0.59
0.06
0.04
0.89
0.01
1.92
Average balance
¥ 87,513,636
52,187,299
22,510,229
147,992
32,450
6,722,143
826,050
1,480,695
¥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
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
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
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 (2017, ¥33,983,080 million; 2016, ¥28,376,025
million).
202
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SMFG2017 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
¥40,533,726
23,868,315
4,014,209
1,319,676
2,198,666
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
—
4,888,341
497,302
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 ��������������������������������������������������������������������
¥32,659,822
18,867,692
6,461,498
645,301
3,241,888
—
2,206,493
830,387
—
107,166
2017
Interest
¥827,003
599,614
79,703
11,738
26,255
—
44,092
18,990
¥319,440
157,977
66,151
5,399
15,784
—
15,450
13,805
—
4,153
Millions of yen
Average rate
2.04%
2.51
1.99
0.89
1.19
—
0.90
3.82
0.98%
0.84
1.02
0.84
0.49
—
0.70
1.66
—
3.88
Average balance
¥37,621,327
22,365,670
3,154,767
918,358
1,521,170
—
5,678,537
444,069
¥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
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
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 (2017, ¥2,134,415 million; 2016, ¥1,732,890
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥125,630,472
78,679,693
21,494,609
1,395,842
1,096,826
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 ������������
7,827,996
5,430,503
2,298,722
Interest-bearing liabilities ������������������������������������������ ¥155,870,100
111,384,184
12,526,355
1,248,366
3,429,496
7,374,658
2,345,192
7,654,498
1,183,878
7,451,001
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 ��������������������������������������������������������������������
2017
Interest
¥1,912,027
1,384,119
259,840
12,205
18,886
12,172
48,040
70,227
¥ 553,394
189,204
67,232
5,491
16,281
4,631
15,510
39,528
118
144,755
Average rate
1.52%
1.76
1.21
0.87
1.72
0.16
0.88
3.06
0.36%
0.17
0.54
0.44
0.47
0.06
0.66
0.52
0.01
1.94
Average balance
¥123,153,560
73,713,490
25,450,418
1,066,351
727,468
6,722,143
6,421,181
1,924,764
¥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
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
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 (2017, ¥36,098,076 million; 2016, ¥30,098,341
million).
011_0800804262908.indd 203
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SMFG2017 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
¥983,977
22,622
118,768
118,164
16,772
5,413
75,725
264,255
122,018
2017
Overseas
operations Elimination
Total
¥224,712
118,683
19,881
42,662
—
2
14,915
3
4,574
¥(13,237) ¥1,195,452
135,602
138,618
159,769
16,772
5,416
86,745
264,258
126,592
(5,703)
(30)
(1,056)
—
—
(3,894)
—
—
Domestic
operations
¥946,124
21,076
114,071
110,138
16,380
5,509
74,257
255,217
112,928
2016
Overseas
operations Elimination
Total
¥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)
—
—
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥144,470
29,997
¥ 40,224
9,750
¥ (2,590) ¥ 182,104
39,720
(27)
¥ 97,907
29,282
¥ 37,190
8,507
¥ (4,472) ¥ 130,625
37,789
(0)
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
2017
Domestic
operations
¥221,610
178,218
Overseas
operations Elimination
¥(27,073)
(13,099)
¥42,858
—
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
13,025
30,336
30
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
9,465
—
—
9,465
—
—
42,858
—
17,607
13,099
155
4,353
—
(155)
(13,818)
—
(27,073)
(13,099)
(155)
(13,818)
—
Millions of yen
2016
Domestic
operations
¥221,701
77,921
Overseas
operations Elimination
¥(33,549)
(5,795)
¥37,330
—
115
143,554
110
5,655
—
—
5,655
—
—
37,330
—
27,894
5,795
49
22,048
—
(49)
(27,704)
—
(33,549)
(5,795)
(49)
(27,704)
—
Total
¥225,481
72,125
65
153,180
110
—
—
—
—
—
Total
¥237,394
165,119
12,869
59,375
30
—
—
—
—
—
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.
204
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SMFG2017 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
2017
2016
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 ������������������������������������������������������������������������������������������������������
¥ 68,135,738
22,249,043
7,290,869
97,675,651
6,021,235
¥103,696,887
¥ 12,766,301
7,256,466
131,791
20,154,558
5,859,702
¥ 26,014,260
¥129,711,148
¥ 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
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
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,714,405
120,160
906,799
4,633,725
4,556,865
2,468,763
8,716,521
4,694,153
1,108,202
22,007,202
¥56,926,799
¥ 217,056
1,494,278
19,037,470
2,561,716
¥23,310,523
¥80,237,322
13.55%
0.21
1.59
8.14
8.00
4.34
15.31
8.25
1.95
38.66
100.00%
0.93%
6.41
81.67
10.99
100.00%
—
¥ 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%
—
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_0800804262908.indd 205
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SMFG2017 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
2017
¥431,510
213,205
1,498
¥646,215
¥288,145
2017
¥ 34,441
558,855
22,434
252,790
¥868,521
¥245,719
2016
¥395,546
228,161
1,311
¥625,019
¥301,983
2016
¥ 44,748
594,077
19,845
266,698
¥925,370
¥273,009
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
2017
¥ 160,665
491,353
275,646
927,665
91,575,200
¥92,502,865
¥ 288,145
Millions of yen
2016
¥ 178,059
526,763
287,921
992,743
85,579,406
¥86,572,150
¥ 301,983
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
206
011_0800804262908.indd 206
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SMFG2017 Annual Report Securities
Year-End Balance
March 31
Domestic operations:
Assets and Liabilities (Consolidated)
Millions of yen
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 8,454,687
90,243
2,731,856
3,925,112
5,297,701
¥20,499,601
¥
—
—
78,031
—
3,998,504
¥ 4,076,536
¥
—
—
—
55,654
—
¥ 55,654
¥24,631,792
¥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
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 ����������������������������������������������������������� ¥5,882,221
Trading securities �������������������������������������������������� 3,543,982
Derivatives of trading securities ����������������������������
56,901
Securities related to trading transactions �������������
—
Derivatives of securities related to
2017
2016
Millions of yen
Overseas
operations Elimination
Total
¥906,906
136,723
—
—
¥(33,700) ¥6,755,428
— 3,680,705
56,901
—
—
—
Domestic
operations
¥7,176,926
3,431,314
13,581
—
Overseas
operations Elimination
Total
¥942,823
138,744
—
—
¥(56,468) ¥8,063,281
— 3,570,058
13,581
—
—
—
trading transactions ��������������������������������������������
10,586
Trading-related financial derivatives ��������������������� 2,172,657
Other trading assets����������������������������������������������
98,093
97
770,086
—
—
(33,700)
—
10,684
2,909,043
98,093
18,098
3,649,936
63,995
120
803,958
—
—
(56,468)
—
18,218
4,397,427
63,995
Trading liabilities �������������������������������������������������������� ¥3,904,067
Trading securities sold for short sales ������������������ 2,013,249
Derivatives of trading securities ����������������������������
58,961
Securities related to trading transactions
¥834,564
58,334
—
¥(33,700) ¥4,704,931
— 2,071,583
58,961
—
¥5,361,628
2,153,965
29,724
¥807,507
43,707
—
¥(56,468) ¥6,112,667
— 2,197,673
29,724
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
8,633
Trading-related financial derivatives ��������������������� 1,823,223
Other trading liabilities ������������������������������������������
—
91
776,138
—
—
(33,700)
—
8,724
2,565,661
—
17,275
3,160,662
—
80
763,719
—
—
(56,468)
—
17,356
3,867,913
—
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_0800804262908.indd 207
207
2017/08/07 14:36:30
SMFG2017 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, 2017
Common stock ���������������������������������������������������������������������������������������������������������������������������������������������������������������
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of shares issued
1,414,055,625
1,414,055,625
208
011_0800804262908.indd 208
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SMFG2017 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, 2017
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
362
79
7,983
1,161
356
297,524
307,472
—
Number of
units
4,774
3,830,262
749,815
1,382,303
6,259,012
4,707
1,889,554
14,120,427
2,012,925
Percentage of
total
0�03%
27�13
5�31
9�79
44�33
0�03
13�38
100�00%
—
Notes: 1. Of 4,028,883 shares in treasury stock, 40,288 units are included in “Individuals and others” and the remaining 83 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, 2017
Japan Trustee Services Bank, Ltd� (Trust Account) �������������������������������������������������������������������������������������
The Master Trust Bank of Japan, Ltd� (Trust Account) ��������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 5) ����������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 9) ����������������������������������������������������������������������������������
STATE STREET BANK AND TRUST COMPANY 505223* ���������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 1) ����������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 2) ����������������������������������������������������������������������������������
NATSCUMCO** �������������������������������������������������������������������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 7) ����������������������������������������������������������������������������������
STATE STREET BANK WEST CLIENT - TREATY 505234*** �����������������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of
shares
77,865,200
63,818,600
29,034,200
26,246,700
24,825,763
21,554,900
21,282,200
19,858,605
19,285,300
19,048,976
322,820,444
Percentage of
shares outstanding
5�50%
4�51
2�05
1�85
1�75
1�52
1�50
1�40
1�36
1�34
22�82%
* Standing agent: Mizuho Bank, Ltd. Settlement Service Department
** Standing agent: Sumitomo Mitsui Banking Corporation
*** Standing agent: Mizuho Bank, Ltd. Settlement Service Department
Notes: 1. Sumitomo Mitsui Trust Bank, Limited has submitted a Report of Possession of Large Volume regarding its shareholding as of September 6, 2016. It stated
that Sumitomo Mitsui Trust Bank, Limited and two other shareholders held the following common shares in SMFG as of August 31, 2016. But, these three
are not included in the above Principal Shareholders because SMFG was unable to confirm the number of shares owned by them at the end of the fiscal
year under review.
The Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: Sumitomo Mitsui Trust Bank, Limited (and two other joint holders)
Number of share held: 71,542,000 shares (including joint ownership)
Shareholding ratio:
5.06%
2. Mizuho Securities Co., Ltd. has submitted a Report of Possession of Large Volume regarding its shareholding as of October 21, 2016. It stated that
Mizuho Securities Co., Ltd. and another shareholder held the following common shares in SMFG as of October 14, 2016. But, these two 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: Mizuho Securities Co., Ltd. (and another joint holder)
Number of share held: 72,802,582 shares (including joint ownership)
Shareholding ratio:
5.15%
3. BlackRock Japan Co., Ltd. has submitted a Change Report of Possession of Large Volume regarding its shareholding as of March 22, 2017. It stated that
BlackRock Japan Co., Ltd. and nine other shareholders held the following common shares in SMFG as of March 15, 2017. But, these ten 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 Change Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: BlackRock Japan Co., Ltd. (and nine other joint holders)
Number of share held: 90,686,690 shares (including joint ownership)
Shareholding ratio:
6.41%
011_0800804262908.indd 209
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2017/08/07 14:36:30
SMFG2017 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 ����������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
Date of resolution: Meeting of the Board of Directors held on July 31, 2015
March 31
Number of shares granted��������������������������������������������������������������������������������������������������������
Type of stock ����������������������������������������������������������������������������������������������������������������������������
Issue price ��������������������������������������������������������������������������������������������������������������������������������
Amount capitalized when shares are issued ����������������������������������������������������������������������������
Exercise period of stock options ����������������������������������������������������������������������������������������������
Date of resolution: Meeting of the Board of Directors held on July 26, 2016
2017
86,900 shares
Common stock
¥2,216 per share
¥1,108 per share
From August 13, 2010 to August 12, 2040
2017
257,900 shares
Common stock
¥1,873 per share
¥937 per share
From August 16, 2011 to August 15, 2041
2017
268,100 shares
Common stock
¥2,043 per share
¥1,022 per share
From August 15, 2012 to August 14, 2042
2017
114,400 shares
Common stock
¥4,160 per share
¥2,080 per share
From August 14, 2013 to August 13, 2043
2017
120,300 shares
Common stock
¥3,662 per share
¥1,831 per share
From August 15, 2014 to August 14, 2044
2017
131,200 shares
Common stock
¥4,905 per share
¥2,453 per share
From August 18, 2015 to August 17, 2045
2017
201,200 shares
Common stock
¥2,812 per share
¥1,406 per share
From August 15, 2016 to August 14, 2046
Common Stock Price Range
Stock Price Performance
Year ended March 31
High ���������������������������������������������������������������������������������������
Low ����������������������������������������������������������������������������������������
2017
¥4,768.0
2,766.5
2016
¥5,770�0
2,819�5
Note: Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
Yen
2015
¥4,915�0
3,800
2014
¥5,470
3,545
2013
¥4,255
2,231
Six-Month Performance
High ��������������������������������������������������������������
Low ���������������������������������������������������������������
October 2016
¥3,657�0
3,351�0
November 2016
¥4,318�0
3,293�0
Yen
December 2016
¥4,768�0
4,290�0
January 2017
¥4,614�0
4,335�0
February 2017
¥4,634�0
4,306�0
March 2017
¥4,533�0
4,045�0
Note: Stock prices of common shares as quoted on the Tokyo Stock Exchange (First Section).
210
011_0800804262908.indd 210
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SMFG2017 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: 354
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_0800885852907.indd 211
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SMFG2017 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, 2017
Amounts
excluded
under
transitional
arrangements
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
8,013,333
3,095,242
5,036,756
12,913
105,752
—
3,206
1,289,962
172,277
27,797
27,797
7,351,752
3,095,202
4,534,472
175,381
102,541
—
2,635
875,680
164,550
48,257
48,257
322,490
583,787
6 Common Equity Tier 1 capital: instruments and reserves
(A)
9,506,577
8,442,875
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
629,840
274,818
355,022
157,460
68,704
88,755
451,805
223,573
228,232
301,203
149,048
152,154
3,350
837
1,282
855
(32,470)
63,740
46,740
2,761
174,987
9,135
—
(8,117)
15,935
11,685
690
43,746
2,283
—
34,278
34,496
30,051
5,089
84,995
4,424
—
22,852
22,997
20,034
3,392
56,663
2,949
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
898,087
646,423
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
8,608,490
7,796,451
212
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SMFG2017 Annual ReportBasel III Information
(Millions of yen, except percentages)
As of March 31, 2017
Amounts
excluded
under
transitional
arrangements
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
449,897
300,000
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
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)
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
—
234,697
812,928
812,928
—
13,015
13,015
1,510,539
(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
108,814
89,162
11,685
7,967
—
43 Additional Tier 1 capital: regulatory adjustments
(E)
172,850
—
183,267
961,997
961,997
—
34,817
34,817
1,480,082
196,827
165,294
20,034
11,498
—
244,860
—
—
—
—
—
—
—
—
—
—
—
—
64,035
16,008
48,032
32,021
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)
1,337,689
1,235,221
(G)
9,946,179
9,031,672
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
—
—
898,911
—
54,539
873,116
—
873,116
74,104
74,104
—
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
197,384
191,125
6,259
2,098,057
(H)
—
—
655,064
—
42,036
1,220,569
—
1,220,569
78,017
78,017
—
345,673
332,809
12,863
2,341,360
012_0800885852907.indd 213
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SMFG2017 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, 2017
Amounts
excluded
under
transitional
arrangements
As of March 31, 2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
—
—
40,000
10,000
75,000
50,000
30,569
30,569
70,569
(I)
62,109
62,109
137,109
(J)
2,027,488
2,204,250
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
11,973,667
11,235,923
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 Tier 2 capital of Other Financial Institutions
(net of eligible short positions)
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)
38,835
16,711
12,010
7,709
68,865
31,824
16,093
16,156
(L)
70,683,540
66,011,621
12.17%
14.07%
16.93%
729,452
542,985
—
24,339
74,104
84,683
—
331,220
812,928
58,050
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)
1,017,141
—
1,220,569
30,203
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31, 2017
5,654,683
As of March 31, 2016
5,280,929
214
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SMFG2017 Annual ReportBasel III Information
■ Capital Requirements
March 31
Capital requirements for credit risk:
Billions of yen
2017
2016
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 ..............................................................................................
5,271.7
3,145.0
2,665.8
45.4
135.7
298.2
793.6
346.4
223.5
223.7
489.1
342.0
147.1
105.2
41.9
300.1
81.2
462.7
520.8
179.8
8.9
5,981.2
102.0
36.7
42.6
2.0
0.0
20.7
117.8
6.9
226.8
Capital requirements for operational risk:
Advanced measurement approach ........................................................................................................
Basic indicator approach ........................................................................................................................
Total capital requirements for operational risk........................................................................................
Total amount of capital requirements .......................................................................................................
228.5
49.3
277.8
6,485.9
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
226.7
40.6
267.2
6,091.1
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., Cedyna Financial
Corporation
(2) Overseas Operations
Sumitomo Mitsui Banking Corporation Europe Limited, Sumitomo Mitsui Banking Corporation (China) Limited, 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_0800885852907.indd 215
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SMFG2017 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
G5
G6
G7
G8
G7R Borrowers Requiring Caution identified as Substandard Borrowers
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
G9
G10
Borrower Category
Normal Borrowers
Borrowers Requiring Caution
Substandard Borrowers
Potentially Bankrupt Borrowers
Effectively Bankrupt Borrowers
Bankrupt Borrowers
J5
J6
J7
J7R
J8
J9
J10
216
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SMFG2017 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, 2017
J1-J3 ................................... 28,682.2 22,987.5
J4-J6 ................................... 16,467.3 14,346.5
J7 (excluding J7R) ...............
1,080.4
Japanese government and
1,289.9
Total
Off-balance
sheet assets
5,694.7
2,120.7
209.5
local municipal corporations ..... 49,945.7 49,586.0
Others ..................................
4,212.0
Default (J7R, J8-J10) ...........
559.3
Total ..................................... 101,415.7 92,771.9
4,432.8
597.8
359.7
220.8
38.5
8,643.8
Weighted
average
LGD
Weighted
Weighted
average
average
CCF
PD
49.50% 0.06% 35.23%
0.75
50.10
13.70
49.43
33.65
39.83
Weighted
average
EL default
Weighted
average
risk weight
—% 18.61%
—
50.28
— 173.72
49.38
49.87
84.61
—
0.00
0.84
100.00
—
35.31
44.01
48.12
—
—
—
47.12
—
0.01
56.29
12.44
—
Total
5,303.7
856.1
188.8
135.7
100.1
0.1
6,584.6
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
4,346.0
Others ..................................
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
PD
CCF
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
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
On-balance
sheet assets
Off-balance
sheet assets
March 31, 2017
G1-G3 .................................. 39,940.4 28,984.6 10,955.8
G4-G6 ..................................
478.1
G7 (excluding G7R) .............
124.2
Others ..................................
418.1
Default (G7R, G8-G10) ........
13.4
Total ..................................... 42,978.2 30,988.6 11,989.6
1,601.9
248.9
62.7
90.6
2,080.0
373.1
480.8
104.0
Total
10,791.7
350.1
195.4
51.9
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
49.38% 0.14% 28.86%
2.89
49.38
14.91
49.38
1.26
50.16
100.00
9.2 100.00
—
—
24.89
24.02
24.72
63.82
—
11,398.4
Billions of yen
Exposure amount
Undrawn amount
Total
Off-balance
On-balance
sheet assets
sheet assets
March 31, 2016
9,816.6
G1-G3 .................................. 38,146.3 28,329.7
638.9
1,461.7
G4-G6 ..................................
103.4
386.6
G7 (excluding G7R) .............
196.5
117.8
Others ..................................
29.6
89.8
Default (G7R, G8-G10) ........
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
—% 17.11%
—
72.27
— 119.58
26.21
—
52.63
59.61
—
—
Weighted
average
EL default
Weighted
average
risk weight
—% 17.98%
—
—
—
50.41
—
69.62
132.5
73.14
51.88
—
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SMFG2017 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, 2017.
• 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
2017
2016
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
28.4
33.7
17.4
18.2
—
3.5
101.1
—
4.2
—
—
0.8
—
—
5.0
5.4
16.4
0.8
5.6
17.1
—
0.0
45.2
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
(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
2017
9.1
8.8
91.1
75.4
275.1
3.4
—
463.0
2016
8.7
4.8
113.7
71.1
156.5
1.8
—
356.7
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SMFG2017 Annual ReportBasel III Information
b. PD/LGD Approach Applicable Portion, Other Than Slotting Criteria Applicable Portion
(a) Project Finance
Billions of yen
Exposure amount
Total
March 31, 2017
G1-G3 .................................. 3,646.3
G4-G6 ..................................
243.9
G7 (excluding G7R) .............
42.9
Others ..................................
—
Default (G7R, G8-G10) ........
52.3
Total ..................................... 3,985.4
On-balance
sheet assets
2,642.4
181.9
33.1
—
51.0
2,908.4
Off-balance
sheet assets
1,003.8
62.0
9.8
—
1.3
1,077.0
Undrawn amount
Weighted
average
CCF
Total
49.38%
1,078.9
49.38
92.4
49.38
2.5
—
—
0.1 100.00
—
1,173.8
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
—
(b) Object Finance
Billions of yen
Exposure amount
Undrawn amount
Weighted
average
LGD
Weighted
average
PD
0.31% 26.03%
2.73
15.37
—
100.00
—
29.10
40.13
—
55.45
—
Weighted
average
LGD
Weighted
average
PD
0.29% 27.51%
3.16
19.28
—
100.00
—
33.98
27.45
—
53.30
—
March 31, 2017
G1-G3 ..................................
G4-G6 ..................................
G7 (excluding G7R) .............
Others ..................................
Default (G7R, G8-G10) ........
Total .....................................
Total
200.9
35.9
3.9
—
2.1
242.9
On-balance
sheet assets
172.6
35.1
3.2
—
2.1
213.0
Off-balance
sheet assets
28.3
0.8
0.7
—
—
29.8
Total
19.7
—
—
—
—
19.7
Weighted
average
LGD
Weighted
Weighted
average
average
PD
CCF
0.28% 11.28%
49.38%
3.47
—
23.62
—
—
—
— 100.00
—
—
6.77
71.82
—
61.56
—
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
—
(c) Income-Producing Real Estate (IPRE)
Billions of yen
Exposure amount
Undrawn amount
Total
March 31, 2017
J1-J3 ................................... 1,009.7
J4-J6 ...................................
356.8
J7 (excluding J7R) ...............
7.5
Others ..................................
399.1
Default (J7R, J8-J10) ...........
—
Total ..................................... 1,773.1
On-balance
sheet assets
905.3
284.2
7.5
377.6
—
1,574.6
Off-balance
sheet assets
104.4
72.6
—
21.6
—
198.5
Weighted
average
CCF
49.38%
—
—
49.38
—
—
Total
2.8
—
—
36.7
—
39.5
Weighted
average
LGD
Weighted
average
PD
0.04% 22.68%
0.86
10.36
0.25
—
—
26.06
5.00
30.84
—
—
Weighted
average
EL default
Weighted
average
risk weight
—% 39.39%
—
94.56
— 219.24
—
—
52.63
51.24
—
—
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
—% 15.84%
—
22.44
— 428.34
—
—
52.63
57.35
—
—
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
—% 11.44%
—
—
—
—
—
51.12
23.66
24.94
—
—
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SMFG2017 Annual ReportBasel III Information
Billions of yen
Exposure amount
Undrawn amount
Total
March 31, 2016
850.1
J1-J3 ...................................
J4-J6 ...................................
469.2
12.6
J7 (excluding J7R) ...............
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
(2) Retail Exposures
A. Residential Mortgage Exposures
(A) Rating Procedures
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
—% 9.95%
—
61.50
— 110.47
26.31
—
10.63
34.27
—
—
• “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, 2017
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 ..............................................
11,804.7
386.5
88.9
152.9
12,433.0
11,782.5
386.5
87.0
152.8
12,408.8
22.2
—
1.9
0.1
24.2
0.44%
1.03
18.42
100.00
—
33.75%
51.24
36.61
34.07
—
—%
—
—
32.43
—
23.18%
67.67
191.19
20.43
—
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, 2016
Mortgage loans
PD segment:
Not delinquent
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
—
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.
220
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SMFG2017 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, 2017
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
947.8
14.7
778.2
14.1
106.9
0.6
62.7
—
254.3 42.04% 2.88% 81.25%
2.7 23.00
28.34
77.68
—% 63.95%
— 214.04
Not delinquent ..... 2,440.6 1,449.2
Delinquent ............
5.7
Default .........................
42.2
Total ............................. 3,456.0 2,289.4
6.7
46.2
685.8
1.0
3.0
797.3
305.7
—
1.0
369.4
8,977.4
—
—
9,234.4
1.92
7.64
—
78.05
— 100.00
—
—
69.79
72.15
83.79
—
—
32.79
— 119.50
123.21
—
73.93
—
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
March 31, 2016
Card loans
PD segment:
Not delinquent .....
Delinquent ............
Credit card balances
PD segment:
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
—
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.”
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SMFG2017 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, 2017
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 .............................
1,022.3
207.5
73.1
1,004.5
206.5
72.2
17.8
1.0
0.8
0.87%
0.67
6.26
47.47%
40.26
41.94
—%
—
—
40.50%
30.91
66.66
Consumer loans
PD segment:
Not delinquent
Use model .........................
Others ...............................
Delinquent .............................
Default ..........................................
Total ..............................................
1,660.4
128.7
23.1
82.1
3,197.2
1,025.8
127.3
21.0
81.2
2,538.6
634.6
1.3
2.2
0.9
658.7
2.20
1.59
24.62
100.00
—
50.56
53.18
49.64
62.07
—
—
—
—
54.01
—
62.26
63.70
107.78
100.82
—
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, 2016
Business loans
PD segment:
Not delinquent
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
—
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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SMFG2017 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 pages
80 to 81) 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 ...........................................................................................................................................
2017
706.5
370.3
240.7
129.6
336.2
3,763.0
4,469.5
2016
532.6
322.0
197.9
124.1
210.6
3,514.6
4,047.2
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
3,457.4
176.1
15.1
113.6
0.7
3,763.0
Billions of yen
2017
Weighted
average
PD
0.05%
0.32
10.45
0.48
100.00
—
Weighted
average
risk weight
100.39%
152.52
566.42
175.70
1,125.00
—
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
—
Exposure
amount
3,229.5
195.5
2.5
86.7
0.4
3,514.6
Notes: 1. The above exposures are “equity exposures” stipulated in the Notification to which the PD/LGD approach is applied and differ from “stocks” described in the
consolidated financial statements.
2. “Others” includes exposures to overseas corporate entities.
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 ........................................................................
2017
1,324.0
2016
1,317.3
Billions of yen
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SMFG2017 Annual ReportBasel III Information
(4) Analysis of Actual Losses
A. Year-on-Year Comparison of Actual Losses
SMFG recorded an increase of ¥61.6 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 ¥164.4 billion on a consolidated basis for
fiscal year 2016.
SMBC recorded an increase of ¥64.3 billion in total credit costs compared to the previous fiscal year, which resulted in an expense
of ¥61.1 billion on a non-consolidated basis in fiscal year 2016, due to the recognition of costs derived from a downturn in the business
of obligors with large exposure.
Total Credit Costs
Billions of yen
Fiscal 2016 (A)
Fiscal 2015 (B)
Fiscal 2014
SMFG (consolidated) total .....................................................
SMBC (consolidated) total ....................................................
SMBC (non-consolidated) total .............................................
Corporate exposures .........................................................
Sovereign exposures .........................................................
Bank exposures .................................................................
Residential mortgage exposures .......................................
QRRE .................................................................................
Other retail exposures .......................................................
164.4
63.3
61.1
64.0
(0.1)
(0.3)
(0.1)
(0.0)
(0.3)
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)
Increase
(decrease)
(A) – (B)
61.6
49.4
64.3
63.9
1.6
(0.3)
(0.2)
(0.1)
1.5
Notes: 1. The above amounts do not include gains/losses on “equity exposures,” “exposures on capital market-driven transactions (such as bonds)” and “exposures under Article
145 of the Notification” that were recognized as gains/losses on bonds and stocks in the statements of 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).
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SMFG2017 Annual ReportBasel III Information B. Comparison of Estimated and Actual Losses
Fiscal 2016
Fiscal 2015
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 ..................................
—
—
461.2
438.3
8.9
7.5
2.3
0.0
4.2
After deduction
of reserves
—
—
167.8
158.7
7.4
3.9
(1.1)
(0.3)
4.2
Actual loss
amounts
164.4
63.3
61.1
64.0
(0.1)
(0.3)
(0.1)
(0.0)
(0.3)
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)
—
—
513.1
483.0
9.1
10.7
3.9
0.0
6.4
Fiscal 2014
Fiscal 2013
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 ..................................
—
—
642.5
523.6
12.7
8.5
2.9
0.0
94.8
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)
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)
—
—
871.2
734.0
5.6
11.4
5.2
0.0
114.9
Fiscal 2012
Fiscal 2011
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 ..................................
—
—
940.1
765.9
22.0
14.9
3.7
0.1
133.5
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
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
—
—
1,062.7
889.3
12.4
14.9
3.8
0.1
142.3
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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SMFG2017 Annual ReportBasel III Information
■ Standardized Approach
1. Scope
The following consolidated subsidiaries have adopted the standardized approach for exposures as of March 31, 2017 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 215).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the IRB Approach
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 ..........................................................................................
9,453.1
9.1
1,574.0
62.8
82.7
1,766.3
4,299.2
76.9
158.7
1.4
1.6
17,485.8
Billions of yen
2017
2016
Of which assigned
country risk score
914.9
—
939.2
—
6.6
—
3.5
0.0
—
1.3
—
1,865.5
Of which assigned
country risk score
598.7
—
724.8
—
10.6
—
3.9
0.0
—
—
—
1,338.1
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
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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SMFG2017 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
There is a framework in place for controlling concentration of risk in obligors with large exposures which includes large exposure limit
lines, risk concentration monitoring, and reporting to the Credit Risk Committee (please refer to pages 78 to 82). Further, exposures to
these obligors are monitored on a group basis, taking into account risk concentration in their parent companies in cases that exposures to
the obligors are guaranteed by the parent companies for risk mitigation.
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
2017
2016
Eligible financial
collateral
Other eligible
IRB collateral
Eligible financial
collateral
Other eligible
IRB collateral
—
160.0
46.8
—
113.2
5,586.1
5,746.1
—
59.8
59.8
—
—
—
59.8
—
134.3
46.4
—
87.8
5,409.5
5,543.8
—
56.0
56.0
—
—
—
56.0
Note: For exposures to which the AIRB approach was applied, eligible collateral is separately taken into account in Loss Given Default (LGD) estimates.
March 31
Internal Ratings-Based (IRB) approach ....................................
Corporate exposures ............................................................
Sovereign exposures ............................................................
Bank exposures ....................................................................
Residential mortgage exposures ..........................................
QRRE ....................................................................................
Other retail exposures ..........................................................
Standardized approach ............................................................
Total ..........................................................................................
2017
Guarantee
9,600.3
9,094.4
294.1
120.2
91.7
—
—
51.7
9,651.9
Billions of yen
2016
Credit derivative
334.2
334.2
—
—
—
—
—
—
334.2
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
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SMFG2017 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
2017
4,547.3
4,558.5
9,105.8
3,477.7
5,297.5
—
198.2
—
87.0
45.4
3,378.7
5,727.2
16.6
16.6
—
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
—
(after taking into account the CRM effect of collateral) ...............................................................
5,710.5
5,569.4
(2) Notional Principal Amounts of Credit Derivatives
Credit Default Swaps
Billions of yen
2017
2016
Notional principal amount
Notional principal amount
March 31
Protection purchased .........................................................
Protection provided ............................................................
Total
623.7
456.7
Of which
for CRM
334.2
—
Total
719.8
373.4
Of which
for CRM
373.8
—
Note: “Notional principal amount” is defined as the total of “amounts subject to calculation of credit equivalents” and “amounts employed for CRM.”
228
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SMFG2017 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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SMFG2017 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
Excluding consolidated subsidiaries, subsidiaries or affiliated companies holding securitization exposures related to the security transactions
conducted by the Holding Company Group are as follows:
• NEC Capital Solutions Limited
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), S&P Global Ratings (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.
230
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SMFG2017 Annual ReportBasel III Information 8. Portfolio (Credit Risk)
(1) Securitization Transactions as Originator
A. As Originator (Excluding as Sponsor)
(A) Underlying Assets
March 31, 2017
Underlying asset amount
Asset
transfer type
0.0
1,353.9
Total
107.1
1,353.9
Synthetic
type
107.0
—
—
0.2
1,461.2
—
0.2
1,354.2
—
—
107.0
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
Billions of yen
Fiscal 2016
Securitized
amount
Default
amount
Loss
amount
100.0
321.9
—
—
421.9
2.7
1.2
—
—
3.9
24.9
0.3
—
—
25.2
Gains/losses
on sales
—
21.8
—
—
21.8
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
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
2017
Term-end balance
Total
103.5
304.7
—
0.2
408.4
On-balance
sheet assets
103.5
304.7
—
0.2
408.4
Off-balance
sheet assets
—
—
—
—
—
Amounts
subject to
a 1250%
risk weight
1.5
24.7
Increase
in capital
equivalent
—
58.4
—
0.0
26.2
—
—
58.4
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
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 ................................
Total
99.1
1.2
0.1
—
308.0
408.4
Billions of yen
2017
Term-end balance
On-balance
sheet assets
Off-balance
sheet assets
99.1
1.2
0.1
—
308.0
408.4
—
—
—
—
—
—
Required
capital
0.6
0.1
0.0
—
27.8
28.5
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
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SMFG2017 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, 2017
Underlying asset amount
Asset
transfer type
903.5
—
832.7
29.6
1,765.7
Total
903.5
—
832.7
29.6
1,765.7
Synthetic
type
—
—
—
—
—
Fiscal 2016
Securitized
amount
5,834.3
—
418.2
27.6
6,280.1
Default
amount
Loss
amount
63.1
—
2.2
0.0
65.3
106.5
—
11.8
0.0
118.3
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
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
2017
Term-end balance
Total
687.4
—
On-balance
sheet assets
674.2
—
Off-balance
sheet assets
13.2
—
Amounts
subject to
a 1250%
risk weight
0.3
—
Increase
in capital
equivalent
—
—
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
—
Increase
in capital
equivalent
—
—
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
mortgage loans) .............
466.9
Other claims ...................
24.4
Total ................................ 1,178.7 1,165.5
466.9
24.4
—
—
13.2
—
—
0.3
497.7
497.7
—
5.9
5.9
—
— 1,185.2 1,185.2
—
—
—
—
—
1.5
—
—
—
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SMFG2017 Annual ReportBasel III Information
b. Risk Weights
March 31
20% or less ....................
100% or less ..................
650% or less ..................
Less than 1250% ...........
1250% ............................
Total ................................
Total
1,156.9
21.5
—
—
0.3
1,178.7
Billions of yen
2017
Term-end balance
On-balance
sheet assets
1,143.7
21.5
—
—
0.3
1,165.5
Off-balance
sheet assets
13.2
—
—
—
—
13.2
Required
capital
7.1
1.0
—
—
0.3
8.3
2016
Term-end balance
On-balance
sheet assets
1,158.9
24.9
—
—
1.5
1,185.2
Total
1,158.9
24.9
—
—
1.5
1,185.2
Off-balance
sheet assets
—
—
—
—
—
—
Required
capital
7.1
0.9
—
—
1.6
9.7
(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
2017
Term-end balance
March 31
Claims on corporates ..... 1,013.3
Mortgage loans ..............
30.2
Retail loans (excluding
Total
On-balance
sheet assets
562.2
30.2
Off-balance
sheet assets
451.0
—
Billions of yen
Amounts
subject to
a 1250%
risk weight
29.8
—
2016
Term-end balance
Increase
in capital
equivalent
Total
— 685.5
83.6
—
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
—
—
mortgage loans) .............
498.3
Other claims ...................
12.4
Total ................................ 1,684.5 1,103.2
628.5
12.5
130.2
0.1
581.3
—
0.1
29.8
338.1
—
8.4
—
— 1,115.6
325.5
8.2
720.5
12.5
0.3
395.2
—
0.1
32.2
—
—
—
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, 2017 and ¥5.6 billion as of March 31, 2016 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
1,522.9
37.0
17.4
—
107.2
1,684.5
Billions of yen
2017
Term-end balance
On-balance
sheet assets
1,048.8
36.9
17.4
—
0.1
1,103.2
Off-balance
sheet assets
474.1
0.1
—
—
107.1
581.3
Required
capital
8.6
2.6
1.5
—
31.6
44.4
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
Total
976.3
31.7
—
—
107.6
1,115.6
Required
capital
5.1
1.7
—
—
34.2
41.0
Note: The risk weight of “100% or less” includes balances of ¥5.6 billion as of March 31, 2017 and ¥5.6 billion as of March 31, 2016 for the securitization exposures
which includes loans whose credit risk are relatively high, such as U.S. subprime loans.
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SMFG2017 Annual ReportBasel III Information (B) Resecuritization Exposures
a. Underlying Assets by Asset Type
2017
Term-end balance
Billions of yen
On-balance
sheet assets
—
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 1250%
risk weight
—
—
Increase
in capital
equivalent
—
—
2016
Term-end balance
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
—
—
—
0.0
0.0
—
0.2
0.2
—
0.0
0.0
—
—
—
—
0.1
0.3
0.3
—
0.4
—
0.0
0.1
—
—
—
Total
0.2
—
0.3
0.1
0.6
March 31
Claims on corporates .....
Mortgage loans ..............
Retail loans (excluding
mortgage loans) .............
Other claims ...................
Total ................................
Total
—
—
—
0.2
0.2
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
2017
Term-end balance
On-balance
sheet assets
Off-balance
sheet assets
Total
0.2
—
—
—
0.0
0.2
—
—
—
—
0.0
0.0
0.2
—
—
—
—
0.2
Required
capital
0.0
—
—
—
0.0
0.0
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
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
(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
mortgage loans) .............
Other claims ...................
Total ................................
Total
0.9
—
6.1
—
6.9
2017
Term-end balance
On-balance
sheet assets
0.9
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 100%
risk weight
0.9
—
Increase
in capital
equivalent
—
—
2016
Term-end balance
On-balance
sheet assets
—
—
Off-balance
sheet assets
—
—
Amounts
subject to
a 100%
risk weight
—
—
Increase
in capital
equivalent
—
—
6.1
—
6.9
—
—
—
6.1
—
6.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
—
—
—
—
—
Note: There are no amounts that represent “securitization exposures subject to the measurement of the comprehensive risk held.”
b. Risk Weights
March 31
Less than 100% .............
100% ..............................
Total ................................
Total
—
6.9
6.9
(B) Resecuritization Exposures
Billions of yen
2017
Term-end balance
On-balance
sheet assets
Off-balance
sheet assets
—
6.9
6.9
—
—
—
Required
capital
—
6.9
6.9
2016
Term-end balance
On-balance
sheet assets
Off-balance
sheet assets
—
—
—
—
—
—
Total
—
—
—
Required
capital
—
—
—
There are no amounts that represent “resecuritization exposures.”
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SMFG2017 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
4,157.1
218.3
4,375.4
Fair value
4,157.1
—
—
Balance sheet amount
3,811.3
227.2
4,038.5
Fair value
3,811.3
—
—
Billions of yen
2017
2016
4. Gains (Losses) on Sale and Devaluation of Equity Exposures
Gains (losses) .........................................................................................................................................
Gains on sale ..................................................................................................................................
Losses on sale ................................................................................................................................
Devaluation .....................................................................................................................................
55.0
80.3
10.5
14.9
69.0
100.3
20.8
10.4
Note: The above amounts are gains (losses) on stocks and available-for-sale securities in the consolidated statements of income.
Billions of yen
Fiscal 2016
Fiscal 2015
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
2017
2016
but not on consolidated statements of income ....................................................................................
2,157.5
1,734.3
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
2017
2016
consolidated balance sheets or consolidated statements of income ..................................................
1.8
(25.6)
Note: The above amount is for stocks of affiliates with market prices.
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SMFG2017 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, 2017
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
10,682.4
358.3
1,365.0
6,474.9
6,347.7
47,124.7
9,966.2
5,449.6
1,257.3
30,186.7
119,212.8
6,626.2
8,189.0
24,823.9
5,128.0
44,767.3
163,980.1
110.1
4.9
24.9
104.7
23.3
437.3
414.7
36.5
99.9
11,301.1
12,557.4
1,425.3
642.4
193.0
1,158.4
3,419.1
15,976.4
219.1
14.5
6.7
148.8
128.5
1,746.4
56.0
46.2
10.9
280.5
2,657.7
15.3
2,014.2
901.5
121.3
3,052.4
5,710.0
2,879.7
44.8
293.1
1,112.0
896.7
1,357.8
388.1
1,159.1
24.2
6,153.9
14,309.3
14.9
970.3
956.3
2,537.7
4,479.2
18,788.5
13,891.3
422.5
1,689.7
7,840.4
7,396.3
50,666.2
10,824.9
6,691.4
1,392.2
47,922.2
148,737.1
8,081.8
11,815.9
26,874.7
8,945.4
55,717.9
204,455.0
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 ...............................................................................................
Notes: 1. The above amounts are exposures after CRM.
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
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.
236
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SMFG2017 Annual ReportBasel III Information
2. Exposure Balance by Type of Assets and Residual Term
March 31, 2017
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.
44,774.2
18,262.4
18,323.5
7,703.1
26,304.1
48,612.8
163,980.1
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
Notes: 1. The above amounts are exposures after CRM.
Bonds
2,800.0
5,032.2
4,262.3
402.8
3,479.0
—
15,976.4
Bonds
4,442.1
3,550.6
5,449.0
564.1
3,295.4
—
17,301.2
Billions of yen
Derivatives
808.1
1,261.4
1,147.9
508.6
1,984.0
—
5,710.0
Billions of yen
Derivatives
826.9
1,243.0
1,356.7
576.6
1,562.1
—
5,565.3
Others
1,000.7
1,392.5
1,103.4
495.8
1,370.1
13,426.0
18,788.5
Total
49,383.0
25,948.5
24,837.1
9,110.3
33,137.2
62,038.9
204,455.0
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
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 .................................................................................................................................................
2017
1,086.3
231.1
41.4
58.3
131.4
1,317.4
2016
1,301.9
177.9
47.3
67.8
62.8
1,479.8
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 ......................................................................................................
2017
141.9
2.5
33.2
94.4
132.4
4.9
176.3
136.0
364.7
1,086.3
2.6
150.1
78.4
231.1
1,317.4
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
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.
012_0800885852907.indd 237
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SMFG2017 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 .................................................................................................
2017 (A)
431.5
1.5
501.4
422.2
79.2
22.0
7.7
49.5
934.4
2016 (B)
395.5
1.3
530.1
457.9
72.2
19.0
15.3
37.9
926.9
2015
387.0
0.7
647.1
590.0
57.1
28.6
5.4
23.1
1,034.8
Increase (decrease)
(A) – (B)
36.0
0.2
(28.7)
(35.7)
7.0
3.0
(7.6)
11.6
7.5
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 .................................................................................................
2017 (A)
431.5
1.5
501.4
422.2
56.1
2.3
14.6
55.5
55.0
3.7
74.7
56.8
103.5
79.2
0.2
64.8
14.2
934.4
2016 (B)
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
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
Increase (decrease)
(A) – (B)
36.0
0.2
(28.7)
(35.7)
(3.9)
(0.3)
0.9
(14.3)
(8.9)
(3.0)
(6.6)
8.8
(8.4)
7.0
(0.1)
(1.1)
8.2
7.5
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 2016
Fiscal 2015
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 ............................................................................................................
0.2
0.1
0.8
0.1
1.0
(0.1)
0.1
2.9
76.4
81.5
—
(0.2)
6.5
6.3
87.8
(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
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.
238
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SMFG2017 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 2016
Fiscal 2015
VaR
Stressed VaR
VaR
Stressed VaR
Fiscal year-end .........................................................................
Maximum ..................................................................................
Minimum ...................................................................................
Average ....................................................................................
3.0
7.2
2.6
4.1
4.5
13.7
4.2
6.9
1.7
5.9
1.2
2.6
1.9
11.7
1.8
4.4
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 ..................................................................................................................................................
47.4
53.2
40.2
46.1
34.0
48.9
23.5
38.7
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.
Billions of yen
Fiscal 2016
Fiscal 2015
012_0800885852907.indd 239
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SMFG2017 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 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 86 to 88.
3. Usage of Insurance to Mitigate Risk
SMFG had not taken measures to mitigate operational risk through insurance coverage for exposures.
240
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SMFG2017 Annual ReportBasel III Information ■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2016 and 2017)
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,
2017
As of
March 31,
2016
46,865,538
1,872,144
899,897
8,760,390
4,420,377
6,755,428
3,439
24,631,792
80,237,322
1,723,867
2,395,597
7,355,845
3,101,642
946,506
314,922
63,001
8,090,111
(646,215)
197,791,611
117,830,210
11,880,937
2,088,019
2,715,752
7,444,655
2,311,542
4,704,931
10,786,713
683,252
1,125,600
8,129,232
1,180,976
6,880,273
77,375
3,045
59,110
2,347
21,744
15,464
156,775
1,745
335,908
31,596
8,090,111
186,557,325
2,337,895
757,346
5,036,756
(12,913)
8,119,085
1,542,308
(42,077)
38,109
65,078
9,034
1,612,453
3,482
1,499,264
11,234,286
197,791,611
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
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
012_0800885852907.indd 241
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
241
2017/08/10 20:49:17
SMFG2017 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, 2017
2,337,895
757,346
5,036,756
(12,913)
8,119,085
As of March
31, 2016
2,337,895
757,306
4,534,472
(175,381)
7,454,294
(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, 2017
As of March
31, 2016
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
8,119,085
7,454,294
3,095,242
5,036,756
12,913
—
3,095,202
4,534,472
175,381
—
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, 2017
As of March
31, 2016
3,482
3,206
2,884
2,635
As of March
31, 2017
As of March
31, 2016
3,206
—
—
2,635
—
—
As of March
31, 2017
946,506
24,631,792
33,029
As of March
31, 2016
878,265
25,264,445
46,540
192,234
171,796
As of March
31, 2017
As of March
31, 2016
343,523
443,777
—
—
—
372,622
380,386
—
—
—
—
—
As of March
31, 2017
As of March
31, 2016
314,922
203,274
Income taxes related to above
96,187
61,615
242
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SMFG2017 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, 2017
As of March
31, 2016
218,734
141,659
As of March
31, 2017
As of March
31, 2016
63,001
335,908
31,596
192,234
96,187
125,832
348,190
32,203
171,796
61,615
(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, 2017
As of March
31, 2016
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
4,188
2,137
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)
24,339
9,700
—
—
—
—
24,339
9,700
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, 2017
As of March
31, 2016
(42,077)
55,130
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
Net deferred gains or losses on hedges
(40,588)
57,131
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.
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, 2017
As of March
31, 2016
6,755,428
8,063,281
24,631,792
80,237,322
25,264,445
75,066,080
4,704,931
6,112,667
(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
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SMFG2017 Annual ReportBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
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)
11,419
11,419
—
—
—
—
—
—
7,374
7,374
—
—
—
—
—
—
729,452
620,209
—
—
—
—
—
—
729,452
620,209
673,029
727,520
—
—
80,044
50,000
—
—
80,053
125,000
542,985
522,466
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, 2017
As of March
31, 2016
3,482
1,499,264
2,884
1,531,022
As of March
31, 2017
As of March
31, 2016
172,277
164,550
—
—
234,697
183,267
—
—
54,539
42,036
As of March
31, 2017
10,786,713
8,129,232
As of March
31, 2016
8,571,227
7,006,357
As of March
31, 2017
As of March
31, 2016
449,897
300,000
898,911
655,064
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.
244
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SMFG2017 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,
2017
As of March 31,
2016
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)
173,317,789
197,791,611
162,192,848
186,585,842
—
—
—
—
24,473,822
24,392,993
945,091
172,372,697
625,036
161,567,811
2,059,221
3,492,391
617,273
2,296,889
3,047,557
533,429
—
—
617,273
533,429
555,356
518,520
583,300
459,631
5,588,449
5,468,116
9,660,288
—
674,034
8,467,867
—
52,386
(c)
10,334,322
8,520,253
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
64,061,261
59,207,893
42,687,096
39,001,675
(d)
21,374,165
20,206,217
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)
9,946,179
209,669,634
4.74%
9,031,672
195,762,400
4.61%
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SMFG2017 Annual ReportBasel III Information Liquidity Coverage Ratio 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”).
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Consolidated LCR
As described in the following page, the LCR has remained stable with no significant fluctuation since 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 2017 is set at 80.0% and from 2018 onwards, the minimum
requirement of 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%
LCR of consolidated SMFG exceeds the minimum requirements of LCR for 2017 (80.0%) 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.
3. Composition of High-Quality Liquid Assets
The high-quality liquid assets held by consolidated 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 the following page, 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.
246
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SMFG2017 Annual ReportBasel III Information ■ 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 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
TOTAL
UNWEIGHTED
VALUE
51,081,510
16,411,266
34,670,244
59,937,087
—
52,634,794
TOTAL
WEIGHTED
VALUE
3,960,053
492,520
3,467,533
30,901,940
—
TOTAL
UNWEIGHTED
VALUE
50,713,432
16,496,462
34,216,969
58,105,137
—
50,521,312
TOTAL
WEIGHTED
VALUE
3,917,699
495,072
3,422,627
30,204,667
—
54,047,613
25,012,466
52,699,714
24,799,244
5,889,474
5,889,474
87,369
5,405,423
5,405,423
103,995
20,450,871
7,000,844
19,619,913
6,411,493
1,400,265
523,593
18,527,013
9,203,530
68,466,084
TOTAL
UNWEIGHTED
VALUE
5,583,352
4,850,618
3,743,563
14,177,533
1,283,472
463,399
17,873,042
8,147,945
67,480,804
TOTAL
UNWEIGHTED
VALUE
4,570,709
4,063,964
4,060,759
12,695,432
1,400,265
523,593
5,076,986
6,535,976
1,236,892
49,723,073
TOTAL
WEIGHTED
VALUE
420,934
3,140,446
2,013,511
5,574,891
52,634,794
44,148,182
119.2%
61
1,283,472
463,399
4,664,622
5,432,366
1,225,834
47,296,054
TOTAL
WEIGHTED
VALUE
297,610
2,587,713
2,143,186
5,028,509
50,521,312
42,267,545
119.5%
3
Notes: 1. The data after 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)
2. For the current quarter (from January 1, 2017 to March 31, 2017), the average values are calculated based on daily data in accordance with Notification No. 7 issued by the
Japanese Financial Services Agency in 2015. For attribute information on customers and some data on consolidated subsidiaries, etc., monthly or quarterly data is used.
■ Breakdown of High-Quality Liquid Assets
Item
1 Cash and due from banks
2 Securities
3
of which, government bonds, etc.
4
5
of which, municipal bonds, etc.
of which, other bonds
of which, stocks
6
7 Total high-quality liquid assets (HQLA)
Current Quarter
(From 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
(In million yen)
44,521,425
8,113,369
5,992,859
163,076
295,595
1,661,839
52,634,794
41,140,903
9,380,409
7,281,907
153,649
329,650
1,615,203
50,521,312
Note: The above amounts are the amounts of high-quality liquid assets in accordance with the liquidity regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are the amounts after multiplying factor in the liquidity regulation under the Basel III.
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SMFG2017 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,
2017
As of March 31,
2016
2,110,462
1,967,830
Intra-financial system assets (a + b + c + d):
a. Funds deposited with or lent to other financial institutions and undrawn committed lines extended
293,360
290,434
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
192,960
184,610
291,742
154,250
6,610,354
108,600
8,672
460,341
423,632
303,703
121,293
6,237,931
99,021
8,309
442,652
222,418
1
2
3
4
5
6
7
8
9
Item No.
11
12
Description
FY ended
March 31, 2017
FY ended
March 31, 2016
Payments (settled through the BOJ-NET, the Japanese Banks’ Payment Clearing Network and other
31,291,084
31,745,875
similar settlement systems, excluding intragroup payments)
Underwritten transactions in debt and equity markets (Note 4)
97,279
72,413
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.
248
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SMFG2017 Annual ReportBasel III Information Financial Highlights
Sumitomo Mitsui Banking Corporation
Consolidated
Year ended March 31
For the Year:
2017
2016
Ordinary income ����������������������������������������������������������� ¥ 3,014,455
Ordinary profit ��������������������������������������������������������������
829,419
Profit attributable to owners of parent �������������������������
543,199
Comprehensive income �����������������������������������������������
687,157
¥ 3,059,022
930,332
680,162
143,086
At Year-End:
Millions of yen
2015
¥ 3,199,409
1,198,955
736,904
1,937,374
2014
2013
¥ 3,105,992
1,298,738
785,687
1,174,292
¥ 2,810,681
928,713
734,514
1,373,623
Total net assets ������������������������������������������������������������ ¥ 8,908,192
Total assets ������������������������������������������������������������������
180,946,664
Total capital ratio (International standard) ��������������������
Tier 1 capital ratio (International standard) ������������������
Common equity Tier 1 capital ratio
17.77%
14.61%
(International standard) ����������������������������������������������
Number of employees ��������������������������������������������������
12.89%
45,963
¥ 9,446,193
180,408,672
¥ 10,036,003
177,559,197
¥ 8,640,763
155,824,141
¥ 8,257,091
143,203,127
18�19%
14�58%
13�04%
54,192
17�93%
13�91%
12�61%
50,249
17�08%
13�43%
12�27%
48,824
16�84%
12�69%
11�26%
47,852
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:
2017
2016
Ordinary income ����������������������������������������������������������� ¥ 2,551,931
2,111
1,663,654
816,942
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
2015
¥ 2,370,998
1,872
1,634,284
791,211
2014
2013
¥ 2,342,582
1,972
1,558,184
745,745
¥ 2,121,369
1,823
1,540,095
727,736
¥ 2,277,812
2,589
1,534,271
805,483
49.1%
809,052
52�5%
728,787
48�4%
843,073
47�9%
812,438
47�3%
812,358
reserve for possible loan losses) �����������������������������
Ordinary profit ��������������������������������������������������������������
Net income �������������������������������������������������������������������
846,711
864,022
681,767
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 7,417,182
Total assets ������������������������������������������������������������������
162,281,729
Deposits �����������������������������������������������������������������������
105,590,771
Loans and bills discounted ������������������������������������������
75,585,256
Securities ���������������������������������������������������������������������
24,342,369
Trust assets and liabilities ��������������������������������������������
6,881,408
Loans and bills discounted ��������������������������������������
635,206
Securities �����������������������������������������������������������������
4,156,409
Capital stock ����������������������������������������������������������������
1,770,996
Number of shares issued (in thousands)
Common stock ����������������������������������������������������
Preferred stock ����������������������������������������������������
Dividend payout ratio ���������������������������������������������������
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
32.61%
18.61%
15.05%
13.15%
29,283
728,787
747,892
609,171
¥ 7,756,810
153,641,430
98,839,722
69,276,735
25,602,156
3,394,170
537,839
1,305,284
1,770,996
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
106,248
70
67�02%
19�47%
15�29%
13�44%
28,002
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
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_0800804262908.indd 249
249
2017/08/08 14:56:19
SMBC2017 Annual Report Income Analysis (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Year ended March 31
Interest income �����������������������������������������������������
Interest expenses ��������������������������������������������������
Net interest income ���������������������������������������������������
Trust fees �������������������������������������������������������������������
Fees and commissions �����������������������������������������
Fees and commissions payments ������������������������
Net fees and commissions ����������������������������������������
Trading income������������������������������������������������������
Trading losses �������������������������������������������������������
Net trading income ����������������������������������������������������
Other operating income ����������������������������������������
Other operating expenses�������������������������������������
Net other operating income���������������������������������������
Millions of yen
Domestic
operations
¥932,959
268,069
664,889
3,698
518,029
131,519
386,509
124,615
9,465
115,150
186,519
64,180
122,338
2017
Overseas
operations Elimination
Total
¥804,213
310,868
493,344
—
217,532
40,708
176,824
42,858
17,609
25,248
59,381
18,240
41,141
¥(68,639) ¥1,668,533
531,108
1,137,425
3,698
725,920
169,653
556,266
140,398
—
140,398
245,246
82,079
163,166
(47,829)
(20,809)
—
(9,641)
(2,574)
(7,067)
(27,075)
(27,075)
—
(655)
(341)
(314)
Domestic
operations
¥1,035,709
263,226
772,483
3,587
590,211
117,909
472,302
205,942
5,655
200,286
176,824
80,709
96,115
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)
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 ���������������������������������������������� ¥ 85,019,098
57,680,696
17,666,269
65,133
10,707
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
5,319,862
754,439
Interest-bearing liabilities ������������������������������������������ ¥120,824,550
93,322,272
6,672,747
303,787
628,915
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 ��������������������������������������������������������������������
5,686,151
138,698
8,330,793
146,594
4,595,891
2017
Interest
¥932,959
654,588
207,047
471
61
6,471
5,924
¥268,069
33,601
1,087
193
3,668
4,176
59
114,300
24
90,868
Millions of yen
Average rate
1.10%
1.13
1.17
0.72
0.58
0.12
0.79
0.22%
0.04
0.02
0.06
0.58
0.07
0.04
1.37
0.02
1.98
Average balance
¥ 87,277,238
53,632,502
22,503,531
147,527
32,450
2016
Interest
¥1,035,709
683,057
267,401
861
15
6,694,461
763,613
10,740
5,001
¥119,039,647
84,841,300
7,422,076
2,295,143
1,281,197
6,791,583
145,053
9,157,549
598,174
5,700,673
¥ 263,226
40,376
5,708
1,523
3,714
6,724
203
88,978
573
106,825
Average rate
1�19%
1�27
1�19
0�58
0�05
0�16
0�65
0�22
0�05
0�08
0�07
0�29
0�10
0�14
0�97
0�10
1�87
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 (2017, ¥33,412,267 million; 2016, ¥28,295,713
million).
250
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SMBC2017 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
¥40,424,491
24,341,091
3,745,964
1,319,676
2,198,666
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
—
4,835,758
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 ��������������������������������������������������������������������
¥32,201,103
18,888,908
6,461,498
645,301
3,241,888
—
2,206,493
396,342
—
57,348
2017
Interest
¥804,213
603,092
68,099
11,738
26,255
—
43,587
¥310,868
157,909
66,151
5,399
15,784
—
15,450
6,172
—
2,665
Millions of yen
Average rate
1.99%
2.48
1.82
0.89
1.19
—
0.90
0.97%
0.84
1.02
0.84
0.49
—
0.70
1.56
—
4.65
Average balance
¥37,624,624
22,900,739
2,886,777
918,358
1,521,170
—
5,645,875
¥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
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
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 (2017, ¥2,132,461 million; 2016, ¥1,730,410
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥123,764,394
81,249,659
21,412,234
1,384,809
1,776,977
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
2017
Interest
¥1,668,533
1,215,517
254,119
12,210
23,639
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
5,319,862
5,137,670
6,471
47,157
Interest-bearing liabilities ������������������������������������������ ¥151,354,044
111,761,048
13,134,246
949,088
3,438,407
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 ��������������������������������������������������������������������
5,686,151
2,345,192
7,954,971
146,594
4,653,240
¥ 531,108
189,117
67,238
5,593
16,775
4,176
15,510
78,309
24
93,354
Average rate
1.35%
1.50
1.19
0.88
1.33
0.12
0.92
0.35%
0.17
0.51
0.59
0.49
0.07
0.66
0.98
0.02
2.01
Average balance
¥123,077,998
75,626,679
25,390,309
1,065,886
727,468
2016
Interest
¥1,652,508
1,167,181
302,821
20,457
10,100
6,694,461
6,335,306
10,740
37,097
¥145,790,207
100,632,418
13,924,191
2,820,952
2,389,569
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
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 (2017, ¥35,538,969 million; 2016, ¥30,015,849
million).
013_0800804262908.indd 251
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SMBC2017 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
¥518,029
22,631
118,768
57,510
15,616
5,413
35,253
1,906
60,282
2017
Overseas
operations Elimination
¥(9,641)
(5,496)
(18)
(1,550)
—
—
(1,299)
—
—
¥217,532
118,683
19,881
40,462
—
2
12,500
—
2,013
Total
¥725,920
135,818
138,631
96,422
15,616
5,416
46,453
1,906
62,295
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
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥131,519
29,997
¥ 40,708
9,750
¥(2,574)
(27)
¥169,653
39,720
¥117,909
29,282
¥ 37,190
8,507
¥ (4,310)
(0)
¥150,788
37,789
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
2017
2016
Millions of yen
Domestic
operations
¥124,615
42,276
Overseas
operations Elimination
¥(27,075)
(13,101)
¥42,858
—
Total
¥140,398
29,175
Domestic
operations
¥205,942
62,162
Overseas
operations Elimination
¥(33,549)
(5,795)
¥37,330
—
Total
¥209,722
56,366
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
13,025
69,283
30
—
42,858
—
(155)
(13,818)
—
12,869
98,322
30
115
143,554
110
—
37,330
—
(49)
(27,704)
—
65
153,180
110
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
¥ 9,465
—
¥17,609
13,101
¥(27,075)
(13,101)
¥ —
—
¥ 5,655
—
¥27,894
5,795
¥(33,549)
(5,795)
¥ —
—
—
9,465
—
155
4,353
—
(155)
(13,818)
—
—
—
—
—
5,655
—
49
22,048
—
(49)
(27,704)
—
—
—
—
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
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SMBC2017 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
2017
2016
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 ������������������������������������������������������������������������������������������������������
¥ 68,719,448
22,262,641
7,231,764
98,213,853
6,736,235
¥104,950,089
¥ 12,824,148
7,279,735
106,921
20,210,805
5,859,702
¥ 26,070,508
¥131,020,597
¥ 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
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
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,705,672
119,042
905,549
4,622,344
4,550,621
5,637,877
9,463,729
4,676,312
1,108,202
20,752,415
¥59,541,768
¥ 217,056
1,499,568
19,584,313
2,471,777
¥23,772,715
¥83,314,483
12.94%
0.20
1.52
7.76
7.64
9.47
15.90
7.86
1.86
34.85
100.00%
0.91%
6.31
82.38
10.40
100.00%
—
¥ 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%
—
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_0800804262908.indd 253
253
2017/08/08 14:56:20
SMBC2017 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
2017
¥ 34,428
512,487
14,977
185,250
¥747,144
¥216,375
Millions of yen
2016
¥ 44,732
547,362
12,695
208,691
¥813,481
¥249,567
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
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 8,454,687
90,243
2,739,649
3,676,900
5,144,881
¥20,106,361
¥
—
—
78,031
—
3,997,207
¥ 4,075,239
¥24,181,601
¥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
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 ����������������������������������������������������������� ¥1,793,210
13,179
233
—
Trading securities ��������������������������������������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions �������������
Derivatives of securities related to
2017
2016
Millions of yen
Overseas
operations Elimination
Total
¥906,906
136,723
—
—
¥(33,700) ¥2,666,417
149,902
233
—
—
—
—
Domestic
operations
¥7,094,562
3,348,958
13,573
—
Overseas
operations Elimination
Total
¥942,877
138,744
—
—
¥(56,468) ¥7,980,971
— 3,487,702
13,573
—
—
—
trading transactions ��������������������������������������������
10,586
Trading-related financial derivatives ��������������������� 1,671,117
Other trading assets����������������������������������������������
98,093
97
770,086
—
—
(33,700)
—
10,684
2,407,504
98,093
18,098
3,649,936
63,995
120
804,012
—
—
(56,468)
—
18,218
4,397,481
63,995
Trading liabilities �������������������������������������������������������� ¥1,330,279
4,984
261
Trading securities sold for short sales ������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions
¥834,564
58,334
—
¥(33,700) ¥2,131,143
63,318
261
—
—
¥5,354,889
2,147,529
29,421
¥807,561
43,707
—
¥(56,468) ¥6,105,982
— 2,191,237
29,421
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
8,633
Trading-related financial derivatives ��������������������� 1,316,400
Other trading liabilities ������������������������������������������
—
91
776,138
—
—
(33,700)
—
8,724
2,058,838
—
17,275
3,160,662
—
80
763,773
—
—
(56,468)
—
17,356
3,867,967
—
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.
254
013_0800804262908.indd 254
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SMBC2017 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 ������������������������������������������� ¥ 948,120
2017
International
operations
¥705,899
Interest expenses ���������������������������������������
43,940
471,141
Net interest income ����������������������������������������
904,180
Trust fees ��������������������������������������������������������
1,927
Fees and commissions �������������������������������
343,363
Fees and commissions payments ��������������
137,214
Net fees and commissions �����������������������������
206,149
Trading income �������������������������������������������
656
Trading losses ���������������������������������������������
—
Net trading income �����������������������������������������
656
Other operating income ������������������������������
51,414
Other operating expenses ��������������������������
10,794
Net other operating income����������������������������
40,619
Gross banking profit ��������������������������������������� ¥1,153,533
Gross banking profit rate (%) �������������������������
1.65%
234,758
184
189,584
47,051
142,533
59,366
0
59,365
94,156
20,877
73,278
¥510,121
Millions of yen
Total
¥1,635,774
[18,246]
496,834
[18,246]
1,138,939
2,111
532,948
184,265
348,682
60,022
—
60,022
145,570
31,671
113,898
¥1,663,654
Domestic
operations
¥ 854,216
2016
International
operations
¥581,173
66,604
345,208
787,611
2,550
347,923
126,929
220,993
5,102
—
5,102
39,882
25,978
13,903
¥1,030,162
235,964
38
179,392
41,867
137,525
61,491
—
61,491
83,723
14,634
69,089
¥504,108
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
1.21%
1.54%
1�43%
1�25%
1�42%
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. As net figures are shown for trading income and losses, figures in the total column of trading income and trading losses are less than those in the total
column of domestic operations and international operations, respectively, for the year ended March 31, 2017.
4. 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 ����������������������������������� ¥69,501,871
[3,603,100]
48,606,540
14,418,571
7,236
0
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
2,393,767
—
9,456
Interest-bearing liabilities ������������������������������� ¥96,792,184
79,873,541
6,856,486
10,462
30,388
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
3,052,165
4,794,088
—
1,079,796
Millions of yen
2017
Interest
¥948,120
[18,246]
505,631
387,399
9
(0)
812
—
7
¥ 43,940
8,926
1,143
(6)
0
316
18,560
—
13,944
Average rate
1.36%
1.04
2.68
0.12
(0.49)
0.03
—
0.07
0.04%
0.01
0.01
(0.05)
0.00
0.01
0.38
—
1.29
Average balance
¥71,694,907
[4,503,590]
45,425,766
19,490,418
53,089
2
1,842,235
—
12,067
¥94,110,848
73,328,279
7,701,125
1,655,876
38,649
2,761,590
6,376,138
18,218
1,457,179
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
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2017, ¥31,403,755 million; 2016, ¥26,578,642
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_0800804262908.indd 255
255
2017/08/08 14:56:20
SMBC2017 Annual Report Income Analysis (Non-consolidated)
International Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥41,969,137
24,161,450
7,270,938
947,474
587,084
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
112,951
5,565,821
Interest-bearing liabilities ������������������������������� ¥41,329,522
[3,603,100]
19,096,890
6,026,377
995,318
1,939,558
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
666,134
3,200,740
3,210,055
2017
Interest
¥705,899
515,390
100,895
(189)
9,554
349
39,151
¥471,141
[18,246]
133,958
63,404
6,838
9,990
3,104
95,707
76,335
Millions of yen
Average rate
1.68%
2.13
1.38
(0.01)
1.62
Average balance
¥40,309,868
22,679,209
6,529,804
620,731
497,349
2016
Interest
¥581,173
424,239
80,365
4,057
5,540
Average rate
1�44%
1�87
1�23
0�65
1�11
0.30
0.70
1.13%
0.70
1.05
0.68
0.51
0.46
2.99
2.37
283,887
6,548,702
1,195
30,854
¥39,908,088
[4,503,590]
16,198,658
7,392,396
868,088
1,128,307
¥345,208
[13,021]
71,524
42,343
4,085
4,087
1,031,227
2,139,371
3,659,097
2,989
69,366
87,852
0�42
0�47
0�86%
0�44
0�57
0�47
0�36
0�28
3�24
2�40
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2017, ¥115,337 million; 2016, ¥104,906
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 ����������������������������������� ¥107,867,908
72,767,990
21,689,510
954,711
587,085
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
2,506,719
—
5,575,277
2017
Interest
¥1,635,774
1,021,022
488,294
(180)
9,554
1,161
—
39,158
Interest-bearing liabilities ������������������������������� ¥134,518,606
98,970,431
12,882,863
1,005,781
1,969,947
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
3,718,299
7,994,829
—
4,289,851
¥ 496,834
142,884
64,548
6,831
9,990
3,421
114,268
—
90,279
Millions of yen
Average rate
1.51%
1.40
2.25
(0.01)
1.62
Average balance
¥107,501,185
68,104,976
26,020,222
673,821
497,352
2016
Interest
¥1,422,367
980,604
326,077
4,165
5,540
Average rate
1�32%
1�43
1�25
0�61
1�11
0.04
—
0.70
0.36%
0.14
0.50
0.67
0.50
0.09
1.42
—
2.10
2,126,123
—
6,560,770
3,185
—
30,860
¥129,515,345
89,526,938
15,093,522
2,523,964
1,166,957
¥ 398,791
93,258
48,250
4,949
4,116
3,792,817
8,515,510
18,218
5,116,277
4,501
88,235
12
104,458
0�14
—
0�47
0�30%
0�10
0�31
0�19
0�35
0�11
1�03
0�06
2�04
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2017, ¥31,519,092 million; 2016, ¥26,683,548
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.
256
013_0800804262908.indd 256
2017/08/08 14:56:20
SMBC2017 Annual Report Income Analysis (Non-consolidated)
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)
¥(26,129)
33,088
(63,939)
(68)
(0)
187
—
(1)
¥ 1,217
731
(585)
(275)
(5)
30
(4,681)
(6)
(4,300)
Volume-related
increase
(decrease)
¥ 24,712
28,963
9,669
(65)
1,129
(587)
(4,630)
¥ 12,689
14,553
(7,824)
665
3,719
(1,058)
(2,198)
31,736
(10,685)
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)
¥ 4,868
65,427
(54,271)
(53)
1,129
176
—
(4,635)
¥ 15,904
10,651
(7,066)
(2,977)
3,590
(86)
(2,198)
(5,395)
(6)
(16,872)
2017
Rate-related
increase
(decrease)
¥120,033
(83,821)
205,626
(30)
(0)
(1,365)
—
1
¥ (23,881)
(13,539)
(4,178)
(595)
(23)
(1,225)
4,374
(6)
1,639
2017
Rate-related
increase
(decrease)
¥100,014
62,187
10,860
(4,181)
2,884
Millions of yen
Net
increase
(decrease)
¥ 93,904
(50,733)
141,687
(99)
(0)
(1,177)
—
0
¥ (22,664)
(12,807)
(4,763)
(870)
(28)
(1,195)
(307)
(12)
(2,660)
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)
Millions of yen
Net
increase
(decrease)
¥124,726
91,150
20,530
(4,246)
4,013
Volume-related
increase
(decrease)
¥34,617
35,201
2,075
1,642
940
(258)
12,928
(845)
8,297
(50)
43
¥25,278
10,103
(5,510)
1,018
(340)
249
(98)
4,927
20,741
¥125,932
62,433
21,061
2,753
5,903
114
1,702
26,340
(11,517)
Millions of yen
Net
increase
(decrease)
¥213,406
40,417
162,217
(4,346)
4,013
(2,023)
—
8,297
¥ 98,043
49,626
16,298
1,882
5,874
(1,080)
1,702
26,033
(12)
(14,178)
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
¥113,242
47,880
28,886
2,087
2,183
1,173
3,900
(5,395)
(831)
2017
Rate-related
increase
(decrease)
¥208,537
(25,009)
216,488
(4,293)
2,884
(2,200)
—
12,933
¥ 82,139
38,974
23,365
4,859
2,284
(993)
3,900
31,428
(6)
2,694
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
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)
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
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
Note: Volume/rate variance is prorated according to changes in volume and rate.
013_0800804262908.indd 257
257
2017/08/08 14:56:20
SMBC2017 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
¥343,363
12,261
93,073
11,906
10,294
5,001
15,634
2017
International
operations
¥189,584
108,578
39,246
1,293
—
—
19,041
Total
¥532,948
120,840
132,320
13,199
10,294
5,001
34,676
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
Fees and commissions payments ������������������
Remittances and transfers �������������������������
¥137,214
24,532
¥ 47,051
13,145
¥184,265
37,678
¥126,929
23,534
¥ 41,867
12,386
¥168,796
35,920
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
¥656
625
2017
International
operations
¥59,366
—
Total
¥60,022
625
Domestic
operations
¥5,102
4,992
2016
International
operations
¥61,491
—
Total
¥66,593
4,992
12,869
12,869
—
—
30
46,496
—
¥ —
—
¥
—
—
—
0
—
—
—
0
46,496
30
¥ —
—
—
—
—
—
—
109
¥ —
—
—
—
—
65
65
61,424
0
¥ —
—
—
—
—
61,424
110
¥ —
—
—
—
—
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
¥40,619
18,236
559
—
2017
International
operations
¥73,278
25,483
9,489
41,513
Total
¥113,898
43,720
10,048
41,513
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
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 �����������������������������������������������������������������������������������������������������������������
2017
¥291,713
(505)
46,299
100,552
60,618
4,664
5,275
5,120
5,357
6,997
14,890
50,481
31,676
193,802
¥816,942
Millions of yen
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
258
013_0800804262908.indd 258
2017/08/08 14:56:21
SMBC2017 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
2017
2016
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 ������������������������������������������������������������������������������������������������������
¥ 64,641,628
18,369,138
1,689,657
84,700,425
6,844,357
¥ 91,544,782
¥ 9,615,086
6,384,596
4,890,663
20,890,346
5,418,734
¥ 26,309,080
¥117,853,863
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
70.6% ¥ 58,803,480
19,099,675
20.1
1,648,767
1.8
79,551,923
92.5
7,090,524
7.5
100.0% ¥ 86,642,448
36.5% ¥ 9,288,738
5,083,772
24.3
4,915,287
18.6
19,287,798
79.4
7,337,814
20.6
100.0% ¥ 26,625,613
¥113,268,061
—
67�9%
22�0
1�9
91�8
8�2
100�0%
34�9%
19�1
18�4
72�4
27�6
100�0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2017
2016
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 ������������������������������������������������������������������������������������������������������
¥ 60,235,051
18,777,737
860,752
79,873,541
6,856,486
¥ 86,730,027
¥ 8,982,190
5,537,372
4,577,327
19,096,890
6,026,377
¥ 25,123,268
¥111,853,295
¥ 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
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 �����������������������������������������������������������������������������������������������������������������
2017
¥43,642,069
44,098,250
¥87,740,319
49.7%
50.3
100.0%
2016
¥42,312,525
39,822,162
¥82,134,687
51�5%
48�5
100�0%
Millions of yen
Note: The figures above exclude negotiable certificates of deposit and Japan offshore banking accounts.
013_0800804262908.indd 259
259
2017/08/08 14:56:21
SMBC2017 Annual Report Deposits (Non-consolidated)
Balance of Investment Trusts, Classified by Type of Customer
March 31
Individual ���������������������������������������������������������������������������������������������������������
Corporate ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2017
¥1,835,300
371,785
¥2,207,085
2016
¥2,077,514
364,493
¥2,442,007
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.
2017
¥11,119,585
6,354,221
6,260
4,759,103
4,482,910
3,532,410
9,700
940,799
5,335,550
4,869,745
3,650
462,154
1,530,508
1,466,936
5,300
58,271
926,357
909,652
12,189
4,515
1,358,787
553,203
645,832
159,751
¥24,753,697
17,686,169
682,931
6,384,596
Millions of yen
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
260
013_0800804262908.indd 260
2017/08/08 14:56:21
SMBC2017 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
2017
2016
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 457,036
39,231,045
10,576,844
74,810
¥50,339,737
¥ 1,158,112
23,899,932
187,473
—
¥25,245,518
¥75,585,256
¥ 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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2017
2016
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 508,124
38,496,524
9,528,666
73,225
¥48,606,540
¥ 1,060,545
22,896,460
204,444
—
¥24,161,450
¥72,767,990
¥ 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
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 �����������������������������������������������������������������������������������������������������������������
2017
¥21,140,418
54,444,837
¥75,585,256
28.0%
72.0
100.0%
2016
¥20,875,436
48,401,299
¥69,276,735
30�1%
69�9
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 �����������������������������������������������������������������������������������������������������������������
2017
¥ 1,546,947
1,189,280
—
6,972,692
1,227,878
10,936,798
23,390,149
41,258,308
¥75,585,256
2016
¥ 570,049
1,170,056
—
6,766,633
1,278,085
9,784,824
23,589,094
35,902,816
¥69,276,735
013_0800804262908.indd 261
261
2017/08/08 14:56:21
SMBC2017 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.
2017
¥12,599,687
12,984,919
10,182,892
2,802,026
12,439,572
9,885,770
2,553,801
5,818,610
4,634,969
1,183,641
20,978,148
19,343,838
1,634,310
10,764,318
10,764,318
—
¥75,585,256
Millions of yen
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
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 7,279,849
115,017
701,698
4,307,167
4,115,200
7,352,196
6,301,402
1,650,512
3,994,039
934,334
17,751,449
¥54,502,869
¥ 206,772
1,581,991
17,609,453
1,684,170
¥21,082,386
¥75,585,256
13.4%
0.2
1.3
7.9
7.5
13.5
11.6
3.0
7.3
1.7
32.6
100.0%
1.0%
7.5
83.5
8.0
100.0%
—
¥ 5,968,107
121,805
711,002
4,294,743
3,949,130
7,042,440
5,970,654
1,043,531
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
11�9
2�1
7�9
2�2
31�8
100�0%
0�8%
7�1
82�7
9�4
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) �������������������������������������������������������������������������������������������������������������
2017
¥54,502,869
34,082,987
62.5%
2016
¥50,072,362
33,860,723
67�6%
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.)
262
013_0800804262908.indd 262
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SMBC2017 Annual Report Loans (Non-consolidated)
Consumer Loans Outstanding
March 31
Consumer loans ����������������������������������������������������������������������������������������������
Housing loans ����������������������������������������������������������������������������������������������
Residential purpose ���������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
2017
¥13,873,169
12,912,398
10,302,283
960,771
2016
¥14,148,084
13,207,194
10,598,147
940,889
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, 2017
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
¥220,963
[334]
134,527
[180]
39,450
[99]
1,179
¥356,670
[515]
* Transfer from reserves by reversal or origination method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
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
¥258,956
Decrease during the fiscal year
Objectives
¥ —
Others
¥220,963*
Balance at end
of the fiscal year
¥258,956
129,764
22,699
111,827*
129,764
37,131
12,067
27,383*
37,131
1,005
¥389,726
—
¥22,699
1,179*
¥333,971
1,005
¥389,726
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
Write-Off of Loans
Year ended March 31
Write-off of loans ���������������������������������������������������������������������������������������������
2017
¥462
2016
¥805
Millions of yen
Note: Write-off of loans include amount of direct reduction.
Specific Overseas Loans
March 31
Azerbaijan ��������������������������������������������������������������������������������������������������������
Egypt ���������������������������������������������������������������������������������������������������������������
Mongolia ����������������������������������������������������������������������������������������������������������
Argentina ���������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Ratio of the total amounts to total assets �������������������������������������������������������
Number of countries ����������������������������������������������������������������������������������������
2017
¥ 8,089
7,072
133
26
¥15,321
0.01%
4
2016
¥10,631
9,112
—
11
¥19,755
0�01%
3
Millions of yen
013_0800804262908.indd 263
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2017/08/08 14:56:21
SMBC2017 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
2017
¥ 31,029
381,651
12,593
89,319
¥514,594
¥103,671
Millions of yen
2016
¥ 39,906
410,020
4,574
106,071
¥560,573
¥121,686
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.
Non-performing loans (NPLs) based on the Financial Reconstruction Act
March 31
Bankrupt and quasi-bankrupt assets ��������������������������������������������������������������
Doubtful assets �����������������������������������������������������������������������������������������������
Substandard loans ������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Normal assets �������������������������������������������������������������������������������������������������
Grand Total ������������������������������������������������������������������������������������������������������
Amount of direct reduction ������������������������������������������������������������������������������
2017
¥ 118,420
347,350
101,913
567,684
86,410,604
¥86,978,288
¥ 109,818
Notes: Definition of NPLs categories
Millions of yen
2016
¥ 135,604
376,366
110,646
622,617
79,046,057
¥79,668,674
¥ 129,826
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
Non-performing loans (NPLs) based on the Financial Reconstruction Act, and Risk-Monitored Loans
Category of borrowers under
self-assessment
NPLs 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
264
013_0800804262908.indd 264
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SMBC2017 Annual Report Classification based on Self-Assessment, and the Financial Reconstruction Act, and Write-Offs/Reserves
Loans (Non-consolidated)
NPLs 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
¥118.4
¥88.1
¥30.4
Direct
write-offs
(Note 1)
¥33.9
(Note 2)
100%
(Note 3)
March 31, 2017
Category of
borrowers under
self-assessment
Bankrupt Borrowers
Effectively Bankrupt
Borrowers
Potentially
Bankrupt
Borrowers
Borrowers
Requiring
Caution
Doubtful assets (2)
¥347.4
Substandard loans (3)
¥101.9
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥86,410.6
NPL ratio (A) / (4)
0.65%
Total
(4)
¥86,978.3
(A) = (1) + (2) + (3)
¥567.7
Portion of claims secured by
collateral or guarantees, etc. (6)
¥203.2
Necessary
amount
reserved
¥144.2
Portion of substandard loans
secured by collateral or
guarantees, etc. (7)
¥48.7
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)
¥339.9
Unsecured portion
(D) = ( A ) – (C)
Specific
reserve
General
reserve
¥95.5
(Note 2)
66.24%
(Note 3)
General reserve
for substandard
loans ¥15.8
¥259.3
(Note 5)
¥1.0
¥389.7
¥145.2
¥227.8
11.35%
(Note 3)
31.18%
(Note 3)
6.43%
10.27%
[
]
(Note 4)
0.12%
(Note 4)
Reserve ratio
(B) / (D)
63.76%
(Note 6)
Coverage ratio { ( B) + (C) } / (A)
85.46%
Notes: 1. Includes amount of direct reduction totaling ¥109.8 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Act. (Bankrupt/Effectively Bankrupt Borrowers: ¥3.5
billion; Potentially Bankrupt Borrowers: ¥4.1 billion)
3. Reserve ratios for claims on Bankrupt/Effectively Bankrupt Borrowers, Potentially Bankrupt Borrowers, Substandard Borrowers, and Borrowers Requiring
Caution: The proportion of each category’s total unsecured claims covered by reserve for possible loan losses.
4. Reserve ratios for claims on Normal Borrowers and Borrowers Requiring Caution (excluding claims to Substandard Borrowers): The proportion of each
category’s total claims covered by reserve for possible loan losses. The reserve ratio for unsecured claims on Borrowers Requiring Caution (excluding
claims to Substandard Borrowers) is shown in brackets.
5. Includes Specific reserve for Borrowers Requiring Caution totaling ¥0.4 billion.
6. The proportion of the reserve to the claims, excluding the portion secured by collateral or guarantees, etc.
Off-Balancing NPLs
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
March 31, 2015
➀
¥ 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
➁
¥135�6
376�4
¥512�0
Fiscal 2016
New occurrences Off-balanced
¥ (61�6)
(156�4)
¥(218�0)
¥ 44�4
127�4
¥171�8
March 31, 2017
➂
¥118�4
347�4
¥465�8
Billions of yen
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
Increase/
Decrease
➁ – ➀
¥ 42�6
(178�7)
¥(136�1)
Increase/
Decrease
➂ – ➁
¥(17�2)
¥(29�0)
¥(46�2)
Notes: 1. The off-balancing (also known as “final disposal”) of NPLs 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 2016. Amount of ¥23.6 billion in fiscal 2016, recognized as “new occurrences” in the first half of the term, was included in the amounts off-balanced
in the second half.
013_0800804262908.indd 265
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2017/08/08 14:56:21
SMBC2017 Annual Report
Securities (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 8,009,687
70,545
2,519,027
4,164,031
1,028,654
/
/
¥15,791,947
¥
—
—
—
—
8,550,422
5,586,975
2,963,447
¥ 8,550,422
¥24,342,369
¥ 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
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2017
2016
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 �����������������������������������������������������������������������������������������������������������������
¥ 8,088,171
47,783
2,400,500
2,953,233
928,882
/
/
¥14,418,571
¥
—
—
—
—
7,270,938
4,418,229
2,852,709
¥ 7,270,938
¥21,689,510
¥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
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
266
013_0800804262908.indd 266
2017/08/08 14:56:21
SMBC2017 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 �����������������������������������������������������������������������������������������
2017
¥ 790,044
—
312,421
1,705,317
1,675,557
—
3,679,481
53
647,132
1,515,791
1,476,309
893
3,177,920
21,175
681,855
532,094
513,436
1,616
52,260
—
276,128
389,719
317,482
6,092
170,260
49,286
399,796
984,714
868,504
6,225
139,720
30
201,692
954,447
735,685
108,214
—
—
—
4,164,031
3,496,992
—
2,840,404
¥8,009,687
70,545
2,519,027
4,164,031
9,579,077
5,586,975
2,963,447
Securities (Non-consolidated)
Millions of yen
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
013_0800804262908.indd 267
267
2017/08/08 14:56:22
SMBC2017 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 ����������������������������������������������������������������
2017
0.53%
11.38
0.42
8.98
Percentage
2016
0�48%
9�49
0�39
7�73
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
2017
2016
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) ��������������������������������������������������������������������������������������������������������
1.36%
0.70
0.66
1.68%
1.56
0.12
1.51%
0.97
0.54
1�19%
0�74
0�45
1�44%
1�27
0�17
1�32%
0�92
0�40
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
2017
2016
¥ 50,339,737
91,544,782
¥ 46,280,872
86,642,448
54.98%
56.04
53�41%
56�06
¥ 25,245,518
26,309,080
¥ 22,995,862
26,625,613
95.95%
96.17
86�36%
96�13
¥ 75,585,256
117,853,863
¥ 69,276,735
113,268,061
64.13%
65.05
61�16%
65�09
268
013_0800804262908.indd 268
2017/08/08 14:56:22
SMBC2017 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
2017
2016
¥ 15,791,947
91,544,782
¥ 17,727,073
86,642,448
17.25%
16.62
20�46%
24�05
¥ 8,550,422
26,309,080
¥ 7,875,082
26,625,613
32.49%
28.94
29�57%
27�67
¥ 24,342,369
117,853,863
¥ 25,602,156
113,268,061
20.65%
19.39
22�60%
24�87
013_0800804262908.indd 269
269
2017/08/08 14:56:22
SMBC2017 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, 2017
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, 2017
Sumitomo Mitsui Financial Group, Inc� ����������������������������������������������������������
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2017
Sumitomo Mitsui Banking Corporation �����������������������������������������������������������
Number of shares
70,001
Percentage of
shares outstanding
100�00%
Percentage of
shares outstanding
100�00%
270
013_0800804262908.indd 270
2017/08/08 14:56:22
SMBC2017 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) �������������������������������������������������������
2017
29,283
36-3
13-1
¥8,148
2016
28,002
36-6
13-4
¥8,301
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 �����������������������������������������������������������������������������������������������������������������
2017
506
431
1
18
20
4
980
2016
506
469
2
17
17
5
1,016
Notes: 1. “Main offices and branches” includes the International Business Operations Dept. (2017, 2 branches; 2016, 2 branches), specialized deposit account
branches (2017, 46 branches; 2016, 46 branches) and ATM administration branches (2017, 17 branches; 2016, 17 branches).
2. “Subbranches” includes Corporate Business Office, etc.
Number of Automated Service Centers
March 31
Automated service centers������������������������������������������������������������������������������
2017
48,201
2016
46,408
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2017
2016
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
410,484
¥ 496,678,416
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
305,267
¥ 894,717,286
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
2,049
¥ 4,898,249
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
737
¥ 1,640,568
¥1,397,934,521
400,108
¥ 567,440,690
302,632
¥ 968,425,075
2,240
¥ 5,425,339
797
¥ 1,710,056
¥1,543,001,161
013_0800804262908.indd 271
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2017/08/08 14:56:22
SMBC2017 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
2017
$1,930,715
1,713,670
$ 931,198
39,779
$4,615,364
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 �����������������������������������������������������������������������������������������������������������������
2017
¥ 74,235
89,431
—
48,461
24,128
¥ 236,256
813,273
6,516,032
¥7,565,562
2016
$2,294,970
1,777,561
$ 901,403
30,044
$5,003,979
2016
¥ 26,695
122,716
—
55,060
21,074
¥ 225,547
762,878
5,748,664
¥6,737,089
272
013_0800804262908.indd 272
2017/08/08 14:56:22
SMBC2017 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 ��������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Others ������������������������������������������������������������������������������������������������������
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 ����������������������������������������������������������������������������������������������
2017
¥ 635,206
635,206
4,156,409
126,392
3,990,300
—
39,716
38,583
20,211
759,095
11,906
747,188
1,215
—
1,158,780
111,699
111,699
208
208
¥6,881,408
¥1,225,851
1,855,753
100,000
20,211
420,242
3,259,349
¥6,881,408
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
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
013_0800804262908.indd 273
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SMBC2017 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 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
6,534,395
3,519,653
3,045,979
—
31,237
—
—
1,154,101
183,880
13,024
13,024
6,955,707
4,263,087
2,909,898
—
217,277
—
—
810,245
175,353
5,276
5,276
288,525
540,163
6 Common Equity Tier 1 capital: instruments and reserves
(A)
7,885,402
7,946,582
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
215,215
43,542
171,672
53,803
10,885
42,918
266,335
110,209
156,126
177,557
73,473
104,084
1,297
324
927
618
(30,148)
—
46,740
2,761
172,582
24
—
(7,537)
—
11,685
690
43,145
6
—
38,273
15,573
30,051
5,089
83,065
29
—
25,515
10,382
20,034
3,392
55,376
19
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
408,473
439,345
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,476,928
7,507,237
274
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SMBC2017 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
(Millions of yen, except percentages)
As of March 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
450,000
300,000
—
24,315
607,479
607,479
—
7,117
7,117
1,088,912
—
17,660
698,497
698,497
—
23,477
23,477
1,039,636
—
—
—
—
—
—
—
—
—
—
—
—
64,035
16,008
48,032
32,021
23,591
11,906
11,685
—
—
(E)
87,626
(F)
1,001,285
102,270
77,045
20,034
5,191
—
150,303
889,332
(G)
8,478,214
8,396,570
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
—
—
905,332
—
5,039
873,368
873,368
—
13,348
6,900
6,448
177,022
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
170,772
6,250
1,974,111
(H)
—
—
655,064
—
3,069
1,220,717
1,220,717
—
7,666
7,666
—
319,291
306,445
12,845
2,205,808
014_0800885852907.indd 275
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2017/08/10 14:19:31
SMBC2017 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 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
—
—
120,000
30,000
75,000
50,000
20,744
20,744
140,744
(I)
51,809
51,809
126,809
(J)
1,833,366
2,078,998
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
10,311,580
10,475,569
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 the Tier 2 capital of Other Financial Institutions (net of
eligible short positions)
60 Risk weighted assets
Capital ratio (consolidated)
32,764
10,307
11,846
9,914
58,545
24,719
15,658
16,156
(L)
58,004,379
57,558,088
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)
12.89%
14.61%
17.77%
400,680
523,446
—
4,715
6,900
20,271
6,448
301,311
618,928
—
13.04%
14.58%
18.19%
445,253
729,943
—
3,700
7,666
24,487
—
293,681
742,714
—
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)
1,017,264
—
1,220,717
31,434
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2017
4,640,350
As of March 31,2016
4,604,647
276
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SMBC2017 Annual ReportSMBCBasel III Information
■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2016 and 2017)
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,
2017
As of
March 31,
2016
44,992,414
1,872,144
2,199,733
3,609,903
4,265,954
2,666,417
0
24,181,601
83,314,483
1,722,104
282,505
3,586,135
1,121,670
339,674
310,588
59,928
6,927,918
(506,515)
180,946,664
118,424,659
12,595,937
844,519
2,737,947
3,190,161
2,312,289
2,131,143
11,981,546
718,940
—
3,987,749
1,180,976
4,524,079
34,990
922
16,788
867
1,189
15,464
40
—
378,740
31,596
6,927,918
172,038,471
1,770,996
1,958,660
3,045,979
(210,003)
6,565,632
1,397,396
(39,174)
38,041
35,589
10,773
1,442,626
276
899,656
8,908,192
180,946,664
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
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
014_0800885852907.indd 277
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
277
2017/08/10 14:19:31
SMBC2017 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, 2017
As of March
31, 2016
1,770,996
1,770,996
1,958,660
2,702,093
3,045,979
2,909,898
(210,003)
(210,003)
6,565,632
7,172,985
(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, 2017
As of March
31, 2016
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
6,565,632
7,172,985
3,519,653
3,045,979
—
—
4,263,087
2,909,898
—
—
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, 2017
339,674
24,181,601
23,744
As of March
31, 2016
526,112
25,153,750
36,559
94,399
118,778
As of March
31, 2017
As of March
31, 2016
54,427
214,591
—
—
—
183,682
260,210
—
—
—
—
—
As of March
31, 2017
As of March
31, 2016
310,588
198,637
94,860
60,195
As of March
31, 2017
As of March
31, 2016
215,728
138,441
(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
278
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2017/08/10 14:19:31
SMBC2017 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, 2017
As of March
31, 2016
59,928
378,740
31,596
94,399
94,860
66,570
275,887
32,203
118,778
60,195
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
4-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
1,621
1,545
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)
4,715
3,700
—
—
—
—
4,715
3,700
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, 2017
As of March
31, 2016
(39,174)
61,781
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
Net deferred gains or losses on hedges
(37,685)
63,789
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, 2017
As of March
31, 2016
2,666,417
7,980,971
24,181,601
83,314,483
25,153,750
77,331,124
2,131,143
6,105,982
(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_0800885852907.indd 279
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2017/08/10 14:19:31
SMBC2017 Annual ReportSMBCBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
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)
30
30
—
—
—
—
—
—
49
49
—
—
—
—
—
—
400,680
445,253
—
—
—
—
—
—
400,680
445,253
753,490
934,997
—
—
80,044
150,000
—
—
80,053
125,000
523,446
729,943
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, 2017
As of March
31, 2016
276
899,656
249
922,549
As of March
31, 2017
As of March
31, 2016
183,880
175,353
—
—
24,315
17,660
—
5,039
—
3,069
As of March
31, 2017
11,981,546
As of March
31, 2016
8,058,848
As of March
31, 2017
As of March
31, 2016
450,000
300,000
905,332
655,064
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.
280
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SMBC2017 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,
2017
As of March 31,
2016
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)
162,047,155
180,946,664
157,139,218
180,408,672
—
—
—
—
18,899,509
23,269,453
453,155
161,594,000
413,963
156,725,255
1,970,160
2,620,126
617,273
2,318,694
3,050,084
533,429
—
—
617,273
533,429
121,281
108,987
583,300
459,631
4,602,580
5,492,448
5,809,637
—
652,754
8,459,158
—
52,367
(c)
6,462,392
8,511,525
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
58,401,965
53,385,837
38,860,189
34,955,755
(d)
19,541,775
18,430,082
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)
8,478,214
192,200,748
4.41%
8,396,570
189,159,312
4.43%
014_0800885852907.indd 281
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SMBC2017 Annual ReportSMBCBasel III Information Liquidity Coverage Ratio 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”).
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Consolidated LCR
As described in the following page, the LCR has remained stable with no significant fluctuation since 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 2017 is set at 80.0% and from 2018 onwards, the minimum
requirement of 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%
LCR of consolidated SMBC exceeds the minimum requirements of LCR for 2017 (80.0%) 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.
3. Composition of High-Quality Liquid Assets
The high-quality liquid assets held by consolidated 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 the following page, 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.
282
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SMBC2017 Annual ReportSMBCBasel III Information ■ 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 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
TOTAL
UNWEIGHTED
VALUE
51,081,614
16,411,311
34,670,303
59,481,399
—
51,485,537
TOTAL
WEIGHTED
VALUE
3,960,060
492,522
3,467,538
30,438,015
—
TOTAL
UNWEIGHTED
VALUE
50,713,556
16,496,501
34,217,056
57,433,719
—
49,176,809
TOTAL
WEIGHTED
VALUE
3,917,709
495,073
3,422,636
29,524,839
—
53,668,873
24,625,490
52,037,266
24,128,386
5,812,526
5,812,526
74,831
5,396,453
5,396,453
73,077
20,385,768
6,815,351
19,533,231
6,214,966
1,136,259
523,593
18,725,916
5,572,123
62,619,566
TOTAL
UNWEIGHTED
VALUE
1,854,464
4,392,564
2,436,594
8,683,623
1,018,196
462,610
18,052,424
4,771,714
61,583,853
TOTAL
UNWEIGHTED
VALUE
1,587,334
3,632,382
2,842,287
8,062,003
1,136,259
523,593
5,155,499
4,185,959
1,081,067
46,555,284
TOTAL
WEIGHTED
VALUE
419,638
2,891,510
1,445,130
4,756,279
51,485,537
41,799,005
123.1%
61
1,018,196
462,610
4,734,160
3,306,382
1,068,807
44,105,779
TOTAL
WEIGHTED
VALUE
296,599
2,356,547
1,551,665
4,204,811
49,176,809
39,900,968
123.2%
3
Notes: 1. The data after 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)
2. For the current quarter (from January 1, 2017 to March 31, 2017), the average values are calculated based on daily data in accordance with Notification No. 7 issued by the
Japanese Financial Services Agency in 2015. For attribute information on customers and some data on consolidated subsidiaries, etc., monthly or quarterly data is used.
■ Breakdown of High-Quality Liquid Assets
Item
1 Cash and due from banks
2 Securities
3
of which, government bonds, etc.
4
5
of which, municipal bonds, etc.
of which, other bonds
of which, stocks
6
7 Total high-quality liquid assets (HQLA)
Current Quarter
(From 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
(In million yen)
43,777,338
7,708,199
5,921,637
101,459
235,780
1,449,323
51,485,537
40,186,702
8,990,107
7,200,237
95,335
291,728
1,402,806
49,176,809
Note: The above amounts are the amounts of high-quality liquid assets in accordance with the liquidity regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are the amounts after multiplying factor in the liquidity regulation under the Basel III.
014_0800885852907.indd 283
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SMBC2017 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 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
5,997,169
3,337,824
2,690,582
—
31,237
—
—
1,110,652
—
6,228,421
4,031,192
2,414,507
—
217,277
—
—
785,705
—
277,663
523,803
6 Common Equity Tier 1 capital: instruments and reserves
(A)
7,107,822
7,014,126
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
128,279
—
128,279
32,069
—
32,069
91,707
—
91,707
61,138
—
61,138
—
—
—
—
(28,183)
23,124
46,740
—
152,821
—
—
(7,045)
5,781
11,685
—
38,205
—
—
30,158
43,929
30,051
—
116,591
—
—
20,105
29,286
20,034
—
77,727
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
322,783
312,437
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
6,785,039
6,701,689
284
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SMBC2017 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 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
450,000
300,000
—
607,479
(160)
(160)
1,057,318
—
698,497
(268)
(268)
998,229
—
—
—
—
—
—
—
—
—
—
—
—
61,008
15,252
45,756
30,504
14,575
11,685
2,890
—
75,584
34,677
20,034
14,643
—
80,434
981,733
917,795
(E)
(F)
(G)
7,766,772
7,619,484
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
—
—
—
—
905,332
656,085
—
—
873,744
1,210,344
—
—
—
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
175,432
170,218
5,214
1,954,510
(H)
014_0800885852907.indd 285
—
—
—
310,455
299,682
10,772
2,176,885
285
2017/08/10 14:19:32
SMBC2017 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 31,2017
Amounts
excluded
under
transitional
arrangements
As of March 31,2016
Amounts
excluded
under
transitional
arrangements
—
—
—
—
—
—
—
—
—
—
—
—
120,000
30,000
75,000
50,000
2,890
2,890
122,890
(I)
14,643
14,643
89,643
(J)
1,831,619
2,087,242
59 Total capital (TC = T1 + T2) ((G) + (J))
(K)
9,598,392
9,706,726
Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
of which: prepaid pension cost
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
72,106
10,436
42,995
9,914
140,505
21,232
86,416
16,156
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)
(L)
51,575,789
49,829,205
13.15%
15.05%
18.61%
386,929
524,160
—
—
—
2,412
—
277,287
618,678
—
13.44%
15.29%
19.47%
336,156
657,720
—
—
—
2,295
—
269,384
742,414
—
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)
1,008,620
—
1,210,344
42,804
Items
Required capital ((L) ✕ 8%)
286
(Millions of yen)
As of March 31,2017
4,126,063
As of March 31,2016
3,986,336
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SMBC2017 Annual ReportSMBCBasel III Information
■ Reconciliation of Regulatory Capital Elements Back to the Balance Sheet (As of March 31, 2016 and 2017)
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
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,
2017
As of
March 31,
2016
41,652,508
1,465,117
523,913
3,184,379
1,125,434
1,879,342
24,342,369
75,585,256
1,663,102
2,383,307
815,808
230,984
275,175
7,565,562
(389,726)
(20,808)
162,281,729
105,590,771
12,263,091
1,009,469
1,359,017
3,076,425
1,390,123
1,472,340
12,026,497
737,961
3,944,061
1,160,014
2,879,318
14,134
612
1,058
13,602
329,253
31,230
7,565,562
154,864,546
1,770,996
1,776,830
2,689,638
(210,003)
6,027,462
1,399,125
(36,110)
26,704
1,389,719
7,417,182
162,281,729
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
6-a
6-c
2
3
6-d
4-a
4-b
1-a
1-b
1-d
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SMBC2017 Annual ReportSMBCBasel III Information Note: The non-consolidated capital adequacy 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 adequacy 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
24,328,791
11,412,841
2,690,582
(36,710)
1,388,315
25,588,578
7,162,861
2,414,507
48,257
1,309,508
6-b
7
1-c
5
Reference # of Basel III common
disclosure template under the
Composition of Capital Disclosure
(Basel III Template)
3
288
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SMBC2017 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, 2017
As of March
31, 2016
1,770,996
1,770,996
1,776,830
2,470,198
2,690,582
2,414,507
(210,003)
(210,003)
6,028,406
6,445,699
(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, 2017
As of March
31, 2016
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
6,028,406
6,445,699
3,337,824
2,690,582
—
—
4,031,192
2,414,507
—
—
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, 2017
As of March
31, 2016
230,984
220,174
70,635
67,329
As of March
31, 2017
As of March
31, 2016
—
160,349
—
—
—
—
152,845
—
—
—
—
—
As of March
31, 2017
As of March
31, 2016
275,175
279,917
84,148
85,598
As of March
31, 2017
As of March
31, 2016
191,027
194,318
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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SMBC2017 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, 2017
As of March
31, 2016
329,253
31,230
249,427
31,837
70,635
84,148
67,329
85,598
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
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, 2017
As of March
31, 2016
(36,710)
48,257
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
Net deferred gains or losses on hedges
(35,228)
50,264
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, 2017
As of March
31, 2016
1,879,342
3,511,957
24,328,791
75,585,256
25,588,578
69,276,735
1,472,340
2,987,815
(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
290
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SMBC2017 Annual ReportSMBCBasel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2017
As of March
31, 2016
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)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
386,929
336,156
—
—
—
—
—
—
386,929
336,156
750,421
858,981
—
—
76,261
150,000
—
—
76,261
125,000
524,160
657,720
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, 2017
11,412,841
As of March
31, 2016
7,162,861
As of March
31, 2017
As of March
31, 2016
450,000
300,000
905,332
656,085
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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SMBC2017 Annual ReportSMBCBasel III Information Liquidity Coverage Ratio 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”).
■ Disclosure of Qualitative Information about Liquidity Coverage Ratio
1. Intra-period Changes in Non-consolidated LCR
As described in the following page, the LCR has remained stable with no significant fluctuation since 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 2017 is set at 80.0% and from 2018 onwards, the minimum
requirement of 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%
LCR of non-consolidated SMBC exceeds the minimum requirements of LCR for 2017 (80.0%) 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.
3. Composition of High-Quality Liquid Assets
The high-quality liquid assets held by non-consolidated 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 the following page, 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.
292
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SMBC2017 Annual ReportSMBCBasel III Information ■ 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 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
TOTAL
UNWEIGHTED
VALUE
43,455,913
13,789,312
29,666,601
55,763,400
—
46,820,211
TOTAL
WEIGHTED
VALUE
3,380,848
413,679
2,967,168
28,929,474
—
TOTAL
UNWEIGHTED
VALUE
43,182,653
13,902,656
29,279,997
53,962,157
—
44,442,390
TOTAL
WEIGHTED
VALUE
3,345,472
417,080
2,928,392
28,173,820
—
50,091,798
23,257,873
48,675,932
22,887,596
5,671,601
5,671,601
59,840
5,286,224
5,286,224
45,329
19,161,594
6,314,557
18,339,314
5,791,311
680,475
523,593
17,957,526
4,747,490
62,121,895
TOTAL
UNWEIGHTED
VALUE
1,500,783
4,489,205
1,886,952
7,876,940
632,857
462,610
17,243,847
3,941,667
61,092,224
TOTAL
UNWEIGHTED
VALUE
1,285,608
4,212,274
2,245,490
7,743,372
680,475
523,593
5,110,489
2,778,959
1,018,972
42,482,650
TOTAL
WEIGHTED
VALUE
410,480
3,149,210
1,281,695
4,841,386
46,820,211
37,641,264
124.3%
61
632,857
462,610
4,695,843
1,951,856
1,012,762
40,320,550
TOTAL
WEIGHTED
VALUE
293,787
3,075,163
1,389,724
4,758,673
44,442,390
35,561,877
124.9%
3
Notes: 1. The data after 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)
2. For the current quarter (from January 1, 2017 to March 31, 2017), the average values are calculated based on daily data in accordance with Notification No. 7 issued by the
Japanese Financial Services Agency in 2015. For attribute information on customers etc., monthly or quarterly data is used.
■ Breakdown of High-Quality Liquid Assets
Item
1 Cash and due from banks
2 Securities
3
of which, government bonds, etc.
4
5
of which, municipal bonds, etc.
of which, other bonds
of which, stocks
6
7 Total high-quality liquid assets (HQLA)
Current Quarter
(From 2017/1/1
To 2017/3/31)
Prior Quarter
(From 2016/10/1
To 2016/12/31)
(In million yen)
39,704,298
7,115,914
5,422,767
98,442
145,382
1,449,323
46,820,211
36,201,345
8,241,044
6,518,373
90,987
228,878
1,402,806
44,442,390
Note: The above amounts are the amounts of high-quality liquid assets in accordance with the liquidity regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are the amounts after multiplying factor in the liquidity regulation under the Basel III.
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SMBC2017 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.
294
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SMFG2017 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
The maximum loss that can be expected to occur with a certain degree
of probability when holding a financial asset portfolio for a given amount
of time.
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 capital required to cover the theoretical maximum
potential 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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SMFG2017 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 during the fiscal year under review (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, SMBC Guarantee Co., Ltd., 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
SMFG, as a Company with a Nomination Committee, has established a Compensation Committee to resolve the “policy to determine
individual remuneration for directors and executive officers,” “executive compensation programme and relevant regulations,”
and “individual remuneration for SMFG’s directors and corporate executive officers.” In addition, SMFG Compensation Committee
reviews and discusses executive compensation programmes/practices of group companies of SMFG and the individual remuneration for
SMFG’s other executive officers. Furthermore, group companies of SMFG respect the details of the deliberations at the Compensation
Committee of SMFG and determine the compensation for directors and corporate auditors within the maximum total amount of
compensation approved at an ordinary general meeting of shareholders.
(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, 2016 to March 31, 2017)
3
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.
296
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SMFG2017 Annual Report ■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
(1) For Officers
SMFG hereby establishes the Executive Compensation Policy (the “Policy”) in order to provide guiding principles for its Compensation
Committee to determine individual remuneration for its directors and executive officers (the “Executives”).
The Policy’s aim is that executive compensation pursuant to it shall provide the appropriate incentives for the Executives to pursue our
Mission and our medium-/long-term vision of becoming “a global financial group that, by earning the highest trust of our customers,
leads the growth of Japan and the Asian region”.
Group companies of SMFG shall determine their executive compensations in accordance with this Policy.
I.
II.
III.
IV.
SMFG’s executive compensation aims at providing appropriate incentives toward the realization of our mission and our vision.
SMFG’s executive compensation shall reflect the changing business environment and the short-, medium- and long-term perfor-
mance of the group, and shall account for the contribution to shareholder value and customer satisfaction.
Individual remuneration shall reflect the assigned roles and responsibilities as well as the performance of the respective Executive.
SMFG shall research and review market practices, including the use of third-party surveys, in order to provide its Executives with a
competitive remuneration package.
SMFG’s executive compensation shall discourage excessive risk-taking and foster a prudent risk culture expected of a financial institution.
V.
VI. Both external and internal regulations/guidelines on executive compensation shall be observed and respected.
VII. SMFG shall establish appropriate governance and controls of the compensation process, and shall regularly review to update its ex-
ecutive compensation practices according to changing market practices and/or business environment.
I.
SMFG’s executive compensation programme (the “Programme”) shall have three components: base salary, cash bonus, and stock
compensation.
In order to hold the Executives accountable and provide them with appropriate incentives for the performance of the group, the
Programme targets the variable compensation component of total remuneration at 40%, if paid at standard levels. Corresponding
with performance and the business environment, the variable component could range from 0% to 150% of the standard levels,
which shall be determined by corporate titles of the Executives.
In order to enhance shareholding of the Executives and align their interests with shareholders, the Programme targets its stock-
based compensation components at 25% of total remuneration, if paid at standard levels.
II.
III.
IV. The above target levels shall be appropriately set in accordance with the roles, responsibilities, etc. of each Executive.
V.
Base salary shall be paid in cash and shall be, in principle, determined by the corporate titles of each Executive, reflecting the roles,
responsibilities, etc.
Annual incentives shall be determined based on the annual performance of the group, the group company and the business unit
each Executive is accountable for, as well as on the performance of the respective Executive reviewed both from short-term and me-
dium-/long-term perspectives. 70% of the determined amount shall be paid as a cash bonus and the remaining 30% shall be paid
under Stock Compensation Plan II (annual performance share plan).
VI.
VII. Stock compensation plans consist of Stock Compensation Plan I (the “Plan I”), under which the remuneration of the Executives shall
be determined based on SMFG’s medium-term performance, etc., Stock Compensation Plan II (the “Plan II”), determined based on
SMFG’s annual performance, etc. and Stock Compensation Plan III (the “Plan III”), determined based on corporate titles, etc.
a. Under the stock compensation plans, the Executives shall receive remuneration via shares of SMFG common stock. The transfer
of such stock shall be restricted for appropriately defined periods.
b. Remuneration under Plan I shall be determined based on SMFG’s performance against the Medium-term Management Plan,
performance of SMFG shares, and the results of customer satisfaction surveys, etc.
c. Remunerations under Plan II shall be determined based on the annual performance of SMFG, the group company, and the busi-
ness unit each Executive is accountable for, as well as on the performance of each Executive reviewed both from a short-term and
medium-/long-term perspectives. Remuneration paid by restricted shares, they shall effectively act as deferred compensation.
d. Remuneration under Plan III shall be determined based on corporate titles, roles, and responsibilities, etc.
VIII. In the event of material amendments to the financial statements or material reputational damages caused by the Executives, remu-
IX.
nerations under the Plans could be reduced or fully forfeit.
Notwithstanding the above, executive compensation for the Executives domiciled outside Japan shall be individually designed and
determined not only in accordance with this Policy, but also with consideration to local regulations, guidelines, and other local
market practices, whilst ensuring the compensation should not incentivize for excessive risk-taking.
SMFG, as a Company with a Nomination Committee, has established a Compensation Committee to resolve the following:
• The Policy, executive compensation programme and relevant regulations.
• Individual remunerations for SMFG’s directors and corporate executive officers.
In addition to the above, SMFG Compensation Committee shall review and discuss the below:
• Executive compensation programmes/practices of group companies of SMFG.
• The individual remuneration for SMFG’s other executive officers.
(2) For Employees and Others
In order to link the business philosophy and strategy of the company to the roles and responsibilities of employees and others, SMFG and
its major consolidated subsidiaries determine the domestic compensation taking into account their job responsibilities, business
performance and other factors.
■ Consistency between Compensation Structure and Risk Management and Link between Compensation and
Performance
1. SMFG and SMBC
In determining the compensation for the officers of SMFG, the details of individual compensation for directors and executive officers
are determined by the mandatory Compensation Committee, where the majority of the committee members are the outside
directors. The compensation for the officers of SMBC are determined within the scope approved at a shareholders' meeting.
015_0800885852907.indd 297
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SMFG2017 Annual ReportCompensation
In order to hold the Executives accountable and provide them with appropriate incentives for the
performance of the group, the Programme targets the variable compensation component of total
remuneration at 40%, if paid at standard levels. The Programme shall have three components: base salary, cash bonus, and
stock compensation. Cash bonus shall be determined based on the annual performance of the group, as well as on the
performance of the respective Executive reviewed both from short-term and medium-/long-term perspectives. Stock
compensation is determined based on the progress of the Medium-term Management plan, performance of SMFG shares, and
the results of customer satisfaction surveys, etc. SMFG and SMBC allot restricted stocks via the Plans to Executives to
effectively defer part of executive compensation.
In addition, SMFG and SMBC introduced the malus (forfeiture) of restricted stock and the claw-back of vested stock allocated
to the Executives under the Plans in order to restrain excessive risk-taking and foster a prudent risk culture expected of a
financial institution. Provisions on malus and clawbacks are included in the Allotment Agreement and they shall be exercised
in the event of material amendments to the financial statements or material reputational damage caused by the Executives
after thorough review at the Compensation Committee.
In addition, in determining the compensation for employees, their job responsibilities and business performance are taken
into account. For variablecompensation, in order to avoid an excessive result-oriented approach, it is determined after
comprehensive evaluation based on not only short-term performance results but also qualitative evaluation. Compensation is
individually designed with consideration to local regulations, guidelines, and other market practices, whilst ensuring the
compensation should not incentivize for excessive risk-taking.
2. Other Major Consolidated Subsidiaries
The compensation for officers and employees of other major subsidiaries of SMFG are determined by comprehensively taking
into account the assessment of the subsidiaries’ medium- and long-term earnings, and in the case of an overseas subsidiary, lo-
cal laws, regulations and employment practices, and a compensation structure that could affect the risk management of the
group has not been adopted. In addition, expenses for employee retention are recorded for employees of certain major consoli-
dated subsidiaries.
■ 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, 2016 to March 31, 2017)
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 ��������
13
92
1,029
7,613
832
3,982
735
3,697
93
281
4
3
176
3,318
176
3,318
17
—
2
312
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥374 million in deferred compensation accrued during the fiscal year (officers: ¥93 million; employees and others: ¥281
million).
3. The total amount of variable compensation includes ¥659 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥659
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
7th series of stock acquisition rights of SMFG ���������������������������
August 15, 2016 to August 14, 2046
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, 2017
62
Payment during the fiscal year
—
Millions of yen
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 ���������������������������
132
141
140
178
192
—
—
—
—
—
■ Other Information Regarding Compensation Structures of SMFG and its Group Companies
Not applicable
298
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SMFG2017 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 of SMBC during the fiscal year under review (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
Kansai Urban Banking Corporation, The Minato Bank, Ltd., SMBC Guarantee Co., Ltd. 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
Determination of compensation is stated in “Compensation” of Sumitomo Mitsui Financial Group (please refer to “2. Determination of
Compensation” on page 296).
■ Assessment of Design and Operation of Compensation Structure
Compensation Policy
Compensation policy is stated in “Compensation” of Sumitomo Mitsui Financial Group (please refer to “Compensation Policy” on page 297).
■ Consistency between Compensation Structure and Risk Management and Link between Compensation and
Performance
Consistency between compensation structure and risk management and link between compensation and performance is stated in
“Compensation” of Sumitomo Mitsui Financial Group (please refer to “Consistency between Compensation Structure and Risk Management
and Link between Compensation and Performance” on pages 297 to 298).
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SMBC2017 Annual Report ■ 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, 2016 to March 31, 2017)
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 ��������
25
74
1,765
5,981
1,451
2,978
1,274
2,764
173
209
2
3
282
2,702
282
2,702
17
—
14
300
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥383 million in deferred compensation accrued during the fiscal year (officers: ¥173 million; employees and others: ¥209
million).
3. The total amount of variable compensation includes ¥516 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥516
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
7th series of stock acquisition rights of SMFG ���������������������������
August 15, 2016 to August 14, 2046
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 ����������������������������
March 31, 2017
46
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 ���������������������������
6th series of stock acquisition rights of SMFG ���������������������������
137
170
134
153
165
—
—
—
—
—
300
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SMBC2017 Annual ReportCompensation 2. Total Amount of Compensation Paid to Officers, Employees and Others (SMBC non-consolidated, April 1, 2016 to March 31, 2017)
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 ��������
25
74
1,765
5,981
1,451
2,978
1,274
2,764
173
209
2
3
282
2,702
282
2,702
17
—
14
300
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. The total amount of fixed compensation includes ¥383 million in deferred compensation accrued during the fiscal year (officers: ¥173 million; employees and others: ¥209
million).
3. The total amount of variable compensation includes ¥516 million in deferred compensation accrued during the fiscal year (officers: ¥- million; employees and others: ¥516
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
7th series of stock acquisition rights of SMFG ���������������������������
August 15, 2016 to August 14, 2046
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 ����������������������������
March 31, 2017
46
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 ���������������������������
6th series of stock acquisition rights of SMFG ���������������������������
137
170
134
153
165
—
—
—
—
—
■ Other Information Regarding Compensation Structures of SMFG and its Group Companies
Not applicable
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SMBC2017 Annual ReportCompensation 015_0800885852907.indd 302
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