SMBC Group
Annual Report
2019
YEAR ENDED MARCH 31, 2019
At Sumitomo Mitsui Financial Group, we position “Our Mission”
as the universal philosophy underpinning the management of
SMBC Group and as the foundation for all of our corporate activities.
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.
Vision
To be a global financial group that
leads growth in Japan and Asia by earning
the highest trust of our customers
Values
Customer First
Proactive and Innovative
Speed
Quality
Team SMFG
Mission
Vision
Values
See page 61 for information on our Code of Conduct.
“SMBC” has been designated as the corporate group’s
master brand. All Group companies use the SMBC logo
and promote the SMBC brand in order to enhance the
brand power of the entire SMBC Group.
Rising Mark
The Rising Mark is the upward curving strip seen beside the letters
“SMBC.” This mark indicates our desire for the Group to grow together
with our customers, shareholders, and society by providing high- value-
added, cutting-edge, and revolutionary services.
Corporate Colors
The fresh green color (color of young grass) of the Rising Mark symbolizes
youthfulness, intellect, and gentleness while the trad green (deep, dark
green) background presents tradition, reliability, and stability.
1
SMBC Group Annual Report 2019 Editorial Policy
SMBC Group Report 2019 is designed to convey financial and
Scope of Report
non-financial information about the overall picture, business strategy,
and corporate infrastructure of SMBC Group. It has been compiled
with reference to the International Integrated Reporting Framework
issued by the International Integrated Reporting Council (IIRC)
in December 2013.
The appendix in the back of this report contains more detailed
information on the Group. Additional information on Sustainability
activities can be found on the Company’s corporate website.
Period covered:
FY2018 (April 2018 to March 2019)
Some subsequent information is also included.
Organizations covered:
Sumitomo Mitsui Financial Group and its
subsidiaries and affiliates
Published
August 2019
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 management with
respect to our future financial condition and results of operations. In many cases but not all, these state-
ments 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 in-
clude: deterioration of Japanese and global economic conditions and financial 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 documents submitted to the U.S. Securities and Exchange Commission, as well as our earnings
press releases, for a more detailed description of the risks and uncertainties that may affect our financial
condition and our operating results, and investors’ decisions.
2
SMBC Group Annual Report 2019 Contents
About SMBC Group
4 History of SMBC Group
6 Financial Highlights
7 ESG Highlights
Corporate Infrastructure
Supporting Value Creation
60 Corporate Governance
68 SMBC Group Global Advisors
10 SMBC Group’s Value Creation Process
70 Outside Director Interview
12 Promotion of Sustainability Management
72 Sumitomo Mitsui Financial Group
To Our Stakeholders
14 Message from the Group CEO
26 Message from the Group CFO
Directors
76 Towards Sustainable Development
of Society
80 Customer-Oriented Initiatives
32 Core Policies of Medium-Term
Management Plan (FY2017–2019)
34 Using Digital Technology to Create
83 Internal Audit
84 Compliance
86 Risk Management
the Future of Finance
38 Have a good Cashless.
90 Human Resources Strategy
94 IT Strategies
Business Strategies for Creating Value
96 Communication with Stakeholders
98 Financial Review
42 Group Structure
44 Retail Business Unit
46 Wholesale Business Unit
48 International Business Unit
50 Global Markets Business Unit
52 Special Feature:
Transformation of Business and Asset
Portfolio through Group Reorganization
54 Special Feature:
Realizing Asia-centric: The New BTPN
Opens Its Doors for Business
56 Special Feature:
Issuance of Japan’s First
Contractual Law Covered Bonds
3
SMBC Group Annual Report 2019 History of SMBC Group
SMBC Group has overcome numerous challenges and enhanced the quality of our corporate infrastructure
via the flexible and timely shifting of target businesses by expanding the scope of our operations and the
markets in which we operate based on the changing needs of the times.
SMBC Nikko
Securities
(Former Nikko
Cordial Securities)
Cedyna
OMC Card,
Central Finance,
and QUOQ merged
Sumitomo Mitsui Banking Corporation formed
Sumitomo Mitsui Card Company
Sumitomo Mitsui Finance and Leasing
SMBC Friend Securities
Merged with SMBC Nikko Securities in January 2018
Japan Research Institute
Sumitomo Mitsui Asset Management
SMBC Consumer Finance
(Former Promise)
Sumitomo Mitsui Financial Group established
2004
2003
2002
2001
2009
2008
2007
2005
2006
Vietnam
Eximbank
(Vietnam)
The Bank
of East Asia
(Hong Kong)
• “Program for
Financial Revival”
commenced
• Lift the ban
of securities
intermediary
• Zero interest rate policy
rescinded by the Bank of Japan
• Firewall regulations
between banking and
securities alleviated
Disposal of
non-performing
Loans conducted
• Blanket guarantee
of deposits fully
lifted
• Financial Instruments and Exchange Act enacted
• Full lift of the insurance products sale by banks
• Japan Post privatized
• Collapse of the IT bubble
• Implementation of Basel II
• Subprime mortgage crisis
• Financial crisis
1895
Sumitomo Bank
established
1590
Riemon Soga
(Brother-in-law
of Masatomo
Sumitomo) starts
copper refining
business
1673
Takatoshi Mitsui
opens Mitsui
Echigoya
Kimono Dealer
1876
Mitsui Bank
established
Operating Environment
Japan
Global
4
About SMBC Group SMBC Group Annual Report 2019 Expansion of Business Domain
SMBC Trust Bank
(Former Societe Generale Private Banking (Japan))
Acquired Citibank Japan’s retail banking operations
in November 2015
Became a wholly
owned subsidiary
(Became a wholly
owned subsidiary
of Sumitomo Mitsui
Card Company in
April 2019)
Became equity method
affiliate
Became a wholly owned subsidiary
Sumitomo Mitsui DS
Asset Management
(Former Sumitomo Mitsui
Asset Management)
Merged with Daiwa SB
Investments in April 2019
Became a
consolidated
subsidiary
2011
2010
Became a wholly owned subsidiary
2015
2014
2012
2013
2019
2018
2016
2017
ACLEDA Bank
(Cambodia)
SMBC Rail Services
(United States)
Bank BTPN
(Indonesia)
SMBC Aviation Capital
(Ireland / former RBS Aerospace)
Became a wholly
owned subsidiary
Merged with Bank
Sumitomo Mitsui Indonesia
in February 2019
Became equity
method affiliate
Expansion of Regional Coverage
• Start of “Abenomics”
• NISA introduced
• Japan’s Corporate Governance
• Great East Japan Earthquake
• Consumption tax
rate raised to 8%
Code instituted
• Workstyle reform-related laws established
• Introduction of negative interest rate policy
• Introduction of quantitative and
qualitative monetary easing
• “Principles for Customer-Oriented
Business Conduct” released
• European sovereign debt crisis
• Dodd-Frank Act enacted in the U.S.
• Implementation
• U.S. federal funds rate
of Basel III
raised for the first time in
nine and a half years
• Finalization of the
Basel III reform
• U.K. announces withdrawal
from the European Union
• Trade friction between the
United States and China erupts
5
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Financial Highlights
Profit attributable to owners of parent
Return on equity (ROE)*
(Billions of yen)
1,000
¥726.7 billion
500
0
’14
’15
’16
’17
’18
(FY)
(%)
15
10
0
8.2%
’14
’15
’16
’17
’18
(FY)
Profit attributable to owners of parent exceeded the target of ¥700 billion in
FY2018. This was mainly due to the robust growth in the International Business
Unit, a driver of group-wide growth, while the wealth management business was
sluggish due to the deterioration of market conditions seen in the second half of
the fiscal year.
* Calculated using stockholders’ equity as the denominator
ROE exceeded our Medium-Term Management Plan target of 7–8% due to the
steady progress of the plan that led to higher than expected profit attributable to
owners of parent.
Overhead ratio (OHR)
Common Equity Tier 1 capital ratio (CET1 ratio)*
(%)
80
60
0
60.3%
’14
’15
’16
’17
’18
(FY)
OHR was lower than the target of the Medium-Term Management Plan:
1% reduction compared with FY2016 (62.1%). This was the result of ongoing
group-wide cost control measures as well as the benefits of the deconsolidation
of Kansai Urban Banking Corporation and THE MINATO BANK, both of which
have relatively high OHR.
16.37%
(%)
20
15
0
’15/3
’16/3
’17/3
’18/3
’19/3
* Basel III fully-loaded basis
CET1 ratio increased by 1.87% due to the rise in CET1 capital following the
accumulation of retained earnings as well as the decrease in risk-weighted
assets primarily attributable to the deconsolidation of Sumitomo Mitsui Finance
and Leasing Company.
Dividend per share of common stock
¥180
Credit ratings (As of June 30, 2019)
Holding company
SMBC
Long-term Short-term Long-term Short-term
’14
’15
’16
’17
’18
(FY)
Moody’s
S&P
Fitch
R&I
JCR
A1
A-
A
A+
AA-
P-1
A1
P-1
A-1
F1
A
A
AA-
a-1+
AA
J-1+
—
F1
—
—
(Yen)
200
100
0
Dividend per share was ¥180 in FY2018, ¥10 higher than the previous fiscal
year and our initial forecast, since profit attributable to owners of parent was
higher than our target because of the steady progress in the Medium-Term
Management Plan.
6
About SMBC Group SMBC Group Annual Report 2019 ESG Highlights
Accreditation
Received a 4-star rating in the 2nd NIKKEI Smart Work
Management Survey through which Nikkei recognizes compa-
nies that stand on the forefront of sustainable growth by
heightening productivity through workstyle reforms
Selected for the third time as a Certified Health and Productivity
Management Organization (large enterprise category) by the
Ministry of Economy, Trade and Industry in a program designed
to recognize companies exercising superior health and
productivity management
Selected for the fourth time in the Nadeshiko Brand selection
of listed companies excelling at empowering female employees
compiled jointly by METI and the Tokyo Stock Exchange
Selected for inclusion in the 2019 Competitive IT Strategy
Company Stock Selection of listed companies engaged in
competitive and strategic IT investment aimed at increasing
corporate value and competitiveness from a medium- to
long-term management perspective compiled jointly by
METI and the Tokyo Stock Exchange
Support for initiatives in Japan and overseas
As a global corporate citizen of the global society, SMBC Group is fully aware of the social impact of financial institutions,
and it supports the following initiatives in Japan and overseas (the action guidelines for the corporate activities and principles).
7
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 ESG Highlights
Environment
See page 76 for more information.
Project finance for overseas renewable energy projects
Total CO2 Emissions (per m2)
Geothermal power Hydropower
Biomass
49
projects
Wind
power
Solar
power
Annual CO2 reduction
20,122
thousand t-CO2
(t-CO2)
150
100
50
0
thousand t-CO2 per thousand m2
104
’15
’16
’17
’18
(FY)
Note: The figure for FY2018 is a preliminary figure.
Social
See page 78, 92 for more information.
Number of employees taking parental leave
(male and female)
Ratio of female managers
(People)
4,500
3,000
1,500
0
3,438
(%)
25
15
0
24.0%
Target 25% by
March 31, 2020
’14
’18
(FY)
’16/3
’17/3
’18/3
’19/3
Note: Figures are for SMBC.
Ratio of GM positions with locally hired employees
Ratio of employees with disabilities
(%)
40
30
0
34.0%
’17/6
’18/4
’19/4
(%)
2.6
2.4
2.2
0
2.47%
’15
’16
’17
’18
(FY)
Note: Figures are for SMBC and overseas bases of major affiliates.
Note: Figures are for SMBC and overseas bases of major affiliates.
8
About SMBC Group SMBC Group Annual Report 2019 Governance
See page 60 for more information.
Board of Directors Focus on supervision of executive officers’ and directors’ execution of duties
Internal
Committees
Nomination Committee
Compensation Committee
Audit Committee
Risk Committee (Optional)
Outside directors
Inside directors
Internal, non-executive
directors
Outside expert
Chairman
Management Committee Business execution decisions
Reporting line (including
personnel right of consent)
Departments
Internal Audit Dept.
Composition of the Board of Directors
Ratio of Outside Directors
Change in Number of Directors
(Year on Year)
17 15
Outside directors 7
Areas of
Expertise
Management
Finance /
accounting
Law
Diplomacy
3
1
2
1
Internal directors
(executive)
5
Non-executive
directors
10 67%
Internal directors
(non-executive)
3
(%)
50
40
30
20
10
0
’14/6
’15/6
’16/6
’17/6
’18/6
’19/6
Company with
Auditors
Company with
Three Committees
47%
ESG Indices on which Sumitomo Mitsui Financial Group is listed
SMBC Group has been included in the following major global ESG indices (as of June 30, 2019).
9
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 SMBC Group’s Value Creation Process
SMBC Group works to improve corporate value by providing high-quality services to its customers.
At the same time, we address social issues through a concerted Group effort.
Social Issues
E Environment
Climate change
Low-carbon society
S Social
Sources of Value Creation for SMBC Group
Spirit of
innovation
On-the
ground
capabilities
(human
resources)
Support for growing industries
and regional revitalization
Speed
Financial inclusion
Digitalization
100-Year life society
G Governance
Compliance
Anti-money laundering
Fiduciary duties
Cybersecurity
Diversity, Workstyle reform
Financial
Environment
Cashless payment
Global liquidity glut
Prolonged negative interest
rate environment in Japan
Trade friction between the
United States and China
10
Solid
customer
base
Domestic and
international
network
Top tier global financial group
that delivers the highest quality
in all aspects of our business
Retail Business Unit
P44
Wholesale Business Unit
P46
International Business Unit
P48
Global Markets Business Unit
P50
History
and brand
Digitalization
Risk management, compliance,
and financial soundness
Corporate governance
About SMBC Group SMBC Group Annual Report 2019 Provision of Value to Stakeholders
Shareholders
Maximization of our
shareholders’ value
Customers
Greater value
of services
Employees
Work environment that
allows employees to fully
exert their ability
Society
Positive contribution
to society as a good
corporate citizen
Medium- to long-term vision
To be a global financial
group that leads growth
in Japan and Asia by
earning the highest trust
of our customers
11
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Promotion of Sustainability Management
SMBC Group has designated three priority issues, “Environment,” “Next Generation,” and “Community,”
to guide its efforts to fulfill its mission as a global financial group. In addition, 10 goals from among the
United Nations Sustainable Development Goals (SDGs) have been selected as areas of focus. Initiatives
for addressing issues in these areas are incorporated into the measures of business units so that we can
respond to these issues through our business activities.
Furthermore, the Corporate Sustainability Committee, which is chaired by the Group CEO, was established
in October 2018 to promote the realization of a sustainable society. Under the strong commitment of top
management, SMBC Group will accelerate sustainability management initiatives and seek to contribute to
the resolution of social issues and the accomplishment of the SDGs through its business activities.
SMBC Group’s Initiatives
Issues We Should Address
Focused SDGs
E
Environment
Promote Environmental Business
Manage Environmental Risks
Reduce Environmental Impacts
Various
Social Issues
S
Next
Generation
Support for growth industries
Contribute to emerging countries
Promote financial literacy education
Community
Achieve safe/secure community
Promote social inclusion
Reconstruct natural disasters
G
Governance
Corporate Governance
Risk Management
Compliance
Internal Audits
Customer-Oriented Initiatives
Human Resources Strategy
12
Renewable energy initiatives
Funding through green bonds
Measures for combating climate change
Promotion of cashless payments among SMEs
Business succession support that addresses
cognitive impairment issues
Financial and economic education
Regional revitalization using traditional
Japanese dwellings
SDGs social loan initiatives
Support for developing countries via donations
through employee volunteer fund
Strengthening and enhancement of
corporate governance
Customer-oriented business conduct and
customer satisfaction and quality improvement
Promotion of diversity and workstyle reforms
About SMBC Group SMBC Group Annual Report 2019 SMBC Group’s Initiatives
Environment
Promote Environmental Business
Manage Environmental Risks
Reduce Environmental Impacts
Next
Generation
Support for growth industries
Contribute to emerging countries
Promote financial literacy education
Community
Achieve safe/secure community
Promote social inclusion
Reconstruct natural disasters
Governance
Corporate Governance
Risk Management
Compliance
Internal Audits
Customer-Oriented Initiatives
Human Resources Strategy
Initiative Examples
Renewable energy initiatives
Funding through green bonds
Measures for combating climate change
Promotion of cashless payments among SMEs
Business succession support that addresses
cognitive impairment issues
Financial and economic education
Regional revitalization using traditional
Japanese dwellings
SDGs social loan initiatives
Support for developing countries via donations
through employee volunteer fund
Strengthening and enhancement of
corporate governance
Customer-oriented business conduct and
customer satisfaction and quality improvement
Promotion of diversity and workstyle reforms
P76
P78
P79
P60
P80
P90
Realization of
a Sustainable
Society
13
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Message from the Group CEO
Building the
Future of Finance
We will Pursue Further Excellence by
Tirelessly Reinventing Ourselves
Jun Ohta
Director President and Group CEO
Sumitomo Mitsui Financial Group, Inc.
14
To Our Stakeholders SMBC Group Annual Report 2019 I was appointed as President and Group CEO of Sumitomo Mitsui Financial Group in April
2019. My key responsibility as Group CEO is to leverage the business foundations and
strengths which our predecessors built over our long history to realize the further growth
and development of SMBC Group. There is no change in our basic principles or vision that
we are pursuing together as SMBC Group. I will spearhead efforts to realize our medium-
to long-term vision: “To be a global financial group that leads growth in Japan and Asia
by earning the highest trust of our customers.”
The Future we are Facing
We are currently facing the need to evolve.
Distortions and deviations have become visible in the framework of capitalism, which has been the
prerequisite for the continued growth of the global economy in the post-war era. Cracks are becoming
ever more apparent in the traditional global order led by the United States. Nationalism is on the rise
in the United States, and we are seeing the rapid spread of anti- globalism that is symbolized by
protectionism. In Europe, which has long walked beside the United States, democracy and multi-
culturalism, concepts that are the basic principles of European integration, are being challenged with
populism and anti-government movements gaining momentum. There is an increasing possibility that
the clash between the United States and China for economic, technological, and military hegemony
will continue as China, which has expanded its presence in the global economy, pursues its unique
brand of state capitalism. The new era of Reiwa has ushered in a world of uncertainty and doubt
where there is no clear or agreed upon global leader.
Domestically speaking, we are also moving into a new period. While we have been aware of this
for quite some time, Japan is expected to face serious population decline that would accelerate the
contraction of the domestic market. In 2040, about twenty years from now, while the global population
is expected to increase by 20%, Japan’s working age population is expected to decrease by more
than 20%. However, this can also be viewed as an excellent opportunity to break free of traditional
business models. For example, it will become possible to draw out the full potential of each employee
by implementing work style reform and streamlining operations. Furthermore, if the private and public
sectors work together to promote innovation and improve productivity, it should reverse Japan’s decline
in international competitiveness. I believe that Japan still possesses much growth potential although
it is facing headwinds, such as population decline and a fall in its relative status on the global stage.
The unprecedented levels of monetary easing pursued by various countries have led to massive
liquidity. The Bank of Japan’s total assets now easily exceed ¥500 trillion and for the first time in the
post-war era surpassed Japan’s GDP. This number jumps to ¥1,600 trillion if we include the total
assets of the US Federal Reserve and the European Central Bank. This means that the total assets
held by the central banks of Japan, the US, and the EU have quadrupled during the decade following
the global financial crisis. This type of liquidity may destabilize financial markets due to the increased
risk of an asset bubble forming. The underlying question going forward will be whether central
banks can carry-out monetary policy normalization without causing disruption given that it is an
unprecedented challenge.
Digitalization has brought on a paradigm shift in various industries, including the financial sector.
Changing industrial structures and advances in technology have blurred traditional boundaries that
15
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Message from the Group CEO
have separated businesses. Our business has not been immune to this trend with players from
sectors such as logistics, telecommunications, and IT entering the financial sector. In the not too
distant future, business-based categories within the financial sector, such as banking, securities,
and insurance may have lost all relevance, leaving only function-based categorizations, such as
loans, deposits, payments, and investments.
What is common among these structural changes is that they are irreversible and that they will
have a major impact on us. In other words, issues such as Japan being our contracting “mother
market” or intensifying competition due to entrants from other sectors are not cyclical issues which
will eventually resolve themselves; these are unpleasant realities which we must confront head-on.
If we are to realize sustainable growth we must, now more than ever before, look forward into the
future and evolve relentlessly.
SMBC Group: Our Journey and Our Strengths
However, these structural changes are by no means a recent development. SMBC, SMBC Group’s
core commercial banking entity, set sail in stormy waters when it was formed in 2001. Japan’s financial
sector had just embarked on an age of large-scale restructuring and reorganization due to domestic
non-performing loans becoming a serious problem under Japan’s prolonged deflationary environment.
Shortly after we had completed paying back our public funds and turned our attention to pursuing
growth, the US subprime loan crisis triggered the global financial crisis in 2008. The lessons that
were learned during this period led to the tightening of international financial regulations, which was
a game changer.
While these events shook our business at its very foundations, each time we succeeded in realizing
quality growth by refashioning ourselves into a stronger, more tenacious financial group. As a result of
such changes, we have developed three universal strengths.
First, a robust client base built upon many years of mutual trust.
SMBC Group is made up of leading corporates operating in various industries, such as banking,
leasing, securities, and consumer finance. The unique combination of SMBC (a Japanese megabank)
and SMBC Nikko (one of the three major Japanese securities companies) is one of our key strengths.
In terms of our domestic retail business, we hold the number one position in key fields, such as credit
card memberships and consumer loan balance, with 43 million customers supported by 50 thousand
employees.
In regards to our global business, our traditional approach was to build a strong presence by
cultivating relationships focusing on corporate clients, for example western multi-national corporations
and leading companies of key ASEAN countries. However, in February 2019 we completed the
merger of BTPN, a local Indonesian bank, with PT Bank Mitsui Sumitomo Indonesia, establishing a
platform from which we can offer a full-line of wholesale and retail banking services in Indonesia.
The post-merger bank is staffed by approximately 20 thousand employees and serves seven million
customers through its digital banking business where our collaborations with BTPN commenced well
before the merger.
Second, a solid business foundation which has been developed with proactive and speedy
initiatives through the changing times.
P54
Merger of BTPN and
PT Bank Sumitomo
Mitsui Indonesia
P4
Expand business and
regional coverage
In Japan, our mother market, the business environment for commercial banks has been challeng-
ing for some time now due to low growth and low interest rates. However, by diversifying our revenue
sources through the expansion of our business and regional coverage, the contribution of SMBC
16
To Our Stakeholders SMBC Group Annual Report 2019
Group companies other than SMBC to consolidated net business profit increased significantly
from 8% in FY2003 to 51% in FY2018, surpassing 50% for the first time. During this time, profit
attributable to owners of parent increased from ¥330.4 billion to ¥726.7 billion, proving that we
have been successful in our efforts to realize quality growth.
As a growth driver, our international business has been increasing its net business profit at an
annual rate of 13% since the establishment of our Group. As a result, our international businesses’
contribution to consolidated net business profit rose from 5% in FY2003 to 33% in FY2018. We
have also increased businesses that we are globally competitive in. For example, our project finance
business, which a team of four employees including myself launched thirty-three years ago with the
dream of one day becoming the best in the world, is now ranked number two in the world.
Furthermore, in the past few years our focus has shifted from growing our topline profit to
maximizing efficiencies given the slowdown in the growth of emerging markets, the introduction
of the negative interest rate policy by the Bank of Japan and tightening international financial
regulations. We have been able to raise the quality of our business foundation by reorganizing our
Group companies (regional banking subsidiaries, leasing business, etc.), and realizing strict cost
controls through Robotic Process Automation (“RPA”) and branch reorganization.
Expand business and regional coverage
(Contribution to consolidated net business profit)
Group companies excl. SMBC
International business
Bottom-line profit
JPY726.7bn
8%
51%
5%
33%
JPY330.4bn
FY2003
FY2018
FY2003
FY2018
FY2003
FY2018
Policy interest rate
0.15%
NIRP
Third, top-tier employees who provide advanced and client-focused business solutions.
Employees are the most important management resource for a financial institution. The reason that
we have been able to consistently maintain the highest loan spread among the Japanese megabanks
and net business profit per employee at a very high level over the years is thanks to our motivated
employees who possess excellent marketing capabilities and expertise providing speedy and on-target
business solutions to our clients. None of our success would have been possible without the trust and
knowhow accumulated by our employees.
We are also carrying out work style reform related initiatives so that our employees can perform at
an even higher level. We have introduced RPA on a Group basis and have already produced world-
class results. RPA is often described in the context of headcount reduction, but this is incorrect. The
purpose of RPA is to leverage digital technology to free our employees from low productivity tasks and
allow them to focus on high-value added tasks and corporate planning activities so that we can further
enhance the quality of our products and services. Such initiatives should contribute to our growth as
they lead to heightened employee motivation.
17
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Message from the Group CEO
“I believe that if banks are
not really needed, we do not
have to continue being a bank.”
Stakeholder Themes that I will Work on Looking Ten,
Twenty Years in the Future
I will work on the following stakeholder themes looking ten, twenty years in the future, while also tak-
ing into account our unchanging universal strengths and the irreversible major changes in the exter-
nal environment which I shared with you earlier.
Customers: Ensure Customer-Oriented Business Conduct and Provide New Added Value
“We grow and prosper together with our customers, by providing services of greater value to them.”
This is the very first section of Our Mission. In addition, “Customer First” (always acting based on a
customer-oriented mindset) has been placed at the head of our Five Values; a set of common values
and behavioral guidelines which are shared among SMBC Group employees to realize Our Mission.
We are working to ensure the comprehensive implementation of customer-oriented business opera-
tions based on the belief that continuously providing high quality products and services that address
our clients’ needs increases business, which in turn leads to the growth of SMBC Group.
We will continue our never-ending efforts to provide clients with higher quality services and new
added value. Recently, some have made the argument that banks are no longer needed. I believe
that if banks are not really needed, we do not have to continue being a bank. There is no need for
us to remain as a bank if the nature of finance changes due to the spread of digitalization, leading
to the creation of more convenient, lower priced products and services which benefit the economy
and society, and these products and services are being provided by entities other than banks. I am
determined that SMBC Group will become a provider of such products and services by tirelessly
reinventing ourselves.
Shareholders: Maximize Shareholder Value by Further Enhancing Shareholder Returns and
Realizing Sustainable Growth
I will continue to devote our utmost efforts to maximize shareholder value by further enhancing share-
holder returns and realizing sustainable growth.
The goal of our basic capital policy is to achieve a healthy balance between securing financial
soundness, enhancing shareholder returns, and investing for growth. In regards to securing financial
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Customer-Oriented
Initiatives
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Capital Policy
18
To Our Stakeholders SMBC Group Annual Report 2019
soundness, our CET1 ratio at the end of FY2018 reached the 10% target set under the Medium-Term
Management Plan, one year ahead of schedule. As such, we will shift from a phase where capital
accumulation was the priority to a new stage where we can focus on strengthening share holders
returns and investing for growth.
Going forward, we will strive to maximize shareholder value by further enhancing shareholder
returns and realizing sustainable growth as a result of striking the right balance of allocating capital
between shareholder returns and investing for growth. In terms of investing for growth, we will engage
in organic investments to accelerate the growth of our domestic and global businesses, in addition to
pursuing inorganic opportunities in a disciplined manner. Potential inorganic opportunities which
we may pursue would be investments in global businesses and portfolios which possess high capital
or asset efficiencies, and investments related to the construction of business platforms aimed at
realizing future growth.
Dividends are our principal approach to shareholder returns, and we are aiming to achieve a
dividend payout ratio of 40% during the next Medium-Term Management Plan. In respect to flexible
share buybacks, we implemented a ¥70 billion share buyback program in May 2018 and a ¥100
billion share buyback program in May 2019. The total payout ratio for FY2019 is expected to be 50%,
which means that we will return exactly half of our earnings to shareholders. We have been steadily
enhancing shareholder returns with our total payout ratio increasing by 20% over the three year
period covered by the current Medium-Term Management Plan.
Employees: Create a Work Environment Where Employees can Pursue Their Dreams with
Confidence and Ambition.
I will create a work environment where each one of our employees can pursue their dreams with
confidence and ambition.
Ever since I was appointed as Group CEO, I have been calling on employees to “Break the Mold.”
We will surely be left behind in this era of rapid change if we shut ourselves behind our molds,
in other words, if our thoughts and actions are constrained by precedent and preconceptions, prohib-
iting us from engaging in self-improvement. Financial institutions have traditionally been considered
as being conservative and as devoted followers of the so called “demerit principle.” Now we must
actively pursue new challenges and determine how we can best leverage the experiences we have
gained through past failures. I will create an energetic workplace in which our employees bravely
pursue new challenges with their colleagues being inspired by such challenges, leading to a steady
stream of new business opportunities being developed.
In addition, we will also revise our human resources framework so that our employees can carry out
their responsibilities with a sense of enthusiasm and maximize their potential. For example, with the
aim of encouraging employees to engage in new challenges, SMBC is in the process of revising its
human resources framework based on the three concepts of Fair: A framework that fairly evaluates
and rewards our employees, Challenge: A framework that encourages and rewards an employee’s
desire to engage in more challenging responsibilities, and Chance: A framework under which all
employees are given opportunities to demonstrate their abilities to the fullest extent. In addition, as
Group CEO, I will redouble our efforts to develop next generation leaders and assign employees based
on the “right person for the right position” approach. I believe that developing a culture and establish-
ing a framework that allows employees to pursue their dreams with confidence and ambition is one of
the key tasks of a business leader.
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Human Resources
Strategy
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About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Message from the Group CEO
“Ever since I was appointed as Group CEO, I have
been calling on employees to ‘Break the Mold.’”
Environment and Society: Resolving Social Issues Through Our Business Operations and
Our Initiatives Related to the Sustainable Development Goals (“SDGs”).
We are currently facing various environmental and social issues which need to be addressed on a
global basis, for example climate change resulting from global warming and human rights violations
in supply chains operating in emerging markets. Financial institutions are expected to play a substan-
tial role in addressing such developments as our business allows us to act as a hub connecting
various industries. SMBC Group will further strengthen efforts to resolve social issues through our
business operations and in relation to our SDG related initiatives so that we may realize the sustain-
able development of society.
We at SMBC Group have positioned the sustainable development of society as a key issue and in
October 2018 reorganized the CSR Committee into the Corporate Sustainability Committee to enable
us to better carry out CSR-related initiatives. The committee has the strong support of top manage-
ment, I serve as the Chairperson of the committee, and it will lead our efforts to promote sustainability
management based on a non-financial perspective. Furthermore, we have designated Environment,
Next Generation, and Community as social issues we will address over the medium- to long-term.
We designated ten goals within the SDGs to focus on in order to resolve the three social issues and
have incorporated them into our business units’ strategies and initiatives. Our initiatives have been
highly evaluated by outside parties as illustrated by the fact that Sumitomo Mitsui Financial Group
is included in many of the world’s major ESG indices. We will continue to engage in group-based
efforts from the perspectives of Environment, Next Generation, and Community to resolve social
issues via our business operations and to achieve the SDGs.
The Environment
We continue to engage in proactive initiatives that are ahead of our competitors. In December 2017,
SMBC Group expressed its support for the Task Force on Climate-related Financial Disclosures
(TCFD), a task force established by the Financial Stability Board. As a part of our efforts, in April
2019 SMBC Group became the first global financial institution to calculate the financial impact of
climate-related risks and disclose the detailed results of such calculations. Furthermore, in February
2019 SMBC promptly announced its endorsement of the Principles for Responsible Banking put
forward by the United Nations Environment Programme Finance Initiative.
With environmentally friendly finance drawing increasing attention, SMBC has limited the financing
of new coal-fired power plants to those using ultra-supercritical or more highly efficient methods,
in addition to the issuance of green bonds to fund eco-friendly projects. Furthermore, SMBC Nikko
established the SDGs Finance Department in September 2018 to support clients in issuing SDG
bonds, namely green bonds, and raise funds that help resolve social and environmental issues.
Society
From the standpoint of initiatives aimed at addressing social issues, SMBC Group companies,
such as SMBC, SMBC Nikko, and SMBC Consumer Finance have been focusing on financial literacy
education based on their respective business models. In addition, in light of Japan’s changing
P12, P76
Sustainable Development
of Society
20
To Our Stakeholders SMBC Group Annual Report 2019
demographics, SMBC Group is introducing facilities and services in order to become a financial insti-
tution which all our customers, including elderly customers, customers with cognitive impairments,
and customers with disabilities feel comfortable dealing with.
We will also accelerate our diversity-related initiatives to further enhance the engagement of our
employees, one of SMBC Group’s strengths. The ratio of female managers is on an upward trend with
SMBC announcing a new target of 25% to be achieved by the end of FY2019 as they had achieved
their original target of 20% by FY2020 ahead of schedule. The ratio of locally hired General Managers
is also rising, reaching 34% as of April 2019. Having said this however, our diversity-related initiatives
are far from complete as long as we continue to apply categorizations such as “sex” and “locally
hired.” SMBC Group will continue its efforts to construct a truly diverse workplace in which innovation
is realized as a result of employees of different backgrounds and attributes, such as gender, national-
ity, and values engaging in open and free-spirited debate.
Governance
We realize that there is no perfect form for corporate governance structures. Accordingly, we
will continue working, on both a group and global basis, toward the enhancement of corporate
governance in order to realize higher levels of effectiveness. In April 2017, we instituted a new Group
governance system through the introduction of group-wide business units and the CxO system. In
June of the same year, we transitioned to a Company with Three Committees. Due to these changes,
I feel that at our Board of Director meetings “big-picture” discussions have increased as it is now
possible to engage in more intensive deliberations while leveraging the expertise of our outside
directors. In June 2019, the number of directors was reduced from 17 to 15. As a result, the ratio
of outside directors sitting on the Board of Directors rose to 47%. Also, in June 2019, SMBC and
SMBC Nikko transformed to a company with an Audit and Supervisory Committee in order to
accelerate the execution of operations and enhance the Board of Directors’ supervisory capabilities.
In August 2018, SMBC Group established the SMBC Group Global Advisory Meeting, a meeting
which SMBC Group Global Advisors, a select group of experts in global political, economic, and
business matters, would act in an advisory capacity to the SMBC Group Management Committee.
The management committee is receiving valuable advice concerning changes in global trends and
the state of various countries’ political and economic environments. We are also working to ensure
the effectiveness of corporate governance-related efforts by conducting compliance surveys so that
management is aware of our employees’ thoughts and concerns.
Progress of the Medium-Term Management Plan and the
Focus of Our Strategies Going Forward
I will now address the progress we have made regarding the strategic initiatives introduced under the
current Medium-Term Management Plan and discuss the focus of our strategies going forward.
In April 2017, the Medium-Term Management Plan “SMBC Group Next Stage” was introduced
under the new Group management system, and we have been engaging in various initiatives focusing
on three core policies: Discipline, Focus, and Integration.
Generally speaking, we have produced solid results during the first two years in terms of imple-
mented initiatives and financial results.
First, I will discuss the core policy of Discipline. Under the current Medium-Term Management
Plan we have consistently looked to better control our costs. During the first two years we realized
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Corporate Governance
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SMBC Group
Global Advisors
P32
Medium-Term
Management Plan
“SMBC Group Next Stage”
21
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Message from the Group CEO
cost savings of ¥36 billion versus the three year target of ¥50 billion due to the success of key
initiatives, such as business process reform through the application of RPA and the transformation
of all of the 430 SMBC branches into smart branches (259 branches have been converted into
smart branches in the first two years). We also improved asset and capital efficiencies as a result
of implementing a number of measures aimed at reorganizing our Group companies, for example
Sumitomo Mitsui Finance and Leasing Co., Ltd., the two Kansai regional banks, Sumitomo Mitsui
Card Company, and BTPN.
For Focus, initiatives targeting each of the Seven Core Business Areas are producing steady results.
Our Retail Business Unit is transforming its wealth management business into a management fee
based revenue model from its original sales commission based revenue model. Our International
Business Unit accelerated its Multi-Franchise Strategy by merging BTPN and PT Bank Mitsui
Sumitomo Indonesia. In our asset management business, Sumitomo Mitsui Asset Management
Company merged with Daiwa SB Investments in April 2019 to form Sumitomo Mitsui DS Asset
Management. The new company has ¥21 trillion of assets under management, number eight in
the domestic market.
For Integration, as I have discussed earlier, initiatives related to enhancing the Group management
system, digitalization, and ESGs are being steadily carried out.
Key initiatives
Discipline
Focus
Integration
Executed Group reorganization measures in a speedy manner to improve capital and asset efficiency
Already reduced cost by ¥36 billion out of the ¥50 billion target
Each business unit made good progress in key strategic initiatives of the Medium-Term Management Plan
Completed M&A in strategic business areas (credit cards, Indonesia, asset management)
Sophisticated Group management by transforming to a Company with Three-Committees and implemented
the business unit system and the CxO system
Capital policy entering into a new stage as the CET1 ratio reached the target one year ahead of schedule
Digitalization Initiatives
Going forward, I believe digitalization will be a key decisive factor in determining a company’s com-
petitive advantage, regardless of the industry it is operating in. In order to realize our goals of becoming
“A Group which leads the evolution of the financial sector” and “A Group that drives innovation with-
out being bound by existing frameworks or boundaries,” we are accelerating our digitalization initia-
tives with cashless payment, data utilization, and generating new businesses as the key themes.
For example, cashless payment in Japan is not as popular as in other countries given that it
possesses a highly developed banking system which offers a variety of services, such as account
transfers, and the high level of trust placed in cash. However, we view Japan’s cashless payment
market as having great growth potential over the medium- to long-term. If we take a closer look at the
market, the value of credit card settlements is about ¥50 trillion while the value of cash settlement
remains quite high at about ¥130 trillion. I believe that promoting cashless payments in Japan and
taking over some of the market share from cash settlements will lead to substantial business opportu-
nities. With Sumitomo Mitsui Card Company and Cedyna, SMBC Group has top-tier capabilities in
both the issuing and acquiring operations in Japan. As part of efforts to further expand our competitive
advantage, we entered into a strategic partnership with GMO Payment Gateway, a leading company
in the electronic commerce and online payment market, and Visa, a company that possesses the
world’s largest payment network, to develop a next-generation payment platform. We are also working
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Reorganization of
Group companies
P42
Four Business Units
P34
Digitalization
22
To Our Stakeholders SMBC Group Annual Report 2019
“SMBC Group will continue to act as a front-runner
in the spread of cashless payments in Japan.”
to expand the availability of cashless payments to medium and small size merchants through
collaboration with Square, a US company with which we have a capital and business partnership,
by providing free of charge small terminals that process credit card payments. SMBC Group will
continue to act as a front-runner in the spread of cashless payments in Japan.
In recent years, advances in digital technology have enabled the collection and analysis of large
volumes of diverse data. The utilization of data, which has been called “the oil of the 21st century,” is
drawing the attention of not only the financial sector but of various industries from around the world.
SMBC Group companies operating in the banking, securities, and consumer finance businesses pos-
sess a tremendous volume of payment and credit information. Of course, ensuring the protection of
our customers’ information and data security are key issues which must be addressed prior to the use
of such data, and SMBC Group’s expertise in information management and the trust which we have
accumulated over many years are significant advantages when addressing our customers’ concerns.
SMBC Group already has a head start in the application of data for business purposes with SMBC
developing a system which uses artificial intelligence (“AI”) to detect changes in a company’s financial
conditions, while SMBC Nikko has launched an investment information service which uses AI to pre-
dict individual stock prices. With these initiatives being highly evaluated, SMBC became the only bank
to be selected as a “Competitive IT Strategy Company 2019” by METI and the Tokyo Stock Exchange.
Generating new business through collaborations with other industries is also an important theme.
In September 2019, SMBC Group established an innovation hub, hoops link tokyo, in Shibuya, Tokyo.
As part of hoops link tokyo’s activities, we established SMBC BREWERY, a workshop program con-
ducted by SMBC Group together with outside companies. The AI investment information service
which I introduced earlier was a new business developed as a result of SMBC BREWERY bringing
together HEROZ, inc., a company renowned for its Shogi (Japanese chess) AI, with SMBC Nikko.
Risk Management Initiatives
While there are an extremely diverse set of risk factors which global financial institutions must pay
close attention to, AML/CFT and cybersecurity are issues which are of particular concern, along with
growing geopolitical risks and prolonged monetary easing.
With the threat of terrorism rising throughout the world, international AML/CFT standards have
rapidly increased in severity, and we have seen many cases in which companies have been subject to
substantial fines levied by overseas regulatory authorities. Overlooking the movement of funds con-
nected to criminal or terrorist activities can disrupt the lives of law abiding citizens as it allows criminal
proceeds to reach criminal and terrorist organizations. In addition, there is the risk that international
trust in Japan’s financial system will be damaged if it is deemed that related controls and frameworks
put in place by Japanese financial institutions are inadequate. The onsite inspection related to the
fourth round of the FATF mutual evaluation for Japan is scheduled to commence in fall 2019.
Management has been driving efforts to ensure SMBC Group’s success in the mutual evaluation by
launching a cross-group project team to review AML risk and client management procedures while
incorporating the recommendations of third party experts, in addition to strengthening related
systems and heightening employees’ awareness.
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Risk Management
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About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Message from the Group CEO
Although convenience is increasing with business and operational processes becoming digitalized,
cybersecurity risk is growing at a rapid pace because every system is now connected to the internet.
Finance is a key part of the economic and social infrastructure of today’s world, and it goes without
saying that system failures, data breaches, and data tampering resulting from cyberattacks would not
only seriously impact SMBC Group’s operations but also Japan’s economic activities and the lives of
Japanese people. In fact, as a result of global networks there is the risk that such attacks would also
substantially affect the systems of countries around the world. SMBC Group recognizes cyber-risk as a
key management risk, and management is leading efforts to implement various measures to strengthen
our cybersecurity measures based on the Declaration of Cyber Security Management issued in March
2018 to address cyber-threats which are becoming increasingly sophisticated on a daily basis. Some
examples of such measures are training personnel to ensure that they have the necessary expertise and
experience and establishing contingency plans aimed at realizing prompt recovery from cyber-incidents.
The Focus of Our Strategies Going Forward
FY2019 is the final year of the current Medium-Term Management Plan. Thanks to the above
mentioned initiatives delivering the desired results, we have made good progress concerning the
three financial targets of financial soundness, capital efficiency, and cost efficiency set under the
Medium-Term Management Plan. However, we cannot deny the fact that uncertainty in the global
economy’s future is increasing. Given such a backdrop, SMBC Group aims to reach its goals by
focusing its resources with a keen sense of urgency to ensure that its various initiatives produce
results, and we will consistently strive to be one step ahead of the times and clearly understand
what our customers’ true needs are.
The new Medium-Term Management Plan will not be a mere extension of the current plan, rather,
we are planning to actively debate a range of topics, including new business opportunities, without
being bound by a traditional mindset. I have identified the following three points as the focus of our
strategies going forward so that we can meet the true needs of our customers by taking full advantage
of our competitive strength; our ability to keep-up with the changing times by transforming ourselves.
Bold Transformation
In response to the challenging earnings environment, we will focus on evolving our business model
and optimizing the allocation of resources. For example, in our Retail Business Unit, we will realize
sustainable growth by making further progress in our efforts to shift the business model of our wealth
management business from one that relies on sales commissions generated by investment products
to one that relies on management fees generated by customers’ assets under management (“AUM”)
while reducing costs through branch reorganization and the promotion of digitalization. In the Inter-
national Business Unit, we will shift to a growth model that does not rely on expanding our balance
sheet. Furthermore, in addition to expanding our business and regional coverage by investing for
growth, including through inorganic measures looking at businesses’ growth potential, profitability,
and efficiency, we will continue to pursue our “select and concentrate” strategy and further
strengthen our cost control initiatives.
Continuous Innovation
The spread of digitalization is changing how the financial sector operates, with SMBC Group’s role
and the expectation of our customers also changing. In the face of such change, SMBC Group will
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IT Strategies
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To Our Stakeholders SMBC Group Annual Report 2019
engage in continuous innovation so that we not only survive but thrive in this environment. We will
consistently provide new value to our customers by identifying what the next age will bring, focusing on
generating new business by collaborating with other industries, utilizing data, and process automation.
Maximize Our Group Values
I feel that the Group management system centered on the holding company has steadily taken root
over the past two years through group-wide business units and the CxO system. On the other hand,
potential still remains in various sectors to expand Group synergies. In addition to determining how to
best increase the corporate value of SMBC Group companies, for example via increased investment
and allocating human resources to growth areas, we will enhance our ability to address customers’
needs by maximizing synergies as a result of further expanding collaborations among Group
companies and optimizing resource allocation on an SMBC Group basis.
Building the Future of the Financial Sector
Looking back over our history, you can see that we have overcome various challenges, for example
issues regarding non-performing loans and the global financial crisis, by continuously evolving.
The impact of the structural changes we are currently facing equals or even exceeds that of past
challenges, but I firmly believe that they present a rare opportunity for us, if we can face these
changes head-on and adjust accordingly, to drive forward our competitive advantages.
I am certain that we can unlock a new era and build the future of finance, if we boldly pursue cutting-
edge initiatives which are one step ahead of the times while steadily carrying-out strategies formulated
under a long-term vision leveraging the various strengths of SMBC Group which I have shared with you
during the course of this message. We will pursue further excellence through tireless self-reinvention.
In closing, I would like to ask for the continued support and understanding of all our stakeholders.
July 2019
Jun Ohta
Director President and Group CEO
Sumitomo Mitsui Financial Group, Inc.
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About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Message from the Group CFO
Implement a capital policy
focused on enhancing shareholder
returns and investing for growth
while proactively disclosing
information via interactive and
constructive communication
Toru Nakashima
Group CFO
Director Senior Managing Corporate Executive Officer
I was appointed as Group CFO and CSO in April 2019. The positions of CFO and CSO are
concurrently held by the same individual based on the belief that in the context of management,
financial and business strategies are two sides of the same coin. In other words, we believe
that both strategies are fundamental to the continued success of our business. By having one
individual fill these two roles, it makes it possible to accelerate the decision making process
and consistently take into account both perspectives when developing strategies.
Business Management Focusing on Enhancing Operational Efficiencies
SMBC Group aims to become a resilient, first class global
financial group by focusing on enhancing capital, asset,
and cost efficiencies. In order to realize this vision, we have
established three financial targets in the current Medium-
Term Management Plan: ROE, OHR, and CET1 ratio.
We produced strong financial results for 1H FY2018 with
all four of our business units realizing a Year-on-Year increase
in profit. We have exceeded our targets for consolidated net
business profit and profit attributable to owners of parent due
to the performance of the International Business Unit and
a group-wide cost control approach, although the Retail
Business Unit’s wealth management business experienced
difficulties in 2H FY2018 due to deteriorating market
conditions. Controlling risk-weighted assets through the
reorganization of Group companies, which I will describe in
more detail later, was also an important factor behind the
strong results in regards to our three financial targets.
26
To Our Stakeholders SMBC Group Annual Report 2019 Financial targets
ROE
7.8%*
OHR
CET1 ratio
8.8%
8.2%
7–8%
62.1%
60.9%
60.3%
vs.FY2016
(1)%
9.5%
8.3%
10.3%
10%
FY2016
FY2017
FY2018
FY2019
target
FY2016
FY2017
FY2018
FY2019
target
Mar.17
Mar.18
Mar.19
Mar.20
target
* Excluding special factors, such as the effects of
implementing the consolidated corporate-tax system
* Post-Basel III reforms basis
Transforming Our Business and Asset Portfolio
Cost Control
In order to enhance capital and asset efficiencies, we need to
maximize returns by carefully selecting target businesses and
focusing our resources on those businesses. SMBC Group has
been swiftly reorganizing its Group companies by reviewing its
business and asset portfolio based upon the goals and strate-
gies established under the Medium-Term Management Plan.
We carried out in rapid-succession the reorganization of
businesses for which there was room to improve capital and
asset efficiencies and merged overlapping business that ex-
isted within SMBC Group. In addition to the merger of SMBC
Nikko and SMBC Friend Securities and the deconsolidation
of the Kansai regional banks, in FY2018 we reorganized our
leasing business to deconsolidate Sumitomo Mitsui Finance
and Leasing and consolidated BTPN by merging the bank
with PT Bank Mitsui Sumitomo Indonesia and by increasing
our capital investment. In April 2019, we also merged
Sumitomo Mitsui Asset Management Company with Daiwa
SB Investments and turned Sumitomo Mitsui Card Company,
a joint venture with NTT DOCOMO, into a wholly owned
subsidiary. Both of these initiatives contributed to improving
capital and asset efficiencies by increasing bottom-line profit
and/or reducing risk weighted assets.
These reorganizations possess multiple merits, not only
from the standpoint of improving efficiencies but also business
strategy. For example, due to the reorganization of our leasing
business, Sumitomo Mitsui Finance and Leasing is able to
expand its leasing operations by entering into new businesses
while SMBC Group is now able to initiate strategic initiatives
through Sumitomo Mitsui Card Company in a flexible and
speedy manner, making the company the central piece of
our group’s cashless payment strategy.
Please refer to page 52 for the reorganization of Group companies
The current Medium-Term Management Plan has a
target to reduce cost by ¥50 billion during its three years by
implementing three key initiatives: business reform to improve
efficiency, retail branch reorganization, and reorganization of
Group companies. We have already realized cost savings of
¥36 billion as of the end of FY2018 and expect to exceed
our target of ¥50 billion in FY2019.
For business reform to improve efficiency, we are proactively
introducing RPA to various parts of our business and SMBC
Group has already produced world-class results. The Medium-
Term Management Plan set a target to automate three million
working hours (annual workload of 1,500 employees) of op-
erations for which we have already accomplished automating
two million working hours (annual workload of 1,025 employ-
ees) as of the end of FY2018. For retail branch reorganization,
our goal is to transform all of the 430 branches into smart
branches which leverage digital technologies during the three
year term. As of the end of FY2018, 259 branches have been
transformed into smart branches and we have consolidated
the back-office clerical operations of 278 branches. In regard
to reorganization of our Group companies, we are expecting
to realize cost reductions which exceed our target via the
integrated management of Sumitomo Mitsui Card Company
and Cedyna Financial Corporation which was not planned at
the time of preparing the current Medium-Term Management
Plan. We will continue to reduce cost with our medium-term
goal being ¥100 billion.
Furthermore, while we initially planned to reduce the
workload equivalent to four thousand employees through the
key initiatives, we now expect to exceed this target and reduce
the workload equivalent to five thousand employees as we
have introduced RPA to Group companies other than SMBC.
We expect to reduce our domestic headcount by about four
thousand through attrition taking into account the above
mentioned workload reduction.
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About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Message from the Group CFO
While we will continue our efforts to reduce cost so that we
may achieve our OHR target, we understand the importance
of making the necessary investments in IT given the rapid
spread of digitalization. As such, we have been reviewing our
budget during the fiscal year in a flexible manner so that we
can address changes in the environment. Of course, we are
applying ample levels of discipline when engaging in such
investments, carefully studying the benefits that they will bring.
Please refer to page 94 for our IT investment strategy
Our Capital Policy: A New Stage
Our Basic Capital Policy
Enhancing Shareholder Returns
As stated in the “Message from the Group CEO,” the goal of
our basic capital policy is to achieve a healthy balance among
securing financial soundness, enhancing shareholder returns,
and investing for growth. We will shift from a phase where
capital accumulation was the priority to a new stage where
we will focus on shareholder returns and investing for growth,
as we reached our CET1 ratio target of 10% as of the end of
FY2018, one year ahead of schedule. We have traditionally
used a triangle to illustrate our basic capital policy with
securing financial soundness placed at the top. To show that
our capital policy has entered a new stage, we have started
using an inverted triangle with enhancing shareholder returns
and investing for growth at the top. Going forward, we will
focus on striking the right balance of allocating capital to
these two items.
Dividends are our principal approach to shareholder returns.
We will pursue a progressive dividends policy, a policy which
means that we will not reduce dividends; we will maintain or
increase dividends. Our goal is to achieve a payout ratio of 40%
during the next Medium-Term Management Plan. In addition,
we will proceed with share buybacks on a flexible basis.
Based on this policy, we increased our dividend for FY2018
to ¥180 per share, ¥10 higher than our initial forecast, and
announced a ¥100 billion share buyback program in May
2019. This was an increase of ¥30 billion from the previous
year. We decided to increase the amount due to various fac-
tors, such as the fact that we had achieved our CET1 ratio
target, we expect to continue to accumulate profits in FY2019,
current growth investment opportunities, our stock price, and
the positive impact on ROE. Among them, our low stock price
was the key factor.
Basic Capital Policy
Enhancing
shareholder returns
Progressive dividend policy
• Progressive dividend policy
means not to reduce dividends,
and will maintain or increase
dividends
Dividend Payout ratio
• Aim to achieve 40% during
the period of next Medium-
Term Management Plan
(FY2020-FY2022)
Flexible share buybacks
Turned the triangle
upside down
[Before]
Securing
financial soundness
Enhancing
shareholder returns
Investing
for growth
28
Sustainable
growth of
corporate
value
ROE target
7-8%
Securing
financial soundness
CET1 ratio target: 10%
Investing
for growth
Investment criteria
• Fits with our strategy
• ROE of over 8% after synergies
and excluding amortization
of goodwill
• Risk is manageable
To Our Stakeholders SMBC Group Annual Report 2019 For FY2019, we will maintain dividends at ¥180 per share
despite an expected decline in profit attributable to owners of
parent as part of our efforts to meet the expectations of our
shareholders and investors.
Dividends per share
(JPY)
180
180
170
150
150
140
10
110
120
100
200
150
100
50
0
’11
’12
’13
’14
’15
’16
’17
’18
’19
(estimate)
(FY)
Ordinary dividend
Commemorative dividend
Dividend
payout
ratio
26.8% 21.3% 20.3% 26.2% 32.7% 29.9% 32.7% 34.6% 35.9%
(Ref) Total payout ratio 44.2% 50.2%
Use of capital
(JPY bn)
Investing for Growth
SMBC Group will pursue sustainable growth by using its
capital to invest in growth opportunities. While we focused on
capital accumulation and not increasing risk weighted assets
prior to achieving our CET1 ratio goal, going forward we will
pursue organic growth by increasing assets, especially in
overseas markets. We will determine whether to pursue
M&A opportunities based on whether the deal contributes to
sustained ROE improvement following the three investment
criteria shown in the basic capital policy chart. Potential M&A
opportunities which we will pursue will be investments that
focus on global businesses and portfolios which possess
high capital or asset efficiencies and investments related to
the construction of business platforms aimed at realizing
future growth.
The former refers to areas in which SMBC Group possess
global strengths. Past investments include aircraft leasing, rail
car leasing, and middle-market LBO finance. Investments of
this type will not only further strengthen our global business
but will also promptly raise ROE. Some examples of invest-
ments of the latter type are commercial banking in Asia, asset
management, securities, and trust banking businesses. In
February 2019, the merger of BTPN and PT Bank Sumitomo
Mitsui Indonesia was completed with the post-merger bank
becoming the eighth largest commercial bank in Indonesia in
terms of loan balance. We will pursue investment opportunities
250
700
100
+0.4%
10.3%
10%
Impact on
CET1 ratio
+0.9%
726.7
(0.3)%
250
(0.1)%
70
(0.1)%
9.5%
CET1 ratio
(Mar.18)
Net
income
Dividends
Share
buybacks
BTPN
consoli-
dation
SMFL
deconsoli-
dation
CET1 ratio
(Mar.19)
Net
income
Dividends
Share
buybacks
Growth
investment
etc.
CET1 ratio
(Mar.20)
FY2018
FY2019
29
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Message from the Group CFO
in other countries so that we can create a second, or potentially
a third, SMBC Group.
How we use our capital is drawing increasing attention from
our shareholders and investors as a result of our capital policy
shifting to a new stage. We began using the chart shown below
as of the beginning of this fiscal year at investor presentations
so that we could better convey how we are using our capital.
Profit attributable to owners of parent is expected to be
¥700 billion in FY2019, and we are allocating ¥250 billion to
dividends and ¥100 billion to share buybacks. This means
that we will return about half of our profit to shareholders. In
terms of investing for growth, we allocated ¥80 billion to the
conversion of Sumitomo Mitsui Card Company to a wholly
owned subsidiary and the merger of Sumitomo Mitsui Asset
Management Company and Daiwa SB Investments, both of
which took place in April 2019. We are planning to allocate
about ¥150 billion to organic growth opportunities with the focus
being on increasing assets overseas. The remaining capital
will be allocated to other growth investment opportunities.
Securing Financial Soundness
Although our capital policy has entered a new stage,
there is no change to the fact that capital will be allocated to
enhancing shareholder returns or investing for growth only
when we are sure that financial soundness has been secured.
Our CET1 ratio target of 10% has been calculated taking
into account the impact of the Basel III reforms which were
finalized in December 2017, and as I stated earlier we
achieved this target as of the end of FY2018. We set our target
at a level which allows us to maintain the minimum CET1 ratio
of 8% even in the case of a once-in-a-decade stress scenario.
Furthermore, the TLAC framework came into effect in Japan
from the end of March 2019. The minimum TLAC require-
ments which SMBC Group must satisfy are 16% in terms of
risk-weighted assets and 6% of the leverage exposure mea-
sure. SMBC Group has cleared both requirements as of the
end of FY2018. We are currently working to secure the capital
required to satisfy the new TLAC requirements, which will
increase starting from 2022 to 18% and 6.75%, respectively.
The minimum acceptable leverage ratio has been set at 3.0%
for 2019-2021 and 3.5% for 2022 onwards. SMBC Group
has already secured a leverage ratio of 4.88% as of the end
of FY2018.
Reducing Strategic Shareholdings
Our goal is to reduce strategic shareholdings in five years by
¥500 billion (book value basis) based on the policy: “We will
halve the ratio of stocks to CET1 to 14% over the five years
starting 2015 September-end.” SMBC Group has reduced
its strategic shareholdings by ¥360 billion since 2015
Reduction Plan
(JPY tn)
10
149%
8
6
4
2
0
6.09
5.36
Reduction plan (announced Nov.2015)
28%
27%
24%
1.80
1.79
1.69
21%
1.57
18%
1.44
To 14% by
around 2020
Reduce
the ratio by
half within
5 years
Toward a level
appropriate
for G-SIFIs
Apr.01
Mar.02
Sep.15
Mar.16
Mar.17
Mar.18
Mar.19
Book value of domestic listed stocks within other securities
Ratio of Stocks-to-CET1 capital
* Apr.01 and Mar.02 are ratio against SMBC consolidated Tier1 capital
30
To Our Stakeholders SMBC Group Annual Report 2019 September- end, including a reduction of ¥130 billion during
FY2018. In addition, we have obtained our clients’ consent
to sell a further ¥88 billion of strategic shareholdings that has
yet to be executed. Thus, as of the end of FY2018 we have
practically realized a total reduction of ¥448 billion.
We will continue efforts to reduce our strategic share-
holdings so that we have reached a level at the end of FY2019
where we have practically achieved our final target figure
with the aim of conforming to Japan’s amended Corporate
Governance Code and mitigating the impact of share price
fluctuations on our financial base.
Communicating with Our Shareholders and Investors
Although I was appointed as Group CFO in April 2019,
I communicated with institutional and individual investors
during FY2018 in my role as Deputy Group CFO. I engaged in
numerous discussions with investors during my four overseas
investor relations trips and the various conferences which I
took part in. I also met with representatives from domestic and
overseas credit rating agencies. While I became confident that
we were able to gain the understanding of our shareholders/
investors regarding the aims and goals of our strategies
through these discussions, I also came to appreciate the very
high expectations our shareholders/investors had regarding
the enhancement of shareholder returns. In response to such
matters, we decided to increase dividend payments and share
buybacks in our FY2019 shareholder return policy following
repeated discussions at meetings of our Board of Directors.
In addition, my discussion with shareholders/investors
regarding ESG and SDGs led to SMBC calculating and
disclosing the financial impact of climate change as part
of our TCFD- related measures.
I strongly believe that one of my most important missions
as Group CFO is to engage in constructive discussions
with investors and analysts. SMBC Group will continue to
proactively disclose information that is useful to shareholders/
investors while leveraging interactive communications to
increase our corporate value and realize sustainable growth.
Toru Nakashima
Group CFO
Director Senior Managing Corporate Executive Officer
31
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Core Policies of Medium-Term Management Plan
(FY2017–2019)
To achieve sustainable growth
by combining the Group’s
strengths with more focused
business management
FY2019 Financial Targets
Capital Efficiency
ROE
7~8%
Maintain at least 7% notwithstanding accumulation of capital
Cost Efficiency
OHR
1% reduction
compared with FY2016
Reduce to around 60% at the earliest opportunity in or after
FY2020 (FY2016: 62.1%)
Financial Soundness
CET1 ratio*
10%
Maintain capital in line with the tightening of regulations
(FY2016: 8.3%)
*Post-Basel III reforms basis
Business Portfolio Transformation
Enhance
SMBC Group’s
competitive
advantage
Mortgage loans
Domestic retail business
Credit card
Wealth management
Grow
Japan mid-sized enterprises
Global products
Global large corporations
Asia-centric
Sales & Trading
Businesses
competing with domestic
regional banks
Trust banking/Asset management
Build
Business growth for SMBC Group
Transform
32
To Our Stakeholders SMBC Group Annual Report 2019 Discipline
Disciplined business
management
Focus
Integration
Focus on our strengths
to generate growth
1
Transformation of business/asset
portfolio
2
Focus on Seven Core
Business Areas
Improving productivity and
efficiency
Integration across the
Group and globally to
achieve sustainable growth
Introduced CxO system and
group-wide business units
3
Digitalization
ESG
Seven Core Business Areas
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
Corporate Governance Framework
A Company with Three Committees
CxO System and Group-Wide Business Units
Board of
Directors
y
r
o
t
u
t
a
t
S
s
e
e
t
t
i
m
m
o
C
Nomination Committee
Compensation Committee
Audit Committee
Risk Committee
Supervisory
Execution
Group Management Committee
Sumitomo Mitsui Financial Group
President
SMBC
President
SMBC NIKKO
President
Major subsidiaries
President
33
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationHead of Business UnitBusiness units (Retail, Wholesale, International, Global Markets)CxOHead office functionsSMBC Group Annual Report 2019
Using Digital Technology to
Create the Future of Finance
As CDIO, I will become
SMBC Group’s internal
disrupter and lead
efforts to pursue
new opportunities.
Katsunori Tanizaki
Senior Managing Corporate
Executive Officer
Group CDIO
34
nnual Report 2019
To Our Stakeholders SMBC Group Annual Report 2019 The economy and society are in the process of undergoing
major change due to the spread of digitalization. Technology
is progressing at an astonishing speed, and SMBC Group
is faced with a situation in which its business model may
undergo change of such a scale that it could be seen as a
paradigm shift. There is no doubt that this is a substantial
challenge for us. However, I believe that there is much
potential for us to evolve by absorbing and adopting these
technological advances. In addition, we will collaborate with
external partners to create new business opportunities, which
would not have been possible based solely on the resources
and expertise of SMBC Group.
In our current Medium-Term Management Plan “SMBC
Group Next Stage,” we have positioned digitalization as a pillar
which penetrates all Seven Core Business Areas. More specifi-
cally, we will spread digitalization by leveraging new technol-
ogy, such as blockchain and AI, in all business areas with the
goal of increasing customer convenience, creating new busi-
nesses, increasing productivity and efficiency, and enhancing
our business infrastructure.
For example, in the cashless payment sector we are in the
midst of creating a next-generation payment platform with the
aim of providing hybrid payment solutions that fuse together
finance, IT, and marketing. Furthermore, by using data which
is accumulated through activities such as payments, we are
working to develop and provide advanced financial products
using high-quality risk analysis and realize a more personal-
ized approach to marketing. New business models which
leverage data, such as the information bank business model,
are being developed, and I believe there is the possibility that
in the future SMBC Group will gradually move from the
financial sector to the information sector.
Our digitalization initiatives have been recognized
by outside parties
Received an award in the Cyber Security Category
(conducted by a subsidiary of the Financial Times)
Selected as a “Competitive IT Strategy Company 2019”
by METI and the Tokyo Stock Exchange
Reinventing SMBC Group and Pursuing New Opportunities
In order to implement our digitalization initiatives in a speedy
and efficient manner, we must engage in open innovation that
brings together the data, technology, and expertise of not
only SMBC Group companies, but also of partner companies,
which include start-ups, and our customers. We will no
longer rely on our traditional principle of self-sufficiency;
rather, we will focus on developing business opportunities by
collaborating with partners, including the use of application
programming interface (“API”s.)
In regards to the digitalization of SMBC Group, I believe
it is important that innovation is not undertaken by a small
group of personnel or divisions with specialized skill sets.
Digitalization must involve all parties within SMBC Group. In
order to make this vision a reality, we need to create an envi-
ronment in which all SMBC Group employees, especially our
younger employees, can pursue new challenges without fear
of failure. At the same time as CDIO, I will become SMBC
Group’s disruptor and spearhead efforts to drive forward
initiatives that are not bound by traditional frameworks.
We will create high-quality, appealing services by focusing
equally on accelerating the reinvention of SMBC Group’s
business culture, for example marketing style and the work-
style of head office employees, and pursuing new opportuni-
ties. All of our customers will be offered these services,
regardless of whether they are wholesale or retail customers.
Mr. Tanizaki attended the 2019 Spring Membership Meeting of the
Institute of International Finance.
35
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Using Digital Technology to Create the Future of Finance
A company’s IT strategy is a key business strategy given the rapid digitalization of our world.
SMBC Group has positioned digitalization as an initiative that will encompass all Seven Core
Business Areas and will promote digitalization from both defensive and offensive perspectives.
I would now like to share with you a few examples of SMBC Group’s digitalization
related initiatives.
Promoting Open Innovation
SMBC BREWERY
SMBC BREWERY, a workshop in which SMBC Group
companies collaborate with non-financial sector
partners to develop new ideas, kicked-off in April
2018. SMBC Group companies spend half a day
working with companies, including start-ups, from
outside the financial sector to discuss ideas
on which they could collaborate.
Through the workshop, SMBC Nikko and HEROZ,
inc., a firm with considerable expertise in AI, part-
nered together to develop an investment information
service “AI Portfolio Diagnosis*,” a service which has
been successfully commercialized and is available
to customers.
* The AI program compiles a suggested portfolio with a high expected
rate of return by forecasting companies’ profitability one month in
the future based on an analysis of factors such as stock price
and earnings.
Discovering and Developing
Cutting Edge Technology
The SMFG Silicon Valley Digital
Innovation Laboratory
The SMFG Silicon Valley Digital Innovation
Laboratory was established in Silicon Valley and is in
charge of discovering high-potential local start-ups.
For example, SMBC Group adopted Trifacta Wrangler
Enterprise, software which dramatically accelerates
data analysis, starting March 2019. Traifcacta,
the company which developed the software, was
discovered by the SMFG Silicon Valley Digital
Innovation Laboratory.
Establishing the Advanced Technology
Laboratory
SMBC Group has established the Advanced
Technology Laboratory at The Japan Research
Institute, and through the laboratory we conduct
research/studies into basic and advanced
technology in collaboration with IT companies
and research institutes.
36
To Our Stakeholders SMBC Group Annual Report 2019 Application of AI
AML Initiatives
The efficiency of the screening process targeting
suspicious transactions has greatly increased
following the application of AI.
SMBC Chatbot
We are proactively marketing commercialized sys-
tems such as the SMBC Chatbot, an AI-based auto-
matic response system developed to deal with
internal inquiries, to customers.
A System that Detects Changes in a Company’s
Financial Conditions
A system that detects changes in a company’s finan-
cial conditions which was developed in
partnership with JSOL*, a company that engages in
IT consulting and systems development, uses AI to
analyze movements in the target company’s bank
account to recognize changes in the company’s
financial conditions in a timely manner. The system
is already in use at SMBC and SMBC Group is
planning to market the system to customers with
the initial focus being Japanese regional banks.
* JSOL is a subsidiary of NTT Data and an equity-method affiliate of
SMBC Group.
Enhancing Our Data Analysis
Capabilities
Promoting Digital Marketing Initiatives
BrainCell, Inc., which was established in partnership
with Yahoo! JAPAN, is classified as a business that
will contribute to the sophistication of the banking
industry under Japan’s Amended Banking Act. We
will initially focus on pushing forward SMBC Group’s
digital marketing initiatives leveraging the search
knowledge of Yahoo! JAPAN.
Verification Exercises Regarding the Data Bank
Business Model
SMBC and The Japan Research Institute have been
commissioned by the Ministry of Internal Affairs and
Communications to conduct verification exercises
regarding the data bank business model. We are
working to enhance the convenience of patients
by facilitating the sharing of information regarding
medical examinations/check-ups and prescriptions
between hospitals and pharmacies.
Individual user
Medical
data
Request
data (data
portability)
Contract
Instruct
data use
Medical
treatment
Data
Data
Hospital
(data
provider)
Contract
SMBC
Group
(Information
bank)
Contract
Hospital /
clinic (data
utilization
operator)
37
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Good Cashless Solutions make a Good Day, Everyday
While cashless payments are increasing in popularity all over
the world, cashless payments account for only about 20% of
payments made in Japan. Having said this, interest in cash-
less payments in Japan has been rapidly increasing in recent
years. The Japanese government has set a target to increase
the ratio of cashless payments to 40% by 2025.
A variety of measures to promote cashless payments, for
example a points reward program for consumers and subsi-
dies for fees associated with cashless payment terminals, are
scheduled to be introduced to coincide with the scheduled
2019 consumption tax rise.
Japan’s cashless payments market has grown while also
becoming more diverse and complicated with new payment
methods, such as mobile payments and QR codes, joining
the more traditional methods of credit cards, debit cards,
and e-money. In order to accelerate the spread of cashless
payments in Japan, it is not enough to merely offer new
payment methods. Rather, we believe that the best strategy
is to create an open payment platform which can address
the needs of both merchants and end-users in a flexible
and speedy manner.
SMBC Group has Sumitomo Mitsui Card Company and
Cedyna, two credit card companies that have long led Japan’s
cashless payment market, amongst its Group companies.
From April 2019 we started to manage, in practice, the two
firms as a single business entity, an entity which forms the
cornerstone of SMBC Group’s cashless payment strategy.
SMBC Group will drive the spread of cashless payments in
Japan by implementing a highly efficient and up-tempo strategy
that brings together the wide-ranging strengths of our business
partners, the expertise accumulated by Sumitomo Mitsui Card
Company and Cedyna, and the client base of SMBC.
manpower required to processes payments, and stimulat-
ing consumption via the use of payment data.
We believe that the key aspects to spreading cashless
payments in Japan are not merely convenience and
rationality. Carrying “safety” which also results in carrying
“peace of mind and freedom” are also key aspects of
spreading cashless payments in Japan.
A society in which anybody can spend their days in
a carefree manner. A society in which each day is free
and welcoming.
Sumitomo Mitsui Card Company has adopted the motto
“Have a good Cashless” to reflect these values.
The reason for the slow spread of cashless payments in
Japan is the convenience offered by Japan’s extensive
ATM network and the ease which cash can be obtained,
for example consumers feeling safe carrying cash due to
Japan’s low crime rate. Having said this, there are a
number of positive factors that will arise from the spread
of cashless payments, such as increased liquidity, less
38
To Our Stakeholders SMBC Group Annual Report 2019 Constructing a Next-Generation Payment Platform
Visa, the company that possesses the world’s largest payment
network, joined Sumitomo Mitsui Card Company and GMO
Payment Gateway in establishing a next-generation payment
platform. In February 2019, the three companies came to an
agreement to develop an even stronger payment platform by
bringing together each company’s respective skills and
expertise.
Our goal is to build a payment platform which satisfies the
following criteria: 1) The terminal must be compatible with the
large number of cashless payment options which exist in the
domestic market, a situation which can be said to be unique
to Japan, 2) The platform must seamlessly merge the online
and real worlds, and 3) The platform must provide new high-
value added services while offering world-class security. We
are aiming to launch the new platform during FY2019.
Lately, we are seeing an increasing number of non-financial
companies introduce their own, unique payment service with
the aim of obtaining and using customers’ payment data. We
at SMBC Group have also identified the successful use of data
obtained from payments as a key part of our cashless payment
strategy. SMBC Group possesses one of Japan’s largest
cashless payment foundations, processing payments worth
¥30 trillion. SMBC Group will develop/enhance our ability to
support businesses’ marketing needs and produce competi-
tive services while increasing the added value we derive from
our payment data by fully leveraging this foundation so that
our next-generation payment platform is used by as many
merchants and end-users as possible.
End-users
Merchants
Next-generation platform
All-in-one
terminal
real
1 Payments through
a single terminal
2 Omni Channel
Multi-payment
system
online
Payment
center
GMO
+
SMCC
Network
Acquirer
Visa
+
SMCC
SMCC
3 World class security and stability
Enhancing Solutions for Merchants
Enhancing Services to End-users
By promoting the adoption of Square, a credit card
payment system for medium/small size merchants and
sole proprietors, and keeping in mind the Japanese
government’s Point Reward Project for Consumers
using Cashless Payment that will come into effect in
October 2019, we will accelerate growth in the number
of stores which
have installed
Square. Square
can be acquired
at all domestic
SMBC branches.
SMBC Group will realize a new cashless payment
experience with convenience, safety/peace of mind,
and good value as the three key pillars. We renewed
the mobile application of SMBC/Sumitomo Mitsui
Card Company in FY2018 and added a number of
new features, such as a payment limit for debit
cards and an asset
management function
which reflects funds
held in banks other
than SMBC.
Joint press conference with Square
Our Renewed
Mobile Application
39
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 40
SMBC Group Annual Report 2019
Business Strategies for Creating Value Business Strategies for Creating Value
42 Group Structure
44 Retail Business Unit
46 Wholesale Business Unit
48 International Business Unit
50 Global Markets Business Unit
52 Special Feature:
Transformation of Business and Asset Portfolio
through Group Reorganization
54 Special Feature:
Realizing Asia-centric: The New BTPN
Opens Its Doors for Business
56 Special Feature:
Issuance of Japan’s First Contractual Law
Covered Bonds
41
SMBC Group Annual Report 2019 Business Strategies for Creating Value
Group Structure
SMBC Group is a global financial group that
develops operations in a wide range of fields,
including banking, leasing, securities, credit
cards, and consumer finance.
Under the holding company, Sumitomo
Mitsui Financial Group, we have established
four business units that draft and implement
Group strategies based on customer segments.
For head office functions, we have clarified
the managers responsible for specific areas of
group-wide management and planning under
the CxO system. In addition, we are taking
steps to share management resources and
optimize the allocation of resources.
Group-Wide Business Units and CxO System
Banking
Sumitomo Mitsui
Banking Corporation
SMBC Trust Bank
Leasing
Sumitomo Mitsui
Finance and Leasing
Securities
SMBC Nikko
Securities
Business
Units
Retail
Wholesale
International
Global
Markets
Head Office
(CxO System)
CFO
Chief
Financial Officer
CSO
Chief
Strategy Officer
CRO
Chief
Risk Officer
CCO
Chief
Compliance Officer
42
SMBC Group Annual Report 2019 Net Business Profit by Business Unit
Global Markets
298.5 billion
Retail
274.6 billion
Retail
(22.3) billion
1,203.8 billion
FY2018
International
+3.6 billion
Global
Markets
+6.4 billion
Wholesale
(4.6) billion
Other
Business
+5.4 billion
1,192.3 billion
International
395.1 billion
Wholesale
484.9 billion
’17
’18
(FY)
Credit Cards and Consumer Finance
Other Business
Sumitomo Mitsui
Card Company
Cedyna
SMBC
Consumer Finance
Japan Research
Institute
Sumitomo Mitsui DS
Asset Management
CHRO
Chief Human
Resources Officer
CIO
Chief Information
Officer
CDIO
Chief Digital
Innovation Officer
CAE
Chief Audit
Executive
43
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Review of Operations by Business Unit
Retail Business Unit
The top-class companies in banking, securities,
credit card, and consumer finance industries that
comprise the Retail Business Unit are enhancing
intra-Group coordination to address the financial
needs of all individual customers, striving to
develop the most trusted and No. 1 Japanese
retail finance business.
Senior Managing
Executive Officer
Head of Retail
Business Unit
Naoki Tamura
With a wide range of businesses encompassing wealth management, cashless payments, and consumer
finance, the Retail Business Unit boasts the No. 1 operating foundation in Japan. After the introduction of
the group-wide business units, we were quick to conduct business model reforms, including those related
to customer-oriented business operations and digitalization. The benefits of these efforts are steadily
emerging in the forms of improved customer convenience and reformed cost structures.
Currently, changes in society are giving rise to business opportunities, such as the new financial
needs appearing as the era of the centenarian approaches and the Japanese government’s push to promote
cashless payments.
Faced with these changes in the operating environment, the Retail Business Unit continues to advance
cutting-edge business model reforms based on the key themes of “customer oriented” and “digitalization.”
Review of FY2018
Our credit card and consumer finance businesses performed favorably with
growth in sales handled exceeding the industry average coupled with success
in capitalizing on the healthy capital needs of individual customers. Conversely,
the wealth management business suffered a year-on-year decline in profit
due to low appetites for investment amid a sluggish market. As a result,
net business profit in the Retail Business Unit decreased ¥22.3 billion, to
¥274.6 billion, while return on equity (ROE) declined to 7.3%. Nevertheless,
our customer-oriented wealth management business initiatives, cashless
payment strategies, and branch reorganizations drove steady increases in
the underlying strength that supports ongoing profit growth.
Contribution to Consolidated Net Business Profit
19%
Gross profit (JPY bn)
Expenses (JPY bn)
(Overhead ratio)
Net business profit (JPY bn)
ROE*2
RwA*3 (JPY tn)
FY2018
1,281.6
1,021.4
79.7%
274.6
7.3%
12.8
Increase
(Decrease)*1
(25.7)
(4.5)
+1.2%
(22.3)
+0.1%
(0.1)
44
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figure is on a managerial accounting basis with RwA calculated assuming
Basel III reforms are finalized and exclude the impact from the provision for
losses on interest repayments and the cost from branch reorganizations.
*3. Figures are on a Basel III transitional basis.
Business Strategies for Creating ValueSMBC Group Annual Report 2019 Priority Strategies
Wealth Management Business
In the wealth management business, we continued to promote the transition
to a customer-oriented wealth management business throughout FY2018. Our
goal in this area is to develop a sustainable, customer-oriented business and
stabilize profits by providing medium- to long-term diversified investment
proposals that respond to customers’ need to protect and increase their assets.
The senior citizen market is anticipated to grow in the upcoming era in which
people consistently live to be 100. We therefore intend to augment our ability to
respond to the long-term wealth management, inheritance, and succession
needs seen in this market.
Cashless Payment Strategies
The Retail Business Unit looks to grow its market share through the full-fledged
implementation of cashless payment strategies. For example, U.S. partner Square,
Inc., has developed a cashless payment service with a simple and intuitive
interface. We will focus on increasing the number of small and medium-sized
enterprises that handle this service by utilizing SMBC’s customer base.
In addition, we renovated our smartphone application in FY2018. We are
now focused on the enhancement of user services, with regard to which we
have begun offering on-the-spot issuance of debit cards, use limit settings,
and household budget management functions.
Branch Reorganizations
Over the past two years, SMBC has transformed 259 of its 430 branches into
next-generation branches. The goal of our reorganizations is not to reduce the
number of branches, but rather to maintain our network, which furnishes our
points of contact with customers, while cutting costs at branches. We are also
reforming our ATM network to better accommodate customer needs. In September
2019, we plan to make it possible for customers of both MUFG Bank, Ltd., and
SMBC to use the same off-site ATMs (ATMs in unstaffed locations other than
branches and convenience stores).
Another area of focus is enhancing the functionality and user interface of our
smartphone application. To this end, we are utilizing the input and requests garnered
from customers through our various contact points to develop optimal services.
Initiatives for Accomplishing Sustainable Development Goals
Balance of Stock-Based Assets
(SMBC and SMBC NIKKO)
(JPY tn)
15
14
13
12
11
0
+3.1
trillion
+1.8
trillion
From FY16
+1.1
trillion
’17/3
’18/3
’19/3 ’20/3 (Target)
Note: Investment products that generate stock-based gains,
such as investment trusts, fund wraps, and foreign
currency deposits (market value basis)
Payment Service Using Square’s Card Reader
Number of “SMBC Direct” Users*
(Millions of people)
8
6
4
2
0
’16
’17
’18
(FY)
* Number of customers who have logged in SMBC Direct at
least once every six months
Opportunities for Investment in Environmentally and Socially Minded Companies
SMBC Nikko Securities handles investment trusts emphasizing environmental, social, and governance (ESG) factors to provide
customers with opportunities for investment in environmentally and socially minded companies. In addition, SMBC began
offering the World Impact Investment Fund that invests in companies boasting innovative technologies or business models.
Through these and other initiatives, SMBC Group is supporting companies intent on accomplishing the United Nations
Sustainable Development Goals.
For more information on SMBC Group’s initiatives for contributing to the accomplishment
of the United Nations Sustainable Development Goals, please refer to page 76.
45
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Review of Operations by Business Unit
Wholesale Business Unit
The Wholesale Business Unit contributes
to the development of the Japanese economy
by providing financial solutions that respond
to the diverse needs of domestic companies in
relation to financing, investment management,
M&A advisory, and leases through a united
Group effort.
Deputy President and
Executive Officer
Co-Head of Wholesale
Business Unit
Gotaro Michihiro
Senior Managing
Executive Officer
Co-Head of Wholesale
Business Unit
Kimio Matsuura
The operating environment for financial institutions is transforming rapidly as indicated by changes in eco-
nomic and financial circumstances and reforms to customer business models stimulated by progress in the
digitalization trend.
Even in the midst of such constant changes to customer business models, the Wholesale Business Unit
has remained focused on developing frameworks for providing customers with high levels of value through a
united Group effort.
Going forward, we will further improve our strengths, including our keen ability to make proposals, speed,
and pioneering spirit, while sharing management resources among Group companies to provide high-value-
added, customer-oriented solutions.
As a business unit that develops operations in our mother market of Japan, we will give each of our corpo-
rate clients our full attention, grow with them, and contribute to the development of the Japanese economy.
Review of FY2018
In FY2018, high levels of net business profit and ROE were achieved with
figures of ¥484.9 billion and 12.1%, respectively. This achievement can be
attributed to higher non-interest income at SMBC following profit structure
reforms as well as growth in the investment bank operations of SMBC Nikko
Securities. These factors counteracted the decline in domestic loans and
investment management income at SMBC that was a result of Japan’s negative
interest rate policy and intense competition.
In addition, we were No. 1 in terms of the number of M&A advisory deals
for the second consecutive year and also became No. 1 in the number of
initial public offerings in which we were the lead underwriter. These accom-
plishments indicated the steady growth of the Wholesale Business Unit’s
underlying strength.
Contribution to Consolidated Net Business Profit
33%
FY2018
784.9
345.1
44.0%
484.9
12.1%
19.5
Increase
(Decrease)*1
+0.6
+0.9
+0.1%
(4.6)
(0.1)%
(0.4)
Gross profit (JPY bn)
Expenses (JPY bn)
(Overhead ratio)
Net business profit (JPY bn)
ROE*2
RwA*3 (JPY tn)
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figure is on a managerial accounting basis with RwA calculated assuming Basel III reforms are finalized.
*3 Figures are on a Basel III transitional basis.
46
Business Strategies for Creating ValueSMBC Group Annual Report 2019
Priority Strategies
Increase Market Share in Corporate & Investment Banking in Key
Global Markets
We will fully utilize the available capabilities of Group companies to propose
solutions to large corporations active on the global stage.
Specifically, we will develop frameworks that allow for greater coordination
among domestic and overseas bases and Group companies to swiftly make
high-quality proposals pertaining to global initiatives.
We will provide solutions for improving the corporate value of our clients and
increase customers’ satisfaction and market share of SMBC Group.
Build on Our Lead Position in the Japanese Mid-Sized Corporation
and SME Market
In the Japanese mid-sized corporation and SME market where we have
strengths, the Wholesale Business Unit will expand SMBC Group’s customer
base by providing various solutions based on the customers’ growth stages.
For companies in the early stages of their development, SMBC Group
provides comprehensive management support through SMBC Startup Hub,
which was opened in Tokyo’s Shibuya Ward with the goal of offering assistance
to start-up companies. For growing companies, we propose measures for
resolving management issues pertaining to initial public offering to support
their ongoing growth. SMBC Group thereby aims to grow with our customers
and expand our customer base.
Cross-Border M&A Project
Draw Up
Hypothesis
Post-Merger
Integration
Transaction
Banking
Financial and
Growth Strategies/
Various Solution
Proposals
Bridge Financing
Permanent
Financing
Ongoing Support Based on Customers’ Growth Stages
Early stage
Growth stage
Further growth
Incubation
Venture
Capital
Investment
Venture
Loan
IPO
Support
M&A
Business
Succession,
Carve-Outs,
etc.
Seamless Support by SMBC Group Companies
Based on Costumers’ Growth Stages
Collaboration
Building Network with Third Parties
Adaptation to New Business Models
Adaption to New Business Models
SMBC Group’s business model is being updated to adapt to the changes in
customer business models spurred by the progress of the digitalization trend.
At the same time, we are working to create new markets through co-creation
activities with customers in various business fields.
Other initiatives include development of infrastructure, active use of data ac-
quired both inside and outside of the Group, and improvement of employee digital
literacy to build frameworks for making higher-quality proposals to customers.
Sharing
Platforms
Co-creation
Cashless
SMBC Group
Customers
Sub
scription
IoT and
other data
use
Initiatives for Accomplishing Sustainable Development Goals
Assessment Loans
The Wholesale Business Unit provides a wide variety of assessment loans to support
customers seeking to work toward environmental issues or to address social issues
such as the empowerment of female employees and workstyle reforms.
In FY2019, we began offering SDG promotion assessment loans through a scheme
in which we first identify the relationship between customers’ businesses and the SDGs
when commencing new financing and then offer advice for advancing future initiatives
pertaining to the SDGs. These loans are just a part of our proactive efforts to contribute
to the accomplishment of the SDGs.
For more information on SMBC Group’s initiatives for contributing to the accomplishment
of the United Nations Sustainable Development Goals, please refer to page 76.
47
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Review of Operations by Business Unit
International Business Unit
The International Business Unit
supports the global business operations
of domestic and overseas customers
by leveraging SMBC Group’s extensive
office network and the various products
and services in which the Group
possesses global strengths.
Deputy President
and Executive Officer
Head of International
Business Unit
Masahiko Oshima
Over the years, the International Business Unit (“INBU”) bolstered its foreign currency procurement capa-
bilities while overcoming numerous financial crises, expanded transactions with leading overseas companies,
and enhanced its ability to offer products which met customers’ demands. Through such efforts, INBU was
able to realize steady growth while expanding its balance sheet. SMBC Group’s overseas network has grown
to 137 branches and offices in 40 countries and regions. Revenue generated by INBU has increased tenfold
over the past 20 years, coming to represent roughly 30% of SMBC Group’s total revenue. Going forward, we
will maintain our focus on capital and asset efficiencies. In order to realize this vision, we will pursue syner-
gies by carrying out various initiatives, such as leveraging the products in which SMBC Group possesses
top-tier capabilities to enhance our cross-selling capabilities and asset turnover initiatives. In this manner,
we will fully capitalize on the competitive edge we have over rivals to transition to a growth model that is not
overly dependent on the expansion of our balance sheet. Through such efforts, we will enhance SMBC
Group’s collective strengths in high growth potential overseas markets so that we may achieve sustainable
growth. INBU will also seek to reinforce corporate governance, compliance, and risk management to achieve
a healthy balance between “offense” and “defense” as it fulfills its role as a growth driver for SMBC Group.
Review of FY2018
The highly volatile market of FY2018 led to our securities businesses under-
performing, and we also booked one-time expenses associated with Brexit and the
merger of BTPN and SMBCI. Nonetheless, growth was achieved in deposits, foreign
exchange, derivatives, and other non-asset-based profits. In addition, we were able
to progressively move forward with priority strategies pertaining to initiatives such
as the implementation of asset-turnover based business models. As a result, net
business profit in FY2018 rose ¥3.6 billion, to ¥395.1 billion, and ROE was 9.3%.
Furthermore, we were able to maintain the balance of foreign currency depos-
its, a key prerequisite for sustainable growth, at a high level of approximately
US$200 billion, while also improving the quality of those deposits.
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figure is on a managerial accounting basis with RwA calculated assuming Basel III reforms are finalized
and excludes medium- to long-term foreign currency funding costs.
*3 Figures are on a Basel III transitional basis.
Contribution to Consolidated Net Business Profit
27%
Gross profit (JPY bn)
Expenses (JPY bn)
(Overhead ratio)
Net business profit (JPY bn)
ROE*2
RwA*3 (JPY tn)
FY2018
689.6
333.4
48.3%
395.1
9.3%
22.3
Increase
(Decrease)*1
+31.2
+22.2
+1.1%
+3.6
(1.1)%
+1.1
48
Business Strategies for Creating ValueSMBC Group Annual Report 2019 Priority Strategies
Improve Efficiencies (Asset and Capital)
We will leverage strengths in product areas in which SMBC Group boasts top-tier
capabilities, such as aircraft-related businesses and project finance, to enhance
relationships with customers so that we are able to service their funding and invest-
ment management needs, such as loans, deposits, foreign exchange, and
capital market transactions. We will also continue with our efforts to grow
asset-turnover based businesses and make further progress in shifting the make-up
of our portfolio from low-profit assets to high-profit assets. At the same time, we
will coordinate these various initiatives to heighten synergies and improve profitability
to achieve sustainable growth without significantly expanding INBU’s balance sheet.
Promote Cross-Selling by Leveraging Our Strengths
Global
network
Japanese
customer base
Cross-Selling by
Leveraging Our
Strengths
Securities
business
Product
capabilities
Banking
business
Maximize Group Strengths
SMBC Group’s growth has traditionally been driven by SMBC, which accounts for
approximately 80% of the group’s revenue. Going forward, however, we will seek
to enhance synergies among Group companies, investees, and partners in order
to further bolster our earnings capacity. The securities business, in particular, will
continue to be a strategic focal area with significant growth potential. In regards
to the merger of PT Bank Tabungan Pensiunan Nasional Tbk (“BTPN”) and PT
Bank Sumitomo Mitsui Indonesia (“SMBCI”), which was concluded in February
2019, we will look to accelerate intra-group collaborations with the post-merger
full-line commercial bank in order to enhance our foundation for medium- to
long-term growth under the Multi- Franchise Strategy.
Enhancing “Defense” through Better Controlled Business Operations
For foreign currency deposits, INBU will conduct funding activities with an
emphasis on costs and stickiness, in addition to diversifying procurement meth-
ods in order to further stabilize its foreign currency procurement capabilities.
At the same time, cost reductions will be pursued by eliminating redundant
functions throughout SMBC Group and consolidating back-office operations.
INBU will also pursue ongoing improvements in corporate governance, control
functions, and compliance in conjunction with the growth of its business. At the
same time, we will practice flexible and agile business management, paying due
consideration to rising geopolitical risks and market volatility while vigilantly
monitoring changes in the operating environment.
Initiatives for Accomplishing Sustainable Development Goals
Breakdown of Net Business Profit (FY2018)
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Finance and Leasing
(Of which, SMBC AC*
The Bank of East Asia
BTPN
SMBC Nikko Securities
Other
80%
11%
10%)
4%
1%
1%
3%
* SMBC Aviation Capital
Enhancement of Sticky Foreign Currency Deposits
Based on CMS*
(Customers)
(USD bn)
20,000
15,000
10,000
5,000
0
’14
’15
’16
’17
’18 (FY)
Number of customers (left axis)
Balance of liquid deposits (right axis)
* Cash management system
Financial Inclusion* through Our Multi-Franchise Strategy
In Indonesia, Bank BTPN offers “BTPN Wow!”, a service that uses mobile phone
technology to allow customers without bank accounts to perform bank transactions.
By leveraging its strengths and collective capabilities, SMBC Group is promoting
financial inclusion* by providing everyone with safe and easy-to-use financial services.
* The act of facilitating access to financial services to help add new levels of stability to people’s lives.
For more information on SMBC Group’s initiatives for contributing to the accomplishment
of the United Nations Sustainable Development Goals, please refer to page 76.
35
30
25
20
15
10
5
0
49
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Review of Operations by Business Unit
Global Markets Business Unit
The Global Markets Business Unit
offers solutions through foreign exchange,
derivatives, bonds, stocks, and other
marketable financial products and also
undertakes asset liability management (“ALM”)
operations which comprehensively control balance
sheet liquidity risks and interest rate risks.
Senior Managing
Executive Officer
Head of Global Markets
Business Unit
Hiroshi Munemasa
The Global Markets Business Unit is a team of market professionals that transforms economic cycles
into profits by collecting and analyzing information on various global developments to formulate scenarios
and accurately identify short-, medium-, and long-term market trends.
This unit is responsible for efforts to “strengthen sales & trading capability,” one of the Group’s
strategic focuses. Aiming to satisfy as many customers as possible, we will provide customers with optimal
solutions by fully utilizing the market-related insight and experience we have accumulated in order to fulfill
this responsibility.
Another responsibility of the Global Markets Business Unit is to support SMBC Group’s overseas
businesses by efficiently managing assets and liabilities based on consideration for stability and costs.
We continue to expand our investor base and diversify procurement methods for this purpose.
Review of FY2018
In FY2018, we achieved earnings amid a volatile operating environment by
rebalancing risks associated with the increasing severity of the trade disputes
between China and the United States and by implementing other flexible
portfolio management measurements. As a result, net business profit grew
by ¥6.4 billion, to ¥298.5 billion, and ROE was 31.8%.
In sales and trading, foreign exchange-related transactions were brisk. These
brisk transactions were a reflection of our ability to solicit transactions from
various customers by responding to diverse customer needs with high-quality
solutions proposals.
Contribution to Consolidated Net Business Profit
21%
Gross profit (JPY bn)
Expenses (JPY bn)
(Overhead ratio)
Net business profit (JPY bn)
ROE*2
RwA*3 (JPY tn)
FY2018
333.6
54.2
16.2%
298.5
31.8%
4.9
Increase
(Decrease)*1
+4.8
(0.4)
(0.4)%
+6.4
+1.4%
(1.2)
*1 Figures are after adjustments for interest rate and exchange rate impacts.
*2 Figure is on a managerial accounting basis with RwA calculated assuming Basel III reforms are
finalized and excludes IRRBB (Interest-Rate Risk in the Banking Book).
*3. Figures are on a Basel III transitional basis.
50
Business Strategies for Creating ValueSMBC Group Annual Report 2019
Priority Strategies
Market-Sensitive, Dynamic Portfolio Management
By conducting various scenario analyses by dealers around the globe, we will
strive to find opportunities to optimize our risk/reward ratio. We will identify signs
of market change to take advantage of profit opportunities through proactive
monitoring and dynamic but well-calculated market operations.
Solutions Provided through Marketable Financial Products—S&T Operations
The Global Markets Business Unit is strengthening its sales and trading opera-
tions to create an earnings pillar that is not dependent on market conditions.
Specifically, we intend to respond to customers’ hedging and investment
management needs by enhancing cooperation between domestic and overseas
product sales teams and bolstering our lineup of foreign exchange, derivatives,
bonds, stocks, and other marketable financial products.
Strengthening of Foreign Currency Funding Capabilities
In FY2018, we sought to expand our investor base and diversify procurement
methods by issuing Japan’s first contractual law covered bonds along with regu-
lar foreign currency bonds. At the same time, we have been pursuing the ideal
foreign currency funding portfolio by increasing medium- to long-term currency
swaps while being mindful of procurement costs.
To support the overseas businesses of SMBC Group, we will continue to
promote high-quality foreign currency funding emphasizing stability and costs.
At the same time, we will appropriately control our balance sheet in response
to international financial regulations.
Turning point
of trend
Carefully-crafted
risk control
Bonds
Equities
Dynamic portfolio
rebalancing
Turning point
of trend
Foreign Exchange Transaction Volume
(USD bn)
800
600
400
200
0
’16
’17
’18
(FY)
Funding through Medium- to Long-Term
Currency Swaps
(bp)
140
120
100
80
60
40
20
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
’15
’16
’17
’18
(FY)
Funding amount
Five-year dollar-yen basis swap spread
Initiatives for Accomplishing Sustainable Development Goals
Issuance of Green Bonds
Green bonds are bonds for which the use of procured funds is restricted to
renewable energy and other eco-friendly projects. By issuing green bonds, SMBC
Group is contributing to the promotion of environmental businesses and the reduction
of environmental impacts. Furthermore, we became the first private Japanese
company to issue green bonds to individual customers in December 2018.
Going forward, we seek to help drive the development of the market and the
preservation of the global environment as a leading Japanese issuer of green bonds.
For more information on SMBC Group’s initiatives for contributing to the accomplishment
of the United Nations Sustainable Development Goals, please refer to page 76.
51
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Business Strategies for Creating Value
Special Feature
Transformation of Business and Asset
Portfolio through Group Reorganization
Transformation of Business Portfolio
In accordance with the Medium-Term Management Plan,
“SMBC Group Next Stage”, SMBC Group has categorized its
current business portfolio into the four quadrants detailed to
the right (see page 32 for details).
Based on these quadrants, we are undertaking swift
reorganizations of the Group’s businesses in order to optimize
our Group structure while pursuing improvements in capital
and asset efficiency.
Grow
Businesses with strong growth potential to which
resources will be allocated as growth drivers
Enhance
Businesses of which we aim to increase profitability
through maximizing synergies and enhancing efficiency
on a group-wide basis while allocating resources
in a suitable manner
Build
Businesses to which resources will be allocated with
the aim of realizing future growth by establishing highly
distinctive business models
Transform
Businesses that compete with banks that are only
subject to domestic capital adequacy standards and
whose business models will be revised
Merger of SMBC Nikko Securities and
SMBC Friend Securities
Grow
Reorganization of the Sumitomo Mitsui
Financial Group and Sumitomo Corporation
Joint Leasing Partnership
Enhance
Goals of Reorganization
Goals of Reorganization
Improve customer satisfaction through increased product
offering, product-related research and enhancement of
sales channels
Enhance productivity through the optimization of sales
personnel staffing
Streamline overlapping functions and management
infrastructure to achieve cost saving synergies
Before Reorganization
Sumitomo Mitsui Financial Group
100%
SMBC Friend Securities
100%
Sumitomo Mitsui
Banking Corporation
100%
SMBC Nikko Securities
After Reorganization
Sumitomo Mitsui Financial Group
100%
100%
Sumitomo Mitsui
Banking Corporation
SMBC Nikko Securities
(Merged with
SMBC Friend Securities)
Engage in the full-scale undertaking of new business initiatives
• Develop of operations in the eco-business, infrastructure,
healthcare, and other growth fields
• Grow asset-based finance operations
• Create value chains with the aim of enhancing businesses
targeting clients’ commercial channels
Improve capital and asset efficiency
Before Reorganization
Sumitomo Mitsui
Financial Group
60%
Sumitomo Corporation
40%
Sumitomo Mitsui Finance and Leasing
After Reorganization
Sumitomo Mitsui
Financial Group
50%
Sumitomo Corporation
50%
Sumitomo Mitsui Finance and Leasing
52
SMBC Group Annual Report 2019 Reorganization
Merger of SMBC Nikko Securities and SMBC Friend Securities
Quadrant
Grow
Timing
January 2018
Conversion of The Japan Net Bank, into a consolidated subsidiary of Yahoo! JAPAN
Transform
February 2018
Change of ownership ratio of (reduction of investment in) POCKET CARD
Transform
March 2018
Deconsolidation of Kansai Urban Banking Corporation and THE MINATO BANK
Transform
March 2018
Reorganization of the Sumitomo Mitsui Financial Group and Sumitomo Corporation
Joint Leasing Partnership
Enhance
November 2018
Merger of BTPN and Bank Sumitomo Mitsui Indonesia
Grow, Build
February 2019
Conversion of Sumitomo Mitsui Card Company into a Wholly Owned Subsidiary
Merger of Sumitomo Mitsui Asset Management and Daiwa SB Investments
Grow
Build
April 2019
April 2019
Conversion of Sumitomo Mitsui Card Company
into a Wholly Owned Subsidiary
Grow
Merger of Sumitomo Mitsui Asset Management
and Daiwa SB Investments
Build
Goals of Reorganization
Goals of Reorganization
Develop business structure to form the core of cashless
payment strategies
Facilitate flexible strategy formulation and swift strategy
execution
Use management resources mutually
Before Reorganization
Sumitomo Mitsui
Financial Group
66%
100%
Cedyna
NTT DOCOMO
34%
Sumitomo Mitsui
Card Company
After Reorganization
Sumitomo Mitsui Financial Group
Maximize use of personnel, customer base and product
lineup to expand through the merger
Lead the industry in areas such as product development
and digitalization
Management that effectively controls costs, such as
streamlining overlapping management bases and operations
After Reorganization
Daiwa
Securities
Sumitomo Mitsui
Financial Group
MS&AD
Insurance Group
Holdings
SUMITOMO LIFE
INSURANCE
COMPANY
100%
23.5%
50.1%
15.0%
10.4%
Sumitomo Mitsui Card Company
100%
Cedyna
Sumitomo Mitsui DS Asset Management
Note: The two companies were owned through an intermediate holding company
Company formed through merger of Sumitomo Mitsui Asset Management
and Daiwa SB Investments
53
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Business Strategies for Creating Value
Special Feature
Realizing Asia-centric: The New
BTPN Opens Its Doors for Business
In February 2019, PT Bank Tabungan Pensiunan Nasional Tbk (“BTPN”), an equity-method affiliate of Sumitomo Mitsui
Banking Corporation, merged with PT Bank Sumitomo Mitsui Indonesia (“SMBCI”), a local subsidiary of Sumitomo Mitsui
Banking Corporation, to create PT Bank BTPN Tbk (“Bank BTPN”), a commercial bank with net assets exceeding ¥1
trillion. Bank BTPN will play an important role in realizing SMBC Group’s Asia-centric strategy as a full-line
commercial bank that offers a comprehensive range of banking services in both the wholesale and retail sectors.
smartphones that targets the middle-class, was launched in
2016. The number of Jenius users exceeded 1 million by the
end of the service’s second year.
BTPN: A Bank with a Robust Presence in the Retail Sector
BTPN was established in 1958 to handle the pensions of
retired military personnel. BTPN focused on providing finan-
cial education and services to retirees, micro-, small, and
medium-enterprises, and people residing in rural areas who
did not possess a bank account. Through such efforts, BTPN
deepened its footprint in Indonesia as a commercial bank with
a robust presence in the mass market segment.
BTPN also developed a reputation as one of Indonesia’s
most innovative banks. While Indonesia’s population exceeds
260 million, an estimated 50% of its adult population does not
possess a bank account. Given such an environment, BTPN
was quick to focus on expanding its digital services in line with
the rapid spread of mobile phones and smartphones, launch-
ing its mobile banking service “BTPN Wow!” in 2015. The aim
of BTPN Wow! is to provide affordable, safe, and convenient
financial services to the many people who do not possess a
bank account. The number of BTPN Wow! users have now
exceeded 6 million. “Jenius,” a mobile banking service for
Transformation into a Full-Line Commercial Bank
SMBCI was established in 1989 and offered various financial
services targeting the wholesale sector. SMBCI developed a
strong presence in the market for large corporates, namely
Japanese and leading local companies. In recent years,
SMBCI actively engaged in project finance, syndicated loans,
and structured finance transactions in relation to infra-
structure development, a theme which continues to draw
the strong interest of the Indonesian government.
Through its merger with SMBCI, BTPN transformed into a
full-line commercial bank by adding a comprehensive portfolio
of wholesale banking services to its existing portfolio of retail
banking services. The new
bank’s net assets exceed
¥1 trillion, making it the
8th largest Indonesian bank.
New company logo of the
merged bank
54
SMBC Group Annual Report 2019 BTPN Milestones
Overview of Merged Bank (as of March 2019)
1958 Established to serve retired military personnel
2008 Listed on the Indonesia Stock Exchange.
2013 SMBC acquired a 24.3% ownership in BTPN via
the purchase of shares owned by TPG Nusantara
S.à r.l. and other shareholders.
2014 SMBC increased its ownership in BTPN to
become the controlling shareholder with a
40.0% ownership stake.
2019 Merged with PT Bank Sumitomo Mitsui Indonesia
to form PT Bank BTPN Tbk.
Total assets
192.15
trillion IDR
SMBC’s ownership
97.3%
Number of branches
795
Number of employees
19,454
Number of digital
banking customers
7 million
A Strategic Component of Asia-centric
SMBC Group’s medium- to long-term vision is: “To be a global
financial group that leads growth in Japan and Asia
by earning the highest trust of our customers.” Furthermore,
“Accelerate our ‘Asia-centric’ strategy” has been stipulated as
one of the Group’s Seven Core Business Areas in the current
Medium-Term Management Plan (FY2017-FY2019).
As part of such efforts, SMBC Group has been pursuing its
Multi-Franchise Strategy, through which it will create a second
and a third SMBC Group in Asia that offers full-line commercial
banking services. Indonesia was selected as the first country
to implement the strategy given its high growth potential, and
the creation of Bank BTPN can be said to be an embodiment
of the strategy’s goal. As a result of the merger, SMBC Group
was able to make significant strides towards realizing its
Asia-centric strategy.
Bank BTPN will leverage the strengths its predecessor
banks have developed over the years to expand the coverage
of its services. In the retail sector, Bank BTPN will work to
expand its presence from the mass market segment to include
middle-class customers, while in the wholesale sector it will
expand its traditional focus on large corporates to include
medium-sized corporate/SME customers. Bank BTPN’s
operations will transcend Indonesia so that it may function as
a strategic component of SMBC Group’s Asia-centric strategy.
We will be the most preferred bank in Indonesia that changes our customers’ lifestyles
The merger of BTPN and SMBCI to form Bank BTPN represents a unique and
an ideal combination of two complementary banks. With its new vision, to be
Indonesia’s most preferred bank which makes a meaningful difference in the
lives of millions powered by technology, Bank BTPN will become a larger and
stronger bank that contributes more to the country’s economy. We believe
Bank BTPN will be able to unlock the opportunities that generate more valuable
customer solutions across businesses.
Ongki Wanadjati Dana President Director
55
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Business Strategies for Creating Value
Special Feature
Issuance of Japan’s First
Contractual Law Covered Bonds
SMBC has succeeded in issuing Japan’s first contractual law covered bonds. In this section,
we will explain the background and the significance behind the arrangement and issuance of
these covered bonds, which entailed overcoming the challenges presented by a lack of legal
frameworks in Japan in comparison with Europe.
Realization of a New Method of Foreign
Currency Funding
The prolongation of low interest rates in Japan is placing
downward pressure on the profitability of domestic busi-
nesses. This situation has prompted SMBC to bolster its over-
seas operations, causing the balance of outstanding loans
overseas to quadruple over the past decade and climb above
¥20 trillion. In response to this increase in foreign currency-
denominated assets, SMBC ramped up its foreign currency
funding by working to increase customer deposits and issuing
senior unsecured bonds. We also looked to diversify our
foreign currency funding methods through the issuance of
Australian dollar-denominated bonds and green bonds as part
of our efforts to realize stability in foreign currency funding.
The issuance of covered bonds was one new initiative that
drew our attention in this undertaking. Covered bonds are a
type of secured corporate bond originating in Europe that are
generally issued with collateral provided in the form of a pool
of housing loans and other low-risk assets (cover pool).
Should the issuer default, investors are able to seek recourse
to the issuer and are given priority access to recourse to the
cover pool above other creditors. This dual recourse frame-
work is a major characteristic of covered bonds. These bonds
also feature other investor protection provisions, such as
requirements that the issuer maintain an amount of collateral
in excess of the outstanding principal amount of the bonds.
These bonds are commonly issued overseas, with legal
frameworks pertaining to covered bonds in place in various
European and other countries. However, such frameworks do
not exist in Japan, and there are no prior cases of covered
bonds being issued in this country. It was against this back-
drop that SMBC sought to arrange and issue covered bonds
as a new method of foreign currency funding.
Goals of Covered Bond Issuance
SMBC turned its attention to covered bonds with two main
goals. The first goal was to realize a foreign currency funding
method that is highly viable under extraordinary
circumstances, such as those of high market volatility. In
Europe, the financial crises seen in the 2000s and forward
underscored the importance of covered bonds as a viable
foreign currency funding method for use when conditions are
extreme, spurring an increase in the utilization of such bonds.
The worldwide balance of outstanding covered bonds stood at
€2.5 trillion, and the total amount of covered bonds issued in
2017 climbed as high as €445.0 billion.
The second goal was to diversify our investor base. Until
now, attracting central banks, government institutions, and
other such investors into our conventional senior unsecured
bonds has proven difficult. This difficulty arises from the
tendency of such investors to only invest in highly rated
bonds, such as government bonds and the bonds of govern-
ment agencies. The ratings assigned by rating agencies
display the reliability of bonds. Our senior unsecured bonds
will never be able to exceed the ratings of Japanese govern-
ment bonds. Covered bonds, however, can achieve ratings
that are higher than those of Japanese government bonds,
thereby enabling us to expand our investor base.
Creation of Revolutionary Scheme for
Issuance
The greatest obstacle to arranging covered bonds in
Japan was the establishment of a dual recourse framework.
In Europe, there are legal frameworks in place ensuring that
the cover pool is not affected by bankruptcy proceedings
(separation of cover pool from bankruptcy). The legal frame-
works in Japan, however, were thought to obstruct the
development of dual recourse frameworks.
Breaking away from such preconceptions, we made it
possible to realize the separation of the cover pool from
bankruptcy through the use of a revolutionary scheme that
uses the close-out netting principle by applying the Japanese
Netting Act of Specified Financial Transactions Conducted by
Financial Institutions should the issuer default. However, the
ability to fulfill the necessary requirement to issue covered
bonds did not guarantee that there would be demand for this
56
SMBC Group Annual Report 2019 product from investors. SMBC’s covered bonds differ from
conventional covered bonds in their application of the afore-
mentioned Netting Act and in their use of residential
mortgage- backed securities (“RMBS”s) for the cover pool. In
light of these differences, it was unclear whether investors
would welcome these bonds. For this reason, we took steps to
gather input from a wide range of investors, including central
banks, government institutions, asset managers, and banks,
and ongoing discussions were held on how to reflect this input
into the structure. This process led us to judge that investors
would be receptive toward the following structure, which was
then used to issue Japan’s first contractual law covered bond.
Covered bond investors
Overseas trustee
Ability to seek
recourse to
SMBC or the
cover pool
(dual recourse)
Covered
bond
proceeds
Covered
bond
issuance
Provision of
RMBSs as
collateral
Issuer
(SMBC’s trust account)
Cover pool
SMBC
TRS*
transaction
Covered bond
proceeds
RMBSs
SMBC
(TRS
counterparty)
* Total return swap, a derivative transaction in which the principal is swapped
together with the economic gains (losses) of an asset
Low-Cost Foreign Currency Funding from a
Wide Range of Investors
SMBC’s euro-denominated contractual law covered bonds
received a rating of Aaa from Moody’s Investors Service, Inc.,
which exceeded the rating therefrom of A1 assigned to Japa-
nese government bonds. SMBC Group thus gained a method
of foreign currency funding at interest rates that are lower by
0.35% compared to the rate of the euro-denominated senior
unsecured bonds issued in July 2018.
Our contractual law covered bonds were issued in late
October 2018, at the same time as the slump in the senior
unsecured bonds market that followed market volatility stem-
ming from the downgrading of Italian government bonds and
the trade friction between China and the United States. These
covered bonds exhibited their viability as a foreign currency
funding method under extraordinary circumstances as we
were able to raise a sufficient amount of foreign currency
funding, despite the adverse market conditions.
Of the investors that purchased SMBC’s covered bonds, 42%
were fixed income asset managers. The next largest group was
comprised of central banks and official institutions, which ac-
counted for 22% of all investors, a substantially higher level than
would have been seen for our conventional senior unsecured
bonds. This figure is evidence that these bonds have enabled
us to incorporate a group of new investors into our investor base
that was previously out of reach. In this manner, the contractual
law covered bonds achieved their initial goal by making large
contributions to the expansion of our investor base.
Amalgamation of SMBC Group’s High-Level Expertise
Forged through more than six months of coordination, the
contractual law covered bonds were an amalgamation of the
high-level expertise of SMBC Group in the areas of banking,
securities, and trusts. Covered bonds have a history of more
than 250 years in Europe, and there have been attempts to
introduce these bonds into Japan for over a decade. However,
the issuance of such bonds in Japan was deemed to be im-
possible due to the legal restrictions. It was the passion of the
team to overcome these restrictions and realize the issuance of
covered bonds in Japan that drove this undertaking to success.
This accomplishment made waves throughout the market and
legal community in Japan and overseas, with some going as far
as to compare this innovative idea with the egg of Columbus.
We hope that this Aaa-rated scheme of foreign currency
funding will find a wider range of use throughout the market
as a low-cost, stress-resistant foreign currency funding method
and come to contribute to the stabilization of the foreign cur-
rency funding of Japanese financial institutions going forward.
SMBC Group covered bond team
57
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 58
SMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation Corporate Infrastructure Supporting Value Creation
60 Corporate Governance
68 SMBC Group Global Advisors
70 Outside Director Interview
72 Sumitomo Mitsui Financial Group Directors
76 Towards Sustainable Development of Society
80 Customer-Oriented Initiatives
83 Internal Audit
84 Compliance
86 Risk Management
90 Human Resources Strategy
94 IT Strategies
96 Communication with Stakeholders
98 Financial Review
59
SMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
Corporate
Governance
Our Approach
We position “Our Mission” as the universal
philosophy underpinning the management of
SMBC Group and as the foundation for all of
our corporate activities. We are working toward
effective corporate governance as we consider
the strengthening and enhancement of corporate
governance to be one of our top priorities in
realizing “Our Mission.”
Initiatives for Improving Corporate Governance
Establishment of Sumitomo Mitsui Financial Group
2002
Voluntary establishment of Nominating Committee,
Compensation Committee, and Risk Committee as
internal committees of the Board of Directors
2015
Establishment of the “SMFG Corporate Governance
Guideline”
Increase in the number of outside directors to five and
the number of outside corporate auditors to three
2005
Voluntary establishment of Audit Committee as
internal committee of the Board of Directors
2006
Formulation of “Basic Policy on Internal Control
Systems” through internal control resolution made
based on “Our Mission” and “Code of Conduct” in
order to establish frameworks for ensuing appropriate
operations
2010
Listing of shares on the New York Stock Exchange in
order to improve transparency of financial reporting,
increase convenience for investors, and diversify fund
procurement methods
2017
Strengthening of Group governance by appointing the
Chairman of SMBC Nikko Securities as a director of
Sumitomo Mitsui Financial Group along with the
President of SMBC
2016
Commencement of evaluations of the effectiveness
of the Board of Directors
Transition to a Company with Three Committees;
increase in the number of outside directors to seven;
establishment of voluntary Risk Committee together
with legally mandated Nomination Committee,
Compensation Committee, and Audit Committee; and
appointment of outside directors as chairmen of three
legally mandated committees
Institution of new Group governance system through
introduction of group-wide business units and CxO
system
2014
Appointment of independent directors and
independent auditors based on stipulations of the
Tokyo Stock Exchange
2019
Transition to the Company with Audit and Supervisory
Committee structure by core subsidiaries SMBC and
SMBC Nikko Securities
60
SMBC Group Annual Report 2019 Sumitomo Mitsui Financial Group’s Corporate Governance System
We have set forth a “Code of Conduct” to serve as action
guidelines across all business activities with the aim of sharing
the principles of “Our Mission” throughout the Group. In
addition, the “SMFG Corporate Governance Guideline,” a
guideline for corporate governance, has been formulated and
disclosed. We are promoting awareness and understanding
regarding these guidelines among all SMBC Group officers
and employees.
SMBC Group employs the Company with Nominating
Committee, etc., structure described in the Companies Act.
This structure was adopted in order to establish a corporate
governance system that is globally recognized and is aligned
with international banking regulations and supervision
requirements and achieve enhanced oversight of the exercise
of duties by the Board of Directors and expedite this exercise
of duties. In addition, core subsidiaries SMBC and SMBC
Nikko Securities transitioned to the Company with Audit and
Supervisory Committee described in the Companies Act in
June 2019.
We realize that there is no perfect form for corporate
governance structures. Accordingly, we will continue working
toward the strengthening and enhancement of corporate
governance in order to realize higher levels of effectiveness.
Corporate Governance System
Code of Conduct
To strive to increase shareholder value whilst also maintaining
healthy relationships with customers, employees, and other
stakeholders. To give utmost consideration to the trust which
people have in the firm, to abide by all laws and regulations, to
maintain a high ethical standard, and to act fairly and sincerely;
To continue improving our knowledge and capability and, at the
same time, to raise our productivity in order to provide superior
financial services at competitive prices;
To establish a top brand global financial group by understanding
the needs of each customer and by providing valuable services
which meet those needs;
To be selective and focused in the implementation of our busi-
ness strategy, to define and develop the competitive advantages
which we have over our competitors and, by allocating manage-
rial resources strategically to those businesses, to become a top
player in our selected markets;
To be creative, proactive, and courageous in order to be in a
leading position in all business areas and always a step ahead
of our competitors;
To build a strong organization based on market practice and
sound principles whilst reflecting our diverse values. To delegate
internal authority under an efficient and effective management
system which facilitates speedy decision-making and execution;
To support our business growth and the development of our
employees by setting challenging targets within an evaluation
and compensation framework which emphasizes their
capabilities and achievements.
Board of Directors
Focus on supervision of executive officers’ and directors’ execution of duties
Internal Committees
Nomination Committee
Compensation Committee
Audit Committee
Risk Committee (Optional)
Management Committee
Business execution decisions
Departments
Outside directors
Inside directors
Internal,
non-executive
directors
Outside expert
Chairman
Reporting line
(including personnel
right of consent)
Internal Audit Dept.
61
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Corporate Governance
Board of Directors
Role of the Board of Directors
Composition of the Board of Directors
The Board of Directors of the Company is primarily respon-
sible for making decisions on the matters that are within its
legally mandated scope of authority, such as basic manage-
ment policies, as well as for overseeing the exercise of duties
of executive officers and directors. Authority for execution
decisions other than those legally required to be made by the
Board of Directors will, in principle, be delegated to executive
officers. The purpose for this delegation is to enhance the
oversight function of the Board of Directors and to expedite
the exercise of duties.
The Board of Directors works toward the realization of “Our
Mission” and the long-term growth of corporate value and the
common interests of the shareholders. Any action that may
impede those objectives will be addressed with impartial
decisions and response measures.
Furthermore, the Board of Directors is responsible for estab-
lishing an environment that supports appropriate risk taking
by executive officers. It will develop a system for ensuring the
appropriateness of SMBC Group’s business operations pursu-
ant to the Companies Act and other relevant legislation in
order to maintain sound management. Another responsibility
of the Board of Directors is to exercise highly effective over-
sight of executive officers from an independent and objective
standpoint. Accordingly, the Board of Directors endeavors to
appropriately evaluate company performance and reflect
these evaluations in its assessment of executive officers.
The Board of Directors is comprised of directors with various
backgrounds and diverse expertise and experience. The
Company strives to maintain the appropriate number of direc-
tors in order to enable the Board of Directors to function with
the greatest degree of effectiveness and efficiency. In addition,
the Board of Directors is to be comprised of at least two direc-
tors, and more than one-third of all directors should be out-
side directors designated as independent directors based on
the stipulations of the Tokyo Stock Exchange.
As of June 27, 2019, the Board of Directors was comprised
of 15 directors. Ten of the 15 directors did not have business
execution responsibilities at the Company or its subsidiaries,
with seven of these 10 directors being outside directors. The
chairman of Sumitomo Mitsui Financial Group, who does not
have business execution responsibilities, served as the chair-
man of the Board of Directors. This membership ensures an
objective stance toward supervising the exercise of duties by
executive officers and directors.
Outside directors serve as chairmen and members of the
Company’s legally mandated and voluntarily established com-
mittees when necessary, outside directors will request reports
on compliance, risk management, or other matters from the
relevant divisions in order to promote appropriate coordination
and supervision.
Composition of the Board of Directors
Change in Number of
Directors (Year on Year)
17 15
Outside directors 7
Areas of
Expertise
Management
Finance /
accounting
Law
Diplomacy
3
1
2
1
Non-executive
directors
10 67%
Internal directors
(executive)
5
Internal directors
(non-executive)
3
62
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Internal Committees
Nomination Committee
The Nomination Committee is responsible for preparing pro-
posals regarding the appointment and dismissal of directors to
be submitted to the general meeting of shareholders. This
committee also deliberates on matters regarding personnel
decisions pertaining to officers of the Company and major
subsidiaries and the selection of successors to the presidents
of the Company and of core subsidiaries. The Nomination
Committee comprises one internal director and five outside
directors. In order to ensure transparency in deliberations on
officer personnel decisions, an outside director has been
appointed to serve as the chairman of this committee.
Compensation Committee
The Compensation Committee is responsible for deciding
policies for determining the compensation of executive officers
and directors of the Company as well as compensation amounts
of individual executive officers and directors of the Company
based on those policies. In addition, this committee deliber-
ates on the policies for determining the compensation of the
executive officers of major subsidiaries and the compensation
amounts of individual executive officers of the Company. The
Compensation Committee is comprised of two internal directors
and four outside directors. In order to ensure transparency in
deliberations on officer compensation, an outside director has
been appointed to serve as the chairman of this committee.
Internal Committee Composition
Audit Committee
The Audit Committee is responsible for the auditing of the
execution of duties by the executive officers and directors of
the Company, preparation of audit reports, and determination
of the content of proposals for election, dismissal, or non-
reelection of the accounting auditor to be submitted to the
general meeting of shareholders. Committee members are
appointed by this committee to perform audits of the opera-
tions and assets of the Company and its subsidiaries. The
Audit Committee is comprised of two internal directors and
three outside directors. An outside director has been ap-
pointed to serve as the chairman of this committee in order to
guarantee the objectivity of audits and independence from
business execution. In principle, at least one member of this
committee is to possess specialized expertise in finance.
Risk Committee
The Risk Committee is responsible for deliberation on
matters relating to environmental and risk awareness, the
operation of the Risk Appetite Framework, and the implemen-
tation of risk management systems as well as other important
matters pertaining to risk management and reporting to the
Board of Directors on these matters. The Risk Committee is
comprised of one internal director, two outside directors, and
two outside experts.
Nomination Committee
(1 inside director,
5 outside directors)
Compensation Committee
(2 inside directors,
4 outside directors)
Audit Committee
(2 inside directors,
3 outside directors)
Member
Chairman
Risk Committee
(1 inside director, 4 outside
directors, and outside experts)
Masayuki Matsumoto Outside director
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
Chairman of the Board
Takeshi Kunibe
Director
President
Director
Senior Managing Corporate
Executive Officer
Director
Director
Atsuhiko Inoue
Toru Mikami
Hirohide Yamaguchi*1 Outside expert
Outside expert
Tatsuo Yamasaki*2
Toru Nakashima
Jun Ohta
*1 Chairman of the Advisory Board of Nikko Research Center, Inc., former Deputy Governor of the Bank of Japan
*2 Specially appointed professor of International University of Health and Welfare
63
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Meetings Only Attended by Outside Directors
As described in the “SMFG Corporate Governance Guideline,”
outside directors may hold meetings that only outside direc-
tors may attend to serve as forums for building consensus and
exchanging information with regard to matters pertaining to
corporate governance and businesses from an independent
and objective standpoint. In FY2018, three such meetings
were held. During these meetings, outside directors engaged
in vigorous discussion regarding topics such as the ideal
procedures for selecting agenda items based on the role of
the Board of Directors and management issues for SMBC
Group. The results of these discussions were communicated
to management.
Corporate Governance
Support Systems for Outside Directors
The Company recognizes that outside directors require an
in-depth understanding of the Group’s business operations
and business activities. Accordingly, we endeavor to continu-
ally supply outside directors with the information and insight
on business activities that is necessary to supervise manage-
ment while also providing the opportunities needed to fulfill
their roles.
Initiatives to support directors in FY2018 included the
following.
• Participation in meetings of general managers of core Group
companies and other executive team meetings, tours of bases of
Group companies, and discussions with presidents of Group
companies for facilitating a greater understanding of business
operations and business activities
• Explanatory forums on Board of Directors’ meeting agenda items
prior to Board meetings to assist in understanding of items
• Study sessions for outside directors led by external lecturers on
topics such as corporate governance and financial regulations
• Small meetings with institutional investors to provide opportunities
for understanding the perspectives of stakeholders
• Training through SMBC Academy training website for employees
Outside Director and Corporate Auditor Independence Standards
In order for an outside director or outside corporate auditor (“Outside Director or Corporate Auditor”) of the Company to be
classified as independent, they must not fall under, or have recently fallen under, any of the following categories:
1
Major
Business
Partner
2 Specialist
• An entity that has the Company or SMBC as a major business partner or an executive director, officer, or other person engaged in
the execution of business of such an entity.
• An entity that is a major business partner of the Company or SMBC or an executive director, officer, or other person engaged in the
execution of business of such an entity.
• A legal expert, accounting expert, or consultant who has received money or other property from the Company or SMBC averaging more
than JPY 10 million per year over the last three years, in addition to any compensation received as a director or corporate auditor.
• A member of a Juridical Person, etc., or other organization that provides specialist services, such as a law firm, accounting firm, or
consulting firm, which has received large amounts of money or other property from the Company or SMBC.
3 Donations
A person who has received – or an executive director, officer, or other person engaged in the execution of business of an entity which
has received – on average over the last three years, donations or other payments from the Company or SMBC in excess of the greater
of JPY 10 million per year and 2% of the recipient’s annual revenue.
4
5
Major
Shareholder
A major shareholder of the Company or an executive director, officer, or other person engaged in the execution of business of a major
shareholder (including anyone who has been a major shareholder, or an executive director, officer, or other person engaged in the
execution of business of a major shareholder, within the last three years).
Close
Relative
A close relative of any person (excluding non-material personnel) who falls under any of the following:
(1) A person who falls under any of 1 through 4 above; or
(2) A director, corporate auditor, executive officer, or other person engaged in the execution of business of the Company or a
subsidiary thereof.
Please see Reference 7 of the “SMFG Corporate Governance Guideline” for more information.
https://www.smfg.co.jp/english/aboutus/pdf/cg_guideline_e.pdf
64
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Evaluation of the Board of Directors’ Effectiveness
The “SMFG Corporate Governance Guideline” contains provi-
sions on evaluating the effectiveness of the Board of Directors.
In accordance with these provisions, annual analyses and
evaluations are conducted by the Board of Directors to deter-
mine whether or not it is executing its duties in line with the
guideline, and the results of these analyses and evaluations
are disclosed.
In FY2018, the evaluation focused on the four areas de-
scribed below, which are areas for which provisions exist in
Japan’s Corporate Governance Code and the “SMFG Corporate
Governance Guideline.” All seven outside directors were asked
for their opinions regarding these areas at meetings of the
Board of Directors held in April and May 2019, and interviews
of internal directors were conducted thereafter. The primary
subject of interviews with internal directors was their expecta-
tions of outside directors. Discussions based on the findings
took place at Board of Directors’ meetings in June, after which
analyses and evaluations were carried out to determine wheth-
er or not the Board of Directors was executing its duties in line
with the “SMFG Corporate Governance Guideline.” Moreover,
reviews by external specialists with expertise from developed
nations are received at each stage of the evaluation process.
Targets
Implementation
(1 year)
Effectiveness
evaluation
Improvement
proposals
PDCA Cycle
Overview of Evaluation Results
Role of the Board of Directors
Composition of the Board of Directors
Steps are taken to invigorate discussions while taking advantage of the
highly specialized expertise of the outside directors. These discussions
were geared toward medium- to long-term improvements in corporate
value based on the interests of various stakeholders while incorporating
important matters related to business strategies to contribute to the
fulfillment of “Our Mission.”
Based on the executive-side discussions of the Management Commit-
tee, matters related to business plans and other basic management
policies as well as the status of the business execution were presented
and reported on several occasions. As a result, effective deliberations
on these matters were able to take place and oversight functions were
exercised properly.
Further evaluations and revisions are necessary for enabling outside
directors to better exercise their functions based on the issues and
future direction for SMBC Group, ongoing, in-depth discussions on the
overarching management issues (big picture) pertaining to medium-
to long-term targets, and the expectations of outside directors.
Proceedings of the Board of Directors
The number and content of agenda items as well as the amount of
time dedicated to discussion of agenda items were more or less
around the appropriate level.
Discussions were livelier than in the previous fiscal year due to the
allocation of time to discuss topics not included in agenda and seating
arrangement-related measures.
The following measures were taken to encourage frank discussion at
meetings of the Board of Directors.
• Preparation of clearer explanations and materials on the points
to be discussed
• Measures related to the direction of proceedings
As of March 31, 2019, the Board of Directors consisted of 17 direc-
tors, seven of which were outside directors. Accordingly, outside
directors represented over 40% of all directors.
It was once again acknowledged that the outside directors represented
a diverse range of expertise, genders, and nationalities and that the
Board of Directors features an atmosphere conducive to outside
directors voicing opinions regarding management.
There is a need to continue evaluating and revising the number of
members and the composition of the Board of Directors to ensure that
the Board of Directors is suitable based on its role.
Support Systems for Outside Directors
Information necessary for making flexible management decisions in a
changing operating environment and for exercising effective oversight
functions continued to be supplied to Board of Directors’ members in
an appropriate and timely manner.
The Company continued to provide systems for effectively supporting
the Board of Directors in making management decisions through
venues such as study sessions for outside directors and forums for
discussions between outside directors and internal directors, executive
officers, and the accounting auditor.
It is desirable for the Company to continue promoting initiatives for
utilizing the insight of outside directors (such as by arranging forums
for exchanges of valuable information between outside directors or
between the executive and oversight functions and increasing the
amount of information provided to outside directors).
65
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Governance
We also introduced the malus (forfeiture) of restricted stock
and the claw-back of vested stock allocated to the executives
under the Plans to restrain excessive risk-taking and foster a
prudent risk culture expected of a financial institution.
Compensation Program
We revised the executive compensation program and
introduced new Stock Compensation Plans as a part of the
executive compensation program, for the purpose of:
1. Providing more appropriate incentives for executives,
strengthening linkage with our short-, medium-, and
long-term performance, and
2. Further aligning the interests of executives with those
of shareholders, by increasing the weight of stock
compensation and enhancing the shareholding of
our executives.
Executive Compensation System
Compensation Components
Payment Standards (Range of Variation)
Payment Method
Base salary
Fixed compensation
• Cash
Bonus (cash)
Bonus (Stock
Compensation Plan II)
Compensation determined based on
SMFG’s annual performance (0%–150%)
Standard levels × annual performance of SMFG and SMBC as
well as on the performance of the executive
• Cash: 70%
• Restricted stock: 30%
Stock Compensation Plan I
Compensation determined based on
SMFG’s medium-term performance, etc. (0%–150%)
Standard levels × SMFG’s medium-term performance, etc.
[Performance Indices]
Financial
Targets
Category
Performance Indices
Capital Efficiency
ROE/RORA
Cost Efficiency
Overhead ratio
Financial Soundness Common equity tier 1 capital ratio
Growth
Growth (rate/amount) of net profit
Shareholder Value
Total shareholder return
Dividend per share
Customer Value
Customer satisfaction surveys, etc.
• Restricted stock
Stock Compensation Plan III
(Promotion reward plan)
• Restricted stock
Applicable to malus and claw-back provisions
Foster a prudent risk culture expected of a financial institution
P
o
r
t
i
o
n
o
f
s
t
o
c
k
-
b
a
s
e
d
c
o
m
p
e
n
s
a
t
i
o
n
:
2
5
%
P
o
r
t
i
o
n
o
f
v
a
r
i
a
b
l
e
c
o
m
p
e
n
s
a
t
i
o
n
:
4
0
%
Providing more
appropriate
incentives for
executives
Further aligning
the interests of
executives
with those of
shareholders
66
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Executive Management Systems
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 Sumitomo Mitsui
Financial Group with other members including executive
officers and other officers designated by the President.
The President of Sumitomo Mitsui Financial Group
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.
Group-Wide Business Units and CxO System
In April 2017, the Company introduced group-wide
business units and the CxO system with the aim of enhancing
Group management. The group-wide business unit structure
entailed the creation of the Retail Business Unit, the Whole-
sale Business Unit, the International Business Unit, and the
Global Markets Business Unit. The goal of this structure is to
heighten our ability to address the various needs of customers
on a group-wide basis by enabling the business units to
formulate and implement business strategies based on their
respective customer segments. The CxO system entails the
appointment of nine Group chief officers in charge of specific
areas in addition to the Group CEO (President of Sumitomo
Mitsui Financial Group). This system is meant to improve
Group management capabilities centered on the holding
company. The heads of business units as well as the chief
officer positions will, in principle, be filled with executive
officers of the Company, with the one exception being the
Group Chief Audit Executive (CAE). Individuals appointed to
these positions are expected to exercise their duties as the
person responsible for overseeing their business unit or head
office division and report on the execution of their duties to
the Board of Directors.
67
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 SMBC Group Global Advisors
Corporate Governance
SMBC Group Global Advisors (“Global Advisors”) act in an advisory capacity to the SMBC
Group Management Committee by attending SMBC Group Global Advisory Meetings, which we
hold on a regular basis.
SMBC Group appointed Global Advisors to provide advice to it on global business and on political and
economic issues in Americas, EMEA and Asia.
At SMBC Group Global Advisory Meetings, advisors inform the Management Committee of trends and
developments in the financial sector and the political and economic environments of the respective regions.
The Global Advisors also provide regular insight in respect of political and economic issues relating to the
formulation of strategy by SMBC Group and key risks faced by SMBC Group.
The Third SMBC Group Global Advisory Meeting
The Third SMBC Group Global Advisory Meeting was held in
Tokyo in May 2019. Five SMBC Group Global Advisors and
members of the Management Committee took part in the
meeting, and actively discussed the business environment,
the business trends, and the global affairs which we need to
take into consideration when formulating the next Medium-
Term Management Plan.
Especially in regards to the business trends in the financial
services sector, various opinions were raised concerning how
SMBC Group plays roles in the market and what kind of
strategy it should focus on, as the digitalization has been
rapidly progressing and the threats of new entrants has
been increasing.
In addition to that, the business environment was also
well discussed from the viewpoints of risks which SMBC
Group needs to take into consideration in its global business
operations, such as the prolonged US-China tensions.
SMBC Group states in its 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”
and will actively leverage the expertise of the Global Advisors
in achieving the realization of that Vision.
68
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
SMBC Group Global Advisors
Dr. Andreas Dombret
Dr. Robert D. Hormats
Career summary
2010–2018
A member of the Executive Board,
Deutsche Bundesbank
2005–2009
Vice Chairman Europe,
Bank of America
Career summary
2013–Present
Vice Chairman, Kissinger Associates
2009–2013
United States Under Secretary
of State
Mr. Andrew N. Liveris
Mr. Cesar V. Purisima
Career summary
2017–2018
Executive Chairman,
DowDuPont Inc.
2006–2017
Chairman and CEO,
The Dow Chemical Company
Career summary
2010–2016
Secretary of Finance of the Republic
of the Philippines
2004–2005
Secretary of Trade and Industry of the
Republic of the Philippines
Sir David Wright
Mr. Joseph Yam
Career summary
2003–2017
Vice Chairman, Barclays
1996–1999
British Ambassador to Japan
Career summary
2017–Present
A member of the Executive Council,
Hong Kong SAR
1993–2009
Chief Executive of the Hong Kong
Monetary Authority
69
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Outside Director Interview: Selection Process for the New Group CEO
Corporate Governance
Sumitomo Mitsui Financial Group
Director
Chairman of the Nomination Committee
Yoshinobu Tsutsui
Q
FY2019 marked the first time our Group CEO
changed since Sumitomo Mitsui Financial
Group transferred to a Company with Three
Committees. Could you please describe the
selection process that was taken?
I was appointed as an outside director of Sumitomo Mitsui
Financial Group in 2017, the same year in which the company
transferred to a Company with Three Committees. In terms of
internal committees, I am a member of the Compensation
Committee and I am the Chairman of the Nomination Commit-
tee. The Nomination Committee has been constructed in a
manner which stresses objectivity and transparency, with five of
its six members being outside directors. Of course, the quality
of discussions takes precedence over the committee’s format.
Repeated discussions took place at the Nomination Committee
meetings for more than one year regarding the selection of the
new Group CEO, and I am confident that the deliberations were
conducted in an objective and transparent manner.
The Nomination Committee established a number of specific
points which needed to be considered when selecting the new
Group CEO after carefully studying the business environment
and business operations of SMBC Group and the qualities we
believed the Group’s leader needed to possess. For example, in
order to realize SMBC Group’s medium- to long- term vision of
becoming a global financial group, we believe that the success-
ful candidate would need to possess a broad global-based
perspective, deep insights, and a creative imagination. As such,
these qualities were included in the selection criteria. The
selection criteria were by no means limited to abilities and skills,
they also included character and behavioral traits, for example
the tenacity and persistence to assemble timely decisions and
to implement those decisions, the ability to form and deploy
outstanding teams, leadership and optimism which demonstrate
courage, and grit/tolerance. Based on such qualities, the
Nomination Committee came to its final decision in December
2018 following a deliberate selection process, which included
candidate interviews.
70
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Q
Could you please share with us some points to
which you paid particular attention during the
Nomination Committee’s selection process?
I did not focus on any single point during the selection
process. The reason being that the criteria required of the
individual selected to lead SMBC Group are multi-faceted
and diverse. My focus was on whether the candidates satisfied
all of the required criteria to a very high standard, and I believe
that the other members of the Nomination Committee shared
this mindset, which allowed us to engage in deliberations
based on a common understanding.
The purpose of involving outside directors in this type of
process is to ensure the presence of opinions that are based
on impartiality, fairness, and neutrality. I believe this is precisely
what shareholders and other stakeholders expect. As such,
I paid very careful attention to ensure that such values were
reflected in the discussions I guided as the Chairman of the
Nomination Committee. Mr. Ohta was selected as the new
Group CEO, and I have no doubt whatsoever that SMBC
Group’s stakeholders understand why Mr. Ohta was selected
once they refer to the required abilities and skills, experience,
and character and behavioral traits that I mentioned earlier.
If we take the aforementioned “possess a broad global-based
perspective, deep insights, and a creative imagination” as an
example, Mr. Ohta has been a leader in SMBC’s project finance
business since its infancy more than 20 years ago. Project
finance has grown into a business in which SMBC Group is a
top-tier global player. Mr. Ohta also has abundant experience
conducting business on the global stage, including from his
experience residing in Singapore. In addition, Mr. Ohta accumu-
lated considerable experience and knowledge concerning digital
technology, which is rapidly growing in importance in the finan-
cial sector, during his tenure as CDIO where he was responsible
for a number of SMBC Group’s new business strategies, for
example cashless payments.
Having said this, if I was asked what quality I consider to be
most important to a business leader, and I was to disregard my
role as Chairman of the Nomination Committee, I would reply:
“leadership.” While similar words exist, for example captaincy,
they give the image of individuals forcibly imposing their will on
others. The leadership I refer to is the ability to attract people
and instill a strong sense of loyalty in them. An individual
making the most of his character and insights, in other words
his personal capabilities, to guide SMBC Group. This is the
leadership which I am referring to.
With the goal of ensuring impartiality, fairness, and neutrality
the Nomination Committee engaged in deliberations focusing
on the qualities I discussed earlier, but I want to stress the fact
that Mr. Ohta certainly possesses, in ample amounts, the type of
leadership which I just shared with you.
SMBC Group has stated that becoming
a global financial group is its medium- to
long-term vision. What do you think is the
most important factor to realizing this vision?
Q
I believe the most important factor is to strengthen SMBC
Group’s corporate governance on a global basis. While it is also
necessary to devote resources to create the framework itself, as
SMBC Group has been making steady progress in this regard I
believe that the focus should now be on further enhancing the
framework’s effectiveness.
In order for this to happen, SMBC Group employees must
address and resolve existing differences in perception by
communicating with each other, and this needs to be done on
a global basis. People will always have different perceptions.
For example, employees will feel different levels of urgency
regarding a particular risk. If we look at SMBC Group, differ-
ences in perception exist between Group companies, business
units, administrative departments and front office departments,
domestic and overseas offices, even between customers and
markets. Creating a system which can promptly detect and
resolve such differences will increase the effectiveness of SMBC
Group’s corporate governance framework. The key to achieving
this is to develop personnel who are highly sensitive to such
differences. I believe that developing as many such personnel
as possible is a critical part of enhancing SMBC Group’s global
corporate governance capabilities.
I was President of the Nippon Life Insurance Company for
seven years starting in 2011. During this time I failed to sense a
critical difference in the perception of the company’s employees
which led to the deterioration of a particular issue. As such, I
have consistently focused on the effectiveness of SMBC Group’s
corporate governance in my role as an outside director. I will
continue to devote my utmost efforts to support the realization
of SMBC Group’s Medium-Term Management Plan and the
sustained improvement of SMBC Group’s corporate value by
proactively voicing my views, which reflect my experiences as a
business leader, at Board of Director, Nomination Committee,
and Compensation Committee meetings.
71
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Sumitomo Mitsui Financial Group Directors (As of June 27, 2019)
Corporate Governance
Takeshi Kunibe
Chairman of the Board
Jun Ohta
Director
President (Representative
Corporate Executive Officer)
Group CEO
Career summary
1976 Joined Sumitomo Bank
2003 Executive Officer of Sumitomo
Mitsui Banking Corporation
(“SMBC”)
2006 Managing Executive Officer
of SMBC
2007 Managing Executive Officer
of the Company
Director of the Company
2009 Director and Senior Managing
Executive Officer of SMBC
2011 President and Chief Executive
Officer of SMBC
2017 President of the Company
Resigned as Director of SMBC
Director President of the Company
2019 Chairman of the Board of the
Company (to present)
Career summary
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer
of SMBC
2014 Senior Managing Executive Officer
of SMBC
2016 Director and Senior Managing
Executive Officer of SMBC
2017 President of SMBC (to present)
Director of the Company
(to present)
Makoto Takashima
Director
President of SMBC
Haruyuki Nagata
Director Senior Managing
Corporate Executive Officer
Group CRO
Director and Senior Managing
Executive Officer of SMBC
Career summary
1982 Joined Sumitomo Bank
2009 Executive Officer of SMBC
2012 Managing Executive Officer of SMBC
2013 Managing Executive Officer of the
Company
2014 Senior Managing Executive Officer
of the Company
Senior Managing Executive Officer
of SMBC
Director of the Company
2015 Director and Senior Managing
Executive Officer of SMBC
2017 Director and Deputy President of
the Company
Resigned as Director of SMBC
Director Deputy President and
Corporate Executive Officer of
the Company
2018 Director and Deputy President
of SMBC
2019 Director President of the Company
(to present)
Resigned as Director of SMBC
Career summary
1985 Joined Mitsui Bank
2011 General Manager of Financial
Accounting Department of the
Company
2013 Executive Officer of SMBC
2015 Managing Executive Officer of SMBC
2016 Managing Executive Officer of the
Company
2018 Director and Managing Executive
Officer of SMBC
Director and Senior Managing
Executive Officer of SMBC (to present)
2019 Senior Managing Corporate Executive
Officer of the Company
Director Senior Managing Corporate
Executive Officer of the Company
(to present)
72
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Toru Nakashima
Director Senior Managing
Corporate Executive Officer
Group CFO, Group CSO
Director and Senior Managing
Executive Officer of SMBC
Atsuhiko Inoue
Director
Director of SMBC
Career summary
1986 Joined Sumitomo Bank
2013 General Manager of Consumer
Business Planning Department of
the Company
2014 Executive Officer of SMBC
2015 General Manager of Corporate
Planning Department of the
Company
2016 Managing Executive Officer of
SMBC
2017 Managing Executive Officer of
the Company
2019 Director and Managing Executive
Officer of SMBC
Senior Managing Corporate
Executive Officer of the Company
Director and Senior Managing
Executive Officer of SMBC
(to present)
Director Senior Managing Corporate
Executive Officer of the Company
(to present)
Career summary
1984 Joined Sumitomo Bank
2006 General Manager of Legal Department
of SMBC
2013 Co-General Manager of General
Affairs Department of the Company
2015 Senior Manager of Head Office
of SMBC
Standing Corporate Auditor of the
Company
2017 Director of the Company (to present)
Toru Mikami
Director
Tetsuya Kubo
Director
Representative Director,
Chairman of SMBC Nikko
Career summary
1981 Joined Sumitomo Bank
2008 Executive Officer of SMBC
2011 Managing Executive Officer of SMBC
2014 Senior Managing Executive Officer of
the Company
Director and Senior Managing
Executive Officer of SMBC
Director of the Company
2015 Resigned as Director of the Company
Senior Managing Executive Officer
of SMBC
2019 Director of the Company (to present)
Director of SMBC (to present)
Career summary
1976 Joined Sumitomo Bank
2003 Executive Officer of SMBC
2006 Managing Executive Officer of SMBC
2008 Managing Executive Officer of the
Company
2009 Senior Managing Executive Officer of
the Company
Director and Senior Managing
Executive Officer of SMBC
2011 Deputy President and Executive
Officer of the Company
Director and Deputy President
of SMBC
Director of SMBC Nikko Securities
Inc. (“SMBC Nikko”)
Director of the Company
2013 Resigned as Director of the Company
Resigned as Director of SMBC
Representative Director, President &
CEO of SMBC Nikko
2016 Representative Director, Chairman
of SMBC Nikko (to present)
Director of the Company (to present)
73
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Sumitomo Mitsui Financial Group Directors (As of June 27, 2019)
Corporate Governance
Career summary
1967 Joined the Japanese National Railways
1987 Joined Central Japan Railway Company
2004 President and Representative Director
of Central Japan Railway Company
2010 Vice Chairman and Representative
Director of Central Japan Railway
Company
2011 Resigned as Director of Central Japan
Railway Company
President of Japan Broadcasting
Corporation
2014 Retired from Japan Broadcasting
Corporation
Special Advisor of Central Japan
Railway Company (to present)
2015 Director of SMBC
2017 Director of the Company (to present)
Retired as Director of SMBC
Career summary
1970 Joined Tohmatsu Awoki & Co.
(currently Deloitte Touche
Tohmatsu LLC)
1974 Registered as a certified public
accountant (to present)
1991 Representative Partner of
Tohmatsu & Co.(currently Deloitte
Touche Tohmatsu LLC)
2010 Retired from Deloitte Touche
Tohmatsu LLC
Chairman and President of
The Japanese Institute of Certified
Public Accountants
2013 Advisor of The Japanese Institute
of Certified Public Accountants
(to present)
2014 Professor of Tohoku University
Accounting School
2017 Director of the Company
(to present)
Career summary
1976 Registered as an attorney at law,
admitted in New York, the U.S.A.
(to present)
2003 General Counsel of the Asian
Development Bank
2007 Joined White & Case LLP
2008 Registered as Foreign Attorney in
Japan (to present)
Registered Foreign Attorney
in Japan at White & Case LLP
(to present)
2015 Director of the Company
(to present)
Career summary
1973 Joined Ministry of Foreign Affairs
of Japan
2005 Director-General of Foreign Policy
Bureau in Ministry of Foreign
Affairs of Japan
2007 Deputy Minister for Foreign Affairs
(in charge of economy) of Ministry
of Foreign Affairs of Japan
2009 Ambassador of Japan to Russia
Ambassador of Japan to Russia,
Armenia, Turkmenistan and
Belarus
2011 Ambassador of Japan to Italy
Ambassador of Japan to Italy,
Albania, San Marino and Malta
2014 Retired from office
2015 Director of the Company
(to present)
Arthur M. Mitchell
Director
Attorney at law, admitted in
New York, the U.S.A. and
Foreign Attorney in Japan
Masaharu Kohno
Director
Former diplomat
Masayuki
Matsumoto
Director
Special Advisor of Central
Japan Railway Company
Shozo Yamazaki
Director
Certified public accountant
74
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Career summary
1984 Registered as an attorney at law
(to present)
1999 Attorney at law at Shinbo
Law Office (currently Shinbo &
Partners) (to present)
2015 Corporate Auditor of SMBC
2017 Director of the Company
(to present)
Resigned as Corporate Auditor
of SMBC
Katsuyoshi Shinbo
Director
Attorney at law
Career summary
1977 Joined Nippon Life Insurance
Company
2004 Director of Nippon Life Insurance
Company
2007 Director and Executive Officer of
Nippon Life Insurance Company
Director and Managing Executive
Officer of Nippon Life Insurance
Company
2009 Director and Senior Managing
Executive Officer of Nippon Life
Insurance Company
2010 Representative Director and Senior
Managing Executive Officer of
Nippon Life Insurance Company
2011 President of Nippon Life Insurance
Company
2017 Director of the Company
(to present)
2018 Chairman of Nippon Life Insurance
Company (to present)
Career summary
1987 Joined Dow Corning Corporation
2008 Director of Dow Corning Toray Co.,
Ltd.
2009 Chairman and CEO of Dow Corning
Toray Co., Ltd.
2011 Regional President -Japan/Korea of
Dow Corning Corporation
2015 President and Representative
Director of Dow Corning Holding
Japan Co., Ltd.
Director of the Company
(to present)
2018 Executor, Dow Switzerland Holding
GmbH, which is a Representative
Partner of Dow Silicones Holding
Japan G.K. (to present)
Chairman and CEO of Dow Toray
Co., Ltd. (to present)
Yoshinobu Tsutsui
Director
Chairman of Nippon Life
Insurance Company
Eriko Sakurai
Director
Chairman and CEO of
Dow 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 135 for SMBC directors, Audit and Supervisory Committee.
75
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
Towards Sustainable Development
of Society
Our Approach
On a global scale, we are currently facing various environmental issues,
such as climate change resulting from global warming, as well as social
issues, such as human rights violations. In Japan, we must address various
challenges arising in conjunction with changes to the social structure, such
as rapid population aging and the contraction of the workforce.
SMBC Group believes that it is the social responsibility of a company to
contribute to the sustainable development of society as a whole by providing
stakeholders with even higher value through the course of its business.
Environment
Renewable Energy Project Funding Amount
(FY2018)
Physical Risks Identified through Scenario Analyses
(Projected increase in credit costs)
Carbon-Related Asset Exposure Ratio
¥520.0
billion
¥30.0–¥40.0
billion
7.8%
Initiatives for Supporting the Environment
Promotion of Renewable Energy
through Financial Functions
SMBC Group is proactive in its efforts to reduce environmental
impacts through its business. For example, we are helping
promote the spread of renewable energy projects that use
natural forces, such as solar and wind, to generate power. As a
comprehensive financial group, we are uniting all Group com-
panies and capitalizing on their unique characteristics in this
undertaking. Accordingly, support for such projects is provided
by SMBC through financing, SMBC Nikko Securities through
investment, SMBC Trust Bank through contracting related to
generation equipment and sites, and Sumitomo Mitsui Finance
and Leasing through leasing of generation equipment.
In addition, SMBC Group has issued four green bonds, a
December 20, 2018
type of bond that is used to collect funds to be exclusively
allocated to eco-friendly projects. Furthermore, the SDGs
May 30, 2019
76
Finance Department established within SMBC Nikko Securi-
ties’ Capital Markets Division is playing a central role in the
provision of support to customers seeking to issue green or
social bonds.
Green Bond Issues
Date of Issue
Issuer
Amount
October 20, 2015
October 11, 2017
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Financial Group
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Financial Group
US$500 million
€500 million
US$227.8 million
AUD83.2 million
€500 million
SMBC Group Annual Report 2019
Credit Policy
In the Credit Policy of SMBC, which contains our overall fi-
nancing policy, guidelines, and rules, we declare that we will
cease to provide financial support to borrowers engaged in
businesses contrary to public responsibility, or which may
have a significant negative impact on the global environment.
Caution for environmental, social, and other impacts is
practiced with regard to the areas detailed to the right.
• Defense manufacturing, cluster munitions, and other armament
• Palm oil plantation developments
• Deforestation
• Coal-fired power plants
• Soil contamination and asbestos
For more information, please refer to Sumitomo Mitsui
Financial Group’s corporate website.
https://www.smfg.co.jp/english/responsibility/smfgcsr/esg_initiative/risk/
Response to Climate Change (Announcement of Support for TCFD)
We announced our support of the Task Force on Climate-related Financial Disclosures (TCFD)*
in December 2017, and we are performing climate change scenario analysis and working together
with customers to address the root causes of climate change and help realize a low-carbon society.
The following initiatives are being carried out with regard to the four areas advocated in the
recommendations of the TCFD.
Governance
We have established Group environmental policies to continuously implement measures to make our corporate activities
conducive to preserving the global environment and curbing pollution.
The Basic Policy on Climate Change is reflected in SBMC Group's business strategy based on the discussions of the
Corporate Sustainability Committee and decisions of the Executive Committee, and the details of our initiatives are
reported regularly to the Board of Directors.
Physical Risks
In light of the recent emergence of natural disasters linked to climate change, SMBC has performed climate change
scenario analyses of the physical risks related to water disasters in Japan, thereby calculating, on a preliminary basis,
that the impact could equate to an aggregate increase in credit costs of between ¥30.0 billion and ¥40.0 billion by
FY2050. When viewed as a per-year average value, it is an additional credit cost of approximately ¥1 billion and thus the
impact of water damage caused by climate change on current SMBC’s single-year finances is considered to be limited.
Transition Risks
Strategy
In the process of transitioning to a low-carbon society, there is a risk that the value of the affected assets will decline
(Stranded asset Risk). Carbon-related assets (electricity, energy, etc.) currently account for 7.8% of all loans by SMBC.
Based on this situation, we will keep evaluating the potential impact of stranded assets.
Opportunities
The market for climate-change-related businesses is expected to grow going forward. Against this backdrop, we are
promoting environmental businesses and reducing environmental impacts in Japan and overseas. Measures to this end
include conducting a total of ¥520.0 billion in financing of renewable energy projects in FY2018 and issuing green
bonds based on the guidelines of the International Capital Market Association and the Ministry of the Environment,
Government of Japan.
Risk
Management
SMBC has adopted the Equator Principles,
which are guidelines developed by private
financial institutions for managing environmental
and social risks related to financing large-scale
development projects to identify and assess
risks to both the environment and society.
In addition, SMBC Group companies estab-
lished lending policies for specific sectors,
including coal-fired power plants.
Metrics and
Targets
SMBC Group is working to reduce greenhouse
gas emissions, and it realized reductions in
per-area CO2 emissions of 15.16 tons per m2
in FY2017 and 104.21 tons per m2 in FY2018.
* The Task Force on Climate-related Financial Disclosures was established to
urge individual companies to disclose their impact on climate change in
their financial reports.
For more information on initiatives regarding the recommenda-
tions of the TCFD, please refer to Sumitomo Mitsui Financial
Group’s corporate website.
https://www.smfg.co.jp/english/responsibility/smfgcsr/esg_initiative/climate/
77
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Towards Sustainable Development of Society
Social
Participants at Financial and Economic
Education Programs
Students We Supported in Emerging
Countries
Donations to Social Welfare Organizations
through Employee Volunteer Fund
140,000
10,000
¥20 million
Initiatives for Supporting the Next Generation
Support for SMEs in Introducing
Business Succession Support
Cashless Payment Systems
We are supporting SMEs across Japan in introducing cashless
payment systems by promoting the payment services of
Square, Inc., a company with which SMBC Group has formed
a business alliance.
The card readers offered by Square are very simple
payment terminals that allows credit card payments to be
made merely by connecting the reader to a smartphone or
tablet. As such, these readers can be introduced with ease
even at retailers, outdoor events, and other locations with
limited space. Moreover, examinations are also brief, allowing
for use as early as the day after application, and payments are
deducted as soon as the following day, enabling customers
to use this payment service in a similar manner to cash
payments. Furthermore, introducing Square’s point-of-sale
register system helps support business growth with increased
efficiency in payment processes realized through smooth
coordination of inventory management, sales analysis, and
accounting software.
Using this system, SMBC Group aims to support SMEs in
introducing cashless payment systems and thereby contribute
to the promotion of cashless payments throughout Japanese
society as a whole.
Framework that Uses Trust Functions
to Address Cognitive Impairment Issues
SMBC Trust Bank provides financial solutions that address
potential social issues as the “100-Year life” era approaches.
Specifically, SMBC Trust Bank has developed a business
succession framework that addresses the needs of customers
seeking to decide the process through which shares of their
company’s stock will be transferred to successors and those
looking to mitigate management risks arising from an inability
to exercise voting rights due to future cognitive impairment or
other forms of cognitive decline.
Characteristics of this product include special provisions for
the following:
• Acquisition of trust beneficiary rights to stock by successor
after inheritance
• Instructions for successor to exercise voting rights on behalf
of customer should they suffer cognitive decline.
Going forward, through the provision of financial products,
we hope to contribute to the realization of a society in which
business operators are able to feel peace of mind as they
continue to develop their business.
Business Succession Support Framework
1 Trust of stock in
customer’s company
Customer
SMBC Trust Bank
4 Acquisition of trust
beneficiary rights to stock
in customer’s company by
successor after inheritance
2 Acquisition of trust
beneficiary rights to stock
in customer’s company
Successor
3 Instructions for successor to exercise
voting rights on behalf of customer
based on defined conditions should
they suffer cognitive decline
78
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Initiatives for Supporting Communities
Traditional Japanese Dwelling
SDGs Social Loans
Lodging Business
In January 2019, Sumitomo Mitsui Finance and Leasing
established Dazaifu Co-Creation through joint investment with
Nishi-Nippon Railroad Co., Ltd., and The Bank of Fukuoka,
Ltd. Dazaifu Co-Creation operates a dispersed traditional
Japanese dwelling lodging business via coordination with
Dazaifu City, Fukuoka Prefecture, and Dazaifu Tenmangu
Shrine. This business entails renovating traditional Japanese
dwellings located throughout the region to function as lodging
facilities and restaurants and welcoming tourists through a
community-wide effort.
In this business, traditional Japanese dwellings are rented
and renovated to become facilities and restaurants. Sumitomo
Mitsui Finance and Leasing supports this business by leasing
interior fixtures, lodging facilities, kitchen equipment, and
equipment and machinery used in restaurants and by provid-
ing other financial services.
SMBC Group is supporting tourism and subsequently the
development of regional economies by participating in such
tourism projects as a partner and by providing leasing and
various other financial services.
SMBC has launched Japan’s first SDG social loan.
These loans are meant to provide funding to projects that
help resolve social issues. Through a scheme entailing impact
reports that measure impacts on society and third-party
evaluations, we are working together with customers to
resolve social issues.
For example, utilizing funds loaned to Healthcare & Medical
Investment Corporation, a Japanese real estate investment
trust specializing in healthcare facilities, we are helping supply
such facilities. These efforts are largely contributing to resolv-
ing the various issues that face the rapidly aging Japanese
society, by lowering the burden placed on the families of
individuals requiring nursing care, reducing the number of
people who are unable to receive such care, and promoting
women’s participation in the workforce.
SMBC (Arranger)
Participation Loan Provider
SMBC (Arranger)
Participation Loan Provider
1 Support to establish
4 Loan
framework
preparation
Investee
Traditional Japanese dwelling converted into lodging facility
5 Facility
purchase
2 Submission
of loan
framework
3 Evaluation
of social
loans
Third-party evaluation firm
(Japan Credit Rating Agency, Ltd.,
in this case)
Healthcare Facilities
6 Impact reports
Disclosure
Dazaifu Tenmangu Shrine
79
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
Customer-Oriented
Initiatives
Our Approach
SMBC 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
We have established the CS Improvement Subcommittee as
well as the CS Improvement Committee, through which we are
advancing initiatives, reinforcing management systems, and
promoting Group coordination related to customer-oriented
business conduct.
Incorporation of Customer Feedback into Management
Outside 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
mindset. Meanwhile, the CS Improvement Committee, which
shares members with the Group Management Committee,
deliberates on concrete measures based on reports from the
CS Improvement Subcommittee.
Holding Company
(Sumitomo Mitsui Financial Group)
Group Companies
CS Improvement Committee
Report / Share
Instruct
Report
Verify
Information
gathering
Analysis
Customer
CS Improvement Subcommittee
Feedback
Improvement
activities
Declaration of Compliance with ISO 10002
SMBC 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.
80
SMBC Group Annual Report 2019 Customer-Oriented Business Initiative
Based on the Principles for Customer-Oriented Business
Conduct (a guideline on fiduciary duties) released by the
Financial Services Agency, SMBC Group* formulated its
Basic Policy for Customer-Oriented Business Conduct and
the Basic Policy for Customer-Oriented Business Conduct
in the Retail Business Unit.
Basic Policy for Customer-Oriented
Business Conduct (Excerpt)
SMBC Group’s Customer-Oriented Business Conduct
In “Our Mission,” it is stated that “We grow and prosper
together with our customers, by providing services of greater
value to them.” To give form to this principle, we have
defined our Five Values, a list of five key words that repre-
sent the values and action guidelines shared by executives
and employees in Japan and overseas. “Customer First”
(always think and act based on a customer-oriented
perspective) is at the top of this list.
Initiatives for Promoting Customer-Oriented
Business Conduct
SMBC Group will implement the following initiatives to
entrench the principles of customer-oriented business
conduct into its activities.
1. Provision of Products and Services Suited to
the Customer
2. Easy-to-Understand Explanation of Important
Information
3. Clarification of Fees
4. Management of Conflicts of Interest
5. Frameworks for Properly Motivating Employees
SMBC Group aims to facilitate the shift from savings to
asset holding seen in Japan through such initiatives.
Furthermore, we will periodically disclose information on
initiatives by SMBC Group 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.
* Group companies applicable under this policy:
Sumitomo Mitsui Banking Corporation; SMBC Trust Bank Ltd.; SMBC Nikko
Securities Inc.; Sumitomo Mitsui DS Asset Management Company, Limited
For information on the Basic Policy for Customer-Oriented
Business Conduct, please see page 124–125.
Basic Policy for Customer-Oriented Business
Conduct in the Retail Business Unit
Based on the Sumitomo Mitsui Financial Group’s Basic Policy
for Customer-Oriented Business Conduct, the Retail Business
Unit shall adhere to the following conduct policies
in offering service as a retail company that is responsible for
providing wealth management and asset building services
for individual customers.
In accordance with these policies, the Retail Business Unit
shall implement a plan-do–check-act (PDCA) cycle that en-
tails disclosing specific indicators, confirming and analyzing
its status in relation to these indicators, and utilizing this
information in the future to improve business practices.
Conduct Policies
1. Customer-Oriented Wealth Management Proposals
Based on Medium- to Long-Term Diversified Investment
With a focus on accurately addressing customers’ wealth
management needs related to protecting or building assets,
we will provide customer-oriented wealth management
proposals based on medium- to long-term diversified
investment. Through this approach, we strive to deliver
customer-oriented financial products.
2. Lineup of Customer-Oriented Products
We shall constantly revise our product lineup, utilizing
third-party evaluations of the products of Group companies
and other products as necessary, in order to enhance our
lineup so that we can accurately address customers’ needs
related to protecting or building assets. At the same time,
we will increase the amount of information provided to
customers and take steps to ensure that this information
is easy to understand.
3. Customer-Oriented After-Sales Services
We will provide fine-tuned after-sales services to help
customers continue to hold our wealth management
products with peace of mind over the long term.
4. Customer-Oriented Performance Evaluation Systems
We shall develop performance evaluation systems that
encourage employees to engage in effective customer-
oriented sales activities.
5. Improvement of Consulting Capabilities
We shall continuously improve our consulting capabilities
to ensure we are always capable of proposing the best
possible solution for customers’ wide-ranging needs.
81
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Customer-Oriented Initiatives
Disclosed Indicators
1 Increase in balance of investment assets
2 Number of customers using wealth management products
3 Ratio sales by wealth management product
4 Average investment trust holding period
5 Fund wrap sales and cancellation amounts
6 Amount of fixed-term foreign currency deposits
7 Number of investment trust and automatic foreign
currency deposit accounts
10 By product sales amounts of lump-sum insurance products
11 Ratio of sales of investment trust products of Group
companies
12 Sales amounts of investment trusts (including fund wraps)
(Breakdown of monthly allocation type and others)
13 Breakdown of losses and gains by customers using
investment trusts and fund wraps
14 Costs and returns of investment trusts with top-ranking
8 Amount of investment trusts and automatic foreign
balance amounts
currency deposits
15 Risks and returns of investment trusts with top-ranking
9 Tsumitate Nisa account numbers, balances, and ratio
of new users
balance amounts
16 Acquisition status of FP qualifications
Performance with Regard to Disclosed Indicators
Increase in Balance of Investment Assets (Indicator 1 )
In FY2018, the total balance of investment assets for
the entire Retail Business Unit continued to grow due in part
to the continuation of customer-oriented initiatives focused
on medium- to long-term diversified investment.
Increase in Balance of Investment Assets
(JPY bn)
+400
+300
+200
+100
0
–100
4Q
1Q
1Q
3Q
2Q
’15
3Q
2Q
’16
4Q
1Q
4Q
3Q
2Q
’17
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
’18
(JPY bn)
+6,400
+4,800
+3,200
+1,600
0
–1,600
(FY)
Increase in balance of investment assets (left axis)
Increase in balance of investment assets (aggregated, right axis)
Note: Figures for 2015 to 2017 represent quarterly averages.
Breakdown of Losses and Gains by Customers Using
Investment Trusts and Fund Wraps (Indicator 13 )
Figures are calculated based on the definitions contained in
the common key performance indicators (KPIs) comparable
across investment trust distributors released by the Financial
Services Agency in June 2018.
Customers posting net gains represent more than 50% of all
customers in both categories.
82
SMBC (As of March 31, 2019)
(%)
40
30
20
10
0
32
20
21
11
8
1
1
6
-50% and
below
-50%–
-30%
-30%–
-10%
-10%–
±0%
±0%–
+10%
+10%–
+30%
+30%–
+50%
+50% and
above
Notes: Figures exclude canceled transactions with no outstanding balance.
Rate of return = Total return ÷ Market value
SMBC Nikko Securities (As of March 31, 2019)
(%)
40
30
20
10
0
21
21
18
14
11
11
2
1
-50% and
below
-50%–
-30%
-30%–
-10%
-10%–
±0%
±0%–
+10%
+10%–
+30%
+30%–
+50%
+50% and
above
SMBC Trust Bank (As of March 31, 2019)
(%)
40
30
20
10
0
34
18
20
0
1
5
-50% and
below
-50%–
-30%
-30%–
-10%
-10%–
±0%
±0%–
+10%
+10%–
+30%
+30%–
+50%
+50% and
above
12
9
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Corporate Infrastructure Supporting Value Creation
Internal Audit
Our Approach
As a part of SMBC Group’s internal control framework, the audit department (the Department)
verifies the effectiveness of the internal control of business units, risk management units, and
other units from an independent standpoint and pursues the quality of internal audits in order
to contribute to development and the highest trust across the entire SMBC Group.
Overview of the Group’s Internal Audit
Enhancement and Effectiveness of
Framework
Internal Audit
The Department has adopted auditing methods in accordance
with the Institute of Internal Auditors (IIA) standards,* con-
ducts risk-based audits, and expands the same approach to
Group companies. To implement effective and efficient inter-
nal audits, the Department conducts monitoring by
attending important meetings and by obtaining internal
management documents of SMFG and Group companies.
In addition, the Department seeks to enhance group-wide
internal auditors’ expertise by gathering up-to-date internal
audit practices, providing the practices to Group companies,
holding training programs, and encouraging auditors to obtain
internal auditors’ international certification.
Furthermore, the Department enhances its quality assur-
ance on a group-wide basis by both fully satisfying the IIA
standards and referring to G-SIFIs practices.
* The Institute of Internal Auditors, Inc. (IIA), was founded in 1941 in the United
States as an organization dedicated to raise the level of specialization and the
status of professionalism of internal auditing staff. Its main activity is to study the
theory and practice of internal audit and to provide an internationally recognized
qualification (Certified Internal Auditor (CIA)).
The Department has been established under the
Audit Committee and is independent from business units,
compliance units, and risk management units. Internal audits
within our Group companies are structured broadly in line
with SMFG. The Group Chief Audit Executive oversees
group-wide internal audit activities.
The Department verifies the appropriateness and the
effectiveness of internal control which aims to assure the
appropriateness of Group operations and the soundness of
assets by conducting internal audits on each department and
Group entity as well as conducting on continuous monitoring
of Group companies’ internal auditing and other activities. The
activities are based on the “Group Internal Audit Charter” and
the “Basic Audit Policy and Plan” formulated by the Audit
Committee and the Board of Directors.
Major audit findings and relevant information are regularly
reported to the Audit Committee, the Board of Directors, and
the Group Management Committee. Whilst the Department
strives to strengthen cooperation to conduct proper audit
practices through frequent information exchange with
external auditors.
Internal Audit Framework
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Audit Committee
Management Committee
Reporting line
(including right
to consent
personnel affairs)
Chief Audit Executive
Internal Audit Dept.
Group Companies
83
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
Compliance
Compliance Management
SMBC Group seeks to maintain a compliance system that
provides appropriate instructions, guidance, and monitoring
for compliance to ensure sound and proper business opera-
tions across the Group. Measures have been put in place to
prevent misconduct and quickly detect inappropriate activities
that have occurred to implement corrective measures.
SMBC Group has established the Compliance Committee,
which is chaired by the Group CCO responsible for overseeing
matters related to compliance. This committee comprehen-
sively examines and discusses SMBC Group’s various work
processes from the perspective of compliance.
In addition, SMBC Group 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 necessary steps to effectively
install compliance frameworks.
The Company receives consultations and reports on
compliance- related matters from Group companies, providing
suggestions and guidance as necessary to ensure compliance
throughout the Group.
84
Our Approach
Management positions the strengthening of
compliance and risk management as a key issue
in enabling SMBC Group to fulfill its public
mission and social responsibilities as a global
financial group. We are therefore working to en-
trench such practices into our operations as we
aim to become a truly outstanding global group.
Compliance Systems at SMBC Group
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Audit Committee
Group Management
Committee
Group CCO
Audit Dept.
Compliance Committee
Department Overseeing Compliance (General Affairs Dept.)
Group Companies
Initiatives for Supporting Healthy Risk
Taking and Appropriate Risk Management
Management positions the strengthening of compliance and
risk management as a key issue in enabling SMBC Group to
fulfill its public mission and social responsibilities. SMBC
Group is therefore devoted to improving its systems in these
areas in order to become a truly outstanding global group. To
this end, SMBC Group has defined the Principles of Action on
Compliance and Risk to serve as guidelines for executives and
employees in practicing compliance and other aspects of risk
management.
Business units function as the risk owners responsible for
compliance and risk management as it pertains to their
SMBC Group Annual Report 2019
Response to Anti-Social Forces
SMBC Group has established a basic policy stipulating that all
Group companies must unite in establishing and maintaining
a system that ensures that the Group does not have any con-
nection 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.
Contractual documents or terms and conditions state the
exclusion of anti-social forces from any business relationship.
In the event that it is discovered subsequent to the com-
mencement 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 outside
professionals specializing in such matters.
Basic Policy for Anti-Social Forces
1. Completely sever any connections or relations from anti-
social forces.
2. Repudiate any unjustifiable claims, and do not engage in
any “backroom” deals. Further, promptly take legal action
as necessary.
3. Appropriately respond as an organization to any anti-social
forces by cooperating with outside professionals.
Customer Information Management
SMBC Group has established Group policies that set forth
guidelines 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 its Group companies establish and disclose
privacy policies for their measures regarding the proper
protection and use of customer information and customer
numbers. Appropriate frameworks are established based
on these policies.
business. Acting in accordance with the Principles of Action
on Compliance and Risk, business units practice healthy risk
taking (business activities) coupled with disciplined compli-
ance and risk management. The Compliance Unit performs
monitoring, oversight, and training regarding the status of
compliance and risk management at business units. Further-
more, the Internal Audit Unit verifies and evaluates the ad-
equacy and effectiveness of compliance and risk management
systems to help fortify these systems.
Anti-Money Laundering and Prevention of
Funding Terrorist Organizations
SMBC Group strictly complies with AML/CFT regulations by
establishing the Group policy and implementing effective
internal control systems in each of the Group companies to
ensure that our operations are sound and appropriate. The
Group policy/systems are in accordance with the require-
ments of the relevant international organizations (e.g. the
Financial Action Task Force Recommendations) and the law/
regulation of relevant countries including Japan (e.g. U.S.
“Office of Foreign Assets Control Regulations”).
Specifically, SMBC Group is developing systems to prevent
its products and services from being used for money launder-
ing (ML) and financing of terrorism (FT), which may have a
massive negative impact on the economy.
Agreement with Federal Reserve Bank of New York
In April 2019, SMBC entered into a written agreement with the
Federal Reserve Bank of New York (the “Reserve Bank”)
to improve its New York Branch’s program for compliance with
the Bank Secrecy Act (“BSA”) and related U.S. anti-money
laundering (“AML”) laws and regulations, which was found to
be inadequate by the Reserve Bank.
Under the terms of the written agreement, SMBC is required
to undertake a number of actions to enhance the Branch’s
overall BSA/AML compliance program, corporate governance
and management oversight, the Branch’s customer due
diligence and suspicious activity monitoring and reporting
programs, internal audit, and the Branch’s program for compli-
ance with the laws and regulations administered by the U.S.
Department of the Treasury’s Office of Foreign Assets Control.
SMBC has already taken actions to improve compliance with
U.S. AML requirements and is fully committed to complying
with all of the terms set forth in the written agreement.
85
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Corporate Infrastructure Supporting Value Creation
Risk Management
Our Approach
Strengthening of compliance and risk
management is positioned as a key issue
in SMBC Group’s Principles of Action on
Compliance and Risk. SMBC Group is
therefore devoted to improving its systems
in these areas in order to become a truly
outstanding global group.
Risk Culture
In order for SMBC Group to realize and maintain a sustainable
growth in corporate value as a “Top Tier Global Financial
Group,” each one of our colleagues should think and judge on
their own if their actions meet the expectations and require-
ments of customers, markets, and other stakeholders, not just
if they are compliant with laws and regulations. SMBC Group
has established “Principles of Action on Compliance and Risk”
in order for every colleague to hold onto as a “keystone” of
their daily business. The principle includes “Business based
on the Risk Appetite Framework” and “Business operations
which give a high priority to the management of risks such as
credit risk, market risk, liquidity risk and operational risk.”
Concrete measures include internal surveys for monitoring the
compliance awareness and risk sensitivity of our colleagues as
well as internal training for fostering a sound risk culture.
Risk Appetite Framework
SMBC Group has introduced a Risk Appetite Framework for
controlling group-wide risks that clarifies the types and levels
of risk that we are willing to take on or are prepared to tolerate
in order to grow profits (risk appetite).
The Risk Appetite Framework is one of two pivots of our
business management alongside business strategies. It func-
tions as a management framework for sharing information on
the operating environment and risks facing SMBC Group
among management and for facilitating appropriate risk taking
based thereon.
86
Risk Appetite Framework Positioning
Environment/Risk View
Top Risks
Risk register
Key Risk Events
Risk Appetite
Framework
Stress testing
Two pivots of
our business
management
Business
strategy
Risk Appetite Composition
Categories
Soundness
Profitability
Liquidity
Credit
Market
Operational
Conduct*
Established for each category
Risk Appetite Statement
Risk Appetite Measures
• A qualitative explanation of our
approach to risk taking and risk
management for various risk
categories
• Quantitative Risk Appetite Measures
that function as benchmarks for
risks that we are considering taking
and for risk/return
*Conduct Risk: Conduct risk is the risk that our conduct negatively affects
customers, market integrity, or effective competition.
SMBC Group Annual Report 2019 Individual risk appetites have been established for specific
business units or strategies as necessary based on the overall
risk appetite of SMBC Group.
Risk appetites are decided during the process of formulat-
ing business strategies and management policies. These risk
appetites are set based on Top Risks that threaten to signifi-
cantly impact management and on risk analyses (stress test-
ing) that illustrate the impact if a risk should materialize. In
addition, risk register and Key Risk Events (KRE) are utilized
in verifying the adequacy of Top Risks, risk appetites, and
business strategies.
The outlooks for the operating environment and risks and
the risk appetite situation are monitored throughout the
course of the fiscal year. Risk Appetite Measures and business
strategies are revised as necessary. Three risk management
levels are set for Risk Appetite Measures, which are monitored
accordingly.
In addition, we apply a uniform standard, risk capital*1
based on value at risk (VaR),*2 which is used to set upper
limits for risk exposure based on group-wide management
constitution. Each business unit operates their business
within that limit.
Top Risks
Intensification of international
political confrontation
Volatile financial and
economic environment
Decline in Japan’s
social vitality
Ideological and
religious conflicts
Ceased operation of
information systems
due to cyber attacks
Changes in competitive climate
due to emergence of FinTech or
other new technologies
Increase of large-scale
natural disasters
Legal or compliance-
related incidents
Materialization of
strategic risks
Note: The above is only a portion of the risks recognized by SMBC Group. It is
possible that the materialization of risks other than those listed above could
have a significant impact on our management.
Please see page 109 for Top Risks.
*1 Risk capital: The amount of capital required to cover the theoretical maximum
potential loss arising from risks of business operations.
Stress Testing
*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.
Top Risks
SMBC Group identifies 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 management, and discus-
sion by the Risk Management Committee and the Management
Committee. Top Risks are utilized to enhance risk management
by being incorporated into discussions of the Risk Appetite
Framework and the formulation of business strategies and into
the creation of risk scenarios for stress testing.
At SMBC Group, we use stress testing to analyze and compre-
hend the impact on SMBC Group’s businesses of changes in
economic or market conditions, in order to plan and execute
forward-looking business strategies.
In our stress testing, we prepare multiple risk scenarios
including macroeconomic variables such as GDP, stock
prices, interest rates, and foreign exchange rates based on
the aforementioned Top Risks, discussions with experts and
related departments.
When developing business strategies, we set out scenarios
assuming stressed business environments such as serious
economic recessions and market disruption for the sake of
assessing risk-taking capabilities at SMBC Group and verifying
whether adequate soundness can be maintained under stress.
In addition, we conduct detailed stress testing for individual
risks such as credit risk, market risk, and liquidity risk, so as
to decide and review risk-taking strategies.
87
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Risk Management
Risk Management System
Based on the recognition of the importance of risk manage-
ment, the group-wide basic policies for risk management
are determined by the Management Committee before being
authorized by the Board of Directors in order to have top man-
agement play an active role in the risk management process.
In accordance with these basic policies for risk manage-
ment, three lines of defense have been defined, and we have
clarified related roles and responsibilities. Risk management
systems have been established based on the characteristics of
particular businesses, and measures are being put in place to
strengthen and improve the effectiveness of these systems.
Furthermore, SMBC Group is strengthening group-wide risk
management systems through the Group CRO Committee and
the Global CRO Committee.
Risk Register
A risk register is formulated by each business unit for
the purpose of realizing more sophisticated risk governance
and enhancing business units’ risk ownership. In formulating
these registers, business units communicate with risk
management departments to identify the risks present in
their business, and these risks are reflected in business
strategies after they have been evaluated and the adequacy
of measures for controlling them has been verified.
Key Risk Events
Key Risk Events (KRE), external events that indicate the in-
creased threat of risks, have been identified to ascertain the
symptoms of the potential risks. KRE are utilized to analyze
and assess how likely similar cases will occur in SMBC Group
and what effects such similar cases will have on SMBC Group,
and to enhance our risk management system.
SMBC Group’s Risk Management System
Holding Company (Sumitomo Mitsui Financial Group)
Board of Directors
Risk Committee
Audit Committee
Management Committee
External Audit
Group CRO
Risk Management Committee
Internal Audit Dept.
ALM Committee
Credit Risk Committee
Group CRO Committee
Global CRO Committee
Departments Responsible for Risk Management
Group Companies
88
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Definition of SMBC Group’s Three Lines of Defense
The Basel Committee on Banking Supervision’s “Corporate governance principles for banks” recommends “three lines of
defense” as a framework for risk management and governance. Based on this framework, we have defined our three lines of
defense with the aim of achieving more effective and stronger risk management and compliance systems through the
clarification of roles and responsibilities.
Principal Organizations
Roles and Responsibilities
First
Line
Business Units
Second
Line
Risk Management and
Compliance Departments
Third
Line
Audit Department
The Business Units shall be risk owners concerning their operations
and shall be responsible for the following in accordance with the basic
principles provided by Second Line.
Identification and evaluation of risks encountered in the business activities
Implementation of measures for minimizing and controlling risks
Monitoring of risks and reporting within First Line and to Second Line
Creation and fostering of a sound risk culture
The Risk Management and Compliance Departments shall assume the
following functions and responsibilities in order to manage the risk
management and compliance systems.
Drafting and development of basic principles and frameworks concerning
risk management and compliance
Oversight, monitoring, and development of training programs for First Line
Independent from First Line and Second Line, the Audit Department shall
assess and verify the effectiveness and appropriateness of risk management
and compliance systems managed and operated by First Line and Second
Line, and report these results to the Audit Committee and the Management
Committee. The Department shall provide recommendations regarding
identified issues/problems.
89
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Corporate Infrastructure Supporting Value Creation
Human
Resources Strategy
Our Approach
We have established the Five Values as a set
of shared beliefs and behavioral guidelines for all
100,000 employees around the world in order to
achieve “Our Mission.” We are moving ahead with
the strategic development of talent and the creation
of a workplace that maximizes the contributions
of a diverse workforce, to enable all employees to
perform to the extent of their capabilities.
Developing, Retaining, and Recruiting Talent to Support the Group
Group-Wide Talent Development Initiatives
In addition, we have established the “Digital University”
SMBC Group established the Learning and Development
Institute to grow its group-wide talent development activities.
Through joint training programs and seminars that are avail-
able to employees from Group companies, we are promoting
cross-entity understanding among employees and fostering
a sense of solidarity. Furthermore, we are promoting the
development of future leaders of the Group via training and
personnel rotations, as well as the establishment of open
application platform to support self-driven career development
on a group-wide basis.
as a talent development program designed in light of the
trend toward digitalization. The courses available through this
program are not limited to those for bolstering conventional
system planning and development capabilities and increasing
the IT literacy of all employees; but, moreover, we are expand-
ing our courses which enhance planning and development
capabilities by utilizing digital technologies. Furthermore, in
view of developing talent required in highly specialized fields,
we continue to send our employees to domestic or overseas
graduate schools.
Digitalization-Related Talent Development Programs
Level
Target
Program Overview
Specialization
Specialists
Secondment
Dispatch to graduate schools
• Data science
• Cyber security, etc.
Advanced
Departments
Digital University
Basic
All officers and employees
Group training, study sessions
e-learning
90
• Data utilization
• Agile software development
• Advanced technologies
• IT literacy, etc.
SMBC Group Annual Report 2019
Talent Development to Cope with the Changing Business
Environment
SMBC is planning to establish a model to encourage
“business-oriented, self-controlled development, in response
to the changes in the current operating environment. In the
highly volatile environment, there is a growing importance for
all employees to be motivated to pursue their own growth and
to continue learning through autonomous target setting. To
accommodate this, we will develop an environment to support
those employees who proactively pursue their own targets,
regardless of their seniorities.
In addition, we will enhance self-driven career development
Participants in a global training program (Global Management Program)
Optimal Allocation of Human Resources to
Support Business Strategies
Strategic Allocation of Human Resources
SMBC Group is strengthening capabilities in prioritized areas
by reallocating existing human resources as well as
by increasing its new hires.
Furthermore, we are actively promoting cross-entity
transfers with a view to securing and developing the talent
to manage the Group or to aggressively advance business
strategies in the medium to long term.
Optimization of Human Resources Allocation
SMBC Group is developing frameworks for gathering human
resources-related data, such as employee numbers, person-
nel expenses, and other information for Group companies. In
addition, the Group is developing frameworks to realize
optimal allocation of human resources by refining its training
programs and establishing cross-entity transfer processes.
by reflecting employees’ proactive skill development efforts
and results to personnel transfers, such as promotion of junior
employees to management.
Reinforcement of management
skills to lead self-driven growth
and development
Provision of learning opportunities for
management
Enhanced contents
Support to front offices in
running PDCA for talent
development programs
Increase in feedback from supervisors
or coworkers
Foster the environment
which encourages self-driven
growth and development
Provision of infrastructure offering
access to desired learning resources
regardless of location or time
Proactive support for nighttime study
at graduate schools and acquisition
of qualifications
Development of Talent on a Global Basis
SMBC Group conducts operations in 40 countries around the
world and we are working together to realize identification,
development, and promotion of our talent on a global basis.
We aim to promote our Group business by realizing optimal
talent management, regardless of location of hire.
For talent development, we provide global training programs
involving participants from offices around the globe. To date,
around 1,300 employees have participated at these global
programs, including a leadership program delivered in partner-
ship with a world-leading business school and joint training
programs targeted for junior to middle-class employees from
Japan and overseas offices.
In addition, we promote cross-border secondment of
employees for both business promotion and training purposes.
We aim to provide services of greater value to our customers
by creating an environment where employees with different
backgrounds work together and inspire each other.
91
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Human Resources Strategy
Support for Balancing Careers with Childcare or
Nursing Care
SMBC Group strives to ensure that no employee finds them-
selves wrought with concern over their ability to balance their
career with their private life and that all ambitious employees
are able to continue working without sacrificing their desired
career. To this end, we are expanding our support systems for
balancing careers with childcare or nursing care and cultivat-
ing a forward-looking corporate culture that is understanding
and supportive toward employees seeking to balance their
work life with their private life.
SMBC is targeting a 100% acquisition rate for short-term
paid childcare leave, which can be acquired flexibly in one-day
increments. This company also holds seminars for supporting
employees working to balance their career with childcare. Both
parents are encouraged to participate in these seminars as
part of SMBC’s efforts to foster a workplace environment in
which it is natural for men to play a role in childcare.
“Platinum Kurumin” Certification Received from
the Ministry of Health, Labour and Welfare
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Card
Company
Japan Research Institute
Empowerment of Female Employees
Targets have been set for the promotion of female employees
to management positions and initiatives are being advanced
with the goal of accomplishing these targets, in order to
support the career development of female employees and
accelerate the diversification of management.
We also have in place a leadership program for cultivating
future management candidates aimed at mid-level female
employees in core positions. This program comprises busi-
ness skills training as well as discussions with management
for cultivating the big picture perspective expected of a leader.
This stance toward proactively supporting female employees
and the results achieved thereby have led to SMBC Group
being included in the Nadeshiko Brand selection for an
industry- topping four times. Among other high evaluations
by external organizations was our inclusion in the 2019
Bloomberg Gender-Equality Index sponsored by Bloomberg
L.P. of the United States.
Creating an Environment to Encourage
Diverse Workforce
Diversity Promotion Framework and Basic Policies
SMBC Group is promoting “Diversity and Inclusion” as it
constitutes a growth strategy itself.
To accelerate diversity and inclusion initiatives on a group-
wide basis, SMBC Group established the SMFG Diversity
and Inclusion Department as a dedicated diversity promotion
organization in 2017. We also hold the SMFG Diversity and
Inclusion Committees, chaired by the Group CEO and
comprises of the leaders of Group companies.
Diversity Promotion Framework
Board of Directors / Management Committee
Reports, exchanges of opinion
SMFG Diversity and Inclusion Committee
Chairman
CEO of Sumitomo Mitsui Financial Group
Vice chairman
CHRO of Sumitomo Mitsui Financial Group
Members
Presidents of 9 major SMBC Group companies
Promotion of Diversity in Management
SMBC Group is increasing the diversity of our management,
including directors and executive officers, in order to create
an organization capable of transforming diversity into com-
petitiveness. We are also promoting correct understanding
regarding diversity and inclusion and workstyle reforms while
encouraging changes in awareness and behavior.
For example, training programs designed to help individuals
realize and address their own unconscious biases are being
introduced at Group companies.
Female
executive officers
Non-Japanese
executive officers
11
14
92
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Initiatives in Support of Sexual Minorities Such as
LGBT, etc.
SMBC Group has established a range of human resource and
employee welfare systems related to same-sex partners and is
supporting TOKYO RAINBOW PRIDE, one of Japan’s largest
LGBT pride events, and sending employee volunteers from
Group companies to participate in this event in order to foster
awareness regarding the LGBT community.
Acquired Top Gold Rating in PRIDE
index evaluation for LGBT-related
initiatives from work with Pride for
second consecutive year (Sumitomo
Mitsui Banking Corporation)
Employment of Differently Abled Individuals
Both SMBC subsidiary SMBC Green Service Co., Ltd.,
and SMBC Nikko Securities subsidiary Nikko MiRun are
specially certified subsidiaries as defined under the Act on
Employment Promotion of Persons with Disabilities. Together
with these companies, we promote employment of and
provide employment support for differently abled individuals.
Furthermore, we aid all employees in exercising their unique
skills and aptitudes.
In addition, we employ numerous leading differently abled
athletes who take part in competitions in Japan and overseas to
foster understanding with regard to differently abled individuals.
SMBC Green Service
Health and Productivity Management
SMBC Group promotes health and productivity initiatives by
implementing stress checks for all employees, establishing
consultation venues regarding mental health, and holding
health improvement events. In addition, SMBC Nikko Securi-
ties has formulated its Declaration of Health and Productivity
Management and, under the guidance of its Chief Health
Officer, established a dedicated Health and Productivity Man-
agement Office to spearhead efforts to strengthen systems for
helping employees and their families maintain and improve
their health.
Workstyle Reforms
We are implementing workstyle reforms to create a work
environment in which every employee is able to feel motivated
in their work, fully exercising their skills while realizing high
levels of productivity. Group companies are endeavoring to
prevent excessive working hours by defining key performance
indicators for working hours and paid leave acquisition rates
and employing robotic process automation to improve work
efficiency. In addition, frameworks are being put in place
to allow employees more freedom in choosing the times
when and locations at which they work. Examples of these
frameworks include flextime, staggered working hours, and
teleworking systems.
Paid Leave Acquisition Rate at SMBC Group
(%)
75
70
65
0
65.5
67.3
70.6
’16
’17
’18
(FY)
At SMBC, employees are provided access to satellite offices
to be used to reduce commuting times or to enable sales
representatives to utilize the time between appointments more
efficiently. In addition to six locations at its branches (as of
June 30, 2019, to be increased going forward), employees
can choose from any of roughly 50 satellite offices operated
by third parties.
Furthermore, SMBC Group is promoting increased flexibility
and diversity in workstyle through educational programs for
management as well as study sessions and a smart work card
system for employees.
Smart work cards used at SMBC
93
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
IT Strategies
Our Approach
SMBC Group is advancing both
proactive and defensive digitalization
initiatives to support efforts in its
Seven Core Business Areas.
Proactive and Defensive Digitalization
Initiatives
SMBC Group is moving forward with digitalization initiatives
targeting four areas. Through proactive digitalization initiatives,
the Group aims to (1) generate new businesses and (2) create
customer benefits and business value through the trans-
formation of existing business models. Under defensive
digitalization initiatives, the Group seeks to (3) automate
operations and processes in conventional businesses and
(4) establish IT infrastructure to support medium- to long-term
business reform.
Proactive digitalization initiatives include utilizing artificial
intelligence, promoting cashless and other strategies. Mean-
while, defensive digitalization initiatives go beyond maintaining
existing systems and ensuring stable operation to include IT
transformation initiatives for adopting cutting-edge architec-
tures. In these initiatives, we pursue efficient operations
through the development of shared group-wide platforms and
the utilization of cloud technologies while embracing state-of-
the-art IT infrastructure and development technologies.
IT Investment Strategies
Under the previous Medium-Term Management Plan, SMBC
Group completed the overhaul of large-scale systems through
measures including the renewal of its core banking system
platform and the implementation of a mutual backup function
between data centers. Initiatives as part of the current Medium-
Term Management Plan involves the increased allocation of
IT budget to strategic investments for business innovation and
the creation of new businesses through digitalization.
SMBC Group applies rigorous standards to the selection
of system development projects while also assessing and
verifying the benefits of these projects before and after in
order to maximize those benefits. Specific targets for return
on investment and key performance indicators must be set
for all projects, and the degree to which these targets are
accomplished will be reviewed over a five-year period after
the completion of each project. Corrective measures will be
implemented with regard to those systems that have not
reached the appropriate performance levels. Even after the
desired performance has been realized, the effectiveness
of each system will be measured in terms of sufficiency,
efficiency, stability, and utilization so that improvements can
be implemented to systems that have suffered declines in
effectiveness. This process constitutes a PDCA (plan-do-
check-act) cycle that will be employed to maximize the
benefits of IT investments.
Digital Governance and Sophisticated
Human Resources Development
Under the guidance of the Group Chief Information Officer
(CIO), we clarify lines of reporting for overseas offices and
other Group companies in order to develop a corporate gover-
nance system that is integrated across the Group and globally.
At the same time, we practice IT governance that emphasizes
quality while evolving digital governance frameworks to
94
SMBC Group Annual Report 2019 incorporate risk-based and speed-oriented perspectives for
accelerating digitalization initiatives.
SMBC Group executes systematic personnel exchanges
between the IT divisions of Group companies. In addition, the
Digital University has been established within core IT Group
company The Japan Research Institute, Limited, as an inter-
nal training institution for promoting IT adoption and digitaliza-
tion. At the Digital University, we offer a unique menu of
training programs including training based on the operations
of specific Group companies, curricula employing the exper-
tise gained from project case studies, and cutting-edge tech-
nology workshops.
Cyber Security
Cyber attacks are becoming ever-more serious and sophisti-
cated. In order to respond to the risks of such attacks, SMBC
Group has strengthened cyber security measures by defining
cyber risks as one of its Top Risks and, establishing a Declara-
tion of Cyber Security Management.
Seeking to facilitate management-led measures for fortifying
response frameworks, the general manager of the System Risk
Planning Department has been appointed as the Chief Infor-
mation Security Officer (CISO). Positioned under the Group
CIO and the Group Chief Risk Officer (CRO), the CISO has
professional expertise regarding measures in this area, and
steps have been taken to clarify the roles and responsibilities
SMBC Group’s Cyber Security Governance System
of CISO. Furthermore, we have established a computer secu-
rity incident response team (CSIRT) and a security operation
center (SOC), and analyses are performed on information
regarding threats and observed phenomena collected from
inside and outside of the Group. The results of these analyses,
along with information on the status of security measures
currently being implemented, are discussed regularly at meet-
ings of the Board of Directors and the Management Committee
to drive ongoing improvements to our cyber security measures.
The CSIRT is centered on the System Risk Planning Depart-
ment, which possesses dedicated cyber security functions. To
ensure preparedness for cyber incidents, the CSIRT coordi-
nates with national government agencies as well as with the
U.S. Financial Services Information Sharing and Analysis
Center (FS-ISAC),*1 Financials ISAC Japan (Financials ISAC),*2
and other external institutions to share information on perti-
nent topics such as cyber attack methods and vulnerabilities.
The SOC, which is centered around The Japan Research
Institute, is dedicated to continuously fortifying cyber security
monitoring systems to mitigate the ever-rising threat of cyber
attacks. Measures taken by SOC include the integration of the
monitoring systems of Group companies and the development
of global systems for conducting monitoring on a 24-hours-a-
day, 365-days-a-year basis.
*1 An organization responsible for coordinating financial industry cyber security
measures in the United States
*2 The Japanese equivalent of the FS-ISAC
Government,
law enforcement agencies
National Center of
Incident Readiness and
Strategy for Cybersecurity
Metropolitan Police
Department
etc.
ISAC, industry bodies
ISAC, industry bodies
Financials ISAC
CEPTOAR-Council
etc.
Board of Directors / Management Committee
Group CIO
Group CRO
IT Planning Dept.
Group CISO
System Risk Planning Dept.
SMBC Group SOC (security operation center)
Group companies and offices in Japan / overseas
Security vendors,
experts etc.
SMBC Group CSIRT
(Computer Security Incident Response Team)
Corporate staff
Corporate Planning Dept.
Public Relations Dept.
General Affairs Dept.
Risk Planning Dept.
95
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019 Corporate Infrastructure Supporting Value Creation
Communication with
Stakeholders
Our Approach
SMBC Group strives to contribute to the
sustainable development of society. To this
end, we work diligently to provide greater value
to our various stakeholders: “Customers,”
“Shareholders and the market,” “Employees”
and “The environment and society.”
Stakeholders of SMBC Group
Customers
P80
Shareholders
and the market
Stakeholder Type
Example Communication Activities
Customers
In-branch questionnaires, Customer
satisfaction surveys, Call centers
Shareholders and
the market
General meeting of shareholders,
Investors meetings, One-on-one meetings
Employees
Opinion exchange meetings with top
management, Employee surveys
The environment
and society
Employees
The environment
and society
Support for initiatives in Japan and
overseas, Volunteer activities of employees
Engagement with Society and the Environment
In addition to the contribution to society through our business
operations, SMBC Group will contribute to realize a flourishing
society in the future by pursuing diverse social contribution
activities in order to fulfill responsibilities as a “good corporate
citizen.”
For example, our employees and their families have taken
part in numerous volunteer activities, including retrieving
valuables and other belongings from collapsed houses and
sorting garbage, in regions still recovering from large-scale
natural disasters, such as the Great East Japan Earthquake,
2016 Kumamoto earthquakes, the heavy rains that hit north-
ern Kyushu in 2017, and others.
96
Volunteering activity in northern Kyushu area
SMBC Group Annual Report 2019 Engagement with Shareholders and the Market
SMBC Group recognizes that appropriate disclosure of
corporate and management information must form the foun-
dation of our efforts to realize one of the statements posted in
“Our Mission”: “We aim to maximize our shareholders’ value
through the continuous growth of our business.”
For this reason, we are enhancing disclosure through
investor meetings after announcement of financial results,
conferences, one-on-one meetings, large meetings for
individual investors, and other activities.
The 17th Ordinary General Meeting of Shareholders
SMBC Group IR Day
Large meeting for individual investors
Activities in FY2018
General meeting of shareholders
585 attendees*1
IR meetings for institutional investors
and analysts*2
One-on-one meetings with institutional
investors and analysts
11 meetings
343 meetings
Conferences held by securities companies
6 conferences
Large meetings for individual investors
3 meetings
*1 143 attendees at site of broadcast in Osaka
*2 Investors’ meetings, SMBC Group IR Day, etc.
Engagement with Employees
Each company at SMBC Group holds town hall meetings and
discussion forums to enhance mutual understanding between
top management and all employees.
In addition, SMBC holds the “SMBC Pitch Contest,” which
provides opportunities for all domestic and overseas employees
to present their business ideas directly to top management.
Town hall meeting (SMBC NIKKO)
“SMBC Pitch Contest” award ceremony (SMBC)
97
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Corporate Infrastructure Supporting Value Creation
Financial Review
Principal Financial Data
Consolidated Performance Summary
Year ended March 31
Consolidated gross profit
Net interest income
Net fees and commissions + Trust fees
Net trading income + Net other operating income
General and administrative expenses
Overhead ratio
Equity in gains (losses) of affiliates
Consolidated net business profit
Total credit cost (gains)
SMBC non-consolidated
Gains (losses) on stocks
Other income (expenses)
Ordinary profit
Extraordinary gains (losses)
Income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent
Consolidated Balance Sheet Summary
March 31
Total assets
Loans and bills discounted
Securities
Total liabilities
Deposits
Negotiable certificates of deposit
Total net assets
Stockholders’ equity
Retained earnings
Accumulated other comprehensive income
Non-controlling interests
Financial Indicators
March 31
Total capital ratio (BIS guidelines)
Tier 1 capital ratio (BIS guidelines)
Common equity Tier 1 capital ratio (BIS guidelines)
Dividend per share (Yen)
Dividend payout ratio
ROE (on a stockholders’ equity basis)
Market Data (As of the end of each fiscal year)
Nikkei Stock Average (Yen)
Foreign exchange rate (USD/JPY)
98
2015
2016
2017
2018
2019
(Billions of yen)
2,980.4
1,505.2
999.6
475.7
1,659.3
55.7%
(10.6)
1,310.5
7.8
(80.1)
66.7
(48.2)
1,321.2
(11.8)
441.4
114.4
753.6
2,904.0
1,422.9
1,007.5
473.5
1,724.8
59.4%
(36.2)
1,142.9
102.8
(3.2)
69.0
(123.9)
985.3
(5.1)
225.0
108.4
646.7
2,920.7
1,358.6
1,017.1
545.0
1,812.4
62.1%
24.6
1,132.9
164.4
61.1
55.0
(17.6)
2,981.1
1,390.2
1,070.5
520.3
1,816.2
60.9%
39.0
2,846.2
1,331.4
1,064.6
450.2
1,715.1
60.3%
61.1
1,203.8
1,192.3
94.2
(26.7)
118.9
(64.5)
110.3
(2.2)
116.3
(63.1)
1,005.9
1,164.1
1,135.3
(26.6)
171.0
101.8
706.5
(55.3)
270.5
104.0
734.4
(11.7)
331.4
65.5
726.7
183,442.6
186,585.8
197,791.6
199,049.1
203,659.1
73,068.2
29,633.7
75,066.1
25,264.4
80,237.3
24,631.8
72,945.9
25,712.7
77,979.2
24,338.0
172,746.3
176,138.2
186,557.3
187,436.2
192,207.5
101,047.9
110,668.8
117,830.2
116,477.5
122,325.0
13,825.9
10,696.3
7,018.4
4,098.4
2,003.9
1,671.7
14,250.4
10,447.7
7,454.3
4,534.5
1,459.5
1,531.0
11,880.9
11,234.3
8,119.1
5,036.8
1,612.5
1,499.3
11,220.3
11,612.9
8,637.0
5,552.6
1,753.4
1,219.6
11,165.5
11,451.6
9,054.4
5,992.2
1,713.9
678.5
16.58%
12.89%
11.30%
140
26.2%
11.2%
17.02%
13.68%
11.81%
150
32.7%
8.9%
16.93%
14.07%
12.17%
150
29.9%
9.1%
19.36%
16.69%
14.50%
170
32.7%
8.8%
20.76%
18.19%
16.37%
180
34.6%
8.2%
19,207
120.15
16,759
112.62
18,909
112.19
21,454
106.25
21,206
111.00
SMBC Group Annual Report 2019
Consolidated Performance Summary
Consolidated Net Business Profit
Financial Impacts of Group Reorganization*
Consolidated gross profit decreased by ¥134.9 billion year-on-
year to ¥2,846.2 billion. Performance was sluggish in the
wealth management business of the Retail Business Unit,
which showed strong performance in the previous fiscal year,
due to the deterioration of market conditions in the second
half of FY2018. Meanwhile, strong performance continued in
the International Business Unit, leading group-wide growth,
which contributed to a slight increase in consolidated gross
profit when excluding the financial impacts of Group reorgani-
zation detailed to the right.
General and administrative expenses decreased by ¥101.1
billion year-on-year to ¥1,715.1 billion. They decreased even
after excluding the impact of Group reorganization because of
ongoing group-wide cost control initiatives.
As a result, consolidated net business profit decreased
by ¥11.6 billion year-on-year to ¥1,192.3 billion. Excluding
the impacts of reorganizations, it reached the same level as
the strong performance in FY2017, despite the challenging
business environment.
Profit Attributable to Owners of Parent
Total credit cost increased by ¥16.1 billion year-on-year to
¥110.3 billion primarily due to reduced gains on reversal of
provisions at SMBC.
Consequently, ordinary profit decreased by ¥28.8 billion
year-on-year to ¥1,135.3 billion. Profit attributable to
owners of parent decreased by ¥7.7 billion year-on-year to
¥726.7 billion, however, it surpassed the disclosed target
of ¥700.0 billion.
(Approximations, billions of yen)
Consolidated gross profit
(139.0)
Consolidated net
business profit
General and administrative
expenses
(92.0)
Profit attributable to
owners of parent
(12.0)
0
Equity in gains (losses)
of affiliates
+35.0
* Deconsolidation of Kansai Urban Banking Corporation, THE MINATO BANK,
LTD., and Sumitomo Mitsui Finance and Leasing Company, Limited;
the consolidation of PT Bank Tabungan Pensiunan Nasional Tbk; the conversion
of Sumitomo Mitsui Card Company, Limited into a wholly owned subsidiary
Performance of Major Group Companies
(Left: FY2018 performance; Right: Year-on-year comparison)
SMBC
SMBC Trust
(Billions of yen)
Gross profit
Expenses
Net business profit
Net income
1,395.6
811.5
584.1
477.4
(32.3)
+0.8
(33.1)
(99.7)
49.8
51.7
(1.9)
(3.8)
+5.6
+1.0
+4.7
+2.0
SMBC Nikko*1
SMCC
66%
Gross profit
Expenses
Net business profit
Net income
323.1
276.0
47.1
31.0
(61.4)
(15.4)
(46.0)
(27.2)
254.2
190.9
63.3
+28.1
+20.6
+7.5
(58.5)*2
(86.9)
Cedyna
SMBCCF
Gross profit
Expenses
Net business profit
Net income
154.1
114.4
40.0
11.9
(3.2)
(1.2)
(1.8)
+9.5
268.5
110.9
157.6
45.1
+7.4
+1.8
+5.6
+20.5
SMAM
60%
SMFL
50%*3
Gross profit
Expenses
Net business profit
Net income
25.7
17.9
7.9
5.3
(0.7)
+0.2
(0.9)
(0.7)
179.8
88.3
93.5
80.0
(4.7)
+3.3
(7.9)
+25.5
Ratio of Ownership by SMFG
*1 Excludes profit from overseas equity method affiliates of SMBC Nikko,
(consolidated subsidiaries of Sumitomo Mitsui Financial Group), year-on-year
comparisons include figures of SMBC Friend Securities
*2 Includes tax impact of approximately ¥(90.0) billion by becoming a wholly
owned subsidiary of SMFG
*3 Changed the ownership ratio of SMFL in November 2018. Consolidated
subsidiary with 60% ownership until the end of December 2018 and equity
method affiliate with 50% ownership after that
99
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Consolidated Balance Sheet Summary
Loans and Bills Discounted (SMBC non-consolidated)
Loans and bills discounted increased by ¥2,505.6 billion
year-on-year to ¥76,401.8 billion due to an increase in
overseas loans.
Balance of Loan
(Trillions of yen)
68.3
18.9
69.3
19.2
75.6
21.1
73.9
20.7
76.4
22.4
100
50
0
’15/3
’16/3
’17/3
’18/3
’19/3
Domestic offices (excluding Japan offshore banking accounts)
Overseas offices and Japan offshore banking accounts
Deposits (SMBC non-consolidated)
Deposits increased by ¥5,847.9 billion year-on-year to
¥116,091.1 billion. This increase was mainly due to increases
in both individual and corporate deposits in Japan.
49.3
50.1
54.5
53.2
54.0
Securities
Financial Review
limited to 0.02 percentage point, and this downward trend
appears to be bottoming out.
Domestic Loan-to-Deposit Spread
FY2018
(%)
FY2017
Interest earned on loans
and bills discounted
Interest paid on
deposits
Loan-to-deposit spread
1Q
2Q
3Q
4Q
Yearly
average
Yearly
average
0.95
0.95
0.93
0.93
0.94
0.98
0.00
0.00
0.00
0.00
0.00
0.00
0.95
0.95
0.93
0.93
0.94
0.98
Other securities decreased by ¥1,639.6 billion year-on-year
to ¥23,800.5 billion due to a decrease in the amount of
Japanese government bonds held by SMBC. Net unrealized
gains on other securities decreased by ¥86.8 billion year-on-
year to ¥2,321.3 billion mainly because of lower stock prices.
Unrealized Gains (Losses) on Other Securities
(Billions of yen)
Balance
Net unrealized gains (losses)
March 31, 2019
YoY
March 31, 2019
YoY
Balance of Deposit
(Trillions of yen)
120
91.3
60
36.0
98.8
39.8
105.6
110.2
116.1
Stocks
Bonds
3,486.6
8,983.7
(2,850.5)
(402.7)
1,902.9
(270.7)
60.4
358.0
+16.0
+167.9
44.1
47.6
50.2
Others
11,330.2
+1,613.5
41.8
42.3
43.6
45.3
47.1
0
’15/3
’16/3
’17/3
’18/3
’19/3
Individuals (domestic)
Corporates (domestic)
Others
Domestic Loan-to-Deposit Spread (SMBC non-consolidated)
In FY2018, domestic loan-to-deposit spread decreased by
0.04 percentage point year-on-year to 0.94% primarily as a
result of a decline of loan spreads. After the second quarter,
the decrease in domestic loan-to-deposit spread has been
Total
23,800.5
(1,639.6)
2,321.3
(86.8)
NPLs Based on the Financial Reconstruction Act
The balance of NPLs based on the Financial Reconstruction
Act increased by ¥22.8 billion year-on-year to ¥695.2 billion.
However, the NPL ratio declined by 0.02 percentage point to
0.76% as a result of an increase in outstanding credit.
Balance of NPLs Based on the Financial Reconstruc-
tion Act and NPL Ratio
(Billions of yen)
1,800
1,200
1,174.8
769.0
1.39
0.97
992.7
927.7
622.6
1.15
0.78
567.7
1.00
0.65
436.3
0.78
0.51
695.2
476.5
2
0.76
0.54
0
’15/3
’16/3
’17/3
’18/3
’19/3
600
0
(%)
6
4
Balance:
Ratio:
Consolidated
Consolidated
SMBC non-consolidated
SMBC non-consolidated
100
Corporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
Capital
Capital
Common equity Tier 1 capital increased by ¥437.1 billion
year-on-year due to an increase in retained earnings.
Risk-Weighted Assets
Risk-weighted assets decreased by ¥4,597.5 billion year-on-
year, due to the deconsolidation of Sumitomo Mitsui Finance
and Leasing as well as improvement of the credit portfolio for
domestic large borrowers in the Wholesale Business Unit.
Capital Ratio
The common equity Tier 1 ratio was 16.37% and the total
capital ratio was 20.76%. In addition, the external TLAC ratio
reached its required level on both the risk-weighted asset
basis and the leverage exposure basis.
Total Capital Ratio (BIS Guidelines)
(Billions of yen)
2019 (A)
2018 (B)
Increase
(decrease)
(A–B)
Shareholder Returns
For FY2018, the Company distributed ordinary dividend
per share of common stock of ¥180, ¥10 higher than in the
previous fiscal year and the disclosed forecast, in reflection of
the fact that profit attributable to owners of parent was higher
than the target because of steady progress in the measures of
the Medium-Term Management Plan.
In addition, the Company announced plans to repurchase
¥100.0 billion of own shares with the aim of further enhancing
shareholder returns.
Ordinary Dividend per Share of Common Stock
(Yen)
200
150
100
50
0
140
150
150
170
180
’14
’15
’16
’17
’18
(FY)
Common equity Tier 1 capital
9,654.5
9,217.4
+437.1
Dividend Payout Ratio
26.2%
32.7%
29.9%
32.7%
34.6%
(Reference) Total payout ratio
44.2%
Overview of Repurchase of Own Shares
Type of shares to be repurchased
Common stock
Aggregated amount repurchased
¥100.0 billion (upper limit)
Aggregate number of shares to be repurchased 32,000,000 shares (upper limit)
Repurchase period
May 16 – August 30, 2019
Additional Tier 1 capital
1,072.7
1,392.9
(320.1)
Tier 1 capital
Tier 2 capital
10,727.2
10,610.2
+117.0
1,513.3
1,693.9
(180.6)
Total capital
12,240.5
12,304.1
(63.6)
Risk-weighted assets
58,942.8
63,540.3
(4,597.5)
Common equity Tier 1 capital ratio
16.37%
14.50%
+1.87%
Total capital ratio
20.76%
19.36%
+1.40%
Leverage Ratio
Leverage ratio
4.88%
5.01%
(0.13)%
External TLAC Ratio
Risk-weighted asset basis
Leverage exposure basis
26.90%
8.19%
101
About SMBC GroupTo Our StakeholdersBusiness Strategies for Creating ValueCorporate Infrastructure Supporting Value CreationSMBC Group Annual Report 2019
SMBC Group Supports the Olympic and
Paralympic Games Tokyo 2020.
Initiatives for Generating Interest in the
Olympic and Paralympic Games Tokyo 2020
Contributions to Para Sports in Preparation
for the Paralympic Games Tokyo 2020
SMBC Group is holding events across Japan with the aim
of generating interest in the Olympic and Paralympic Games
Tokyo 2020. For example, we organized SMBC FRIENDS
RUN 2019 in YOKOHAMA at International Stadium Yokohama
500 days prior to the opening day of the games as part of
500 Days to Go! Festival—500 Days Until the Olympic and
Paralympic Games Tokyo 2020.
With only one year remaining until the Olympic and
Paralympic Games Tokyo 2020, SMBC is engaged in a con-
certed effort to generate interest in the Games across Japan.
SMBC Group employs 12 para-athletes (as of June 30, 2019).
These athletes take part in events for fostering understanding
with regard to para sports and for encouraging social ac-
ceptance by holding para sports workshops for children and
acting as presenters at new employee rallies.
Together with these employees, SMBC Group is contributing
to the spread of para sports leading up to the Paralympic
Games Tokyo 2020.
Note: Photograph is of javelin competitor Yukiko Saito.
Sumitomo Mitsui Financial Group is the Gold Partner (Banking Category) of the Olympic and Paralympic Games Tokyo 2020.
102
SMBC Group Annual Report 2019 Appendix I
CONTENTS
Group Companies .......................................... 104
Corporate Data ............................................... 133
Risk Management ........................................... 109
Sumitomo Mitsui Financial Group, Inc.
Internal Reporting Systems and
Hotline for Inappropriate Accounting
and Auditing Activities .................................... 123
Basic Policy for Customer-Oriented
Business Conduct ........................................... 124
Support for Mid-Sized
Corporations and SMEs,
Vitalization of Local Regions in Japan ............ 126
Employees ....................................................... 128
Main Work-Life Balance Support System ........ 131
Directors and Executive Officers ................ 133
Sumitomo Mitsui Financial Group
Organization ............................................... 134
Sumitomo Mitsui Banking Corporation
Board of Directors, Directors, Members of
the Audit and Supervisory Committee and
Executive Officers ........................................ 135
SMBC Organization .................................... 138
Principal Subsidiaries and Affiliates ................ 140
Principal Domestic Subsidiaries ................. 140
Principal Overseas Subsidiaries ................. 141
Principal Affiliates ........................................ 142
International Directory .................................... 143
103
SMBC Group Annual Report 2019
Group Companies (as of March 31, 2019)
The companies of Sumitomo Mitsui Financial
Group primarily conduct commercial banking
through the following financial services: leas-
ing, securities, consumer 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: Takeshi Kunibe
(Appointed on April 1, 2019)
President: Jun Ohta
(Appointed on April 1, 2019)
Capital: ¥2,339.4 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, 2019)
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)
2019
Billions of yen
2017
2018
2016
1,135�3
For the Year:
Ordinary income �������� ¥ 5,735�3 ¥ 5,764�1 ¥ 5,133�2 ¥ 4,772�1
Ordinary profit���������
985�2
Profit attributable to
owners of parent �����
At Year-End:
11,451�6 11,612�8 11,234�2 10,447�6
Net assets ��������������
Total assets ������������ ¥203,659�1 ¥199,049�1 ¥197,791�6 ¥186,585�8
1,164�1
1,005�8
734�3
706�5
726�6
646�6
www.smbc.co.jp/global/index.html
Sumitomo Mitsui Banking Corporation
(“SMBC”) was established in April 2001
through the merger of the 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 a share transfer, and SMBC became
a wholly owned subsidiary of Sumitomo
Mitsui Financial Group. In March 2003,
SMBC merged with The Wakashio Bank, Ltd.
SMBC’s competitive advantages include
its solid and extensive client base, the expe-
ditious implementation of strategies, and
also the service providing capability of its
predominant Group companies. Under the
management of Sumitomo Mitsui Financial
Group, SMBC will unite with other SMBC
Group companies in an effort 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
(Concurrent Director at Sumitomo
Mitsui Financial Group)
Number of Employees: 28,482
Number of branches and other business locations:
In Japan:
2,086*
Branches:
511
(Including 47 specialized deposit account branches)
Sub-branches:
382
Banking agencies:
1
Automated service centers:
1,192
45
19
23
4
* The number of domestic branches excludes ATMs
located at retail convenience stores. The number
of overseas branches excludes branches that are
closing and locally incorporated companies overseas.
Overseas:
Branches:
Sub-branches:
Representative offices:
104
Credit Ratings (as of June 30, 2019)
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)
2019
Billions of yen
2017
2018
2016
For the Year:
Ordinary income ������� ¥ 3,369�8 ¥ 3,117�0 ¥ 3,014�4 ¥ 3,059�0
930�3
Ordinary profit ��������
Net income �������������
680�1
At Year-End:
Net assets ��������������
8,986�7 9,090�4 8,908�1 9,446�1
Total assets ������������ ¥190,690�2 ¥182,727�4 ¥180,946�6 ¥180,408�6
932�7
627�5
894�5
617�4
829�4
543�1
SMBC Group Annual Report 2019
Formerly Societe Generale Private Banking,
SMBC Trust Bank Ltd. joined SMBC Group in
October 2013. We then made a fresh start fol-
lowing the integration of the retail banking
operations of Citibank Japan Ltd. under the
new PRESTIA brand in November 2015.
As a trust bank with strengths in the fields
of trusts, foreign currency, and real estate,
SMBC Trust Bank provides finely tuned sup-
port and custom-tailored products and
solutions to address wealth management and
inheritance needs as Japan’s population ages
and achieves a longer life span.
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: Fumiaki Kurahara
Number of Employees: 2,091
Number of branches: In Japan: 54
(Including Internet Branch, and Sub-Branches,
and Foreign Exchange Counters)
Company Name: Sumitomo Mitsui Finance and
Leasing Company, Limited
Business Profile: Leasing
Establishment: February 4, 1963
Head Office:
Tokyo Head Office: 3-2, Marunouchi 1-chome,
Chiyoda-ku, Tokyo, Japan
Osaka Head Office: 3-10-19, Minami-Semba,
Chuo-ku, Osaka
President and CEO: Masaki Tachibana
Number of Employees: 3,285
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
services appropriate to the diverse needs of
customers by taking advantage of its abun-
dant experience and past performance
results accumulated over the years while
appropriately responding to the globalization
of capital expenditures and sales activities
overseas. SMFL also develops an unparal-
leled aircraft leasing business.
In November 2018, a reorganization of
Sumitomo Mitsui Financial Group’s and
Sumitomo Corporation’s joint leasing part-
nership was executed with the goal of
drastically heightening competitiveness and
achieving sustainable growth. Acting in its
capacity as SMBC Group’s leasing business
platform, SMFL is contributing to the devel-
opment of society through engagement in
the business sectors which are expected to
experience future growth such as green
energy, social infrastructure, and healthcare.
www.smbctb.co.jp/en
Financial Information (Years ended March 31)
For the Year:
Ordinary income �������
Ordinary profit (loss) ��
Net income (loss) ������
At Year-End:
Total assets ��������������
2019
Billions of yen
2017
2018
2016
¥ 61�9
(2�4)
(3�7)
¥ 50�6
(7�1)
(5�7)
¥ 39�9
(15�8)
(4�1)
¥ 20�5
(9�5)
(10�8)
¥3,273�6
¥3,064�4
¥2,710�8
¥2,517�2
www.smfl.co.jp/english/
Credit Ratings (as of June 30, 2019)
Standard & Poor’s
R&I
JCR
Long-term Short-term
A–
A+
AA–
—
a–1
J–1+
Financial Information
(Consolidated basis, years ended March 31)
2019
Billions of yen
2017
2018
2016
For the Year:
Leasing transaction
volume ���������������������
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Profit attributable to
owners of parent �������
At Year-End:
Total assets ��������������
¥2,412�2
1,502�3
90�9
87�5
¥2,185�0
1,622�8
96�4
97�6
¥2,192�6
1,420�4
89�0
90�4
¥1,994�8
1,147�8
79�6
81�0
80�0
54�5
50�4
45�5
¥5,812�6
¥5,660�6
¥5,601�6
¥4,736�8
105
SMBC Group Annual Report 2019
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: 10,122
www.smbcnikko.co.jp/en
Credit Ratings (as of June 30, 2019)
Moody’s
Standard & Poor’s
R&I
JCR
Long-term Short-term
A1
A
AA–
AA
P–1
A–1
a–1+
—
Financial Information (Years ended March 31)
2019
Billions of yen
2017
2018
2016
For the Year:
Operating revenue ����� ¥ 344�6 ¥ 376�0 ¥ 334�4 ¥ 297�9
46�9
Operating income������
48�3
Ordinary profit�����������
Net income ���������������
33�1
At Year-End:
Total assets �������������� ¥10,753�1 ¥10,541�4 ¥11,536�9 ¥10,346�2
38�6
42�1
28�0
84�8
87�4
57�7
69�0
70�5
39�4
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
Credit Rating (as of June 30, 2019)
R&I
Long-term Short-term
AA–
a–1+
Osaka Head Office: 4-5-15, Imabashi,
Financial Information (Years ended March 31)
Chuo-ku, Osaka
President and CEO: Yukihiko Onishi
Number of Employees: 2,546
2019
Billions of yen
2017
2018
2016
For the Year:
Revenue from credit
card operations ��������� ¥15,466�2 ¥13,756�0 ¥12,262�7 ¥11,360�6
210�1
Operating revenue �����
40�5
Operating profit ���������
40�5
Ordinary profit�����������
26�6
Net income (loss)�������
At Year-End:
Total assets �������������� ¥ 1,933�3 ¥ 1,698�2 ¥ 1,500�7 ¥ 1,356�3
Number of
cardholders
(in thousands) �����������
279�3
48�0
47�7
(58�5)
247�7
41�5
41�0
28�3
223�4
34�7
34�5
24�4
25,731
24,239
27,471
29,207
SMBC Nikko Securities Inc. has continued to
build strong relationships with individual and
corporate clients for more than a century. In
January 2018, SMBC Nikko Securities was
merged with SMBC Friend Securities Co.,
Ltd., enabling it to amalgamate the strengths
of both companies and to provide financial
services that capitalize on the collective
strength of SMBC Group as its comprehen-
sive securities company.
Guided by its brand slogan of “Share the
Future,” SMBC Nikko Securities aspires to
become the foremost Japanese comprehen-
sive securities company as a provider of
high-quality services to customers in Japan
and overseas.
Since its founding in 1967, Sumitomo Mitsui
Card Company, Limited, has continued to
drive the development of Japan’s credit card
industry as a pioneer in the issuance of the
Visa Card in Japan and as a comprehensive
payment service provider at the forefront of
the cashless payment trend.
In April 2019, Cedyna Financial Corpora-
tion was converted into a wholly owned
subsidiary of Sumitomo Mitsui Card Com-
pany to solidify the core of SMBC Group’s
cashless payment strategies, and these two
companies have been effectively functioning
as a single business entity since.
Capitalizing on the transaction base,
expertise, credibility, and other strengths it
has accumulated as an industry leader,
Sumitomo Mitsui Card Company aims to
become Japan’s No. 1 comprehensive pay-
ment service provider in the burgeoning
cashless society through the integration of its
credit card, consumer credit, and financing
solution businesses.
106
SMBC Group Annual Report 2019
Formed in April 2009 as a result of the merger
of OMC Card, Inc., Central Finance Co., Ltd.,
and QUOQ Inc., Cedyna Financial Corpora-
tion celebrated the 10th anniversary of its
founding in April 2019.
Moreover, Cedyna was converted into a
wholly owned subsidiary of Sumitomo Mitsui
Card Company in April 2019 to solidify the
core of SMBC Group’s cashless payment
strategies, and these two companies have
been effectively functioning as a single busi-
ness entity since.
Together with Sumitomo Mitsui Card Com-
pany, Cedyna aims to become Japan’s No. 1
comprehensive payment service provider in
the burgeoning cashless society by capitaliz-
ing on the transaction base, expertise,
credibility, and other strengths it has accu-
mulated to date and integrating its credit
card, consumer credit, and financing solution
businesses.
Since its establishment in 1962, with the
original goal of striving to become the leading
provider of innovative financial services for
consumers, Promise Co., Ltd., currently
known as SMBC Consumer Finance Co.,
Ltd., has developed convenient loan prod-
ucts for individuals to accommodate the
changing times and has created an appropri-
ate system for offering loan consultation
services and executing loan agreements.
S MBC 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.
www.cedyna.co.jp/english/
Company Name: Cedyna Financial Corporation
Business Profile: Credit card and installment
Establishment: September 11, 1950
Head Office:
Head Office: 3-23-20, Marunouchi,
Naka-ku, Nagoya
Tokyo Head Office: 2-16-4, Konan,
Minato-ku, Tokyo
President and CEO: Naoki Ono
Number of Employees: 3,248
(Appointed on April 1, 2019)
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income (loss)�������
At Year-End:
Total assets ��������������
Number of
cardholders
(in thousands) �����������
2019
Billions of yen
2017
2018
¥ 146�3
2�9
3�0
3�5
¥ 149�6
2�0
2�2
(5�9)
¥ 152�1
7�0
7�1
14�2
2016
¥ 149�9
0�4
0�4
0�2
¥2,128�7
¥2,115�0
¥2,112�5
¥2,037�8
16,159
16,410
16,650
17,020
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: Ryohei Kaneko
(Appointed on April 1, 2019)
Number of Employees: 2,252
Cooperation:
SHOCHIKU Co., Ltd.,
Kabuki-za Co., Ltd.
Credit Rating (as of June 30, 2019)
R&I
Long-term Short-term
A
—
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit (loss) ��
Ordinary profit (loss) ��
Net income (loss)�������
At Year-End:
Total assets ��������������
2019
¥196�4
23�6
32�0
35�9
Billions of yen
2017
2018
¥192�2
15�4
15�7
8�9
¥186�2
51�6
51�8
100�8
2016
¥178�3
(72�3)
(72�3)
(72�1)
¥959�9
¥939�3
¥925�8
¥858�5
107
SMBC Group Annual Report 2019 www.jri.co.jp/english/
The Japan Research Institute, Limited (“JRI”)
is a comprehensive information services
company with information systems, consult-
ing, and think-tank functions. In addition to
providing IT-based strategic data systems
planning and development and outsourcing
services, JRI offers consultation in areas
such as management strategy and admin
reforms. It also engages in activities ranging
from economic research and analysis on
Japan and other countries and policy recom-
mendation to business incubation.
Company Name: The Japan Research Institute,
Limited
Business Profile: System development, data
processing, management
consulting and economic research
Establishment: November 1, 2002
Head Office:
Tokyo Head Office: 2-18-1, Higashi-Gotanda,
Shinagawa-ku, Tokyo
Osaka Head Office: 2-2-4, Tosabori,
Nishi-ku, Osaka
President and CEO: Masahiro Fuchizaki
Number of Employees: 2,621
Financial Information (Years ended March 31)
For the Year:
Operating revenue �����
Operating profit ���������
Ordinary profit�����������
Net income ���������������
At Year-End:
Total assets ��������������
2019
¥138�4
3�6
3�4
2�6
Billions of yen
2017
2018
¥136�5
2�8
2�5
1�7
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www.smd-am.co.jp/english/
Company Name: Sumitomo Mitsui DS 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: 1,099
Formed from the merger of Sumitomo Mitsui
Asset Management Company, Limited, and
Daiwa SB Investments Ltd. in April 2019,
Sumitomo Mitsui DS Asset Management
Company, Limited is one of Japan’s top-tier
asset managers.
Leveraging its industry-leading research
platform and global network, Sumitomo Mitsui
DS Asset Management Company provides
high-quality asset management services that
meet specific needs of its diverse client base
composed of Japanese and non-Japanese
institutional (pension funds, financial institu-
tions, etc.) and individual investors. The
company’s vision is to become the best asset
management firm for better Quality of Life of
our clients and all the other stakeholders.
Financial Information (Years ended March 31)
Sumitomo Mitsui Asset Management
For the Year:
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2019
Billions of yen
2017
2018
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¥46�9
6�0
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4�1
¥46�5
7�3
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4�9
¥39�1
4�5
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¥41�7
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¥48�9
¥53�8
¥46�5
¥45�1
Daiwa SB Investments
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2019
Billions of yen
2017
2018
2016
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¥38�6
¥39�3
¥35�8
¥36�0
108
SMBC Group Annual Report 2019 Risk Management
Risk Management Categories
SMBC Group defines the following risk management categories and conducts management of these risks accordingly.
Group companies manage risk in accordance with the characteristics of their particular businesses. These risk categories are continuously
reviewed and new ones may be added in response to changes in the operating environment.
Credit risk
Market risk
Liquidity risk
Risk Category
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.
Department in Charge
Credit & Investment
Planning Department
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.
Corporate Risk
Management Department
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.
Corporate Risk
Management Department
Operational risk
Operational risk is the possibility of losses arising from inadequate or failed internal
processes, people, and systems or from external events (see page 119 for information
on risk categories and the departments in charge).
Conduct risk
Conduct risk is the risk that our conduct negatively affects customers, market integrity, or
effective competition.
Corporate Risk
Management Department
Corporate Risk
Management Department
General Affairs Department
Top Risks
The Top Risks, risks that threaten to significantly impact management, recognized by SMBC Group and examples of the scenarios that could
potentially result from these risks are listed in the table below (see page 87 for information on methods of utilizing Top Risks).
Top Risks
Example Risk Scenarios
Intensification of the international
political confrontation
Slowdown in the global economy resulting from increased opaqueness in the US or European political
climates
Volatile financial and economic
environment
Decline in Japan’s social vitality
US, China, or other countries’ economic slowdown spillovers to the global economy or sharp resource
price movements
Lack of reliability or efficiency with regard to foreign currency procurement due to rising foreign currency
procurement costs
Economic slowdown or increased financial instability in Japan resulting from sluggish overseas demand,
yen appreciation, poor market conditions, etc., in the midst of a low potential economic growth rate;
deterioration of financial institutions’ earnings resulting from prolonged monetary easing measures by the
Bank of Japan
Ideological and religious conflicts
Slowdown in the economies of specific countries resulting from the increased geopolitical risks associated
with tensions in the Korean peninsula and the Middle East, domestic or overseas acts of terrorism, etc.
Ceased operation of information
systems due to cyber attacks
Difficulty in maintaining business continuity due to ceased operation or destruction of information systems
following cyber attacks, etc.
Changes in competitive climate
due to emergence of FinTech or
other new technologies
Decreased profitability due to significant erosion of our 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
Increase of large-scale natural
disasters
Halting of operations of business partners as a result of supply chain disruptions, system failures, etc.
Adverse impacts on our profits from store closures, system failures, etc.
Legal or compliance-related
incidents
Damage to reputation due to incurring government penalties or other sanctions as a result of incidents
stemming from misconduct; government penalties due to insufficient measures for Anti-Money Laundering/
Combating the Financing of Terrorism, etc.
Materialization of strategic risks
Difficulty in securing human resources in strategic or specialized fields and in maintaining a sufficient base
of diverse employees
Note: The above is only a portion of the risks recognized by SMBC Group. It is possible that the materialization of risks other than those listed above could have a significant impact on our management.
109
SMBC Group Annual Report 2019
Stress Testing
SMBC Group conducts stress testing for each category of risks
as well as stress testing used to verify the overall soundness of
comprehensive risk management practices. The level of soundness
used for verifications is determined based on risk appetite com-
bined with consideration for the severity of the scenario anticipated.
When evaluating group-wide soundness, evaluations are
made using the consolidated balance sheets and consolidated
statements of income, which include data from affiliates, with the
goal of identifying major risks to our business and asset portfolio.
Specifically, scenarios are selected based on the aforementioned
severity level as well as background conditions that cover all areas
In this manner, stress testing processes often require a variety
of expertise. When selecting the background conditions for scenar-
ios, expertise regarding macroeconomic conditions and geopolitical
risks is required. When selecting methodologies, insight into the
statistical and other mathematical analysis techniques is crucial.
When calculating impacts on SMBC Group as a whole, insight into
SMBC Group and the businesses of its customers must be used.
Stress testing processes will thus be based on discussions among
and opinions of directors, members of upper management, special-
ists, and representatives from relevant organizations and records
will be created of these discussions and opinions in order to ensure
objectivity, transparency, and reproducibility. In this way, measures
in which we may face risks (e.g. an outlook encompassing the entire
for practicing proper governance of stress testing will be applied.
world). We also employ methodology for ensuring scenarios can
be accurately reflected and for incorporating business and portfolio
characteristics.
Commonly used statistical methods are utilized in developing
such methodologies. However, as it is necessary to estimate out-
liers, we may choose the methodology that best recreates outliers
rather than the methodology that offers the highest statistical
accuracy. When projecting scenarios for which there are no prior
examples, human judgment may be given greater weight than the
results of estimates.
■ Stress Testing Process
(1) Scenario Design
Scenarios are designed by the Corporate Risk Management Department after compil-
ing information on SMBC Group’s Top Risks and the views of related departments 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.
110
SMBC Group Annual Report 2019
Risk-Weighted Assets
Risk-weighted assets subject to the Basel Capital Accord totaled
(3) Credit Policy
SMBC Group’s credit policy comprises clearly stated universal
¥58,942.8 billion as of March 31, 2019, down ¥4,597.5 billion from
and basic operating concepts, policies, and standards for credit
March 31, 2018. The main factors behind the decrease in risk-
operations, in accordance with our business mission and rules of
weighted assets were the conversion of Sumitomo Mitsui Finance
conduct. SMBC Group is promoting the understanding of and strict
and Leasing Company, Limited to an equity-method investee and
adherence to its Group credit policy among all its managers and
the improvement of our portfolio of corporate exposure.
employees. By fostering a culture of appropriate levels of risk-taking
■ Risk-Weighted Assets as of March 31, 2019
and providing high-value-added financial services, SMBC Group
aims to enhance shareholder value and play a key contributory role
(Trillions of yen)
in the community.
Credit risk
Market risk
Operational risk
Total
March 31,
2018
March 31,
2019
Increase
(decrease)
57.3
2.7
3.5
63.5
53.0
2.3
3.6
58.9
(4.3)
(0.4)
+0.1
(4.6)
■ Risk Assets of Individual Business Units
2. Credit Risk Management System
At SMBC Group, the Group CRO formulates credit risk manage-
ment 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 regu-
lations, including the Group credit policies, manages non-performing
(Trillions of yen)
loans (NPLs), and performs other aspects of credit portfolio manage-
Retail Business Unit
Wholesale Business Unit
12.8
19.5
ment. We have also established the Credit Risk Committee to serve
as a body for deliberating on matters related to group-wide credit
portfolios.
International Business Unit
22.3
At SMBC, the core bank of SMBC Group, the Credit &
Global Markets Business Unit 4.9
SMBC Group
Credit risk
Market risk
Operational risk
53.0
2.3
3.6
Credit Risk
1. Basic Approach to Credit Risk Management
(1) Characteristics of Credit Risk
Credit risk is characterized by 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 transac-
tions) to lose value or become worthless.
(2) Fundamental Principles for Credit Risk Management
All Group companies follow the fundamental principles established
by SMBC Group to assess and manage credit risk on a group-wide
basis and further raise the level of accuracy and comprehensive-
ness 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 SMBC Group 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.
Investment Planning Department within the Risk Management Unit
furnishes the credit risk management system and is thus responsible
for the comprehensive management of credit risk. This department
drafts and administers credit policies, the internal rating system,
credit authority 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.
111
SMBC Group Annual Report 2019
The credit departments within each business unit conduct credit
the results directly to the Board of Directors and the Management
risk management, along with the branches, for loans handled by
Committee.
their units and manage their units’ portfolios. The credit approval
SMBC has established the Credit Risk Committee as a con-
authority is determined based on the credit amount and internal
sultative body to round out its oversight system for undertaking
grades, while credit departments focus on the analysis and manage-
flexible and efficient control of credit risks, and ensuring the overall
ment of customers and transactions with relatively high credit risk.
soundness of the bank’s loan operations.
The Credit Administration Department is responsible for handling
NPLs of borrowers classified as potentially bankrupt or lower, and
draws up plans for their workouts, including write-offs. 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.
The Compliance Unit has in place a system of coordinating
to establish systems for providing explanations to customers and
develop information management practices for the purpose of cus-
tomer protection and to prevent transactions with antisocial forces,
among other tasks.
The Internal Audit Unit, operating independently of the business
units, audits asset quality, the accuracy of gradings and self-
assessment, and the state of credit risk management, and reports
■SMBC’s Obligor Grading System
Obligor Grade
Domestic
(C&I), etc.
Overseas
(C&I), etc.
Definition
3. Credit Risk Management Methods
(1) Credit Risk Assessment and Quantification
At SMBC Group, to effectively manage the risk involved in individual
loans as well as the credit portfolio as a whole, we first acknowl-
edge that every loan entails credit risks, assess the credit risk posed
by each borrower and loan using an internal rating system, and
quantify that risk for control purposes.
(a) Internal Rating System
There is an internal rating system for each asset control category
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 obli-
gor’s financial statements. The financial grade is then adjusted taking
into account the actual state of the obligor’s balance sheet and
qualitative factors to derive the obligor grade. In the event that the
Borrower
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
Virtually
Bankrupt Borrowers
Bankrupt
Borrowers
Doubtful
Assets
Bankrupt and
Quasi-Bankrupt
Assets
112
SMBC Group Annual Report 2019
borrower is domiciled overseas, internal ratings for credit are made
after taking into consideration country rank, which represents an
(2) Framework for Managing Individual Loans
SMBC Group strives to maintain a sound portfolio through appro-
assessment of the credit quality of each country, based on its polit-
priate credit assessments and monitoring conducted over credit
ical and economic situation as well as its current account balance
periods. The following framework is used for managing individual
and external debt. The borrower categories used in self-assessment
loans at SMBC, the core bank of SMBC Group.
are consistent with the obligor grade categories.
(a) Credit Assessment
Obligor grades and facility grades are reviewed once a year, and
At SMBC, credit assessment of corporate loans involves a variety
whenever necessary, such as when there are changes in the credit
of financial analyses, including cash flow, to predict an enterprise’s
situation. There are also grading systems for loans to individuals and
capability of loan repayment and its growth prospects. These quan-
project finance and other structured finance tailored according to
titative measures, when combined with qualitative analyses of indus-
the risk characteristics of these types of assets.
trial trends, the enterprise’s R&D capabilities, the competitiveness
The Credit & Investment Planning Department centrally man-
of its products or services, and its management caliber, result in a
ages the internal rating systems and properly designs, operates,
comprehensive credit assessment. The loan application is analyzed
supervises, and validates the grading models. It validates the grad-
in terms of the intended utilization of the funds and the repayment
ing models and systems of main assets following the procedures
schedule. Thus, SMBC is able to arrive at an accurate and fair credit
manual (including those for statistical validation) once a year to
decision based on an objective examination of all relevant factors.
ensure their effectiveness and suitability and submits reports with
Increasing the understandability to customers of loan conditions
this regard. SMBC, the core bank of SMBC Group, employs a total
and approval standards for specific borrowing purposes and loan
of 22 grading models for corporate, specialized lending, and retail
categories is a part of SMBC’s ongoing review of lending practices,
applications. For details on internal rating methods, please refer to
which includes the revision of loan contract forms with the chief aim
Appendix II.
(b) Quantification of Credit Risk
of clarifying lending conditions utilizing financial covenants.
To respond proactively and promptly to customers’ funding
Credit risk quantification refers to the process of estimating the
needs—particularly those of SMEs—we employ a standardized
degree of credit risk of a portfolio or individual loan taking into
credit risk assessment process for SMEs that uses a credit-scoring
account not just the obligor’s Probability of Default (PD) but also the
model. With this process, we are building a regime for efficiently
concentration of risk in a specific customer or industry and the loss
marketing our Business Select Loan and other SME loans.
impact of fluctuations in the value of collateral, such as real estate
In the field of housing loans for individuals, we employ a credit
and securities.
assessment model based on credit data amassed and analyzed
Specifically, first, the PD by grade, Loss Given Default (LGD),
by SMBC over many years. This model enables our loan officers
credit quality correlation among obligors, and other parameter
to efficiently make rational decisions on housing loan applications
values are estimated using historical data of obligors and facilities
and to reply to the customers without delay. It also facilitates the
stored in a database to calculate the credit risk. Then, based on
effective management of credit risk as well as the flexible setting of
these parameters, we run a simulation of simultaneous default using
interest rates.
the Monte Carlo method to calculate our maximum loss exposure to
We also provide loans to individuals who rent out properties
the estimated amount of the maximum losses that may be incurred.
such as apartments. The loan applications are subjected to a
Based on these quantitative results, we allocate risk capital.
precise credit risk assessment process utilizing a risk assessment
Risk quantification is also executed for purposes such as to
model that factors in the projected revenue from the rental business.
determine the portfolio’s risk concentration, or to simulate economic
We also provide advice to such customers on how to revise their
movements (stress tests), and the results are used for making
business plans.
optimal decisions across the whole range of business operations,
including formulating business plans and providing a standard
against which individual credit applications are assessed. For details
on internal rating methods, please refer to Appendix II.
113
SMBC Group Annual Report 2019
(b) Credit Monitoring System
(c) Researching Borrowers More Rigorously and Balancing Risk
At SMBC, in addition to analyzing loans at the application stage, the
and Returns
Credit Monitoring System is utilized to maintain an understanding
Against a backdrop of drastic change in the business environment,
of the circumstances surrounding the obligor in order to reassess
we rigorously research borrower companies’ actual conditions.
obligor grades and review self-assessment and credit policies so
It runs credit operations on the basic principle of earning returns
that problems can be detected at an early stage and quick and
that are commensurate with the credit risk involved, and makes
effective action can be taken. The system includes periodic moni-
every effort to reduce credit and capital costs as well as general and
toring carried out each time an obligor enterprise discloses financial
administrative expenses.
results as well as continuous monitoring performed each time credit
(d) Preventing and Reducing Non-Performing Loans
conditions change, as indicated in the diagram below.
On NPLs and potential NPLs, we carry out regular loan reviews
(3) Framework for Credit Portfolio Management
In addition to managing individual loans, SMBC Group applies the
following basic policies to the management of the entire credit port-
folio to maintain and improve its soundness and profitability over the
medium to long term. Information on the status of credit portfolio
management is reported to the Management Committee and the
Board of Directors and regular monitoring is performed through the
Risk Appetite Framework (RAF).
(a) Appropriate Risk Control within Capital
to clarify handling policies and action plans, enabling it to swiftly
implement measures to prevent deterioration of borrowers’ busi-
ness situations, support business recoveries, collect on loans, and
enhance loan security.
(e) Actively Managing Portfolios
We make active use of credit derivatives, loan asset sales, and
other instruments to proactively and flexibly manage its portfolios to
stabilize credit risk.
(4) Self-Assessment, Write-Offs and Provisions,
To take risks within acceptable level of capital, we set an upper limit
Non-Performing Loans Disclosure
for internal credit risk capital based on risk appetite and portfolio
(a) Self-Assessment
plan of each business unit.
(b) Controlling Concentration Risk
Self-assessment is a preparatory task for ensuring SMBC Group’s
asset quality and calculating the appropriate level of write-offs and
As the equity capital of SMBC Group may be materially impaired in
provisions. Each asset is assessed individually for its security and
the event that the credit concentration risk becomes apparent, we
collectibility. Depending on the borrower’s current situation, the
implement measures to manage credit toward industrial sectors with
borrower is assigned to one of five categories: Normal Borrowers,
excessive risk concentration and introduce large exposure limit lines
Borrowers Requiring Caution, Potentially Bankrupt Borrowers,
and conduct intensive loan review for obligors with large exposure.
Virtually Bankrupt Borrowers, and Bankrupt Borrowers. Based
To manage country risk, we also have credit limit guidelines
on the borrower’s category, claims on the borrower are classified
based on each country’s creditworthiness.
into Classification I, II, III, and IV assets according to their default
■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
Virtually
Bankrupt
Borrowers
Bankrupt
Borrowers
Grading Outlook Assessment
Performance
Trends
+
Qualitative
Risk
Factors
Final
Obligor
Grade
•Positive
•Flat
•Negative
Determination of
Credit Policies
Credit Policy Segment
Policy for Handling
Each Individual
Company
Action Plan Formulation
Restructuring
Feasibility
Basic
Approach
Specific
Action Plan
Facility Grading Assignment
114
SMBC Group Annual Report 2019
and impairment risk levels, taking into account such factors as
SMBC’s Standards for Write-Offs and Provisions
collateral and guarantees.
SMBC, the core bank of SMBC Group, conducts rigorous
self-assessments of asset quality using criteria based on the
Self-Assessment
Borrower Categories
Standards for Write-Offs and
Provisions
Financial Inspection Manual of the Financial Services Agency and
Normal Borrowers
the Practical Guideline published by the Japanese Institute of
Certified Public Accountants. Self-assessment is the latter stage of
the obligor grading process for determining the borrower’s ability to
Borrowers Requiring Caution
fulfill debt obligations, and the obligor grade criteria are consistent
with the categories used in self-assessment. As part of our efforts
to bolster risk management throughout SMBC Group, consoli-
dated subsidiaries carry out self-assessment in substantially the
same manner.
Borrower Categories, Defined
Potentially Bankrupt Borrowers
Normal Borrowers
Borrowers with good earnings performances and no
significant financial problems
Borrowers Requiring Caution
Borrowers identified for close monitoring
Potentially Bankrupt Borrowers
Virtually Bankrupt Borrowers
Borrowers perceived to have a high risk of falling into
bankruptcy
Borrowers that may not have legally or formally declared
bankruptcy but are essentially bankrupt
Bankrupt Borrowers
Borrowers that have been legally or formally declared bankrupt
Asset Classifications, Defined
Virtually Bankrupt / Bankrupt
Borrowers
General Reserve
Notes
Assets not classified under Classifications II, III, or IV
Specific Reserve
The expected loss amount for the next 12 months is
calculated for each grade based on the grade’s historical
bankruptcy rate, and the total amount is recorded as
“provision for the general reserve for possible loan losses�”
These assets are divided into groups according to the level
of default risk� Amounts are recorded as provisions for the
general reserve in proportion to the expected losses based
on the historical bankruptcy rate of each group� The groups
are “claims on Substandard Borrowers” and “claims on other
Borrowers Requiring Caution�” The latter group is further
subdivided according to the borrower’s financial position,
credit situation, and other factors� Further, when cash flows
can be estimated reasonably accurately, the discounted
cash flow (DCF) method is applied mainly to large claims for
calculating the provision amount�
A provision for the specific reserve for possible loan losses
is made for the portion of Classification III assets (calculated
for each borrower) not secured by collateral, guarantee, or
other means� Further, when cash flows can be estimated
reasonably accurately, the DCF method is applied mainly to
large claims for calculating the provision amount�
Classification III asset and Classification IV asset amounts
for each borrower are calculated, and the full amount of
Classification IV assets (deemed to be uncollectible or of no
value) is written off in principle and provision for the specific
reserve is made for the full amount of Classification III assets�
Provisions made in accordance with general inherent default
risk of loans, unrelated to specific individual loans or other
claims
Provisions made for claims that have been found uncollectible
in part or in total (individually evaluated claims)
Classification I
Classification II
Classification III
Assets perceived to have an above-average risk of
uncollectibility
Assets for which final collection or asset value is very
doubtful and which pose a high risk of incurring a loss
Classification IV
Assets assessed as uncollectible or worthless
(b) 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
SMBC Group, are shown below. As part of our overall measures
to strengthen credit risk management throughout SMBC Group, all
consolidated subsidiaries use substantially the same standards as
SMBC for write-offs and provisions.
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.
115
SMBC Group Annual Report 2019
(c) Non-Performing Loans Disclosure
transparency of the risk management process; and clearly sep-
Non-Performing Loans are loans and other claims of which recovery
arating front-office, middle-office, and back-office operations to
of either principal or interest appears doubtful and are disclosed in
establish a highly efficient system of mutual checks and balances.
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 “Non-Performing Loans”). Non-Performing
Loans 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 Non-
Performing Loans at March 31, 2019, please refer to page 335.
4. Risk Management of Marketable Credit
Transactions
2. Market and Liquidity Risk Management System
In accordance with the group-wide basic policies for risk man-
agement decided upon by the Management Committee, SMBC
Group determines important matters relating to the management
of market and liquidity risks, such as basic policies and risk lim-
its, in order to manage these risks. The ALM Committee meets
four times a year, in principle, to report on the state of market and
liquidity risk management and to discuss ALM operation policies.
The Corporate Risk Management Department, which is indepen-
Financial products, such as investments in funds, securitized
dent of the business units that directly handle market transactions,
products, and credit derivatives, that bear indirect risk arising from
manages market and liquidity risks in an integrated manner. This
underlying assets such as bonds and loan obligations are considered
department not only monitors the current risk situations but also
to be exposed to both credit risk from the underlying assets as well
reports regularly to the Management Committee and the Board of
as “market risk” and “liquidity risk” that arise from their trading as
Directors. Furthermore, the ALM Committee at SMBC, the core
financial products. This is referred to as marketable credit risk.
bank of SMBC Group, meets on a monthly basis to examine reports
For these types of products, we manage credit risk by analyzing
on the state of observance of limits on market and liquidity risks and
and assessing the characteristics of the underlying assets, but, for the
to discuss ALM operation policies.
sake of complete risk management, we also apply the methods for
Verification of the effectiveness of this risk management system
management of market and liquidity risks.
is conducted through regular internal audits implemented by the
In addition, we have established guidelines based on the charac-
independent Audit Department.
teristics of these types of risks and appropriately manage the risk of
losses.
Market and Liquidity Risks
3. Market and Liquidity Risk Management Methods
(1) Market Risk Management
SMBC Group manages market risk by setting maximum limits for
1. Basic Approach to Market and Liquidity Risk
value at risk (VaR) and maximum loss based on business policies
Management
(1) Definitions of Market and Liquidity Risks
Market risk is the possibility that fluctuations in interest rates, foreign
exchange rates, stock prices, or other market prices will change the
market value of financial products, leading to a loss.
Liquidity risk is defined as the uncertainty around the ability of the
firm to meet debt obligations without incurring unacceptably large
losses. Examples of such risk include the possible inability to meet
current and future cash flow/collateral needs, both expected and
unexpected. In such cases, the firm may be required to raise funds
at less than favorable rates or be unable to raise sufficient funds for
settlement.
(2) Fundamental Principles for Market and Liquidity
Risk Management
SMBC Group is working to further enhance the effectiveness of
its quantitative management of market and liquidity risks across
the entire Group by setting allowable risk limits; ensuring the
pertaining to market transactions. These limits are set within the risk
capital limit, which is determined taking into account the Group’s
shareholders’ 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.
SMBC Group 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.
Trading activities are market operations that gain profits by
taking advantage of fluctuations of market prices in the short term
or price differences among markets. We assess and manage the
market risk of trading activities on a daily basis by utilizing VaR and
other tools. Banking activities are market operations which gain
profits by controlling interest rates and term period for assets (loans,
bonds, etc.) and liabilities (deposits, etc.). In the same way as in the
case of trading activities, we assess and manage the market risk of
banking activities on a daily basis, utilizing VaR and other tools.
116
SMBC Group Annual Report 2019
Please note that, the risk of interest rate fluctuation differs
The following table shows the VaR results of the Group’s trading
substantially by how to recognize the dates for the maturity of
activities during fiscal 2018. VaR fluctuated greatly during this fiscal
demand deposits (current accounts and ordinary deposit accounts
year due to changes in the nature and investment positions of our
that can be withdrawn at any time) and how to estimate the time of
trading operations.
cancellation prior to maturity of time deposits and consumer loans.
b. Banking activities
At SMBC, the maturity of demand deposits that are expected to
Banking activities are market operations which gain profits by con-
be left with the bank for a prolonged period is regarded to be up
trolling interest rates and term period for assets (loans, bonds, etc.)
to five years (2.5 years on average). The cancellation prior to the
and liabilities (deposits, etc.). At SMBC Group, in the same way as in
maturity of time deposits and consumer loans is estimated based
the case of trading activities, we assess and manage the market risk
on historical data.
(a) Market Risks
a. Trading activities
of banking activities on a daily basis, utilizing VaR and other tools.
The following table shows the VaR results of the Group’s bank-
ing activities during fiscal 2018.
Trading activities are market operations that gain profits by taking
advantage of fluctuations of market prices in the short term or price
differences among markets. At SMBC Group, we assess and man-
age the market risk of trading activities on a daily basis by utilizing
VaR and other tools.
■ VaR for Trading Activities
March 31, 2019
September 30, 2018
Fiscal 2018
Maximum
Minimum
Average
(Billions of yen)
March 31, 2018
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Foreign exchange
Equities, commodities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
16.4
10.5
5.1
7.7
6.6
2.5
15.7
10.0
3.9
8.1
7.2
2.8
33.0
19.0
6.9
21.7
13.5
9.3
14.7
8.5
3.2
4.7
5.7
2.0
19.7
12.8
4.4
7.7
7.6
3.7
21.5
11.3
4.3
7.5
8.1
4.9
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)].
■ VaR for Banking Activities
March 31, 2019
September 30, 2018
Fiscal 2018
Maximum
Minimum
Average
(Billions of yen)
March 31, 2018
Sumitomo Mitsui Financial Group
(consolidated)
Interest rates
Equities, etc.
SMBC (consolidated)
SMBC (non-consolidated)
44.8
38.2
19.8
43.9
35.8
42.9
35.6
20.5
40.4
35.6
50.6
38.4
33.7
48.4
44.1
37.0
28.4
17.8
36.0
31.6
42.3
33.0
24.3
40.4
35.4
48.2
33.7
28.1
45.7
41.3
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.
117
SMBC Group Annual Report 2019
(b) Market Risk Volume Calculation Model
(d) Management of Stocks Held for Strategic Purposes
SMBC Group uses internal models to measure VaR and stressed
SMBC Group establishes risk allowance limits on stocks held for
VaR. For information on the consolidated subsidiaries that employ
strategic purposes and monitors the observance of these limits
these internal models, please refer to the section on market risk.
in order to control stock price fluctuation risk appropriately. More
a. Presuppositions and limits of model
specifically, VaR (1 year holding period) computed from profit-and-
In the Group’s internal VaR and stressed VaR models, various
loss simulations based on historical market fluctuation data and
market fluctuation scenarios are drawn up on the basis of past
aggregated fluctuation in market price from the beginning of the
data, and the historical simulation method is used to run profit-
fiscal year are subject to the risk capital limit management and mon-
and-loss movement simulations that enable us to forecast probable
itored on a daily basis.
maximum losses. The appropriateness of the internal model is later
To diminish the impact of stock price declines on capital, we
verified through back-testing.
have drawn up plans for reducing equity holdings from the perspec-
However, as back-testing cannot take into account major
tive of securing the financial base necessary to sufficiently exercise
market fluctuations that have not actually occurred historically, we
intermediary functions, even under high-stress environments that
supplement this method with the use of stress testing.
create substantial decline in stock prices. In accordance with these
This internal model employed by SMBC Group undergoes
plans, we are seeking to reduce the Group’s holdings*1 to a common
regular auditing by an independent auditing firm to ensure that it
equity Tier1 (CET1)*2 ratio of 14% over approximately five years from
operates appropriately.
b. Validity verification process
i Outline of validity verification
SMBC Group uses back-testing as a method for verification of
the validity of the internal model. VaR figures calculated by the
internal model are compared with actual portfolio profit-and-loss
figures on a given day to compute an appropriate VaR level and
confirm the adequacy of risk capital management.
ii Back-testing results
Information on back-testing of trading in fiscal 2018 can be found
on page 299.
c. Indicators substitute for the back-testing method
SMBC Group employs, as a method substitute for the back-testing
method, the VaR wherein presumptions for the model, such as
observation periods, change.
d. Changes in model from fiscal 2017
There have been no changes in the model from fiscal 2017.
(c) Stress Testing
The market occasionally undergoes extreme fluctuations that
exceed projections. To manage market risk, therefore, it is important
to run simulations of unforeseen situations that may occur in finan-
cial markets (stress testing). SMBC Group conducts stress tests
regularly, assuming various scenarios, and has measures in place
for irregular events.
118
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
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SMBC Group’s Portfolio
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(2) Liquidity Risk Management
At SMBC Group, liquidity risk is regarded as one of the major risks.
The Group’s liquidity risk management is based on a framework
consisting of setting Risk Appetite Measures and establishing con-
tingency plans.
The Risk Appetite Measures are measures for selecting the
types and levels of risk that we are willing to take on or tolerate. As
the level of liquidity risk is evaluated based on cash flow and balance
sheet conditions, Risk Appetite Measures have been set for both of
these areas. These measures include Liquidity Coverage Ratio, a
liquidity regulation; periods set for which it will be possible to main-
tain funding levels even under stress due to deposit outflow or other
factors; and the ratio that stable funding covers loans.
SMBC Group Annual Report 2019
The tolerated levels of risk are set based on account funding
status, cash management planning, economic environments, and
(2) Fundamental Principles for Operational Risk Management
We have set forth the policies on Operational Risk Management to
other factors, and measures are monitored on a daily or monthly
define the basic rules to be observed in the conduct of operational
basis in order to limit reliance on short-term funding and appropri-
risk management across the entire Group. Under these policies, we
ately manage liquidity.
have been working to enhance the operational risk management
As a framework to complement the Risk Appetite Measures,
framework across the whole Group by establishing an effective sys-
upper limits are set in place on both a Group company basis and
tem for identifying, assessing, controlling, and monitoring material
an individual branch basis with regard to funding gaps, which is
operational risks as well as a system for addressing risks that have
defined as a maturity mismatch between the source of funds and
materialized and implementing emergency response measures.
use of funds.
Based on the framework of the Basel Capital Accord, we have been
Furthermore, contingency plans are established in preparation
continuously pursuing sophisticated quantification of operational
for emergency situations. These plans contain information on chains
risks and advanced group-wide management.
of command and lines of reporting as well as detailed action plans
depending on the existing situation (i.e., normal, concerned, or criti-
cal). Meanwhile, SMBC carries out quantitative management of alert
indications based on early warning indicators established to assist
the bank in promptly and systematically detecting liquidity risks.
Operational Risk
2. Operational Risk Management System
Based on the group-wide basic policies for risk management
established by Sumitomo Mitsui Financial Group, Group companies
have developed an operational risk management system.
At Sumitomo Mitsui Financial Group, the Management
Committee makes decisions on basic policies for operational risk
1. Basic Approach to Operational Risk Management
management, and these decisions are authorized by the Board of
(1) Definition of Operational Risk
Operational risk is the risk of loss arising from inadequate or failed
internal processes, people, and systems or from external events.
Specifically, the risk—which, in addition to processing risk and sys-
tem risk, covers legal risk, human resources risk, reputational risk,
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
failures, and (7) execution, delivery, and process management.
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
comprehensively managing operational risks.
As a brief overview, this system operates by collecting and
analyzing internal loss data and Key Risk Indicators (KRI) from
Group companies. In addition, the system entails comprehen-
sively 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 implementation status
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
The risk 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
119
SMBC Group Annual Report 2019
of such risk mitigation plans will be monitored by the Corporate
equivalent amount. The approach has been utilized for the manage-
Risk Management Department. Furthermore, operational risks are
ment of operational risks since then.
quantified and quantitatively managed by utilizing the collected
Specifically, a model to which internal loss data and scenario
internal loss data and scenarios.
analysis results are input has been introduced to calculate the oper-
Regular reports are issued to the Group CRO on internal loss
ational risk equivalent amount and risk asset amounts. In addition,
data, KRI, scenario risk severity information, and the status of
steps are taken to ensure the objectivity, accuracy, and comprehen-
risk mitigation. In addition, the Risk Management Committee, a
siveness of scenario evaluations by utilizing external loss data and
cross-organizational committee established within Sumitomo Mitsui
Business Environment and Internal Control Factors in verification
Financial Group, discusses measures for mitigating risks. Through
processes.
these and other efforts, we are striving to ensure effective risk man-
The quantification model produces the distribution of loss
agement. Moreover, our independent Internal Audit Department
frequency and loss severity based on the internal loss data and
conducts periodic internal audits to verify that the Group’s opera-
scenario analysis results, and it also produces the loss distribution
tional risk management system is functioning properly.
based on the said distribution of loss frequency (distribution of
3. Operational Risk Management Methodology
As previously defined, operational risks cover a wide range of
cases, including the risks of losses due to errors in operation,
system failures, and natural disasters. Also, operational risk events
can occur virtually anywhere and everywhere. Thus, it is essential
to check whether material operational risks have been overlooked,
monitor the overall status of risks, and manage and control them.
To this end, it is necessary to be able to quantify risks using a
measurement methodology that can be applied to all types of oper-
ational risks and to comprehensively and comparatively capture the
status of and changes in potential operational risks in business pro-
cesses. Also, from the viewpoint of internal control, the measure-
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, SMBC Group adopted the AMA set
forth by the Basel Capital Accord for calculating the operational risk
■ Basic Framework of Operational Risk Measurement
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 Sumitomo Mitsui Financial Group
consolidated basis, SMBC consolidated basis, and SMBC non-
consolidated basis. The operational risk equivalent amount based
on the AMA is calculated as the simple aggregate of the amount
Internal Loss Data
Data
input
Distribution of Loss Frequency
Calculation of Operational Risk Equivalent Amount Using Quantification Model
(
f
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q
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n
c
y
)
P
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0.20
0.15
0.10
0.05
0
0
(
f
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q
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c
y
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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
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q
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c
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0.4
0.3
0.2
0.1
0
99.9%
Aggregated annual loss amount
External Loss Data
Verifi-
cation
Scenario
Analysis
Results
Business Environment and
Internal Control Factors
120
SMBC Group Annual Report 2019
of the seven event types set forth by the Basel Capital Accord and
strategy taking into account advances in IT, minimizing system risk
of tangible asset damages arising from earthquakes. However, in
by updating policies and procedures, including a security policy and
the case of Sumitomo Mitsui Financial Group consolidated basis,
establishing contingency plans to minimize losses if a system risk
the risk of losses on repayment of excess interest is added on. The
materializes. A risk management system has thus been put in place
measurement accuracy is ensured through a framework of regu-
to ensure adequate risk management.
larly conducted verifications of the quantification models pre- and
The methods whereby cyber attacks are carried out are grow-
post-measurement.
ing more sophisticated and diverse, and the threat of cyber risks
Meanwhile, the operational risk equivalent amounts of other
to financial institutions is becoming more serious. In response to
Group companies that do not apply the AMA are calculated
the growing threat of cyber risks, SMBC Group is enhancing its
according to the Basic Indicator Approach (BIA), and the opera-
response measures while utilizing third-party assessments to objec-
tional risk equivalent amounts for Sumitomo Mitsui Financial Group
tively evaluate its response systems. To ensure preparedness for a
consolidated basis and SMBC consolidated basis are calculated by
wide range of cyber attacks, we plan to augment our prior program
consolidating such amounts calculated based on the BIA with the
of cyber attack response drills and training with more sophisticated
operational risk equivalent amount calculated based on the AMA.
practical-application drills, which incorporate the fundamental ele-
4. Processing Risk Management
Processing risk is the risk of losses arising from negligent processing
by directors and employees, and from accidents or misconducts.
SMBC Group has clarified the divisions responsible for the over-
sight functions for processing risk management, and we are working
to raise the level of sophistication of our management of processing
risk across the whole Group on a risk basis by establishing systems
for managing the processing risks faced by Group companies,
ensuring in-office inspection, minimizing losses in the event of
processing risk materialization by drafting exhaustive contingency
plans, and carrying out thorough quantification of the risk under
management as basic principles.
Basic policies for processing risk management are decided by
the Management Committee and then approved by the Board of
Directors. The status of processing risk management is reported to
the Management Committee and the Board of Directors regularly
and when necessary. These and other steps are taken to ensure
that we can provide customers with high-quality services.
Based on the group-wide basic policies for risk management,
Group companies promote appropriate operating practices by
establishing operating rules and regulations, systematizing trans-
action processing, receiving guidance from business divisions, and
inspecting conditions related to transaction processing.
5. System Risk Management
System risk is 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 system
breakdown including those caused by cyber attack, malfunction,
deficiency or unauthorized use (unauthorized alteration, destruction,
duplication and leakage of information).
SMBC Group has set the following as basic principles: rec-
ognizing information systems as an essential part of management
ments* for cyber risk management by the financial sector released
by the G7 Cyber Expert Group in October 2018. Meanwhile, the
focus on constant monitoring and human resources development by
dedicated organizations will continue to be maintained to reinforce
response measures to cyber risks.
In addition, we actively and openly incorporate various tech-
nological progress to improve convenience for customers, create
new businesses, boost productivity and efficiency, and otherwise
promote digitalization in a wide range of fields. The systems for
managing the risks projected to arise from such activities are being
strengthened on an ongoing basis in response to operating environ-
ment changes. As SMBC Group adopts artificial intelligence, cloud,
robotic process automation, and application programing interface
technologies, shared group-wide manuals are being prepared with
regard to items requiring compliance at the time of introduction,
technology-specific risks, and items for periodic monitoring. These
manuals are being utilized as part of efforts to reinforce group-wide
IT governance.
SMBC operates its risk management system by conducting
risk assessments based on the Security Guidelines published by
the Center for Financial Industry Information Systems (FISC) and by
enhancing safety measures based on the results of these assess-
ments. System 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 trouble prevention,
including maintenance to ensure stable and uninterrupted operation,
duplication of various systems and infrastructure, and a disaster-
prevention system consisting of data centers in eastern and western
Japan. To maintain the confidentiality 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 event of an emergency.
* As defined in G-7 Fundamental Elements for Threat-led Penetration Testing
121
SMBC Group Annual Report 2019
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.)
and liquidity risk.
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
A formal statistical framework that consists of verifying that actual losses
are in line with projected losses. This involves systematically comparing
the history of VaR forecasts with their associated portfolio returns.
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.
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 we are 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
The denominator used in the calculation of the capital ratio designed to
maintain prudential standards for banks.
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.
122
SMBC Group Annual Report 2019 Internal Reporting Systems and Hotline for
Inappropriate Accounting and Auditing Activities
SMBC Group Alarm Line is intended to promote self-correction
Sumitomo Mitsui Financial Group Accounting and Auditing
through early detection and rectification of actions that may violate
Hotline is aimed at strengthening the Group’s self-correction function
laws and regulations. All Group employees can use this internal
by encouraging early detection and rectification of improper actions
means of reporting from inside and outside their company. In addi-
relating to accounting, accounting internal controls, and auditing
tion, SMBC and other Group companies have established internal
at the Company and its consolidated subsidiaries. The hotline can
reporting systems for their employees.
be used from inside or outside the Group to report accounting and
auditing irregularities.
SMFG Accounting and Auditing Hotline/Designated Dispute Resolution Agencies
SMFG Accounting and Auditing Hotline
Designated Dispute Resolution Agencies
Reports may be submitted by regular mail or e-mail to the
following addresses.
Mailing address: SMFG Accounting and Auditing Hotline
Iwata Godo Attorneys and Counselors at Law
10th floor, Marunouchi Building
2-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-6310
E-mail address: smfghotline@iwatagodo.com
• The hotline accepts any alerts of inappropriate activities
concerning accounting and auditing at the Company 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 res-
olution 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 the “Designated Dispute Resolution
Agencies” under the Financial Instruments and Exchange Act.
Japanese Bankers Association
Contact information: Consultation office,
Japanese Bankers Association
Telephone numbers: (Japan) 0570-017109 or 03-5252-3772
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm
Trust Companies Association of Japan
Contact information: Consultation office,
Trust Companies Association of Japan
Telephone numbers: (Japan) 0120-817335 or 03-6206-3988
Business hours:
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:15 pm
Financial Instruments Mediation Assistance Center
Contact information: Financial Instruments Mediation
Telephone number:
Fax:
Business hours:
Assistance Center
(Japan) 0120-64-5005
(Japan) 03-3669-9833
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm
123
SMBC Group Annual Report 2019 Basic Policy for Customer-Oriented Business Conduct
SMBC Group*1 has formulated the Basic Policy for Customer-
relation to its sales practices for interest rate swaps. We are thus
Oriented Business Conduct for its domestic asset management and
committed to preventing the reoccurrence of such malpractice.
asset formulation businesses, based on which they are promoting
Accordingly, we have adopted a customer- oriented perspective in
customer-oriented business conduct.
pursuing sustainability throughout our management, internal control,
This policy informs our basic stance of emphasizing the dispers-
and compliance systems. Through these and other efforts, we have
ing of investments over the medium to long term through which
endeavored to regain trust from customers and from society as a
we seek to support customers in stable asset formulation. Also
whole.
based on this policy, Sumitomo Mitsui Financial Group and its Group
Furthermore, the Customer Satisfaction (CS) Improvement
companies aim to contribute to the development of capital markets
Subcommittee has been set up to incorporate customer input into
that provide companies with the funds they need to grow and to
management. The opinions of external experts*2 are utilized in meet-
economic growth through their asset management and asset formu-
ings of this committee as discussions on and verification of initiatives
lation businesses.
at Group companies are carried out to promote the exercise of a
customer-oriented perspective on a group-wide basis. In addition,
1. SMBC Group’s Customer-Oriented Business
the CS Improvement Committee, which comprises officers sitting on
Conduct
the Group Management Committee, holds regular discussions on
In “Our Mission,” it is stated that “We grow and prosper together
customer-oriented business conduct.
with our customers, by providing services of greater value to them.”
We are convinced that the ongoing quest to provide quality
To give form to this principle, we have defined our Five Values, a
products and services based on customer needs and desires will
list of five key words that represent the values and action guide-
contribute to economic growth and subsequently growth for SMBC
lines shared by executives and employees in Japan and overseas.
Group. Everyone at SMBC Group will carry out their duties in an
“Customer First” (always think and act based on a customer-
earnest and just manner while exercising a high degree of special-
oriented perspective) is at the top of this list. SMBC Group continues
ized knowledge and good business ethics. SMBC Group will never
to push forward with various initiatives in accordance with these
let up in its efforts to ensure that it always thinks and acts based on
values and action guidelines.
a customer-oriented perspective in the truest sense as it strives to
Sumitomo Mitsui Financial Group is fully aware of the severity
generate the greatest profits for its customers.
of the government penalties imposed on SMBC in April 2006 in
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
124
SMBC Group Annual Report 2019
2. Initiatives for Promoting Customer-Oriented
Business Conduct
Sumitomo Mitsui Financial Group will implement the following ini-
(5) Frameworks for Properly Motivating Employees
Always thinking and acting based on a customer-oriented perspec-
tive in the truest sense requires our employees to be properly moti-
tiatives to entrench the principles of customer-oriented business
vated so that they can remain dedicated and effective in their work.
conduct into its activities.
(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 to properly develop and select products.
We will also help customers to find the ideal products and ser-
vices. Our first step in this process will be to learn about our custom-
ers, 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 custom-
er’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.
(2) Easy-to-Understand Explanation of Important
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
Sumitomo Mitsui Financial Group receives fees from customers for
the products and services it provides out of consideration for the
Sumitomo Mitsui Financial Group 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.
SMBC Group aims to facilitate the shift from savings to asset
holding seen in Japan through such initiatives.
Furthermore, we will periodically disclose information on initiatives
by SMBC Group based on this policy with the aim of facilitating
understanding regarding these initiatives among customers. In addi-
tion, 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.
*1 Sumitomo Mitsui Financial Group and its subsidiaries and affiliates are
referred to collectively as “SMBC Group.” The following SMBC Group
companies are subject to this policy:
SMBC; SMBC Trust Bank Ltd.; SMBC Nikko Securities Inc.;
Sumitomo Mitsui DS Asset Management Company, Limited
*2 Exter nal experts* are invited to meetings of the CS Improvement
Subcommittee to provide advice and suggestions with the aim of incor-
porating a wide range of perspectives into management that includes and
goes beyond input and requests from customers.
* External experts (in alphabetical order)
Name
Position
Professor Hideki Kanda
Emeritus Professor, University of Tokyo,
and Professor, Gakushuin University
Law School
need to develop and improve the quality of products and services
Kumiko Bando
President, Japan Legal Support Center
Taku Umezawa
Partner, Nagashima Ohno & Tsunematsu
and to supply various types of information as well as for process-
ing- 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 Interest
Performing duties in an earnest and just manner based on a cus-
tomer-oriented perspective entails managing any potential conflicts
of interest to ensure that our operations are truly customer oriented.
Based on the Management Policy Concerning Conflicts of
Interest in Sumitomo Mitsui Financial Group, we have defined the
types of conflicts of interest requiring management as well as the
types of transactions that tend to present conflicts of interest and
procedures for identifying these transactions, methods and systems
for managing conflicts of interest, and the scope of Group compa-
nies at which conflicts of interest should be managed. In this manner,
we take steps to ensure that conflicts of interest are properly man-
aged and therefore do not impede the interests of customers.
125
SMBC Group Annual Report 2019
Support for Mid-Sized Corporations and SMEs,
Vitalization of Local Regions in Japan
Services for Corporations
In April 2014, SMBC established its Area Main Offices to more fully
address the wholesale-retail integral needs of mid-sized corporations
Collaboration with Local Credit Guarantee
Corporations
SMBC offers Business Select Loans, a loan service that offers
and SME clients, including the aspect of business succession. Area
unsecured and unguaranteed financing, and also provides jointly
Main Offices enable us to offer integrated corporate and personal
guaranteed loans through collaboration with local credit guarantee
consulting and draw on SMBC Group networks to provide specialist
corporations, enabling it to meet a diverse range of funding needs.
services. In addition to providing business loans, SMBC Group
We will continue offering services to fund and support the man-
companies offer tailored support, including consultation on overseas
agement of the mid-sized corporations and SMEs that form the
business development, business matching, business succession,
backbone of the Japanese economy.
and internal company reforms, alongside consultation on personal
asset management, loans, inheritance, and asset succession.
Credit Guarantee Corporation
Name
Credit Guarantee Corporation of Tokyo
SMBC Strengthen
Management Base
Guarantee (SDGs,
electronic contracts)
Credit Guarantee Corporation of Kanagawa Kanagawa Asset 200
Credit Guarantee Corporation of Osaka
CS Next Guarantee
Credit Guarantee Corporation of Hyogo-Ken HIYAKU
Support System for Mid-Sized Corporations and SMEs
SMBC Group
SMBC
Mid-sized
corporations,
SMEs, and retail
customers
• Loans
• Management
consultation
• Management
support
• Corporate
Business
Offices
• Area Main
Offices
• Branches,
etc.
Affiliation
• Departments
of the
head office
Affiliation
• External
organizations
• External experts /
professionals
Affiliation
SMBC Group Companies
126
SMBC Group Annual Report 2019 Support for Improved Management, Business
Turnaround, and Business Transformation
Along with its efforts to fulfill its financial intermediary function
Involvement in Regional Revitalization
Regional revitalization continues to be a key theme for the Japanese
government. Related “regional comprehensive strategy” plans drawn
smoothly, SMBC seeks to provide solutions to management issues,
up by local government entities are in their wrap-up stage.
putting itself in the position of the client to devise optimum propos-
It is becoming more important for regions to exercise their overall
als based on the nature of the issues and the client’s stage in life.
capabilities. There are thus high expectations for contributions that
Examples include offering a full range of loan products designed
financial institutions can make by leveraging their wide-reaching
to meet funding needs and address management issues. We also
information networks.
provide solutions in such areas as business matching, overseas
SMBC Group has entered into cooperation agreements with local
business development, and business succession.
government entities as part of its efforts to assist in local industrial
Our assistance in business operating improvements and regen-
development. Based on these agreements, we are making con-
eration involves links with external experts / professionals *1 and
tributions to regional revitalization from various angles based on
external organizations*2 to provide support in drawing up plans for
specific issues and needs of individual local government entities and
improvement and advice in such areas as cost cutting and asset
regions across Japan. By coordinating with local government entities,
sales.
For clients that have suffered damage in natural disasters, we
propose optimal solutions and support the implementation of
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.
regional financial institutions, and private-sector companies, we
provide a wide variety of support services. For example, we leverage
the functions of SMBC Group companies to help enhance regional
infrastructure, attract tourists from overseas, develop comfortable
cities that are conducive to interactions between various generations,
accomplish the United Nations Sustainable Development Goals,
promote the expansion of regional employment by assisting migra-
tion to less urban areas, and
increase popularity of regional
specialties in Tokyo.
We will continue to work
with local government entities
and regional financial institu-
tions across Japan, drawing
on SMBC Group’s network to
contribute to local economies
through regional revitalization.
Ceremony commemorating the
conclusion of a cooperation agreement
for transforming Yokohama into a
futuristic city compatible with the
Sustainable Development Goals
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
4. Provide appropriate and thorough explanations to
clients in consultations and applications for new loans
or modification of loan conditions
5. Respond appropriately and adequately to client inquiries
regarding new loan and modification consultations and
applications and to consulting requests or complaints
6. Liaise closely with other financial institutions involved in
applications for modifying loan conditions, applications
for support through public and third-party institutions,
or other applications
7. Respond appropriately in respect of personal
guarantees in accordance with the “Guidelines for
Personal Guarantee Provided by Business Owners”
127
SMBC Group Annual Report 2019
Employees
SMBC
March 31
Number of employees*1
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)*2
2017
2018
2019
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�
27,935
12,989
46.50%
14,946
53.50%
37 yrs 1 mos�
40 yrs 5 mos�
34 yrs 2 mos�
13 yrs 1 mos�
15 yrs 10 mos�
10 yrs 9 mos�
27,154
12,471
45.93%
14,683
54.07%
37 yrs 5 mos�
40 yrs 4 mos�
34 yrs 10 mos�
13 yrs 6 mos�
15 yrs 11 mos�
11 yrs 4 mos�
911
1,022
1,164
2.28%
2.38%
2.47%
*1 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�
*2 As of March 1 of respective years
April 1
2019
Number of new hires
667
Number of newly employed female graduates
269
Ratio of newly employed females to total new employees 62.5% 46.3% 40.3%
2017
1,347
842
2018
803
372
Fiscal
Number of employees taking parental leave*3
Number of career hires*3
*3 Retroactive revisions have been made to previous fiscal years due to change in definition�
2018
2017
2016
2,183
2,370
2,217
<332> <223> <316>
16
115
32
SMBC Trust Bank
March 31
Number of employees*1
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)*2
2017
2018
2019
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�
1,937
907
46.82%
1,030
53.18%
42 yrs 5 mos�
44 yrs 4 mos�
40 yrs 9 mos�
9 yrs 1 mos�
8 yrs 6 mos�
9 yrs 7 mos�
1,985
948
47.76%
1,037
52.24%
44 yrs 7 mos�
46 yrs 11 mos�
41 yrs 4 mos�
7 yrs 3 mos�
6 yrs 3 mos�
8 yrs 2 mos�
97
90
95
1.87%
1.96%
2.51%
*1 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�
*2 The legally mandated number of employees with disabilities had been hired as of March 31, 2019�
April 1
2019
Number of new hires
44
Number of newly employed female graduates
18
Ratio of newly employed females to total new employees 46.4% 51.9% 40.9%
2018
54
28
2017
56
26
Fiscal
Number of employees taking parental leave
Number of career hires*3
*3 Retroactive revisions have been made to previous fiscal years due to change in definition�
2017
94
<1>
35
2016
95
<1>
208
2018
95
<33>
28
128
Sumitomo Mitsui Finance and Leasing
March 31
Number of employees*1, 2
2018
2017
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service*2
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)*2, 3
1,678
1,067
63.59%
611
36.41%
40 yrs 2 mos�
42 yrs 2 mos�
36 yrs 7 mos�
14 yrs 10 mos�
16 yrs 8 mos�
11 yrs 5 mos�
1,683
1,072
63.70%
611
36.30%
40 yrs 6 mos�
42 yrs 5 mos�
37 yrs 1 mos�
15 yrs 0 mos�
16 yrs 10 mos�
11 yrs 11 mos�
2019
2,434
1,581
64.95%
853
35.05%
40 yrs 7 mos�
42 yrs 8 mos�
37 yrs 2 mos�
15 yrs 0 mos�
16 yrs 11 mos�
11 yrs 10 mos�
19
20
26
2.23%
2.18%
2.05%
*1 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)�
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 As of March 1 of respective years
April 1
2019
Number of new hires*4
76
Number of newly employed female graduates*4
43
Ratio of newly employed females to total new employees*4 51.0% 50.0% 56.6%
*4 Retroactive revisions have been made to previous fiscal years due to change in definition�
2018
56
28
2017
49
25
Fiscal
Number of employees taking parental leave*5
Number of career hires
*5 Retroactive revisions have been made to previous fiscal years due to change in definition�
2017
69
<35>
7
2016
81
<48>
10
2018
44
<17>
16
SMBC Nikko Securities
March 31
Number of employees*1, 2
2017
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service*2, 3
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)*4
8,705
5,283
60.69%
3,422
39.31%
40 yrs 1 mos�
41 yrs 3 mos�
38 yrs 4 mos�
13 yrs 11 mos�
14 yrs 7 mos�
13 yrs 0 mos�
2018
2019
10,678
6,579
61.61%
4,099
38.39%
40 yrs 0 mos�
41 yrs 4 mos�
37 yrs 11 mos�
11 yrs 10 mos�
12 yrs 1 mos�
11 yrs 5 mos�
10,394
6,411
61.68%
3,983
38.32%
40 yrs 7 mos�
41 yrs 9 mos�
38 yrs 8 mos�
12 yrs 6 mos�
12 yrs 8 mos�
12 yrs 3 mos�
154
166
171
2.25%
2.16%
2.38%
*1 Excluding executive officers, part-time employees, dispatched employees, locally hired employees
(LH) at overseas branches
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 The average years of service of applicable employees� Years of service for employees joined
through the merger with SMBC Friend Securities are counted from the date of the merger�
*4 As of March 1 of respective years
April 1
2019
Number of new hires
325
Number of newly employed female graduates
114
Ratio of newly employed females to total new employees 55.2% 37.6% 35.1%
2018
354
133
2017
516
285
Fiscal
Number of employees taking parental leave*5
*5 Retroactive revisions have been made to previous fiscal years due to change in definition�
Note: The merger with SMBC Friend Securities was conducted in January 2018�
2017
399
<62>
2016
303
<18>
2018
409
<64>
SMBC Group Annual Report 2019 Sumitomo Mitsui Card
March 31
Number of employees*1
2017
Male
Percentage of total
Female
Percentage of total
Average age*1
Male
Female
Average years of service*1
Male
Female
Number of women in
managerial positions*2
Ratio of employees with
disabilities (% of total)*3
2,439
1,140
46.74%
1,299
53.26%
38 yrs 9 mos�
40 yrs 9 mos�
36 yrs 11 mos�
14 yrs 5 mos�
15 yrs 8 mos�
13 yrs 4 mos�
2018
2019
2,482
1,151
46.37%
1,331
53.63%
39 yrs 0 mos�
41 yrs 0 mos�
37 yrs 4 mos�
14 yrs 8 mos�
15 yrs 11 mos�
13 yrs 8 mos�
2,495
1,141
45.73%
1,354
54.27%
39 yrs 6 mos�
41 yrs 5 mos�
37 yrs 10 mos�
15 yrs 0 mos�
16 yrs 2 mos�
14 yrs 0 mos�
40
48
89
2.32%
2.32%
2.45%
*1 The number of full-time employees� This excludes directors, consultants, advisors, part-time
employees, specialist contract employees, affiliated company employees (including employees sec-
onded from other companies and organizations), and locally hired employees at overseas branches�
Retroactive revisions have been made to previous fiscal years due to change in definition�
*2 Total of group managers, vice presidents, and assistant vice presidents
*3 Computed based on single month of March
April 1
2019
Number of new hires
54
Number of newly employed female graduates
28
Ratio of newly employed females to total new employees 53.5% 60.9% 51.9%
2018
69
42
2017
86
46
Fiscal
Number of employees taking parental leave
Number of career hires*4
*4 Retroactive revisions have been made to previous fiscal years due to change in calculation
2018
202
<33>
16
2017
187
<29>
22
2016
172
<19>
21
methodology�
Cedyna
March 31
Number of employees*1
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)*2
2017
2018
2019
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�
3,425
1,971
57.55%
1,454
42.45%
42 yrs 8 mos�
44 yrs 10 mos�
39 yrs 7 mos�
18 yrs 2 mos�
20 yrs 6 mos�
15 yrs 1 mos�
3,349
1,897
56.64%
1,452
43.36%
43 yrs 0 mos�
45 yrs 2 mos�
40 yrs 2 mos�
18 yrs 6 mos�
20 yrs 9 mos�
15 yrs 7 mos�
62
75
88
2.14%
2.39%
2.32%
*1 Excluding employees seconded from other companies, employees on short-term contracts and
part-time employees
*2 As of March 1 of respective years
April 1
2019
Number of new hires
51
Number of newly employed female graduates
25
Ratio of newly employed females to total new employees 39.7% 63.3% 49.0%
2018
60
38
2017
58
23
Fiscal
Number of employees taking parental leave*3
Number of career hires
*3 Including employees on short-term childcare leave� Retroactive revisions have been made to
2018
180
<32>
0
2017
136
<3>
0
2016
137
<2>
0
previous fiscal years due to change in calculation methodology�
SMBC Consumer Finance
March 31
2017
Number of employees*1, 2
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service*2
Male
Female
Number of women in
managerial positions
Ratio of employees with
disabilities (% of total)*3
2,078
1,366
65.74%
712
34.26%
40 yrs 5 mos�
42 yrs 1 mos�
37 yrs 5 mos�
16 yrs 4 mos�
18 yrs 2 mos�
12 yrs 10 mos�
2018
2019
2,134
1,386
64.95%
748
35.05%
41 yrs 0 mos�
42 yrs 7 mos�
38 yrs 1 mos�
16 yrs 8 mos�
18 yrs 7 mos�
13 yrs 3 mos�
2,263
1,425
62.97%
838
37.03%
41 yrs 2 mos�
42 yrs 8 mos�
38 yrs 8 mos�
16 yrs 4 mos�
18 yrs 1 mos�
13 yrs 6 mos�
96
112
118
2.23%
2.32%
2.43%
*1 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, contract employees, part-time employees, and employees of
temporary employment agencies�
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 As of March 31 of respective years
April 1
2019
Number of new hires
48
Number of newly employed female graduates
24
Ratio of newly employed females to total new employees 55.1% 43.6% 50.0%
2018
55
24
2017
49
27
Fiscal
Number of employees taking parental leave*4
Number of career hires
*4 Including employees who retired during the fiscal year� Retroactive revisions have been made to
2018
53
<3>
1
2017
63
<3>
1
2016
75
<0>
1
previous fiscal years due to change in definition�
Japan Research Institute
March 31
2017
Number of employees*1, 2
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service*2
Male
Female
Ratio of employees with
disabilities (% of total)*3
2,296
1,677
73.04%
619
26.96%
40 yrs 6 mos�
41 yrs 3 mos�
38 yrs 5 mos�
12 yrs 3 mos�
12 yrs 7 mos�
11 yrs 5 mos�
2018
2019
2,357
1,710
72.55%
647
27.45%
40 yrs 6 mos�
41 yrs 4 mos�
38 yrs 6 mos�
12 yrs 6 mos�
12 yrs 10 mos�
11 yrs 7 mos�
2,427
1,773
73.05%
654
26.95%
40 yrs 9 mos�
41 yrs 6 mos�
38 yrs 10 mos�
12 yrs 8 mos�
13 yrs 1 mos�
11 yrs 10 mos�
2.68%
2.40%
2.27%
*1 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, consultants, advisors, employees on short-term contracts, part-time employees,
employees of temporary employment agencies, locally hired employees at overseas branches, and
full-time employees of affiliates�
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 As of March 31 of respective years
April 1
2019
Number of new hires
110
Number of newly employed female graduates*4
30
Ratio of newly employed females to total new employees 31.1% 30.5% 27.3%
*4 Including only Sogoshoku employees� Ippanshoku employees are excluded�
2018
105
32
2017
103
32
Fiscal
Number of employees taking parental leave
Number of career hires*5
*5 Excluding employees of temporary employment agencies converted to direct employees and former
2018
75
<30>
46
2017
64
<21>
33
2016
69
<24>
32
bank employees transferred to the company
129
SMBC Group Annual Report 2019 Sumitomo Mitsui Asset Management
March 31
2018
Number of employees*1, 2
2017
538
382
71.00%
156
29.00%
43 yrs 10 mos�
45 yrs 6 mos�
39 yrs 7 mos�
7 yrs 11 mos�
8 yrs 4 mos�
6 yrs 11 mos�
551
388
70.42%
163
29.58%
44 yrs 1 mos�
45 yrs 10 mos�
39 yrs 10 mos�
8 yrs 5 mos�
8 yrs 10 mos�
7 yrs 5 mos�
2019
552
386
69.93%
166
30.07%
44 yrs 7 mos�
46 yrs 3 mos�
40 yrs 6 mos�
9 yrs 3 mos�
9 yrs 9 mos�
8 yrs 2 mos�
Male
Percentage of total
Female
Percentage of total
Average age*2
Male
Female
Average years of service*2, 3
Male
Female
Number of women in
managerial positions
8
10
9
*1 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�
*2 Retroactive revisions have been made to previous fiscal years due to change in definition�
*3 New employees joining due to mergers are calculated based on the merger date�
April 1
2019
Number of new hires
15
Number of newly employed female graduates
6
Ratio of newly employed females to total new employees 50.0% 45.5% 40.0%
2018
11
5
2017
10
5
Fiscal
Number of employees taking parental leave*4
Number of career hires*4
*4 Retroactive revisions have been made to previous fiscal years due to change in definition�
2017
11
<1>
32
2016
19
<0>
24
2018
10
<0>
15
Daiwa SB Investments
March 31
Number of employees*1
2017
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)
307
239
77.85%
68
22.15%
44 yrs 4 mos�
45 yrs 5 mos�
40 yrs 9 mos�
14 yrs 10 mos�
15 yrs 10 mos�
11 yrs 3 mos�
2018
2019
316
245
77.53%
71
22.47%
44 yrs 9 mos�
45 yrs 8 mos�
41 yrs 6 mos�
15 yrs 9 mos�
16 yrs 3 mos�
11 yrs 11 mos�
322
245
76.09%
77
23.91%
45 yrs 1 mos�
45 yrs 10 mos�
42 yrs 9 mos�
15 yrs 10 mos�
17 yrs 1 mos�
11 yrs 11 mos�
0
0
0
0.98%
0.95%
1.56%
*1 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�
April 1
2018
Number of new hires
6
Number of newly employed female graduates
1
Ratio of newly employed females to total new employees 25.0% 16.7%
2017
4
1
Fiscal
Number of employees taking parental leave
Number of career hires
2016
8
<6>
7
2017
5
<1>
13
2019
—
—
—
2018
10
<7>
6
130
SMBC Group Annual Report 2019 Main Work-Life Balance Support System
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
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
Until the entry into
elementary school
Until the entry into
elementary school
1 year or maximum of
2 years in case of inability
to place in daycare center
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Employees can reduce daily
working hours to a minimum
of 5 hours 30 minutes until
March 31 of the 6th grade
Until the entry into
elementary school
Until the entry into
elementary school
Until 3 years of age
Until the entry into junior high
school (5 days per annum per
child; 10 days for two or more
children)
Employees may reduce daily
working hours in increments
of 30 minutes up to 2�5 hours
until March 31 of the
6th grade
Until March 31 of the
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 6th grade
(5 days per annum per child;
10 days for two or more children)
Until March 31 of the
3rd grade
Until March 31 of the
3rd grade
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 3 years of age
Until completion of the 6th grade
(40 hours per annum per child;
80 hours for two or more children)
Until completion 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
18 months or maximum of
2 years in case of inability to
place in daycare center
Until the entry into elementary
school (5 days per annum per
child; 10 days for two or more
children)
Until March 31 of the 6th
grade (Employees can choose
to work 6, 6�5, 7, or 7�5 hours
a day)�
Until the entry into
junior high school
Until the entry into
junior high school
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
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)
Until March 31 of the 6th
grade (Employees can choose
to work 5, 6, 6�5, or 7 hours
a day)�
Until child completes
6th grade of
elementary school
Until child completes
3rd grade of
elementary school
SMBC Trust
Bank
Sumitomo
Mitsui Finance
and Leasing
SMBC Nikko
Securities
Sumitomo
Mitsui Card
Cedyna
SMBC
Consumer
Finance
Japan
Research
Institute
Sumitomo
Mitsui DS Asset
Management
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
• Telework
• Staggered working hours
• 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
• Family care time off
• Family support leave
• Short-term childcare leave
• Annual leave in hour increments
• Short-term childcare leave
• Leave for nursing care
• Shorter working hours allowed for nursing care
• Nursing care leave system
• Staggered working hours
• Half day leave
• System for rehiring former employees
• Work relocations
• Flextime system
• Flexibility in the work place
• 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
• Childcare subsidies
• Flexibility in the work place
• 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
• Paternity leave
• 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
• Nursing care leave
• Adjustment of work start and end times
• Childcare subsidies
• Telecommuting
• Flextime system
• 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
• Half day leave
• 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
• Annual leave in half-day increments
• Telecommuting
• Lifestyle enriching leave
• Paid leave for initial 15 days of childcare
• Annual leave in hour increments
• Flextime system
• Daycare subsidies
• Celebratory gifts for birth of 3rd child
• Leave for accompanying spouse undergoing job relocation
131
SMBC Group Annual Report 2019 132
SMBC Group Annual Report 2019 Corporate Data
Sumitomo Mitsui Financial Group, Inc.
■ Directors and Executive Officers (as of June 30, 2019)
DIRECTORS AND CORPORATE
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Executive Officers
Chairman of the Board
Takeshi Kunibe
Director President
(Representative Executive Officer)
Jun Ohta
Group CEO
Director
Makoto Takashima
Director Senior Managing Executive Officers
Haruyuki Nagata
Group CRO
Corporate Risk Management Dept.,
Credit & Investment Planning Dept.
Toru Nakashima
Group CFO and Group CSO
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Subsidiaries & Affiliates Dept.
Directors
Atsuhiko Inoue
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
(Representative Executive Officers)
Gotaro Michihiro
Co-Head of Wholesale Business Unit
Masahiko Oshima
Head of International Business Unit
Toshikazu Yaku
Group CCO and Group CHRO
Human Resources Dept., Quality Management Dept.,
General Affairs Dept., Administrative Services Dept.
Senior Managing Executive Officers
Katsunori Tanizaki
Group CDIO
IT Innovation Dept.
Naoki Tamura
Head of Retail Business Unit
Hiroshi Munemasa
Head of Global Markets Business Unit
Kimio Matsuura
Co-Head of Wholesale Business Unit
(Planning Dept., Wholesale Business Unit)
Managing Executive Officer
Shoji Masuda
Group CIO
IT Planning Dept., Data Management Dept.,
Operations Planning Dept.
(1) Messrs. and Ms. Matsumoto, Mitchell, Yamazaki, Kohno, Tsutsui,
Shinbo and Sakurai satisfy the requirements for an “outside director”
under the Companies Act.
DEPUTY CHAIRMEN
Manabu Narita
Yasuyuki Kawasaki
Toshihiro Isshiki
Private Banking Planning Dept.,
Transaction Business Planning Dept.
Ryuji Nishisaki
Deputy Head of International Business Unit
(Asia Business Strategic Planning Dept.,
Asia Growing Markets Dept.)
Kenichi Hosomi
Deputy Head of International Business Unit
Iwao Kawaharada
Deputy Head of Wholesale Business Unit
Managing Executive Officers
Youichi Mori
Group Deputy CIO
Hiroshi Mishima
Deputy Head of Global Markets Business Unit
Akira Inoue
Group Deputy CRO
Takehisa Ikeda
Wholesale Business Unit
CHOW Ying Hoong
Co-Head of Asia Pacific Division
Naoya Ishida
Wholesale Business Unit
Hiroaki Toyoda
Deputy Head of Retail Business Unit
Takashi Aiki
Group Deputy CIO and Group Deputy CDIO
Tetsuro Imaeda
Head of Europe, Middle East and Africa Division
Nobuyuki Kawabata
International Business Unit
Eiichi Sekiguchi
Wholesale Business Unit,
Retail Business Unit
Naoki Takahashi
Deputy Head of Wholesale Business Unit
Hitoshi Ishii
Deputy Head of Wholesale Business Unit
Kazuhiro Notsu
Group Deputy CSO
Hitoshi Minami
Deputy Head of International Business Unit
Masaaki Sasai
Co-Head of Asia Pacific Division
Kengo Nakagawa
Wholesale Business Unit
Masayoshi Furusho
Group Deputy CHRO
Narumitsu Yoshioka
Head of East Asia Division
Masamichi Koike
Deputy Head of Global Markets Business Unit
Takaki Ono
Wholesale Business Unit
Kotaro Hagiwara
Public Relations Dept., Corporate Planning Dept.,
Subsidiaries & Affiliates Dept.
Yoshihiro Hyakutome
Head of Americas Division
Takashi Yamashita
Deputy Head of Retail Business Unit
General Manager, Planning Dept., Retail Business Unit
Atsushi Oku
Retail Business Unit
Yuichiro Kondo
Group Deputy CFO
Toshihiro Sato
Deputy Head of Global Markets Business Unit
Takeshi Mikami
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept.
Olympic and Paralympic Dept., Corporate Planning Dept.
Yukio Noda
Group Deputy CCO
Ryo Suzuki
Wholesale Business Unit,
International Business Unit
Rie Asayama
Retail Business Unit
Quality Management Dept.
Yukiko Yoritaka
General Manager, Learning and Development Institute, Human
Resources Dept.
Keiichiro Nakamura
General Manager, Planning Dept., International Business Unit
Nobuaki Nakamura
Global Markets Business Unit
Shuji Yabe
Deputy Head of Americas Division
Jun Uchikawa
General Manager, IT Planning Dept.
Yoshiyuki Gono
General Manager, Corporate Risk Management Dept.
Hiroyuki Fukumaru
General Manager, Credit & Investment Planning Dept.
Takanori Kato
Wholesale Business Unit
(Planning Dept., Wholesale Business Unit)
Fumihiko Ito
General Manager, Corporate Planning Dept.
Hirofumi Otsuka
General Manager, Asia Business Strategic Planning Dept.
Takashi Kobayashi
General Manager, Human Resources Dept.
Isaac Deutsch
Deputy Head of Americas Division
Akio Isowa
General Manager, Transaction Business Planning Dept.
Tomoaki Nakayama
General Manager, IT Innovation Dept.
Natsuhiro Samejima
General Manager, Planning Dept., Americas Division
Kazuhiro Fukuda
General Manager, Planning Dept., East Asia Division
Yukihiro Mabuchi
General Manager, Planning Dept., Wholesale Business Unit
[REFERENCE]
Group CxO/Head of Business Units
(as of June 30, 2019)
Group CxO
Group CEO
Jun Ohta
Group CFO and
Group CSO
Toru Nakashima
Group CRO
Haruyuki Nagata
Group CCO and
Group CHRO
Toshikazu Yaku
Group CIO
Shoji Masuda
Group CDIO
Katsunori Tanizaki
Group CAE
Tetsuro Yoshino
Head of Business Units
Head of Retail Business Unit
Naoki Tamura
Co-Head of Wholesale
Business Unit
Gotaro Michihiro
Co-Head of Wholesale
Business Unit
Kimio Matsuura
Head of International
Business Unit
Masahiko Oshima
Head of Global Markets
Business Unit
Hiroshi Munemasa
133
SMBC Group Annual Report 2019 Sumitomo Mitsui Financial Group Organization (as of June 30, 2019)
Public Relations Dept.
Retail Business Unit
Corporate Planning Dept.
Investor Relations Dept.
Corporate Treasury Dept.
Financial Research Dept.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Financial Accounting Dept.
Tax Planning Dept.
Planning Dept., Retail Business Unit
Retail Marketing Dept.
Retail IT Strategy Dept.
Private Banking Planning Dept.
Transaction Business Planning Dept.
Wholesale Business Unit
Equity Portfolio Management Dept.
Planning Dept., Wholesale Business Unit
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Learning and Development Institute
Diversity and Inclusion Dept.
Global Human Resources Dept.
Quality Management Dept.
Private Banking Planning Dept.
Transaction Business Planning Dept.
International Business Unit
Planning Dept., International
Business Unit
Global Portfolio Strategy Dept.,
International Business Unit
Asia Business Strategic
Planning Dept.
*1
*2
*1
*2
IT Innovation Dept.
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.
Europe, Middle
East and Africa
Division
Asia Pacific
Division
East Asia Division
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
Administrative Services Dept.
Transaction Business Planning Dept.
*2
Secretariat
Corporate Real Estate
Management Dept.
Cost Control Dept.
Operations Planning Dept.
Audit Dept.
Global Markets Business Unit
Planning Dept., Global Markets
Business Unit
Global Markets Engineering Dept.
*1 Belongs to both Retail Business Unit and Wholesale Business Unit.
*2 Belongs to Retail Business Unit, Wholesale Business Unit and International Business Unit.
Board of
Directors
Nomination
Committee
Shareholders’
Meeting
Compensation
Committee
Group
Management
Committee
Audit
Committee
Risk
Committee
Audit
Committee
Office
134
SMBC Group Annual Report 2019 Sumitomo Mitsui Banking Corporation
■ Board of Directors, Directors, Members of the Audit and Supervisory Committee and Executive Officers
DIRECTORS, MEMBERS OF THE AUDIT AND
SUPERVISORY COMMITTEE
Yozo Takigawa
Toshiaki Nakai
Hiroshi Takahashi (2)
Sonosuke Kadonaga (2)
Masaaki Oka (2)
Michiko Kuboyama (2)
Atsuhiko Inoue
(2) Messrs. and Ms. Takahashi, Kadonaga, Oka, and Kuboyama satisfy the requirements for
an “outside director” under the Companies Act.
(as of June 30, 2019)
BOARD OF DIRECTORS
Chairman of the Board
Koichi Miyata
President and Chief Executive Officer (Representative Director)
Makoto Takashima*
Director and Deputy Presidents (Representative Directors)
Gotaro Michihiro*
Co-Head of Wholesale Banking Unit
Head of Global Corporate Banking Division
Masahiko Oshima*
Head of International Banking Unit
Toshikazu Yaku*
Human Resources Dept., Human Resources Development Dept.,
Quality Management Dept., General Affairs Dept.,
Administrative Services Dept.
Director and Senior Managing Executive Officers
Haruyuki Nagata*
Risk Management Unit (Corporate Risk Management Dept.,
Credit & Investment Planning Dept.)
Human Resources Dept., Human Resources Development Dept.
Keiji Kakumoto*
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Located at Osaka
Fumiharu Kozuka*
Internal Audit Dept., Credit Review Dept.
Toru Nakashima*
Public Relations Dept., Corporate Planning Dept.,
Financial Accounting Dept., Subsidiaries & Affiliates Dept.
Director and Managing Executive Officer
Shoji Masuda*
IT Planning Dept., Data Management Dept.,
Operations Planning Dept., Operations Support Dept.,
Inter-Market Settlement Dept.
Director
Paul Yonamine (1)
* These Directors are appointed as Executive Officers also.
(1) Mr. Yonamine satisfies the requirements for an “outside director” under the Companies Act.
135
SMBC Group Annual Report 2019 DEPUTY CHAIRMEN
Manabu Narita
Yasuyuki Kawasaki
EXECUTIVE OFFICERS
Senior Managing Executive Officers
Katsunori Tanizaki
IT Innovation Dept.
Kimio Matsuura
Co-Head of Wholesale Banking Unit
(Planning Dept., Wholesale Banking Unit, Strategic Corporate Business Dept.,
Public & Financial Institutions Banking Dept., Wholesale Banking Unit,
Growth Business Development Dept., M&A Advisory Services Dept.,
Real Estate Finance Dept.)
Naoki Tamura
Head of Retail Banking Unit
Ryuji Nishisaki
Head of Corporate Advisory Division
Deputy Head of Wholesale Banking Unit
(Strategic Corporate Business Dept.),
Deputy Head of International Banking Unit
(Asia Business Strategic Planning Dept., Asia Growing Markets Division)
Global Advisory Dept.
Hiroshi Munemasa
Head of Treasury Unit
Toshihiro Isshiki
Private Advisory Division,
Transaction Business Division
Kenichi Hosomi
Deputy Head of International Banking Unit
Iwao Kawaharada
Deputy Head of Wholesale Banking Unit
Head of Corporate Banking Division
Toru Sawada
Deputy Head of Wholesale Banking Unit
(Credit Administration Dept., Corporate Credit Dept.)
Corporate Research Dept.
Deputy Head of Financial Solutions Unit (Trust Services Dept.)
Managing Executive Officers
Nobuyuki Kawabata
Deputy Head of International Banking Unit
CHOW Ying Hoong
Co-Head of The Asia Pacific Division and Head of Asia Growing Markets
Division
Tetsuro Imaeda
Head of Europe, Middle East and Africa Division and CEO of Sumitomo
Mitsui Banking Corporation Europe Limited
Atsushi Takada
Head of Kobe Middle Market Banking Division
Eiichi Sekiguchi
Deputy Head of Wholesale Banking Unit,
Deputy Head of Retail Banking Unit
Kengo Nakagawa
Deputy Head of Wholesale Banking Unit (in charge of East Japan)
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Dept. XII)
Muneo Kanamaru
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. IV, VI, IX and XI)
Teiko Kudo
Head of Financial Solutions Unit
Deputy Head of International Banking Unit
Yusuke Hirako
Nagoya Corporate Banking Division (Nagoya Corporate Banking Dept.)
Head of Nagoya Middle Market Banking Division
Takashi Arima
Osaka Corporate Banking Division
(Osaka Corporate Banking Depts. I, II and III)
Hiroyoshi Korosue
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. II, III and X)
Masaaki Sasai
Co-Head of The Asia Pacific Division
Narumitsu Yoshioka
Head of East Asia Division
Global Advisory Dept.
Chairman of Sumitomo Mitsui Banking Corporation (China) Limited
Masamichi Koike
Deputy Head of Treasury Unit
Takaki Ono
Deputy Head of Wholesale Banking Unit (in charge of West Japan)
Kotaro Hagiwara
Public Relations Dept., Corporate Planning Dept.,
Subsidiaries & Affiliates Dept.
Yoshihiro Hyakutome
Head of The Americas Division and President of SMBC Americas
Holdings, Inc.
Takashi Yamashita
Deputy Head of Retail Banking Unit
Tomofumi Saeki
Head of Kyoto Hokuriku Middle Market Banking Division
Akira Ueda
Head of Higashinihon Daini Middle Market Banking Division
Hiroshi Irie
Deputy Head of Financial Solutions Unit,
Deputy Head of Wholesale Banking Unit
(Growth Industry Cluster Dept.)
Hideo Ohara
Deputy Head of Retail Banking Unit (in charge of East Japan)
Hiroyuki Kamimoto
Deputy Head of Corporate Advisory Division
Kenji Hirao
Tokyo Corporate Banking Division
(Tokyo Corporate Banking Depts. I, V, VII and VIII)
Takeshi Mikami
Public Relations Dept., Corporate Planning Dept., Financial Accounting Dept.
Olympic and Paralympic Dept., Corporate Planning Dept.
136
SMBC Group Annual Report 2019 Executive Officers
William Karl
(Executive Officer without portfolio)
Stanislas Roger
Deputy Head of Europe, Middle East and Africa Division
Ryo Suzuki
Deputy Head of Wholesale Banking Unit,
Deputy Head of International Banking Unit
Rie Asayama
Deputy Head of Retail Banking Unit
Quality Management Dept.
Rajeev Kannan
General Manager, Investment Banking Dept., Asia
Isaac Deutsch
Deputy Head of The Americas Division
John Ferreira
Co-General Manager, Sydney Branch
Yukiko Yoritaka
General Manager, Learning and Development Institute,
Human Resources Dept.
Antony Yates
Chairman of SMBC Capital Markets, Inc.
and President of SMBC Nikko Capital Markets Limited
Shuji Yabe
Deputy Head of The Americas Division
and Chairman of SMBC Nikko Securities America, Inc.
Masatsugu Kojima
Head of Higashinihon Daisan Middle Market Banking Division
Yoshiaki Kageyama
Deputy Head of The Asia Pacific Division and General Manager,
Japanese and Korean Corporate Banking Dept., Asia Pacific Division
Masanao Nakao
General Manager, Osaka Corporate Banking Dept. I
Koji Matsumoto
General Manager, Planning Dept., Financial Solutions Unit
Keiichiro Nakamura
General Manager, Planning Dept., International Banking Unit
Nobuaki Nakamura
General Manager, Planning Dept., Treasury Unit
Fumito Yoshioka
Head of Higashinihon Daiyon Middle Market Banking Division
Alan Krouk
General Manager, Global FIG Dept.
Airo Shibuya
Head of Transaction Business Division
Ryoichi Tanaka
Deputy Head of Corporate Advisory Division
Jun Uchikawa
General Manager, IT Planning Dept.
Shinji Ono
President of Sumitomo Mitsui Banking Corporation (China) Limited
Tomohiro Ohisa
General Manager, Corporate Credit Dept.
Hiroyuki Kaneko
Deputy Head of Retail Banking Unit (in charge of West Japan)
Yoshiyuki Gono
General Manager, Corporate Risk Management Dept.
Hiroyuki Fukumaru
General Manager, Credit & Investment Planning Dept.
Takanori Kato
General Manager, Planning Dept., Wholesale Banking Unit
Fumihiko Ito
General Manager, Corporate Planning Dept.
Katsufumi Uchida
General Manager, International & Structured Finance Dept., Europe, Middle
East and Africa Division
Hirofumi Otsuka
General Manager, Asia Business Strategic Planning Dept.
Takashi Kobayashi
General Manager, Human Resources Dept.
Takafumi Tsuji
General Manager, Distribution Dept.
Akihiro Yasuda
General Manager, Marunouchi Corporate Business Office
James Fenner
General Manager, Specialised Products Dept., Europe, Middle East and
Africa Division
Takayuki Inoue
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)
Makoto Ueda
Head of Nishinihon Daisan Middle Market Banking Division
Yuichi Nishimura
Country Head of Thailand and General Manager, Bangkok Branch
Noriyuki Watanabe
Deputy Head of Wholesale Banking Unit
(Credit Depts. I and II, Wholesale Banking Unit),
Deputy Head of Retail Banking Unit
(Credit Dept., Retail Banking Unit)
Akio Isowa
General Manager, Transaction Business Planning Dept.
Akihiro Ueda
General Manager, Gaien Area Main Office
Yoshiyuki Ogata
General Manager, Hong Kong Branch
Nobuo Ozawa
General Manager, Akasaka Corporate Business Office
Tomoaki Nakayama
General Manager, IT Innovation Dept.
Hiroyuki Fukuda
General Manager, Osaka Corporate Banking Dept. II
Katsuya Fujita
General Manager, Treasury Dept., East Asia Division
Hitoshi Miyake
General Manager, Structured Finance Dept.
Natsuhiro Samejima
General Manager, Planning Dept., Americas Division
Hideki Niiyama
General Manager, Nagoya Corporate Banking Dept.
Kazuhiro Fukuda
General Manager, Planning Dept., East Asia Division
Yukihiro Mabuchi
General Manager, Planning Dept., Wholesale Banking Unit and Global
Corporate Banking Dept., Planning Dept., Wholesale Banking Unit
Richard Miles
General Manager, Corporate Banking Dept.-II, Europe, Middle East and
Africa Division
137
SMBC Group Annual Report 2019 SMBC Organization
(as of June 30, 2019)
Audit and Supervisory
Committee
Audit and Supervisory
Committee Office
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Financial Accounting Dept.
Tax Planning Dept.
Equity Portfolio Management Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Learning and Development 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
Branch
Wholesale
Banking Unit
*3
*5
*4
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.*7
East Asia Division
Americas Division
Europe, Middle East and Africa Division
Asia Pacific Division
Shareholders’
Meeting
Board of
Directors
Management
Committee
Risk Management Unit
Corporate Risk Management Dept.
Risk Management Information Dept.
Credit & Investment Planning Dept.
Credit Portfolio Management Dept.
International
Banking Unit
Private Banking Dept.*7
Consumer Loan Promotion Office
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Retail Credit Business Office
Global Transaction Office*6
E-Transaction Business Center*6
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*6
E-Transaction Business Center*6
Branches/Representative Offices in East Asia
Global FIG Dept.
Institutional Client Dept., Asia
Global Client Business Dept.
Global Trade Finance Dept.
Global Supply Chain Finance Dept.
Transportation Dept.
Departments of Americas Division
Departments of Europe,
Middle East and Africa Division
Branches/Representative Offices
in Asia Pacific Division
Global Transaction Office*6
E-Transaction Business Center*6
Compliance Unit
General Affairs Dept.
Anti Money Laundering & Financial
Crime Prevention Department
Legal Dept.
Treasury Unit
*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).
Corporate Services Unit
Administrative Services Dept.
Secretariat
Corporate Real Estate Management Dept.
Operations Planning Dept.
Operations Support Dept.
Inter-Market Settlement Dept.
Financial
Solutions Unit
138
Planning Dept., Retail Banking Unit
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business Dept.
Retail Human Resources Dept.
Retail Business Control Dept.
Retail Financial Products Compliance Dept.
Retail Anti Money Laundering 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.
Credit Dept., Retail Banking Unit
Strategic Corporate Business Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Wholesale Business Control 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.
Asia Business Strategic Planning Dept.
Planning Dept., Americas Division
Information Control Dept., Americas Division
Credit Dept., Americas Division
Financial Products Credit Dept., Americas Division
Risk Management Dept., Americas Division
Compliance Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe,
Middle East and Africa Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
LBO Credit Dept., Europe, Middle East and Africa Division
Risk Management Dept., Middle East and Africa Division
Compliance Dept., Europe, Middle East and Africa Division
Planning Dept., Asia Pacific Division
Legal and Compliance Dept., Asia Pacific Division
Learning and Development Dept., Asia
Credit Dept., Asia Pacific Division
Risk Management Dept., Asia
Corporate Solutions Dept., Asia
Credit Dept., East Asia Division
Asia Growing Markets Division
Asia Retail Innovation Dept.
Credit Dept., International Banking Unit
Environment Analysis Dept., International Banking Unit
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
Treasury Dept., East Asia Division
Planning Dept., Financial Solutions Unit
Structured Finance Dept.
Acquisition and Leveraged 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.
*3 • Corporate Advisory Division
• Advisory Dept. I
• Advisory Dept. II
• Advisory Dept. III
• Corporate Research Dept.
• Growth Industry Cluster Dept.*2
*4 • Private Advisory Division
• Private Advisory Business Dept.
• Private Banking Planning Dept.
• Inheritance Advisory Business Dept.
• Corporate Employees Solution Dept.
• Defined Contribution Dept.
*5 • Transaction Business Division
• Transaction Business Planning Dept.
• Transaction Products Development Dept.
• Asset Finance Dept.
• Transaction Banking Dept.
• Global Transaction Banking Dept.
• Global Advisory Dept.
• Global Business Promotion Dept.
• Global Transaction Support Dept.
*6 • Belongs to Retail Banking Unit, Wholesale Banking Unit and International Banking Unit.
*7 • 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
SMBC Group Annual Report 2019
Audit and Supervisory
Committee
Audit and Supervisory
Committee Office
Shareholders’
Meeting
Board of
Directors
Management
Committee
Internal Audit Unit
Internal Audit Dept.
Credit Review Dept.
Corporate Staff Unit
Public Relations Dept.
Corporate Planning Dept.
Financial Research Dept.
Corporate Sustainability Dept.
Olympic and Paralympic Dept.
Productivity Management Dept.
Financial Accounting Dept.
Tax Planning Dept.
Equity Portfolio Management Dept.
Subsidiaries & Affiliates Dept.
IT Planning Dept.
System Risk Planning Dept.
Human Resources Dept.
Learning and Development 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
Next W-ing Project Dept.
Retail Facilitating Financing Dept.
Channel Strategy Dept.
Loan Business Dept.
Retail Human Resources Dept.
Retail Business Control Dept.
Retail Financial Products Compliance Dept.
Retail Anti Money Laundering 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.
Credit Dept., Retail Banking Unit
Strategic Corporate Business Dept.
Planning Dept., Wholesale Banking Unit
Middle Market Facilitating Financing Dept.
Global Corporate Banking Dept.
Wholesale Business Control 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.
Asia Business Strategic Planning Dept.
Planning Dept., Americas Division
Information Control Dept., Americas Division
Credit Dept., Americas Division
Financial Products Credit Dept., Americas Division
Risk Management Dept., Americas Division
Compliance Dept., Americas Division
Planning Dept., Europe, Middle East and Africa Division
IT & Security Planning Dept., Europe,
Middle East and Africa Division
Credit Dept., Europe, Middle East and Africa Division
Asset Finance Credit Dept.
LBO Credit Dept., Europe, Middle East and Africa Division
Risk Management Dept., Middle East and Africa Division
Compliance Dept., Europe, Middle East and Africa Division
Planning Dept., Asia Pacific Division
Legal and Compliance Dept., Asia Pacific Division
Learning and Development Dept., Asia
Credit Dept., Asia Pacific Division
Risk Management Dept., Asia
Corporate Solutions Dept., Asia
Credit Dept., East Asia Division
Asia Growing Markets Division
Asia Retail Innovation Dept.
Credit Dept., International Banking Unit
Environment Analysis Dept., International Banking Unit
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
Treasury Dept., East Asia Division
Planning Dept., Financial Solutions Unit
Structured Finance Dept.
Acquisition and Leveraged 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.
Area Main Office
*4
Corporate Banking Division
Middle Market Banking Division
*3
*5
Branch
Private Banking Dept.*7
Consumer Loan Promotion Office
Remote Marketing Dept.
Call Center
Consumer Finance Promotion Office
Retail Credit Business Office
Global Transaction Office*6
E-Transaction Business Center*6
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*6
E-Transaction Business Center*6
Global Corporate Banking Division
Tokyo Corporate Banking Division
Osaka Corporate Banking Division
Nagoya Corporate Banking Division
Corporate Banking Dept.
Private Banking Dept.*7
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 Trade Finance Dept.
Global Supply Chain Finance Dept.
Transportation Dept.
Departments of Americas Division
Departments of Europe,
Middle East and Africa Division
Branches/Representative Offices
in Asia Pacific Division
Global Transaction Office*6
E-Transaction Business Center*6
*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 • Corporate Advisory Division
• Advisory Dept. I
• Advisory Dept. II
• Advisory Dept. III
• Corporate Research Dept.
• Growth Industry Cluster Dept.*2
*4 • Private Advisory Division
• Private Advisory Business Dept.
• Private Banking Planning Dept.
• Inheritance Advisory Business Dept.
• Corporate Employees Solution Dept.
• Defined Contribution Dept.
*5 • Transaction Business Division
• Transaction Business Planning Dept.
• Transaction Products Development Dept.
• Asset Finance Dept.
• Transaction Banking Dept.
• Global Transaction Banking Dept.
• Global Advisory Dept.
• Global Business Promotion Dept.
• Global Transaction Support Dept.
*6 • Belongs to Retail Banking Unit, Wholesale Banking Unit and International Banking Unit.
*7 • 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
139
SMBC Group Annual Report 2019
Principal Subsidiaries and Affiliates (as of March 31, 2019)
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.
SMBC Nikko Securities Inc.
Sumitomo Mitsui Card Company, Limited
Cedyna Financial Corporation
SMBC Consumer Finance Co., Ltd.
The Japan Research Institute, Limited
Sumitomo Mitsui Asset Management
Company, Limited
SMBC Guarantee Co., Ltd.
SMFG Card & Credit, Inc.
SMM Auto Finance, Inc.
SMBC Finance Service Co., Ltd.
SMBC Mobit Co., Ltd.
JAIS, Limited
NCore Co., Ltd.
SMBC VALUE CREATION 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 Staff Service Co., Ltd.
SMBC Learning Support Co., Ltd.
SMBC PERSONNEL SUPPORT CO., LTD.
SMBC OPERATION SERVICE CO., LTD.
SMBC Green Service Co., Ltd.
SMBC Real Estate Appraisal Service Co., Ltd.
87,550
10,000
34,000
82,843
140,737
10,000
0
0
0
(100)
100
(65.99)
(100)
100
100
2,000
51.19
—
100
—
—
—
—
—
—
Jun. 6, 1996
Commercial banking
Feb. 25, 1986
Trust service and commercial banking
Jun. 15, 2009
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 management
187,720
49,859
7,700
71,705
20,000
450
10
495
490
500
1,100
1,600
100,010
1,000
500
90
10
10
30
30
30
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(100)
0
(99.99)
Jul. 14, 1976
Credit guarantee
100
(51)
(100)
(100)
(100)
—
41
—
—
—
Oct. 1, 2008
Business management
Sep. 17, 1993
Automotive financing
Dec. 5, 1972
Collecting agent and factoring
May 17, 2000
Consumer lending
Oct. 16, 1990
System engineering and data processing
(50.99)
50.99
Apr. 1, 2004
Data processing service and e-trading consulting
0
(51)
(40)
100
51
Feb. 20, 2019
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
—
Apr. 1, 2004
Management support services
Mar. 11, 1999
Servicer
Apr. 16, 2009
Electronic monetary claims recording
Jul. 15, 1982
Fee-based headhunting services and contracting
of human resources-related procedures
May 27, 1998
Seminar organizer
Apr. 15, 2002
Banking clerical work
Jan. 31, 1996
Banking clerical work
Mar. 15, 1990
Banking clerical work
Feb. 1, 1984
Collateral real estate survey and appraisal
May 1, 2017
Biometric authentication services
(Polarify biometric authentication services) and
e-KYC service (Polarify e-KYC)
Polarify, Inc.
420
76.90
140
SMBC Group Annual Report 2019 ■ Principal Overseas Subsidiaries
Company Name
Country
Issued Capital
Sumitomo Mitsui Banking Corporation
Europe Limited
Sumitomo Mitsui Banking Corporation
(China) Limited
U.K.
China
US$3,200 million
CNY10.0 billion
PT Bank BTPN Tbk
Indonesia
Rp163.0 billion
SMBC Americas Holdings, Inc.
Manufacturers Bank
Banco Sumitomo Mitsui
Brasileiro S.A.
JSC Sumitomo Mitsui Rus Bank
SMBC Bank EU AG
Sumitomo Mitsui Banking Corporation
Malaysia Berhad
SMBC Leasing and Finance, Inc.
SMBC Rail Services LLC
SMBC Nikko Securities America, Inc.
U.S.A
U.S.A.
Brazil
Russia
Germany
Malaysia
U.S.A.
U.S.A.
U.S.A.
US$1,500
US$80.786 million
R$793.819 million
RUB6.4 billion
€450 million
MYR2,452 million
US$4,350
0
US$388
SMBC Nikko Capital Markets Limited
U.K.
US$1,138 million
SMBC Capital Markets, Inc.
U.S.A.
SMBC Cayman LC Limited*
Cayman Islands
US$100
US$500
SMBC MVI SPC
Cayman Islands
US$195 million
SMBC DIP Limited
SFVI Limited
SMBC, S.A.P.I. DE C.V.,
SOFOM, E.N.R.
Cayman Islands
US$8 million
British Virgin Islands
US$6,600
Mexico
MXN1,460 million
SMBC International Finance N.V.
Curaçao
SMFG Preferred Capital GBP 2 Limited
Cayman Islands
SMFG Preferred Capital JPY 2 Limited
Cayman Islands
SMFG Preferred Capital JPY 3 Limited
Cayman Islands
SMBC Preferred Capital GBP 2 Limited
Cayman Islands
US$200,000
£0.01
¥173,000 million
¥268,400 million
£1.5 million
SMBC Preferred Capital JPY 2 Limited
Cayman Islands
¥180,600 million
Sumitomo Mitsui Finance Dublin Limited Ireland
Sakura Finance Asia Limited
SMBC Capital Partners LLC
SMBC Derivative Products Limited
Hong Kong
U.S.A.
U.K.
SMBC Advisory Services Saudi Arabia LLC Saudi Arabia
US$18 million
US$65.5 million
US$10,000
US$200 million
SAR3,500,000
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
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(100)
(100)
100
100
Mar. 5, 2003
Commercial banking
Apr. 27, 2009
Commercial banking
(98.49)
98.49
Feb. 5, 1958
Commercial banking
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
(100)
(100)
(100)
(100)
(100)
(100)
(100)
100
100
100
Aug. 8, 1990
Management of the US BHC
and US BHC subsidiaries
Jun. 26, 1962
Commercial banking
Oct. 6, 1958
Commercial banking
99
(1)
May 8, 2009
Commercial banking
100
100
Nov. 23, 2017
Commercial banking
Dec. 22, 2010
Commercial banking
0
0
0
0
(100)
(100)
(80)
Nov. 9, 1990
Leasing, investments
May 11, 2011
Leasing
Aug. 8, 1990
Securities, investments
84.84
Mar. 13, 1990
Derivatives and investments,
securities services
(100)
Dec. 4, 1986
Derivatives and investments
100
100
100
100
100
100
—
—
—
100
100
100
100
100
Feb. 7, 2003
Credit guarantee,
bond investment
Sep. 9, 2004
Mar. 16, 2005
Loans, buying/
selling of monetary claims
Loans, buying/
selling of monetary claims
Jul. 30, 1997
Investments
Sep. 18, 2014
Money lending business,
services related to leasing
and used lease properties
Jun. 25, 1990
Finance
Oct. 25, 2007
Finance
Nov. 3, 2008
Finance
Aug. 12, 2009
Finance
Oct. 25, 2007
Finance
Nov. 19, 2008
Finance
Sep. 19, 1989
Finance
Oct. 17, 1977
Investments
Dec. 18, 2003
Holding and trading securities
0
(100)
Apr. 18, 1995
Derivatives and investments
100
Dec. 29, 2017
Consulting
* 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.
141
SMBC Group Annual Report 2019 Issued Capital
(Millions of Yen)
Percentage of
SMFG’s Voting
Rights (%)
Percentage of
SMBC’s Voting
Rights (%)
Date of
Establishment or
Investment
Main Business
(46.58)
46.58
Sep. 19, 2000
Commercial banking
(24.09)
21.31 (0.14)
Nov. 14, 2017
Business management
0
0
0
(100)
(100)
(100)
Jul. 1, 1922
Commercial banking
Nov. 24, 1950
Commercial banking
Sep. 6, 1949
Commercial banking
37,250
29,589
47,039
38,971
27,484
Rp928,707 million
Rp2,442,060 million
US$395 million
HKD39,925 million
0
0
0
0
0
0
0
0
0
0
15,000
50
(100)
(100)
(100)
(35.10)
(35.10)
(15.07)
(18.25)
(19.52)
(100)
(20)
(50)
(49)
35.10
35.10
15.07
18.25
19.52
—
—
32
20
—
49
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. 4, 1963
Leasing
Feb. 21, 1981
Leasing
Aug. 14, 1997
Leasing
May 25, 1982
Credit card services
Jul. 3, 2006
Nov. 29, 1972
System engineering and data
processing
System engineering and data
processing
System engineering and data
processing
(49.86)
28.52 (3.66)
Mar. 29, 1969
(49)
48.96
49
—
Dec. 5, 2014
Information processing services
Apr. 1, 1999
Investment management
(23.67)
23.67
Apr. 24, 2012
Investment management
(40)
40
Feb. 1, 2010
Investments, fund management
(33.33)
(24.50)
49
33.33
24.50
—
Sep. 1, 2015
Investments
Jul. 31, 2018
Investments
Jun. 1, 2018 Marketing
■ Principal Affiliates
Company Name
The Japan Net Bank, Limited
Kansai Mirai Financial Group, Inc.
Kansai Urban Banking Corporation
The Kinki Osaka Bank, Ltd.
THE MINATO BANK, LTD.
PT Oto Multiartha
PT Summit Oto Finance
ACLEDA Bank Plc.
The Bank of East Asia, Limited
Sumitomo Mitsui Finance and Leasing
Company, Limited
Vietnam Export Import Commercial Joint Stock Bank VND12,526,947 million
Sumitomo Mitsui Auto Service Company, Limited
13,636 21.99
(48)
SMBC Aviation Capital Limited
POCKET CARD CO., LTD.
JSOL CORPORATION
Sakura Information Systems Co., Ltd.
SAKURA KCS Corporation
brees corporation
Daiwa SB Investments Ltd.
US$887 million
14,374
5,000
600
2,054
100
2,000
China Post & Capital Fund Management Co., Ltd.
CNY304 million
Daiwa Securities SMBC Principal
Investments Co., Ltd.
MSD Investment, Ltd.
Spring Infrastructure Capital Co., Ltd.
BrainCell, Inc.
100
49
250
300
0
0
0
0
0
0
0
0
0
0
142
SMBC Group Annual Report 2019 International Directory (as of June 30, 2019)
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
Exchange Square (7th Floor) Unit 701,
No.19 and 20, Street 106, Sangkat Wat
Phnom, Village 2, Khan Daun Penh,
Phnom Penh, Kingdom of 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
143
SMBC Group Annual Report 2019 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
Room 15T21, 15F, Shanghai World
Financial Center, 100 Century Avenue,
Pudong New Area, Shanghai 200120,
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 BTPN Tbk
Menara BTPN, 29th Floor,
CBD Mega Kuningan, Jl. Dr. Ide Anak
Agung Gde Agung Kav. 5.5-5.6,
Jakarta 12950, Indonesia
Tel: 62 (21) 300-26200
PT Bank Tabungan Pensiunan Nasional
Syariah Tbk
Menara BTPN, 12th Floor,
CBD Mega Kuningan Jl. Dr. Ide Anak
Agung Gde Agung Kav. 5.5-5.6,
Jakarta 12950, Indonesia
Tel: 62 (21) 300-26400
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
BSL Leasing Co., Ltd.
19th Floor, Sathorn City Tower,
175 South Sathorn Road,
Thungmahamek, Sathorn,
Bangkok, 10120, Thailand
Tel: 66 (2) 670-4700
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 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
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, China
Tel: 86-20-8755-0021
144
SMBC Group Annual Report 2019 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
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
Shanghai Sumitomo Mitsui General
Finance and Leasing Co., Ltd.
10 F, Gopher Center, 757 Mengzi Road,
Huangpu District, Shanghai, 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, 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, China
Tel: 86-10-8529-7887
Shanghai Sumitomo Mitsui General
Finance and Leasing Co., Ltd.
Chengdu Branch
Room 2002, YanLord Landmark,
No.1, Section 2, Renmin South Road,
Chengdu, 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
145
SMBC Group Annual Report 2019 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
Toronto Dominion Centre,
222 Bay Street, Suite 1400, P.O. Box 172,
Toronto, Ontario M5K 1H6, Canada
Tel: 1 (416) 368-4766
Cayman Branch
25 Main Street, George Town,
P.O. BOX 694, 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
Chicago Representative Office
300 S. Riverside Plaza, Suite 1970,
Chicago, IL 60606, U.S.A.
Tel: 1 (312) 796-3668
Dallas Representative Office
14241 Dallas Parkway, Suite 660,
Dallas,TX 75254, U.S.A.
Tel: 1 (972) 942-7000
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 Virreyes-Pedregal 24, Piso 5, Int
502-A, Col. Molino del Rey,
Ciudad de Mexico, Mexico, 11040
Tel: 52 (55) 2623-0200
Leon Representative Office
Plaza de la Paz #102. int.901
Puerto Interior, Silao, Guanajuato,
CP36275, Mexico
Tel: 52 (472) 500-0177
Bogota Representative Office
80 Once Building, Carrera 11 No. 79-52,
Suite 1002, Bogota, 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 Principal Subsidiaries/
Affiliates SMFG Network
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
25 Main Street, George Town,
P.O. BOX 694, 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, S.A.P.I. DE C.V., SOFOM, E.N.R.
Torre Virreyes-Pedregal 24, Piso 5, Int
502-A, Col. Molino del Rey,
Ciudad de Mexico, Mexico, 11040
Tel: 52 (55) 2623-1373
SMBC Nikko Securities America, Inc.
277 Park Avenue, New York,
NY 10172, U.S.A.
Tel: 1 (212) 224-5300
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 Americas Holdings, Inc.
251 Little Falls Drive, Wilmington,
New Castle, DE 19808, U.S.A.
Tel: 1 (212) 224-4000
Europe, Middle East
and Africa
SMBC Branches and
Representative Offices
London Branch
99 Queen Victoria Street,
London EC4V 4EH, U.K.
Tel: 44 (20) 7786-1000
Düsseldorf Branch
Prinzenallee 7, 40549 Düsseldorf,
Germany
Tel: 49 (211) 36190
Frankfurt Branch
Main Tower, 17th Floor,
Neue Mainzer Str. 52-58, 60311
Frankfurt am Main, Germany
Tel: 49 (69) 222298201
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
146
SMBC Group Annual Report 2019 SMBC Advisory Services Saudi Arabia
LLC
7th Floor Al Faisaliah Tower,
P.O. Box 54995, Riyadh 11524,
Kingdom of Saudi Arabia
Tel: 966 (11) 484-7105
SMBC Nikko Capital Markets Europe
GmbH
Neue Mainzer Str. 52-58, 60311
Frankfurt am Main, Germany
Tel: 49 (69) 2222-9-8500
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
SMBC Bank EU AG Amsterdam Branch
World Trade Center Amsterdam,
Tower H, Level 15 Zuidplein 130,
1077XV, Amsterdam, The Netherlands
Tel: 31 (20) 718-3888
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 Paris Branch
1/3/5 rue Paul Cézanne, 75008,
Paris, France
Tel: 33 (1) 44 (90) 48-00
SMBC Bank EU AG
Main Tower, Neue Mainzer Str. 52-58,
60311 Frankfurt am Main, Germany
Tel: 49 (69) 222298200
SMBC Bank EU AG Dublin Branch
IFSC House, IFSC, Dublin 1, Ireland
Tel: 353 (1) 859-9300
SMBC Bank EU AG Prague Branch
International Business Centre, Pobrezni
3 186 00 Prague 8, Czech Republic
Tel: 420 (295) 565-800
SMBC Bank EU AG Madrid Branch
Calle Pedro Teixeira 8, Edificio Iberia
Mart I, planta 4a., 28020 Madrid, Spain
Tel: 34 (91) 312-7300
SMBC Bank EU AG 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
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
147
SMBC Group Annual Report 2019 SMBC Bank EU AG
SMBC Nikko Capital Markets Europe GmbH
Frankfurt Branch
SMBC Bank EU AG
Dublin Branch
Sumitomo Mitsui Finance
Dublin Limited
SMBC Aviation
Capital Limited
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Nikko Capital
Markets Limited
London Branch
SMBC Bank EU AG
Amsterdam Branch
Brussels Branch
JSC Sumitomo Mitsui Rus Bank
SMBC Bank EU AG Prague Branch
Düsseldorf Branch
SMBC Bank EU AG Milan Branch
Ulaanbaatar Representative Office
SMBC Bank EU AG
Madrid Branch
Sumitomo Mitsui
Banking Corporation
Europe Limited
Paris Branch
Istanbul Representative Office
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
DIFC Branch-Dubai
SMBC Advisory Services Saudi Arabia LLC
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 BTPN Tbk
■ 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)
■ The Bank of East Asia, Limited
■ Vietnam Export Import Commercial Joint Stock Bank
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ ACLEDA Bank Plc.
148
Overseas service network (as of June 30, 2019)
Total: 85
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 698 offices. (as of June 30, 2019)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
Shenyang Branch
Beijing Branch
Manufacturers Bank
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Dallas Representative Office
Houston Representative Office
Chicago Representative
Office
Canada Branch
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
SMBC Americas Holdings, 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
Mexico City Representative Office
SMBC, S.A.P.I. DE C.V., SOFOM, E.N.R.
Hong Kong Branch
Leon Representative Office
SMBC Capital Markets (Asia) Limited
Bogota Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Cayman Branch
Cayman Branch
Chonburi Branch
ACLEDA Bank Plc.
Lima Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
Yangon Branch
Thilawa Front Office
Bangkok Branch
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Kuala Lumpur Office
Manila Branch
Phnom Penh Representative Office
Ho Chi Minh City Branch
Vietnam Export Import
Commercial Joint Stock Bank
Labuan Branch
Singapore Branch
PT Bank BTPN Tbk
PT Oto Multiartha
PT Summit Oto Finance
Indicates branch or sub-branch of
Sumitomo Mitsui Banking Corporation (China) Limited
Europe, Middle East and Africa
■ Sumitomo Mitsui Banking Corporation
■ DIFC Branch-Dubai
Europe Limited Head Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited Paris Branch
■ SMBC Bank EU AG
■ SMBC Bank EU AG Amsterdam Branch
■ SMBC Bank EU AG Dublin Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ London 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
■ SMBC Nikko Capital Markets Europe GmbH
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
■ SMBC Advisory Services Saudi Arabia LLC
The Americas
■ New York Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Canada Branch
■ Cayman Branch
■ Chicago Representative Office
■ Dallas Representative Office
■ Houston Representative Office
■ Silicon Valley Representative Office
■ Mexico City Representative Office
■ Leon 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, S.A.P.I. DE C.V., SOFOM, E.N.R.
■ SMBC Americas Holdings, Inc.
SMBC Group Annual Report 2019 SMBC Bank EU AG
Frankfurt Branch
SMBC Nikko Capital Markets Europe GmbH
SMBC Bank EU AG
Dublin Branch
Sumitomo Mitsui Finance
Dublin Limited
SMBC Aviation
Capital Limited
Sumitomo Mitsui
Banking Corporation
Europe Limited
SMBC Nikko Capital
Markets Limited
London Branch
SMBC Bank EU AG
Amsterdam Branch
Brussels Branch
JSC Sumitomo Mitsui Rus Bank
SMBC Bank EU AG Prague Branch
Düsseldorf Branch
SMBC Bank EU AG Milan Branch
Ulaanbaatar Representative Office
SMBC Bank EU AG
Madrid Branch
Sumitomo Mitsui
Banking Corporation
Europe Limited
Paris Branch
Istanbul Representative Office
Tehran Representative Office
Cairo Representative Office
Bahrain Representative Office
DIFC Branch-Dubai
SMBC Advisory Services Saudi Arabia LLC
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
■ Chonburi Branch
Head Office (Shanghai)
Shanghai Pilot Free Trade Zone Sub-Branch
■ Ho Chi Minh City Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ Sumitomo Mitsui Banking Corporation (China) Limited
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
■ Sumitomo Mitsui Banking Corporation (China) Limited
Shanghai Puxi Sub-Branch
Changshu Sub-Branch
Suzhou Industrial Park Sub-Branch
Tianjin Binhai Sub-Branch
■ Sumitomo Mitsui Banking Corporation (China) Limited
■ PT Bank BTPN Tbk
■ Sumitomo Mitsui Banking Corporation Malaysia Berhad
■ 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
■ 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
■ SMBC Nikko Capital Markets Limited (Sydney Office)
■ The Bank of East Asia, Limited
■ Vietnam Export Import Commercial Joint Stock Bank
■ PT Oto Multiartha
■ PT Summit Oto Finance
■ ACLEDA Bank Plc.
Overseas service network (as of June 30, 2019)
Total: 85
(including banking subsidiaries and their branches/
sub-branches/rep. offices)
Consolidated subsidiary PT Bank BTPN Tbk has 698 offices. (as of June 30, 2019)
Also showing principal overseas subsidiaries
Los Angeles Branch
San Francisco Branch
Silicon Valley Representative Office
Shenyang Branch
Chicago Representative
Office
Beijing Branch
Manufacturers Bank
Tianjin Branch
Tianjin Binhai Sub-Branch
Dalian
Branch
Suzhou Branch
Suzhou Industrial Park Sub-Branch
Changshu Sub-Branch
Chongqing Branch
Seoul
Branch
Kunshan Sub-Branch
Head Office (Shanghai)
Shanghai Puxi Sub-Branch
Shanghai Pilot Free
Trade Zone Sub-Branch
Hangzhou
Branch
Guangzhou
Branch
Taipei Branch
Hanoi Branch
Shenzhen Branch
The Bank of East Asia, Limited
Hong Kong Branch
SMBC Capital Markets (Asia) Limited
Yangon Branch
Thilawa Front Office
Bangkok Branch
Chonburi Branch
Sumitomo Mitsui Banking
Corporation Malaysia Berhad
Kuala Lumpur Office
Manila Branch
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 BTPN 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
Canada Branch
New York Branch
SMBC Capital Markets, Inc.
SMBC Leasing and Finance, Inc.
SMBC Nikko Securities America, Inc.
SMBC Americas Holdings, Inc.
Dallas Representative Office
Houston Representative Office
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.
Leon Representative Office
Bogota Representative Office
Lima Representative Office
Banco Sumitomo Mitsui Brasileiro S.A.
Santiago Representative Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited Head Office
■ Sumitomo Mitsui Banking Corporation
Europe Limited Paris Branch
■ SMBC Bank EU AG
■ SMBC Bank EU AG Amsterdam Branch
■ SMBC Bank EU AG Dublin Branch
■ SMBC Bank EU AG Prague Branch
■ SMBC Bank EU AG Madrid Branch
■ SMBC Bank EU AG Milan Branch
■ London Branch
■ Düsseldorf Branch
■ Frankfurt Branch
■ Brussels Branch
■ 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
■ SMBC Nikko Capital Markets Europe GmbH
■ Sumitomo Mitsui Finance Dublin Limited
■ SMBC Aviation Capital Limited
■ SMBC Advisory Services Saudi Arabia LLC
■ New York Branch
■ San Francisco Branch
■ Los Angeles Branch
■ Canada Branch
■ Cayman Branch
■ Chicago Representative Office
■ Dallas Representative Office
■ Houston Representative Office
■ Silicon Valley Representative Office
■ Mexico City Representative Office
■ Leon 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, S.A.P.I. DE C.V., SOFOM, E.N.R.
■ SMBC Americas Holdings, Inc.
149
SMBC Group Annual Report 2019 150
SMBC Group Annual Report 2019 Appendix II
CONTENTS
Financial Data
Sumitomo Mitsui Financial Group
SMBC
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
152
153
155
157
158
161
Notes to Consolidated Financial Statements 163
Independent Auditor’s Report
SMBC
Supplemental Information
Sumitomo Mitsui Financial Group
Income Analysis (Consolidated)
Assets and Liabilities (Consolidated)
Capital (Non-consolidated)
227
228
234
237
240
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)
319
320
323
325
329
331
336
338
340
341
Trust Assets and Liabilities (Non-consolidated) 343
Basel III Information
Basel III Information
Sumitomo Mitsui Financial Group
SMBC
Capital Ratio Information (Consolidated)
243
Capital Ratio Information (Consolidated)
344
Countercyclical buffer requirement by
country or region
310
Indicators for assessing Global Systemically
Important Banks (G-SIBs)
311
Leverage Ratio Information (Consolidated) 313
TLAC information
Liquidity Coverage Ratio Information
(Consolidated)
314
317
Leverage Ratio Information (Consolidated) 351
Liquidity Coverage Ratio Information
(Consolidated)
352
Capital Ratio Information (Non-consolidated) 354
Leverage Ratio Information (Non-
consolidated)
Liquidity Coverage Ratio Information (Non-
consolidated)
361
362
Compensation
Sumitomo Mitsui Financial Group
SMBC
Compensation (Consolidated)
366
Compensation
370
006_0800801371908.indd 151
151
2019/08/16 18:48:47
SMBC Group Annual Report 2019 Financial Highlights
Sumitomo Mitsui Financial Group (Consolidated)
Year ended March 31
For the Year:
2019
2018
Ordinary income ����������������������������������������������������������� ¥ 5,735,312
Ordinary profit ��������������������������������������������������������������
1,135,300
Profit attributable to owners of parent �������������������������
726,681
Comprehensive income �����������������������������������������������
795,191
¥ 5,764,172
1,164,113
734,368
984,133
At Year-End:
Millions of yen
2017
¥ 5,133,245
1,005,855
706,519
966,057
2016
2015
¥ 4,772,100
985,284
646,687
178,328
¥ 4,851,202
1,321,156
753,610
2,063,510
Total net assets ������������������������������������������������������������ ¥ 11,451,611
Total assets ������������������������������������������������������������������
203,659,146
Total capital ratio (International Standard) �������������������
Tier 1 capital ratio (International Standard) ������������������
Common equity Tier 1 capital ratio
20.76%
18.19%
(International Standard) ���������������������������������������������
Number of employees ��������������������������������������������������
16.37%
86,659
¥ 11,612,892
199,049,128
¥ 11,234,286
197,791,611
¥ 10,447,669
186,585,842
¥ 10,696,271
183,442,585
19�36%
16�69%
14�50%
72,978
16�93%
14�07%
12�17%
77,205
17�02%
13�68%
11�81%
73,652
16�58%
12�89%
11�30%
68,739
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.
152
010_0800801371908.indd 152
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
2018
2019
*8
*8
*8
*1, *2, *8, *16
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*8
*8, *10, *11, *12
¥ 53,732,582
1,881,879
827,892
8,337,700
4,730,770
5,585,591
1,482
25,712,709
72,945,934
2,166,190
2,329,431
8,005,807
3,475,131
2,553,213
341,949
424,277
6,332
33,971
115,387
865,584
428,756
272,203
163
164,460
383,418
27,609
*8
*8
*8
*1, *2, *8, *16
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*10, *11, *12
¥ 57,411,276
2,465,744
6,429,365
4,097,473
4,594,578
5,328,778
390
24,338,005
77,979,190
1,719,402
247,835
7,307,305
1,504,703
573,292
345,420
427,484
25,548
37,663
95,293
769,231
431,135
193,127
990
143,977
329,434
40,245
Millions of
U�S� dollars
2019
$ 517,219
22,214
57,922
36,914
41,393
48,007
4
219,261
702,515
15,490
2,233
65,832
13,556
5,165
3,112
3,851
230
339
859
6,930
3,884
1,740
9
1,297
2,968
363
8,575,499
(536,088)
¥199,049,128
9,564,993
(468,808)
¥203,659,146
86,171
(4,223)
$1,834,767
010_0800801371908.indd 153
153
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
2018
2019
Millions of
U�S� dollars
2019
*8
*8
*8
*8, *13
*8, *14
*8
*10
*8
*10
¥116,477,534
11,220,284
1,190,928
5,509,721
7,186,861
2,384,787
4,402,110
10,829,248
865,640
1,256,600
9,057,683
1,328,271
6,348,202
84,046
3,861
39,982
2,026
22,244
17,765
144,763
2,397
455,234
30,539
8,575,499
187,436,236
2,338,743
758,215
5,552,573
(12,493)
8,637,039
1,688,842
(68,543)
37,097
36,906
59,121
1,753,424
2,823
1,219,604
11,612,892
¥199,049,128
*8
*8
*8
*8, *13
*14
*8, *15
*10
*8
*10
¥122,325,038
11,165,486
1,307,778
11,462,559
$1,102,027
100,590
11,782
103,266
1,812,820
2,291,813
4,219,293
10,656,897
1,165,141
84,500
9,227,367
1,352,773
4,873,630
70,351
3,091
31,816
1,374
23,948
7,936
147,594
2,847
378,220
30,259
9,564,993
192,207,534
2,339,443
739,047
5,992,247
(16,302)
9,054,436
1,688,852
(54,650)
36,547
50,379
(7,244)
16,332
20,647
38,012
96,008
10,497
761
83,129
12,187
43,907
634
28
287
12
216
72
1,330
26
3,407
273
86,171
1,731,599
21,076
6,658
53,984
(147)
81,571
15,215
(492)
329
454
(65)
1,713,884
4,750
678,540
11,451,611
¥203,659,146
15,440
43
6,113
103,168
$1,834,767
154
010_0800801371908.indd 154
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019
Consolidated Statements of Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
Ordinary income ��������������������������������������������������������������������������������������
Interest income �����������������������������������������������������������������������������������
Interest on loans and discounts ����������������������������������������������������
Interest and dividends on securities ���������������������������������������������
Interest on call loans and bills bought ������������������������������������������
Interest on receivables under resale agreements �������������������������
Interest on receivables under securities borrowing transactions ��
Interest on deposits with banks ����������������������������������������������������
Interest on lease transactions �������������������������������������������������������
Other interest income ��������������������������������������������������������������������
Trust fees ��������������������������������������������������������������������������������������������
Fees and commissions ����������������������������������������������������������������������
Trading income �����������������������������������������������������������������������������������
Other operating income ���������������������������������������������������������������������
Lease-related income ��������������������������������������������������������������������
Installment-related income ������������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Other income ��������������������������������������������������������������������������������������
Gains on reversal of reserve for possible loan losses �������������������
Recoveries of written-off claims ����������������������������������������������������
Other ���������������������������������������������������������������������������������������������
Ordinary expenses ���������������������������������������������������������������������������������
Interest expenses �������������������������������������������������������������������������������
Interest on deposits ����������������������������������������������������������������������
Interest on negotiable certificates of deposit ��������������������������������
Interest on call money and bills sold ���������������������������������������������
Interest on payables under repurchase agreements ���������������������
Interest on payables under securities lending transactions ����������
Interest on commercial paper �������������������������������������������������������
Interest on borrowed money ���������������������������������������������������������
Interest on short-term bonds ��������������������������������������������������������
Interest on bonds ��������������������������������������������������������������������������
Other interest expenses ����������������������������������������������������������������
Fees and commissions payments ������������������������������������������������������
Trading losses ������������������������������������������������������������������������������������
Other operating expenses ������������������������������������������������������������������
Lease-related expenses ����������������������������������������������������������������
Installment-related expenses ��������������������������������������������������������
Other ���������������������������������������������������������������������������������������������
General and administrative expenses ������������������������������������������������
Other expenses ����������������������������������������������������������������������������������
Ordinary profit �����������������������������������������������������������������������������������������
*1
*2
*3
Millions of yen
2018
2019
Millions of
U�S� dollars
2019
¥5,764,172
2,165,788
1,469,232
342,013
19,462
24,566
14,619
75,619
70,941
149,333
3,884
1,244,063
246,338
1,863,345
271,703
1,041,351
550,290
240,751
11,562
10,231
218,957
4,600,059
775,560
283,229
86,810
8,471
48,597
11,316
18,393
54,654
54
186,095
77,936
177,418
36
1,589,355
142,894
987,154
459,305
1,816,197
241,491
1,164,113
*1
*2
*3
¥5,735,312
2,488,904
1,666,283
364,685
16,551
20,457
17,784
103,135
47,573
252,433
4,656
1,240,917
194,676
1,578,159
233,675
981,090
363,393
227,997
5,729
11,047
211,220
4,600,012
1,157,482
463,989
136,178
14,270
119,733
1,272
45,356
75,883
60
226,536
74,201
181,019
3,305
1,319,328
120,097
930,884
268,347
1,715,050
223,825
1,135,300
$51,669
22,423
15,012
3,285
149
184
160
929
429
2,274
42
11,179
1,754
14,218
2,105
8,839
3,274
2,054
52
100
1,903
41,442
10,428
4,180
1,227
129
1,079
11
409
684
1
2,041
668
1,631
30
11,886
1,082
8,386
2,418
15,451
2,016
10,228
010_0800801371908.indd 155
155
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Consolidated Statements of Income
(Continued)
Year ended March 31
Extraordinary gains ����������������������������������������������������������������������������������
Gains on disposal of fixed assets ������������������������������������������������������
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 ����������������������������������������������������
*5
Millions of yen
2018
¥
866
852
13
—
56,129
5,563
49,900
665
1,108,850
225,617
44,907
270,524
838,326
103,957
¥ 734,368
*4
*5
2019
¥
2,826
541
—
2,285
14,547
4,485
9,610
450
1,123,579
276,329
55,095
331,424
792,155
65,474
¥ 726,681
Millions of
U�S� dollars
2019
$
25
5
—
21
131
40
87
4
10,122
2,489
496
2,986
7,137
590
$ 6,547
156
010_0800801371908.indd 156
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Consolidated Statements of Comprehensive Income
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31
*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 ������
Millions of yen
2018
2019
Millions of
U�S� dollars
2019
*1
¥838,326
145,807
162,673
(28,659)
1
(50,387)
49,221
12,957
984,133
876,353
107,780
¥792,155
3,035
31,157
29,981
—
10,396
(65,530)
(2,970)
795,191
687,690
107,500
$7,137
27
281
270
—
94
(590)
(27)
7,164
6,195
968
010_0800801371908.indd 157
157
2019/08/16 18:54:01
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Consolidated Statements of Changes in Net Assets
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Year ended March 31, 2018
Balance at the beginning of the fiscal year ��������������������� ¥2,337,895
Changes in the fiscal year
Capital
stock
Millions of yen
Stockholders’ equity
Retained
earnings
¥5,036,756
Capital
surplus
¥757,346
Issuance of new 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’
847
847
(218,596)
734,368
(41)
62
34
5
(599)
(2)
(314)
923
Treasury
stock
¥(12,913) ¥8,119,085
Total
1,695
(218,596)
734,368
(142)
521
(142)
562
62
34
5
(599)
(2)
(314)
923
equity in the fiscal year ���������������������������������������������
847
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year ������������������������������� ¥2,338,743
868
¥758,215
515,817
¥5,552,573
420
517,954
¥(12,493) ¥8,637,039
Year ended March 31, 2018
Balance at the beginning of the fiscal year ��������������������� ¥1,542,308
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
¥(42,077)
Land
revaluation
excess
¥38,109
Foreign
currency
translation
adjustments
¥ 65,078
Accumulated
remeasurements
of defined
benefit plans
¥ 9,034
Total
¥1,612,453
Issuance of new 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’
146,533
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
146,533
Balance at the end of the fiscal year ������������������������������� ¥1,688,842
(26,466)
(26,466)
¥(68,543)
(1,012)
(1,012)
¥37,097
(28,171)
(28,171)
¥ 36,906
50,087
50,087
¥59,121
140,971
140,971
¥1,753,424
Year ended March 31, 2018
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Issuance of new 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’
Stock
acquisition
rights
Millions of yen
Non-
controlling
interests
Total
net assets
¥3,482
¥1,499,264 ¥11,234,286
1,695
(218,596)
734,368
(142)
521
62
34
5
(599)
(2)
(314)
923
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
(659)
(659)
¥2,823
(279,659)
(279,659)
(139,348)
378,606
¥1,219,604 ¥11,612,892
158
010_0800801371908.indd 158
2019/08/16 18:54:02
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Consolidated Statements of Changes in Net Assets
Year ended March 31, 2019
Balance at the beginning of the fiscal year ��������������������� ¥2,338,743
Changes in the fiscal year
Capital
stock
Millions of yen
Stockholders’ equity
Retained
earnings
¥5,552,573
Capital
surplus
¥758,215
Treasury
stock
Total
¥(12,493) ¥8,637,039
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
699
699
(245,576)
726,681
0
4
(11)
(23)
302
(41,704)
(68)
(65,922)
4,419
41,704
(70,094)
363
65,922
1,398
(245,576)
726,681
(70,094)
294
—
4,419
0
4
(11)
(23)
302
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
699
Balance at the end of the fiscal year ������������������������������� ¥2,339,443
(19,167)
¥739,047
439,673
¥5,992,247
(3,809)
417,396
¥(16,302) ¥9,054,436
Year ended March 31, 2019
Balance at the beginning of the fiscal year ��������������������� ¥1,688,842
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
¥(68,543)
Land
revaluation
excess
¥37,097
Foreign
currency
translation
adjustments
¥36,906
Accumulated
remeasurements
of defined
benefit plans
¥ 59,121
Total
¥1,753,424
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
equity in the fiscal year ���������������������������������������������
10
Net changes in the fiscal year �����������������������������������������
10
Balance at the end of the fiscal year ������������������������������� ¥1,688,852
13,893
13,893
¥(54,650)
(549)
(549)
¥36,547
13,473
13,473
¥50,379
(66,366)
(66,366)
(39,540)
(39,540)
¥ (7,244) ¥1,713,884
Year ended March 31, 2019
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of yen
Non-
controlling
interests
Total
net assets
¥2,823
¥1,219,604 ¥11,612,892
1,398
(245,576)
726,681
(70,094)
294
—
4,419
0
4
(11)
(23)
302
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
1,926
1,926
¥4,750
(541,063)
(541,063)
(578,677)
(161,280)
¥ 678,540 ¥11,451,611
010_0800801371908.indd 159
159
2019/08/16 18:54:02
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Consolidated Statements of Changes in Net Assets
Millions of U�S� dollars
Stockholders’ equity
Retained
earnings
Capital
surplus
Treasury
stock
$6,831
$50,023
$(113)
Capital
stock
$21,070
6
6
(631)
3
594
(2,212)
6,547
0
0
(0)
(0)
3
(376)
(1)
(594)
40
376
Total
$77,811
13
(2,212)
6,547
(631)
3
—
40
0
0
(0)
(0)
3
—
6
$21,076
(173)
$6,658
3,961
$53,984
(34)
$(147)
3,760
$81,571
Millions of U�S� dollars
Accumulated other comprehensive income
Net unrealized
gains (losses)
on other
securities
$15,215
Net deferred
gains (losses)
on hedges
Land
revaluation
excess
$(618)
$334
Foreign
currency
translation
adjustments
$332
Accumulated
remeasurements
of defined
benefit plans
$ 533
Total
$15,797
Year ended March 31, 2019
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
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, 2019
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
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 �������������������������������
0
0
$15,215
125
125
$(492)
(5)
(5)
$329
121
121
$454
(598)
(598)
$ (65)
(356)
(356)
$15,440
Year ended March 31, 2019
Balance at the beginning of the fiscal year ���������������������
Changes in the fiscal year
Issuance of new stock������������������������������������������������
Cash dividends �����������������������������������������������������������
Profit attributable to owners of parent �����������������������
Purchase of treasury stock�����������������������������������������
Disposal of treasury stock ������������������������������������������
Cancellation 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 ���������������������������
Transfer from retained earnings to capital surplus �����
Net changes in items other than stockholders’
Stock
acquisition
rights
Millions of U�S� dollars
Non-
controlling
interests
$10,987
$25
Total
net assets
$104,621
13
(2,212)
6,547
(631)
3
—
40
0
0
(0)
(0)
3
—
equity in the fiscal year ���������������������������������������������
Net changes in the fiscal year �����������������������������������������
Balance at the end of the fiscal year �������������������������������
17
17
$43
(4,874)
(4,874)
$ 6,113
(5,213)
(1,453)
$103,168
160
010_0800801371908.indd 160
2019/08/16 18:54:02
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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 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
2018
2019
Millions of
U�S� dollars
2019
¥ 1,108,850
281,535
49,900
25,225
—
(38,992)
(67,041)
10,570
821
(36,499)
(244)
637
3,704
(11,939)
(2,165,788)
775,560
(142,228)
(0)
323,045
4,710
1,475,948
(796,943)
761,992
6,079,437
(472,574)
59,482
(1,359,236)
(338,019)
422,690
2,059,841
108,893
(168,890)
(453,061)
183,504
26,591
131,000
860,316
147,294
2,121,086
(756,202)
(768,910)
9,446,071
(103,276)
9,342,794
¥ 1,123,579
269,010
9,610
25,919
(2,285)
(61,145)
(60,213)
(16,467)
(757)
(25,570)
(196)
1,704
(9,828)
2,830
(2,488,904)
1,157,482
(101,219)
(0)
(148,278)
3,944
477,890
(1,603,188)
(3,152,247)
5,039,495
(73,017)
1,418,493
1,520,423
(6,235,713)
4,240,226
6,097,354
(95,014)
(5,374,040)
446,136
298,550
(53,975)
(51,200)
467,587
24,502
2,435,453
(1,116,584)
489,142
4,879,488
(283,245)
4,596,242
$ 10,122
2,424
87
234
(21)
(551)
(542)
(148)
(7)
(230)
(2)
15
(89)
26
(22,423)
10,428
(912)
(0)
(1,336)
36
4,305
(14,443)
(28,399)
45,401
(658)
12,779
13,698
(56,178)
38,200
54,931
(856)
(48,415)
4,019
2,690
(486)
(461)
4,213
221
21,941
(10,059)
4,407
43,959
(2,552)
41,408
010_0800801371908.indd 161
161
2019/08/16 18:54:02
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019
Consolidated Statements of Cash Flows
(Continued)
Year ended March 31
Cash flows from investing activities:
Millions of yen
2018
2019
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 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:
Repayment of subordinated borrowings ��������������������������������������������
Proceeds from issuance of subordinated bonds and bonds with
*2
*3
¥(23,726,100)
13,528,011
8,357,784
(1)
1,957
(712,563)
302,362
(136,079)
3
(161,851)
(848,822)
(3,395,299)
(10,000)
stock acquisition rights ��������������������������������������������������������������������
254,747
*2
*3
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
(180,033)
(218,569)
(135,000)
(61,986)
(142)
521
(6)
—
0
(350,468)
(93,874)
5,503,152
42,478,393
7,837
(632,819)
166,646
5,136,329
47,983,114
¥(26,615,239)
17,969,410
10,078,569
(2)
1,094
(510,213)
104,451
(139,329)
—
(57,182)
174,702
1,006,260
(8,000)
—
(27,539)
(245,594)
(212,537)
(77,185)
(70,094)
294
Millions of
U�S� dollars
2019
$(239,777)
161,887
90,798
(0)
10
(4,597)
941
(1,255)
—
(515)
1,574
9,065
(72)
—
(248)
(2,213)
(1,915)
(695)
(631)
3
—
71
(5,701)
1,501
46,273
432,280
subsidiaries in consolidation �����������������������������������������������������������������
Cash and cash equivalents at the end of the fiscal year �������������������������
*1
1,568
¥ 47,983,114
1,519
¥ 53,120,963
*1
14
$ 478,567
162
010_0800801371908.indd 162
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019
Notes to Consolidated Financial Statements
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
(Basis of presentation)
Sumitomo Mitsui Financial Group, Inc. (“the Company”) was established on December 2, 2002 as a holding company for the SMBC Group
(“the Group”) through a statutory share transfer (kabushiki iten) of all of the outstanding equity securities of Sumitomo Mitsui Banking
Corporation (“SMBC”) in exchange for the Company’s newly issued securities. The Company is a joint stock corporation with limited liability
(Kabushiki Kaisha) incorporated under the Companies Act of Japan. Upon formation of the Company and completion of the statutory share
transfer, SMBC became a direct wholly owned subsidiary of the Company.
The Company 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 the Company’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, 2019 which was ¥111.00 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 As of and for the years ended March 31, 2018 and 2019
(Significant accounting policies for preparing consolidated financial statements)
1. Scope of consolidation
(1) Consolidated subsidiaries
The number of consolidated subsidiaries at March 31, 2019 is 173.
Principal companies:
Sumitomo Mitsui Banking Corporation (“SMBC”)
SMBC Trust Bank Ltd.
SMBC Nikko Securities Inc. (“SMBC Nikko”)
Sumitomo Mitsui Card Company, Limited (“SMCC”)
Cedyna Financial Corporation
SMBC Consumer Finance Co., Ltd.
The Japan Research Institute, Limited
Sumitomo Mitsui Asset Management Company, Limited (“SMAM”)
Sumitomo Mitsui Banking Corporation Europe Limited
Sumitomo Mitsui Banking Corporation (China) Limited
PT Bank BTPN Tbk
SMBC Americas Holdings, Inc.
SMBC Guarantee Co., Ltd.
Changes in the consolidated subsidiaries in the fiscal year ended March 31, 2019 are as follows:
PT Bank BTPN Tbk and 34 other companies were newly included in the scope of consolidation as a result of acquisition of shares
and for other reasons.
Sumitomo Mitsui Finance and Leasing Company, Limited and 38 other companies were excluded from the scope of consolidation, as
a result of becoming equity method affiliates due to the partial sale of their stock and for other reasons; and 170 other companies were
excluded from the scope of consolidation, as they ceased to be subsidiaries due to liquidation and for other reasons.
(2) Unconsolidated subsidiaries
Principal company:
SBCS Co., Ltd.
Unconsolidated subsidiaries are 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 financial position
and results of operations of the Company and its consolidated subsidiaries 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, 2019 is 5.
Principal company:
(2) Equity method affiliates
SBCS Co., Ltd.
The number of equity method affiliates at March 31, 2019 is 110.
Principal companies:
Sumitomo Mitsui Finance and Leasing Company, Limited
Sumitomo Mitsui Auto Service Company, Limited
Daiwa SB Investments Ltd.
Changes in the equity method affiliates in the fiscal year ended March 31, 2019 are as follows:
Sumitomo Mitsui Finance and Leasing Company, Limited and 38 other companies were excluded from the scope of consolidation and
became equity method affiliates due to the partial sale of their stock and for other reasons; Kansai Mirai Financial Group, Inc. became an
equity method affiliate as a result of share exchanges conducted with THE MINATO BANK, LTD. and Kansai Urban Banking
Corporation, which are the Company’s equity method affiliates; and 10 other companies became equity method affiliates due to new
establishment and for other reasons.
PT Bank BTPN Tbk and 9 other companies were excluded from the scope of equity method affiliates, as a result of becoming
subsidiaries due to acquisition of shares and for other reasons.
(3) Unconsolidated subsidiaries that are not accounted for by the equity method
There are no corresponding companies.
(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
Daiwa SB Investments (USA) Ltd.
amounts in terms of net income and retained earnings are immaterial, and as such, they do not hinder a rational judgment of the
Company’s financial position and results of operations when excluded from the scope of equity method.
164
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
3. The balance sheet dates of consolidated subsidiaries
(1) The balance sheet dates of the consolidated subsidiaries at March 31, 2019 are as follows:
2
84
5
82
October 31.............................
December 31......................... .
January 31.............................
March 31...............................
(2) The subsidiaries with balance sheets dated October 31 are consolidated using the financial statements as of January 31. The subsidiaries
with balance sheets dated January 31 and certain subsidiaries with balance sheets dated December 31 are consolidated using the
financial statements as of March 31. Other subsidiaries are consolidated using the financial statements 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 (based on 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” except for the amount reflected
on the gains or losses by applying fair value hedge accounting.
2) Securities included in money held in trust are carried in the same method as in (1) and (2), 1) above.
(3) Standards for recognition and measurement of derivative transactions
Derivative transactions, excluding those classified as trading derivatives, are carried at fair value.
(4) Depreciation
1) Tangible fixed assets (excluding assets for rent and lease assets)
Buildings owned by the Company and SMBC, which is a consolidated subsidiary of the Company, 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 the Company
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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (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, which is a consolidated subsidiary of the Company, 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 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, 2018 and 2019 were ¥190,945 million and ¥139,981 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
corporate 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.
(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 attribute 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.
166
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (14) Translation of foreign currency assets and liabilities
Assets and liabilities of the Company and SMBC, which is a consolidated subsidiary of the Company, 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, which is a consolidated subsidiary of the Company, 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, which is a consolidated subsidiary of the Company, 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, which is a consolidated subsidiary of the Company, 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.
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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (19) Consumption taxes
National and local consumption taxes of the Company and its consolidated domestic subsidiaries are accounted for using the tax-
excluded method.
(20) Adoption of the consolidated corporate-tax system
The Company and certain consolidated domestic subsidiaries apply the consolidated corporate-tax system.
(Unapplied Accounting Standards and Others)
“Accounting Standard for Revenue Recognition” (ASBJ Statement No.29) etc. (issued March 30, 2018)
(1) Outline
The accounting standard etc. provide comprehensive principles for revenue recognition by taking into account of international trends.
The principle of revenue recognition in the standard etc. is to recognize revenue to depict the transfer of promised goods or services to
customers in an amount of the consideration expected to be earned in exchange for those goods or services.
(2) Date of Application
The date of application is undetermined.
(3) Effects of Application of the Accounting Standard etc.
The effects of the application of the accounting standard etc. are currently being examined.
(Notes to consolidated balance sheets)
*1 Stocks and investments in unconsolidated subsidiaries and affiliates
Stocks and investments in unconsolidated subsidiaries and affiliates at March 31, 2018 and 2019 were as follows:
March 31
Stocks ...............................................................................................................................
Investments ......................................................................................................................
2018
¥677,723
5,428
2019
¥969,481
6,368
Millions of yen
Stocks of jointly controlled entities were as follows:
March 31
Stocks of jointly controlled entities ...................................................................................
2018
¥101,782
2019
¥340,821
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, 2018 and 2019 were as follows:
March 31
Japanese government bonds in “Securities” .......................................................................
2018
¥901
2019
¥902
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, those securities lent and those securities held without being disposed at March 31, 2018 and
2019 were as follows:
March 31
Securities pledged .............................................................................................................
Securities lent ...................................................................................................................
Securities held without being disposed .............................................................................
2018
¥6,659,456
7,772
1,307,487
2019
¥7,270,140
140,772
2,232,706
Millions of yen
168
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
*3 Bankrupt loans and non-accrual loans
Bankrupt loans and non-accrual loans at March 31, 2018 and 2019 were as follows:
March 31
Bankrupt loans .................................................................................................................
Non-accrual loans .............................................................................................................
2018
¥ 27,709
406,066
2019
¥ 12,806
456,802
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, 2018 and 2019 were as follows:
March 31
Past due loans (3 months or more) ....................................................................................
2018
¥12,822
2019
¥13,444
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, 2018 and 2019 were as follows:
March 31
Restructured loans ............................................................................................................
2018
¥210,616
2019
¥193,427
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).”
*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, 2018 and
2019 were as follows:
March 31
Risk-monitored loans .......................................................................................................
2018
¥657,215
2019
¥676,481
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, 2018 and 2019 were as follows:
March 31
Bills discounted ................................................................................................................
2018
¥780,542
2019
¥906,636
Millions of yen
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements *8 Assets pledged as collateral
Assets pledged as collateral at March 31, 2018 and 2019 consisted of the following:
March 31, 2018
Assets pledged as collateral:
Millions of yen March 31, 2019
Millions of yen
Assets pledged as collateral:
Cash and due from banks ..................................... ¥ 19,998
19,600
Monetary claims bought ......................................
Trading assets ......................................................
2,223,355
5,277,492
Securities .............................................................
8,014,149
Loans and bills discounted ...................................
13,241
Lease receivables and investment assets ................
51,630
Tangible fixed assets ............................................
223
Other assets ............................................................
Cash and due from banks ..................................... ¥ 7,353
11,459
Monetary claims bought ......................................
Trading assets ......................................................
514,328
6,286,499
Securities .............................................................
9,086,500
Loans and bills discounted ...................................
Liabilities corresponding to assets pledged as collateral:
Liabilities corresponding to assets pledged as collateral:
Deposits ..............................................................
Payables under repurchase agreements .................
Payables under securities lending transactions .....
Borrowed money .................................................
Bonds ..................................................................
Other liabilities ...................................................
Acceptances and guarantees .................................
26,555
3,374,283
6,167,353
6,807,957
27,901
12,477
170,036
Deposits ..............................................................
Payables under repurchase agreements .................
Payables under securities lending transactions .....
Borrowed money .................................................
Due to trust account ............................................
Acceptance and guarantees ..................................
26,089
5,762,587
1,582,791
7,922,955
124,550
167,027
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, 2018 and 2019:
March 31, 2018
Cash and due from banks .......................................... ¥ 12,012
Trading assets ...........................................................
196,313
7,893,437
Securities ..................................................................
Loans and bills discounted ........................................
2,812,382
Cash and due from banks .......................................... ¥ 41,584
Trading assets ...........................................................
1,591,280
4,812,271
Securities ..................................................................
Loans and bills discounted ........................................
853,603
Millions of yen March 31, 2019
Millions of yen
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, 2018
Collateral money deposited for financial instruments ..... ¥1,630,600
Collateral money deposited for financial instruments ..... ¥1,745,149
Surety deposits .........................................................
Surety deposits .........................................................
92,281
108,513
64,340
65,172 Margins of futures markets .......................................
Margins of futures markets .......................................
43,365
Other margins ..........................................................
38,003
Other margins ..........................................................
Millions of yen March 31, 2019
Millions of yen
*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, 2018 and 2019 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
2018
¥59,795,908
2019
¥62,409,943
42,963,575
44,048,947
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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
*10 Land revaluation excess
SMBC, a consolidated subsidiary of the Company, revalued its 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 the Company’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. The Company’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
Certain 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).
Certain 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, 2018 and 2019 were as follows:
March 31
Accumulated depreciation ................................................................................................
2018
¥1,089,903
2019
¥741,648
Millions of yen
*12 Deferred gain on tangible fixed assets deductible for tax purposes
Deferred gain on tangible fixed assets deductible for tax purposes at March 31, 2018 and 2019 were as follows:
March 31
Deferred gain on tangible fixed assets deductible for tax purposes .....................................
[The consolidated fiscal year concerned] .......................................................................
2018
¥62,550
[661]
2019
¥62,127
[—]
Millions of yen
*13 Subordinated borrowings
The balance of subordinated borrowings included in “Borrowed money” at March 31, 2018 and 2019 were as follows:
March 31
Subordinated borrowings ..................................................................................................
2018
¥265,000
2019
¥257,000
Millions of yen
*14 Subordinated bonds
The balance of subordinated bonds included in “Bonds” at March 31, 2018 and 2019 were as follows:
March 31
Subordinated bonds ..........................................................................................................
2018
¥2,211,841
2019
¥2,195,130
Millions of yen
*15 Borrowings from trust account in relation to covered bonds issued by trust account
The amount of borrowings from trust account in relation to covered bonds issued by trust account included in “Due to trust account” at
March 31, 2018 and 2019 were as follows:
March 31
The amount of borrowings from trust account in relation to covered bonds issued
Millions of yen
2018
2019
by trust account ...........................................................................................................
¥—
¥124,550
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements *16 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, 2018 and 2019 were as follows:
March 31
Guaranteed amount to privately-placed bonds ..................................................................
2018
¥1,796,308
2019
¥1,662,777
Millions of yen
(Notes to consolidated statements of income)
*1 Other income
“Other” in “Other income” for the fiscal years ended March 31, 2018 and 2019 included the following:
Year ended March 31, 2018
Gains on sales of stocks .............................................
Millions of yen Year ended March 31, 2019
¥140,695
Gains on sales of stocks .............................................
Millions of yen
¥134,748
*2 General and administrative expenses
“General and administrative expenses” for the fiscal years ended March 31, 2018 and 2019 included the following:
Year ended March 31, 2018
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen Year ended March 31, 2019
¥689,192
84
Salaries and related expenses .....................................
Research and development costs ...............................
Millions of yen
¥641,844
167
*3 Other expenses
“Other expenses” for the fiscal years ended March 31, 2018 and 2019 included the following:
Year ended March 31, 2018
Write-off of loans......................................................
Millions of yen Year ended March 31, 2019
¥105,228
Write-off of loans......................................................
Millions of yen
¥105,429
*4 Other extraordinary gains
“Other extraordinary gains” for the fiscal year ended March 31, 2019 is gains on step acquisitions.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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, 2018 and 2019.
Year ended March 31, 2018
Area
Purpose of use
Type
Tokyo metropolitan area ...............................Idle assets (121 items)
Kinki area ....................................................Idle assets (73 items)
Other ...........................................................Idle assets (32 items)
—
—
Land and buildings, etc.
Land and buildings, etc.
Land and buildings, etc.
Goodwill and Intangible fixed
assets
Year ended March 31, 2019
Area
Purpose of use
Type
Tokyo metropolitan area ...............................Branches (14 items)
Idle assets (64 items)
Land and buildings, etc.
Kinki area ....................................................Branches (7 items)
Land and buildings, etc.
Other ...........................................................Branches (2 items)
Land and buildings, etc.
—
Idle assets (19 items)
—
Intangible fixed assets
Idle assets (40 items)
Millions of yen
Impairment loss
¥15,424
9,538
3,627
21,310
Millions of yen
Impairment loss
¥ 205
2,335
77
2,139
258
889
3,703
At SMBC, a branch, which continuously manages and determines its income and expenses, is the smallest unit of asset group for
recognition and measurement of impairment loss of fixed assets. Assets such as corporate headquarters facilities, training facilities, data and
system centers, and health and recreational facilities which do not produce cash flows that can be attributed to individual assets are treated
as corporate assets. As for idle assets, impairment loss is measured individually. At other consolidated subsidiaries, a branch or other group
is the smallest asset grouping unit as well.
The carrying amounts of idle assets 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.
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 for goodwill and intangible assets is mainly based on each consolidated subsidiary. For the fiscal year ended March 31, 2018,
the book value of goodwill and intangible assets of the PB, Real Estate and Trust Services of SMBC Trust Bank Ltd. was not expected to be
recovered. Therefore, all unamortized balance of goodwill and intangible assets at the end of the fiscal year ended March 31, 2018 were
included in “Extraordinary losses” as “Losses on impairment of fixed assets.” The recoverable amount is measured by value in use, which is
calculated by discounting future cash flows by 10%. In addition, the book value of goodwill and intangible assets of the auto lease business
of SMFL Capital Company, Limited was not expected to be recovered. Therefore, all unamortized balance of goodwill and a portion of
intangible assets at the end of the fiscal year ended March 31, 2018 were included in “Extraordinary losses” as “Losses on impairment of
fixed assets.” The recoverable value is net realizable value, which is calculated based on the revalued corporate value.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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
2018
2019
¥ 462,091
(217,083)
245,008
(82,335)
162,673
(93,976)
53,058
(40,918)
12,259
(28,659)
—
—
—
1
1
(57,881)
7,494
(50,387)
—
(50,387)
50,592
19,696
70,289
(21,067)
49,221
13,971
(1,013)
12,957
—
12,957
¥ 145,807
¥ 67,769
(142,464)
(74,694)
105,852
31,157
381
40,513
40,895
(10,914)
29,981
—
—
—
—
—
13,212
(2,815)
10,396
—
10,396
(80,149)
(15,063)
(95,212)
29,682
(65,530)
(22,857)
19,886
(2,970)
—
(2,970)
¥ 3,035
174
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Notes to consolidated statements of changes in net assets)
Fiscal year ended March 31, 2018
1. Type and number of shares issued and treasury stock
Year ended March 31, 2018
Shares issued
At the beginning
of the fiscal year
Increase
Decrease
At the end
of the fiscal year
Number of shares
Common stock ....................................
Total ...............................................
1,414,055,625
1,414,055,625
Treasury stock
Common stock ....................................
Total ...............................................
4,028,883
4,028,883
387,765
387,765
31,554
31,554
—
—
1,414,443,390
1,414,443,390
175,469
175,469
3,884,968
3,884,968
Notes: 1. Increase of 387,765 shares in the total number of shares issued was due to issuance of new stocks as stock-based compensation.
2. Increase of 31,554 shares in the number of treasury common stock was due to purchases of fractional shares.
3. Decrease of 175,469 shares in the number of treasury common stock was due to sales of fractional shares and exercise of stock options.
Notes
1
2,3
2. Information on stock acquisition rights
Year ended March 31, 2018
The Company
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
—
—
—
—
—
¥2,823
¥2,823
Date of resolution
Ordinary General Meeting of Shareholders
held on June 29, 2017 ................................ Common stock
Meeting of the Board of Directors held on
November 14, 2017 ................................... 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
¥105,752
¥75 March 31, 2017
June 30, 2017
112,844
80
September 30, 2017 December 1, 2017
Date of resolution
Ordinary General Meeting of Shareholders
held on June 28, 2018 ................................ Common stock
Type of shares
Millions of yen, except per share amount
Cash
dividends
¥126,950
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥90 March 31, 2018
June 29, 2018
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
Fiscal year ended March 31, 2019
1. Type and number of shares issued and treasury stock
Year ended March 31, 2019
Shares issued
At the beginning
of the fiscal year
Increase
Decrease
At the end
of the fiscal year
Number of shares
Common stock ....................................
Total ...............................................
1,414,443,390
1,414,443,390
326,330
326,330
15,368,300
15,368,300
1,399,401,420
1,399,401,420
Treasury stock
Common stock ....................................
Total ...............................................
3,884,968
3,884,968
15,390,528
15,390,528
15,474,578
15,474,578
3,800,918
3,800,918
Notes
1,2
3,4
Notes: 1. The increase of 326,330 shares in the total number of shares issued was due to issuance of new stocks as stock-based compensation.
2. The decrease of 15,368,300 shares in the total number of shares issued was due to cancellation of treasury stock.
3. The increase of 15,390,528 shares in the number of treasury common stock comprises the increase of 22,228 shares due to purchase of fractional shares, and the increase
of 15,368,300 shares due to purchase of treasury stock.
4. The decrease of 15,474,578 shares in the number of treasury common stock comprises the decrease of 106,278 shares due to sales of fractional shares as well as exercise of
stock option, and the decrease of 15,368,300 shares due to cancellation of treasury stock.
2. Information on stock acquisition rights
Year ended March 31, 2019
The Company
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
—
—
—
—
—
—
—
—
—
—
¥2,539
2,210
¥4,750
Date of resolution
Ordinary General Meeting of Shareholders
held on June 28, 2018 ................................ Common stock
Meeting of the Board of Directors held on
November 13, 2018 ................................... 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
¥126,950
¥90 March 31, 2018
June 29, 2018
118,626
85
September 30, 2018 December 4, 2018
Date of resolution
Ordinary General Meeting of Shareholders
held on June 27, 2019 ................................ Common stock
Type of shares
Millions of yen, except per share amount
Cash
dividends
¥132,582
Source of
dividends
Retained
earnings
Cash
dividends
per share
Record date
Effective date
¥95 March 31, 2019
June 28, 2019
176
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(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 .................................................................................................
2018
¥53,732,582
(5,749,468)
¥47,983,114
2019
¥57,411,276
(4,290,312)
¥53,120,963
Millions of yen
*2 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 American Railcar Leasing
LLC and 19 other companies by SMBC Rail Services LLC’s stock acquisition and the relation between the acquisition cost of shares and
expenditure to acquire were as follows;
Year ended March 31, 2018
Assets ...............................................................................................................................
Tangible fixed assets ....................................................................................................
Liabilities .........................................................................................................................
Borrowed money .........................................................................................................
Acquisition cost of 20 companies ......................................................................................
Cash and cash equivalents included in acquired assets of 20 companies .............................
Expenditure for acquisition of 20 companies .....................................................................
Millions of yen
¥ 319,975
304,256
(149,469)
(147,523)
170,506
(8,654)
¥ 161,851
The major components of assets and liabilities at the commencement of consolidation due to consolidating PT Bank Tabungan
Pensiunan Nasional Tbk (“BTPN”) and 1 other company 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, 2019
Assets ...............................................................................................................................
Loans and bills discounted ...........................................................................................
Liabilities .........................................................................................................................
Deposits ......................................................................................................................
Foreign currency translation adjustments ..........................................................................
Stock acquisition rights ....................................................................................................
Non-controlling interests .................................................................................................
Goodwill ..........................................................................................................................
Acquisition cost of 2 companies ........................................................................................
Cash and cash equivalents included in acquired assets of 2 companies ...............................
Fair value of BTPN’s common stocks immediately prior to the business combination .......
Expenditure for acquisition of 2 companies .......................................................................
Millions of yen
¥ 837,523
522,918
(643,346)
(538,529)
5,049
(2,141)
(12,402)
4,707
189,390
(54,182)
(78,025)
¥ 57,182
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements *3 The major components of assets and liabilities for entities which were excluded from the scope of consolidation by sale of the
shares
The major components of assets and liabilities of THE MINATO BANK, LTD. (“Minato Bank”) and 15 other companies, and Kansai
Urban Banking Corporation (“Kansai Urban”) and 6 other companies which became the Company’s equity method affiliates due to the
partial sales of the shares of Minato Bank and Kansai Urban by SMBC in accordance with the tender offers for the common shares of each
bank by Resona Holdings, Inc. and the relation between the selling price of shares and the expenditure for sales were as follows;
Minato Bank (consolidated)
Year ended March 31, 2018
Assets ...............................................................................................................................
Loans and bills discounted ...........................................................................................
Liabilities .........................................................................................................................
Deposits ......................................................................................................................
Stock acquisition rights ....................................................................................................
Non-controlling interests .................................................................................................
Investment account after sales of stocks ............................................................................
Gains (losses) on sales of stocks .........................................................................................
Selling price of 16 companies ...........................................................................................
Cash and cash equivalents included in disposed assets of 16 companies .............................
Expenditure for sales of 16 companies ...............................................................................
Kansai Urban (consolidated)
Year ended March 31, 2018
Assets ...............................................................................................................................
Loans and bills discounted ...........................................................................................
Liabilities .........................................................................................................................
Deposits ......................................................................................................................
Non-controlling interests .................................................................................................
Investment account after sales of stocks ............................................................................
Gains (losses) on sales of stocks .........................................................................................
Selling price of 7 companies .............................................................................................
Cash and cash equivalents included in disposed assets of 7 companies ...............................
Expenditure for sales of 7 companies .................................................................................
Millions of yen
¥ 3,528,896
2,513,381
(3,384,488)
(3,233,642)
(318)
(138,098)
(3,969)
(634)
1,389
(550,292)
¥ (548,903)
Millions of yen
¥ 4,709,055
3,939,196
(4,498,339)
(4,063,161)
(63,804)
(58,581)
(1,332)
86,999
(386,917)
¥ (299,918)
The major components of assets and liabilities of Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) and 184 other
companies which were excluded from the scope of consolidation due to the partial sale of SMFL’s stock by the Company and the relation
between the selling price of shares and the income for sales were as follows;
Year ended March 31, 2019
Assets ...............................................................................................................................
Lease receivables and investment assets ........................................................................
Tangible fixed assets ....................................................................................................
Liabilities .........................................................................................................................
Borrowed money .........................................................................................................
Non-controlling interests .................................................................................................
Investment account after sales of stocks ............................................................................
Gains (losses) on sales of stocks .........................................................................................
Selling price of 185 companies .........................................................................................
Cash and cash equivalents included in disposed assets of 185 companies ...........................
Income for sales of 185 companies ....................................................................................
Millions of yen
¥ 6,154,253
2,157,141
2,267,524
(5,435,353)
(3,101,458)
(258,602)
(301,028)
17,014
176,284
(1,582)
¥ 174,702
178
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (Notes to lease transactions)
1. Finance leases
(1) Lessee side
1) Lease assets
(a) Tangible fixed assets
Tangible fixed assets mainly consisted of branches and equipment.
(b) Intangible fixed assets
Intangible fixed assets are software.
2) Depreciation method of lease assets
Depreciation method of lease assets is reported in 4. Accounting policies (4) Depreciation.
(2) Lessor side
1) Breakdown of lease investment assets
March 31
Lease receivables ......................................................................................................
Residual value .........................................................................................................
Unearned interest income ........................................................................................
Total ........................................................................................................................
2018
¥1,537,348
136,677
(211,532)
¥1,462,494
2019
¥269,214
65,094
(86,474)
¥247,835
Millions of yen
2) The scheduled collections of lease payments receivable related to lease receivables and investment assets are as follows:
2018
2019
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
¥ 298,334
213,802
162,091
92,799
55,429
177,736
¥1,000,194
Lease payments receivable
related to investment
assets
¥ 432,502
347,790
265,262
176,630
109,159
206,002
¥1,537,348
Lease payments receivable
related to lease receivables
¥—
—
—
—
—
—
¥—
Lease payments receivable
related to investment
assets
¥ 43,411
24,003
21,214
20,682
13,813
146,089
¥269,214
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, 2018 and 2019 were
¥1,927 million and ¥1,332 million, respectively, more than it would have been if such transactions had been treated in a similar way
to sales of the underlying assets.
2. Operating leases
(1) Lessee side
Future minimum lease payments on operating leases which were not cancelable were as follows:
March 31
Due within 1 year .........................................................................................................
Due after 1 year ............................................................................................................
Total .............................................................................................................................
2018
¥ 45,672
258,746
¥304,419
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 .............................................................................................................................
2018
¥ 242,466
1,390,427
¥1,632,894
Millions of yen
2019
¥ 44,385
271,612
¥315,997
2019
¥ 35,936
85,242
¥121,178
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Notes to financial instruments)
1. Status of financial instruments
(1) Policies on financial instruments
The 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, the 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, the Company’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 the 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 the Group 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 the 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 with special clause specifying that the repayment order of borrowing or bond subordinates to other borrowings
or bonds. Also, financial liabilities, like financial assets, expose the Group to not only market risk but also funding liquidity risk: the
risk of the Group not being able to raise funds due to market turmoil, deterioration in the Group’s 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 the Group include foreign exchange futures; futures, forwards, swaps and options related to interest rates,
currencies, equities, bonds and commodities; and credit and weather derivatives.
Major risks associated with derivatives include market risk, liquidity risk, and credit risk arising from nonperformance of
contractual obligations due to deterioration in the counterparty’s financial conditions. These risks are properly monitored and
managed based on “(3) Risk management framework for financial instruments” below.
Hedge accounting is applied to derivative transactions executed for ALM purposes, as necessary. Hedging instruments, hedged
items, hedging policy and hedging method to assess the effectiveness of the hedge are described in “(Notes to significant accounting
policies for preparing consolidated financial statements), 4. Accounting policies, (16) Hedge accounting.”
(3) Risk management framework for financial instruments
The fundamental matters on risk management for the entire Group are set forth in “Regulations on Comprehensive Risk Management.”
The Company’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. Each Group company has a risk management system based on the characteristics of
its particular businesses and in accordance with the basic policy. Furthermore, the Group CRO is established to assess risk management
across the Group unitarily and implement appropriate risk management. The Company is sharing information on group-wide risk
management and strengthening related systems through the Group CRO Committee, which consists of the Group CRO and risk
management representatives from strategically important Group companies.
1) Management of credit risk
The Company 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
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 Dept. is responsible for the comprehensive management of credit
risk. This department drafts and administers credit risk regulations, including the Group’s credit policies, and performs credit
portfolio management including non-performing loans. The Company has also established the Credit Risk Committee to serve as
a body for deliberating on matters related to group-wide credit portfolios.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements At SMBC, the Company’s major consolidated subsidiary, 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.
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 each business unit conduct credit risk management for loans handled by their units and manage
their units’ portfolios. Credit approval authority is generally determined based on the credit amounts and internal grades, and the
credit departments focus on analysis and management of customers and transactions with relatively high credit risk. The Credit
Administration Dept. is mainly responsible for formulating and implementing measures to reduce the exposure of non-
performing loans. Through industrial and sector-specific surveys and studies of individual companies, the Corporate Research
Dept. works to form an accurate idea of the circumstances of borrower companies and identify those with potentially troubled
credit positions at early stage.
Moreover, the Credit Risk Committee, a cross-departmental consultative body, rounds out SMBC’s oversight systems for
undertaking flexible and efficient control of credit risk and ensuring the overall soundness of SMBC’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
The Company 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 capital
To keep credit risk exposure to a permissible level relative to capital, the Company sets credit risk capital limit for internal
control purposes. Under these limits, separate guidelines are issued for each business unit and marketing unit. The Company
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 the Company’s capital
significantly, the Company 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, the Company also has credit limit guidelines based on each country’s creditworthiness.
• Greater understanding of actual corporate conditions and balancing returns and risks
The Company 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 cost) level.
• Reduction and prevention of non-performing loans
For non-performing loans and potential non-performing loans, the Company carries out loan reviews to clarify credit policies
and action plans, enabling it to swiftly implement measures to prevent deterioration of borrowers’ business situations, support
business recoveries, collect on loans, and enhance loan security.
In regard 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 regard 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 which the Company frequently conducts
derivative transactions, measures such as a close-out netting provision, which provide offsetting credit exposures between two
parties in 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
The Company 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (a) Market and liquidity risk management systems
In accordance with the group-wide basic policies for risk management decided upon by the Management Committee, the
Company determines important matters relating to the management of market and liquidity risks, such as basic policies and risk
limits, in order to manage these risks. The ALM Committee meets four times a year, in principle, to report on the state of market
and liquidity risk management and to discuss ALM operation policies. The Corporate Risk Management Dept., which is
independent from the business units that directly handle market transactions, manages market and liquidity risks in an integrated
manner. This department not only monitors the current risk situations but also reports regularly to the Management Committee
and the Board of Directors. Furthermore, the ALM Committee at SMBC, the Company’s major consolidated subsidiary, meets on
a monthly basis to examine reports on the state of observance of limits on market and liquidity risks and to discuss ALM
operation policies.
In addition, the Internal Audit Dept., 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
The Company 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.
The Company 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 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), the Company 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, the Company 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, the Company 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, 2019, total VaR of SMBC and its major consolidated subsidiaries was ¥44.8 billion for the banking activities,
¥16.4 billion for the trading activities and ¥1,156.0 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
The Company manages liquidity risk based on the framework of “setting management levels of risk appetite indicators” and
“developing contingency plans.” Risk appetite indicators are quantitative benchmarks that select the types and indicate the
levels of risk that the Company is willing to take on or tolerate. As an example, the Company sets a lower limit on the number
of days over which cash flows could be maintained in the event of stressed conditions such as deposit outflow, so as to secure
funding sources that do not fall below the benchmark to avoid excessive reliance on short term funding. In addition, the
Company develops contingency plans consisting of instructions, reporting lines and action plans in case of emergency.
Moreover, to manage the liquidity risk of marketable instruments, derivative transactions, etc., the Company has trading
limits for each business office classified by currency, instrument, transaction period, etc. As for financial futures, etc., risks are
managed by restricting positions to within a certain percentage of open interest in the entire market.
(4) Supplementary explanations about matters concerning fair value of financial instruments
Fair values of financial instruments are based on their market prices and, in cases where market prices are not available, on reasonably
calculated prices. These prices have been calculated using certain assumptions, and may differ if calculated based on different
assumptions.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 2. Fair value of financial instruments
(1) “Consolidated balance sheet amount,” “Fair value” and “Net unrealized gains (losses)” of financial instruments as of March 31, 2018 and
2019 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, 2018
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 ....................................................................................................
Hedge accounting not applied ..............................................
Hedge accounting applied ....................................................
Total ..........................................................................................
Consolidated balance
sheet amount
¥ 53,719,075
1,880,248
827,892
8,337,151
4,727,884
3,166,912
1,482
372,463
24,231,212
72,945,934
(318,294)
72,627,639
2,163,382
2,321,355
¥174,376,701
¥116,477,534
11,220,284
1,190,928
5,509,721
7,186,861
2,384,787
2,139,980
10,829,248
865,640
1,256,600
9,057,683
1,328,271
¥169,447,542
¥ 185,561
126,340
¥ 311,902
Millions of yen
Fair value
¥ 53,727,901
1,882,226
828,019
8,337,727
4,740,759
3,166,912
1,482
374,596
24,231,212
74,501,561
2,166,382
2,410,967
¥176,369,750
¥116,473,422
11,223,576
1,190,936
5,509,721
7,186,861
2,384,771
2,139,980
10,889,743
865,640
1,256,600
9,300,891
1,328,271
¥169,750,416
¥ 185,561
126,340
¥ 311,902
Net unrealized
gains (losses)
¥ 8,825
1,977
127
575
12,875
—
—
2,132
—
1,873,921
2,999
89,611
¥1,993,048
¥ (4,111)
3,291
7
—
—
(15)
—
60,494
—
—
243,208
—
¥ 302,874
¥
¥
—
—
—
*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 on “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
March 31, 2019
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 ..........................................................
Hedge accounting not applied ..............................................
Hedge accounting applied ....................................................
Total ..........................................................................................
Consolidated balance
sheet amount
¥ 57,404,619
2,463,660
6,429,365
4,097,238
4,591,920
2,755,519
390
280,247
22,696,091
77,979,190
(301,809)
77,677,380
1,717,469
247,550
¥180,361,453
¥122,325,038
11,165,486
1,307,778
11,462,559
1,812,820
2,291,813
1,992,314
10,656,897
1,165,141
84,500
9,227,367
1,352,773
¥174,844,490
Millions of yen
Fair value
¥ 57,414,384
2,466,418
6,429,231
4,097,502
4,609,409
2,755,519
390
281,136
22,696,091
79,713,860
1,720,319
242,941
¥182,427,205
¥122,320,963
11,170,627
1,307,710
11,462,559
1,812,820
2,291,785
1,992,314
10,706,117
1,165,141
84,500
9,387,562
1,354,823
¥175,056,926
¥ 391,707
[45,676]
¥ 346,030
¥ 391,707
[45,676]
¥ 346,030
Net unrealized
gains (losses)
¥ 9,765
2,757
(133)
263
17,489
—
—
888
—
2,036,479
2,850
(4,609)
¥2,065,752
¥ (4,074)
5,140
(68)
—
—
(27)
—
49,219
—
—
160,195
2,050
¥ 212,435
¥
¥
—
—
—
*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 on “Trading assets,” “Trading liabilities,” “Other assets” and “Other liabilities.” Debts and
credits arising from derivative transactions are presented on a net basis, with a net debt presented in square brackets.
(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 the Company
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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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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.
The fair values of borrowings from the trust account related to covered bond issued by the trust account are based on the amount
calculated in accordance with the price quoted on securities exchange.
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, fair
values are, in principle, based on the present value of estimated future cash flows discounted by using the refinancing rate applicable to
the same type of instruments in the market for the remaining maturity. For certain type of instruments, however, fair values are based
on either the amount calculated in accordance with the price quoted by industry associations, etc., or the present value of future cash
flows calculated by using the rate derived from the published yield data, etc.
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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 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.
(3) Consolidated balance sheet amount of financial instruments whose fair values are extremely difficult to determine are as follows:
March 31
Securities:
Unlisted stocks, etc. *1 *3 .............................................
Investments in partnership, etc. *2 *3 ...........................
Total ..................................................................................
Millions of yen
2018
2019
¥176,491
249,390
¥425,881
¥170,572
215,245
¥385,817
*1 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.
*2 They are capital contributions with no market prices. The above-stated amount includes the book value amount of investments in the partnership of which the Company
records net changes in their balance sheets and statements of income.
*3 Unlisted stocks and investments in partnership totaling ¥9,142 million and ¥9,669 million were written-off in the fiscal year ended March 31, 2018 and 2019, respectively.
(4) Redemption schedule of monetary claims and securities with maturities
Millions of yen
March 31, 2018
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
¥52,990,470
1,802,316
758,829
8,333,400
3,748,669
5,982,341
92,000
92,000
—
—
—
5,890,341
3,280,000
17
313,490
2,296,833
16,794,489
2,161,454
655,790
¥93,227,762
After 1 year
through 5 years
¥ 23,915
79,563
69,062
4,300
569,546
9,064,475
280,000
280,000
—
—
—
8,784,475
5,226,000
21,748
1,253,754
2,282,972
30,930,098
3,776
1,247,385
¥41,992,123
After 5 years
through 10 years
¥ 15,210
—
—
—
67,347
3,276,795
—
—
—
—
—
3,276,795
344,500
25,148
736,678
2,170,468
12,002,922
—
166,152
¥15,528,429
After 10 years
¥ 1,130
—
—
—
301,601
1,661,510
—
—
—
—
—
1,661,510
300,200
16
242,819
1,118,474
7,270,166
—
93,880
¥9,328,290
*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: ¥9,451 million, Loans and bills discounted:
¥423,081 million, Foreign exchanges: ¥960 million, Lease receivables and investment assets: ¥29,545 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥5,526,153 million at March 31, 2018.
186
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
March 31, 2019
Deposits with banks ...................................................
Call loans and bills bought .........................................
Receivables under resale agreements ...........................
Receivables under securities borrowing transactions ...
Monetary claims bought .............................................
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 .......................
Total ...........................................................................
Within 1 year
¥56,196,163
2,416,537
6,169,917
4,097,473
3,587,450
3,857,187
20,000
20,000
—
—
—
3,837,187
1,217,500
—
292,202
2,327,484
19,029,803
1,703,142
38,813
¥97,096,488
Millions of yen
After 1 year
through 5 years
¥ 142,027
49,206
72,150
—
514,675
8,960,637
260,000
260,000
—
—
—
8,700,637
4,080,400
11,072
1,200,987
3,408,177
32,387,618
15,882
55,765
¥42,197,963
After 5 years
through 10 years
¥ 8,980
—
—
—
161,745
3,667,235
—
—
—
—
—
3,667,235
520,900
87,188
840,586
2,218,560
13,497,696
—
23,295
¥17,358,954
After 10 years
¥ 1,125
—
—
—
286,006
2,116,326
—
—
—
—
—
2,116,326
335,700
7
273,372
1,507,246
6,642,339
—
64,866
¥9,110,664
*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 Securities: ¥12,958 million, Loans and bills discounted: ¥417,829 million, Foreign
exchanges: ¥378 million.
*2 “Loans and bills discounted” without the maturity dates are not included. Such amount is totaled to ¥6,000,359 million at March 31, 2019.
(5) Redemption schedule of bonds, borrowed money and other interest-bearing debts
March 31, 2018
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
¥112,396,477
10,760,778
1,190,928
5,509,721
7,186,861
2,384,787
7,875,146
865,640
1,256,600
972,227
1,328,271
¥151,727,440
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥3,426,343
459,505
—
—
—
—
1,569,039
—
—
4,199,206
—
¥9,654,095
After 5 years
through 10 years
¥ 179,801
—
—
—
—
—
981,380
—
—
2,834,687
—
¥3,995,869
After 10 years
¥ 474,912
—
—
—
—
—
403,682
—
—
1,053,459
—
¥1,932,054
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
March 31, 2019
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
¥118,166,614
10,605,811
1,307,778
11,443,460
1,812,820
2,291,813
8,430,682
1,165,141
84,500
1,087,139
1,228,223
¥157,623,985
* Demand deposits are included in “Within 1 year.” Deposits include current deposits.
Millions of yen
After 1 year
through 5 years
¥3,495,841
559,675
—
—
—
—
1,086,996
—
—
4,240,236
124,550
¥9,507,299
After 5 years
through 10 years
¥ 182,195
—
—
—
—
—
765,268
—
—
2,833,135
—
¥3,780,600
After 10 years
¥ 480,387
—
—
—
—
—
373,949
—
—
1,067,400
—
¥1,921,736
188
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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
2018
¥(5,538)
2019
¥20,551
2. Bonds classified as held-to-maturity
March 31, 2018
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, 2019
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 .............................................................................................................
Millions of yen
Consolidated balance
sheet amount
Fair value
Net unrealized
gains (losses)
¥370,463
—
—
—
370,463
2,000
—
—
—
2,000
¥372,463
¥372,596
—
—
—
372,596
2,000
—
—
—
2,000
¥374,596
¥2,132
—
—
—
2,132
—
—
—
—
—
¥2,132
Millions of yen
Consolidated balance
sheet amount
Fair value
Net unrealized
gains (losses)
¥280,247
—
—
—
280,247
—
—
—
—
—
¥280,247
¥281,136
—
—
—
281,136
—
—
—
—
—
¥281,136
¥888
—
—
—
888
—
—
—
—
—
¥888
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
3. Other securities
March 31, 2018
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
¥ 3,633,885
6,998,992
4,797,431
14,051
2,187,509
3,498,836
14,131,714
113,878
4,835,189
4,405,604
32,980
396,604
5,933,514
10,882,582
¥25,014,297
Millions of yen
Acquisition cost
¥ 1,442,756
6,946,588
4,779,687
14,004
2,152,896
3,107,132
11,496,477
131,341
4,843,215
4,410,865
33,076
399,274
6,135,100
11,109,658
¥22,606,135
Net unrealized
gains (losses)
¥2,191,129
52,404
17,743
47
34,613
391,704
2,635,237
(17,463)
(8,026)
(5,260)
(95)
(2,670)
(201,585)
(227,075)
¥2,408,161
Notes: 1. Net unrealized gains (losses) on other securities shown above include gains of ¥15 million for the fiscal year ended March 31, 2018 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, 2018
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥141,578
284,303
¥425,881
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, 2019
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
¥ 3,175,611
8,094,287
5,547,344
89,608
2,457,334
5,885,370
17,155,270
171,965
889,443
686,982
9,555
192,906
5,198,045
6,259,454
¥23,414,725
Millions of yen
Acquisition cost
¥ 1,242,178
8,031,868
5,523,497
88,868
2,419,502
5,398,325
14,672,372
202,460
891,497
687,573
9,560
194,363
5,327,052
6,421,010
¥21,093,383
Net unrealized
gains (losses)
¥1,933,433
62,419
23,847
740
37,831
487,045
2,482,898
(30,495)
(2,053)
(591)
(4)
(1,457)
(129,007)
(161,555)
¥2,321,342
Notes: 1. Net unrealized gains (losses) on other securities shown above include losses of ¥12,277 million for the fiscal year ended March 31, 2019 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, 2019
Stocks .......................................................................................................
Other .......................................................................................................
Total .........................................................................................................
Millions of yen
¥139,051
246,765
¥385,817
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.
190
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 4. Held-to-maturity bonds sold during the fiscal year
Fiscal year ended March 31, 2018
There are no corresponding transactions.
Fiscal year ended March 31, 2019
There are no corresponding transactions.
5. Other securities sold during the fiscal year
Year ended March 31, 2018
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Year ended March 31, 2019
Stocks ............................................................................................
Bonds ............................................................................................
Japanese government bonds ......................................................
Japanese local government bonds ..............................................
Japanese corporate bonds ..........................................................
Other ............................................................................................
Total ..............................................................................................
Sales amount
¥ 202,808
6,477,102
6,088,215
89,854
299,031
6,867,924
¥13,547,835
Sales amount
¥ 206,738
8,071,326
7,797,751
80,253
193,321
9,588,573
¥17,866,638
Millions of yen
Gains on sales
Losses on sales
¥106,361
9,798
9,534
9
254
51,414
¥167,573
¥ (89)
(2,024)
(86)
(342)
(1,595)
(22,359)
¥(24,473)
Millions of yen
Gains on sales
Losses on sales
¥ 96,067
11,418
10,798
67
551
48,653
¥156,140
¥ (1,139)
(2,154)
(2,065)
(71)
(17)
(36,968)
¥(40,262)
6. Change of classification of securities
Fiscal year ended March 31, 2018
There are no significant corresponding transactions to be disclosed.
Fiscal year ended March 31, 2019
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, 2018 and 2019 were ¥3,331 million and ¥9,013 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (Notes to money held in trust)
1. Money held in trust classified as trading purposes
Fiscal year ended March 31, 2018
There are no corresponding transactions.
Fiscal year ended March 31, 2019
There are no corresponding transactions.
2. Money held in trust classified as held-to-maturity
Fiscal year ended March 31, 2018
There are no corresponding transactions.
Fiscal year ended March 31, 2019
There are no corresponding transactions.
3. Other money held in trust
March 31, 2018
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥1,482
March 31, 2019
Other money held in trust .............................................................
Consolidated balance
sheet amount
¥390
Millions of yen
Acquisition cost
¥1,482
Millions of yen
Acquisition cost
¥390
Net unrealized
gains (losses)
—
Net unrealized
gains (losses)
—
192
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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, 2018
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 ..........................................................................................................................................
(+) The Company’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
¥2,408,313
2,408,313
—
659,098
1,749,215
65,950
5,577
¥1,688,842
Notes: 1. Net unrealized gains of ¥15 million for the fiscal year ended March 31, 2018 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, 2019
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 ..........................................................................................................................................
(+) The Company’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
¥2,333,619
2,333,619
—
553,246
1,780,372
102,611
11,090
¥1,688,852
Notes: 1. Net unrealized losses of ¥12,277 million for the fiscal year ended March 31, 2019 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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, 2018
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 37,301,443
37,215,533
¥ 6,925,140
6,842,217
¥ 16,067
(14,654)
¥ 16,067
(14,654)
Interest rate options:
Sold ............................................................................
Bought .......................................................................
1,391,595
65,110,433
45,200
29,958,221
(300)
4,520
(300)
4,520
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 ..............
12,680,558
12,344,032
429,909,020
196,148,823
193,099,356
40,571,800
521,495
435,954
341,129,716
156,251,285
154,329,705
30,474,185
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
5,790,268
4,911,806
3,542,146
3,086,445
Caps:
Sold ............................................................................
Bought .......................................................................
39,511,432
8,998,567
25,413,931
7,222,545
Floors:
Sold ............................................................................
Bought .......................................................................
666,212
1,123,673
608,582
957,378
Other:
(4,656)
4,594
93,567
1,762,226
(1,689,126)
9,649
(7,850)
8,068
(27,760)
1,176
(728)
895
(4,656)
4,594
93,567
1,762,226
(1,689,126)
9,649
(7,850)
8,068
(27,760)
1,176
(728)
895
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,449,762
15,456,836
/
701,009
13,055,363
/
(2,589)
15,918
¥ 86,268
(2,589)
15,918
¥ 86,268
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.
194
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
March 31, 2019
Listed
Interest rate futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 30,533,013
28,898,271
¥ 3,061,730
5,902,494
¥ (16,015)
16,633
¥ (16,015)
16,633
Interest rate options:
Sold ............................................................................
Bought .......................................................................
3,452,722
130,788,808
3,286,192
65,425,283
(1,929)
24,009
(1,929)
24,009
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 ..............
26,319,818
28,150,897
444,871,798
197,044,427
189,646,811
58,102,014
1,420,320
1,305,595
354,014,671
156,309,066
153,321,990
44,309,569
Interest rate swaptions:
Sold ............................................................................
Bought .......................................................................
6,329,197
5,706,918
3,871,862
3,485,353
Caps:
Sold ............................................................................
Bought .......................................................................
48,034,687
11,030,207
31,841,749
7,991,304
Floors:
Sold ............................................................................
Bought .......................................................................
939,796
1,253,804
Other:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,519,045
7,769,837
/
767,715
776,639
772,769
6,281,874
/
12,029
(12,572)
294,408
2,831,588
(2,545,878)
(156)
(39,722)
39,242
(57,898)
6,571
(3,380)
4,160
12,029
(12,572)
294,408
2,831,588
(2,545,878)
(156)
(39,722)
39,242
(57,898)
6,571
(3,380)
4,160
(3,053)
31,891
¥ 294,374
(3,053)
31,891
¥ 294,374
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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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(2) Currency derivatives
March 31, 2018
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 513
175
¥ —
—
¥ (18)
0
¥ (18)
0
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
39,984,899
27,675,508
90,337
113,215
431,065
874,253
76,246,360
2,606,941
2,424,055
/
375,092
772,102
8,727,532
1,357,801
1,177,161
/
(3,156)
5,364
21,951
(75,760)
79,404
¥118,123
(3,156)
5,364
21,951
(75,760)
79,404
¥141,000
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, 2019
Listed
Currency futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥ 2,833
1,109
¥ —
—
¥ 21
0
¥ 21
0
Over-the-counter
Currency swaps ................................................................
Currency swaptions:
Sold ............................................................................
Bought .......................................................................
Forward foreign exchange ................................................
Currency options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
46,383,650
34,753,013
82,884
76,881
341,280
817,560
81,510,434
3,031,324
2,676,865
/
256,973
708,288
11,113,122
1,496,970
1,186,165
/
(628)
1,484
24,012
(62,269)
67,564
¥113,069
(628)
1,484
24,012
(62,269)
67,564
¥107,066
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.
196
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(3) Equity derivatives
March 31, 2018
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥481,952
345,111
Equity price index options:
Sold ............................................................................
Bought .......................................................................
842,858
936,687
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 ................................................................................
322,508
334,710
—
7,564
¥ 9,744
3,140
374,414
327,012
252,083
237,738
—
207
¥ (5,450)
1,693
(68,340)
42,208
(18,727)
22,178
—
537
¥ (5,450)
1,693
(68,340)
42,208
(18,727)
22,178
—
537
73,385
58,755
(8,013)
(8,013)
167,867
/
140,115
/
14,971
¥(18,943)
14,971
¥(18,943)
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, 2019
Listed
Equity price index futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥635,249
295,976
Equity price index options:
Sold ............................................................................
Bought .......................................................................
682,846
576,496
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 ................................................................................
401,236
320,518
—
8,094
¥ 28,221
15,021
350,760
317,636
290,126
242,408
—
115
¥ 3,170
(1,081)
(56,853)
29,383
(25,905)
24,375
—
554
¥ 3,170
(1,081)
(56,853)
29,383
(25,905)
24,375
—
554
67,491
43,666
(8,214)
(8,214)
254,937
/
177,164
/
21,736
¥(12,835)
21,736
¥(12,835)
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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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(4) Bond derivatives
March 31, 2018
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥2,098,517
1,677,824
¥ —
—
¥(11,317)
9,729
¥(11,317)
9,729
Bond futures options:
Sold ............................................................................
Bought .......................................................................
427,121
60,157
Over-the-counter
Bond forward contract:
Sold ............................................................................
Bought .......................................................................
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
900
5,359
93,576
193,642
/
—
—
—
—
(421)
17
2
40
(421)
17
2
40
—
100,066
/
(223)
644
¥ (1,529)
(223)
644
¥ (1,529)
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, 2019
Listed
Bond futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥2,145,140
1,755,892
¥ —
—
¥(28,956)
26,722
¥(28,956)
26,722
Bond futures options:
Sold ............................................................................
Bought .......................................................................
446,325
45,285
Over-the-counter
Bond forward contract:
Sold ............................................................................
Bought .......................................................................
Bond options:
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
1,328
—
505,303
595,039
/
—
—
—
—
(662)
120
2
—
(662)
120
2
—
—
83,476
/
(1,887)
853
¥ (3,805)
(1,887)
853
¥ (3,805)
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.
198
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(5) Commodity derivatives
March 31, 2018
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥10,401
10,500
¥ —
—
¥ (191)
129
¥ (191)
129
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 ................................................................................
63,231
62,061
3,173
7,190
4,978
/
51,460
50,443
1,922
6,384
4,189
/
2,549
(503)
164
(533)
(8)
¥1,606
2,549
(503)
164
(533)
(8)
¥1,606
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, 2019
Listed
Commodity futures:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
¥14,158
14,664
¥ —
—
¥ 326
(296)
¥ 326
(296)
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 ................................................................................
91,437
89,660
2,018
7,918
5,796
/
42,874
41,086
1,461
2,678
778
/
(1,163)
3,089
(10)
(401)
12
¥ 1,556
(1,163)
3,089
(10)
(401)
12
¥ 1,556
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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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(6) Credit derivative transactions
March 31, 2018
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥549,981
691,315
/
¥465,481
567,065
/
¥ 7,755
(7,719)
¥ 36
¥ 7,755
(7,719)
¥ 36
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, 2019
Over-the-counter
Credit default options:
Millions of yen
Contract amount
Total
Over 1 year
Fair value
Valuation
gains (losses)
Sold ............................................................................
Bought .......................................................................
Total ................................................................................
¥692,851
811,914
/
¥639,636
713,858
/
¥ 6,303
(6,955)
¥ (651)
¥ 6,303
(6,955)
¥ (651)
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.
200
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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, 2018
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
Borrowed money, corporate
bonds
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥16,675,512
1,593,750
¥11,044,262
—
¥ 4,287
79
35,415,915
27,945,628
(59,991)
16,132,939
14,569,986
39,356
150,343
—
150,343
—
(2,569)
—
62,830
53,125
(2,536)
201,714
187,519
(1,245)
12,840
/
4,921
/
(Note 3)
¥(22,620)
Notes: 1. The Company 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”.
010_0800801371908.indd 201
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
March 31, 2019
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 ................................................
Recognition of gain or
loss on the hedged items
Special treatment for
interest rate swaps
Interest rate swaps:
Loans and bills discounted
Receivable fixed rate/payable floating
rate ....................................................
Receivable floating rate/payable fixed
rate ....................................................
Interest rate swaps:
Receivable floating rate/payable fixed
rate ....................................................
Total ..........................................................
Borrowed money, corporate
bonds
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥ 2,220,000
—
¥ 2,220,000
—
¥ (149)
—
33,822,621
30,249,753
252,739
15,191,315
13,130,451
(282,377)
157,065
—
157,065
—
3,441
—
—
—
—
301,178
291,450
(3,274)
68,690
/
66,690
/
(Note 3)
¥ (29,620)
Notes: 1. The Company 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”.
202
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(2) Currency derivatives
March 31, 2018
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
¥5,995,052
Over 1 year
¥3,158,350
Fair value
¥165,826
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign exchange, etc.
51,850
—
379
Currency swaps ................................ Loans and bills discounted, foreign
146,889
127,037
(17,089)
exchange
Currency swaps ................................ Borrowed money
Forward foreign exchange ................
Total ................................................
53,215
1,381
/
37,921
—
/
(Note 3)
¥149,116
Notes: 1. The Company 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, 2019
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
¥7,828,136
Over 1 year
¥5,000,432
Fair value
¥(22,720)
Forward foreign exchange ................
bills discounted, other securities, deposits,
foreign exchange, etc.
2,772
—
(218)
Currency swaps ................................ Loans and bills discounted, other
186,032
131,640
5,056
securities
Currency swaps ................................
Forward foreign exchange ................
Total ................................................
—
—
—
/
—
—
/
—
¥(17,882)
Notes: 1. The Company 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) Equity derivatives
March 31, 2018
Hedge accounting
method
Recognition of gain or
loss on the hedged items
Type of derivative
Equity price index swaps:
Receivable floating rate/payable equity
index .......................................................
Total ..............................................................
Principal items
hedged
Other securities
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥2,218
/
2,218
/
(155)
¥(155)
Note:
Fair value is calculated using discounted present value.
March 31, 2019
Hedge accounting
method
Recognition of gain or
loss on the hedged items
Type of derivative
Equity price index swaps:
Receivable floating rate/payable equity
index .......................................................
Total ..............................................................
Principal items
hedged
Other securities
Note:
Fair value is calculated using discounted present value.
Millions of yen
Contract amount
Total
Over 1 year
Fair value
¥48,510
/
48,510
/
1,826
¥1,826
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Notes to employee retirement benefits)
1. Outline of employee retirement benefits
The Company’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 ..............................................................
2018
¥1,179,737
39,579
6,905
15,451
(67,287)
(43)
(49,333)
738
¥1,125,746
(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 ........................................................................................
2018
¥1,435,548
41,635
65,860
18,130
(44,429)
(49,287)
1,724
¥1,469,182
2019
¥1,125,746
38,597
5,946
31,582
(55,656)
96
(22,529)
(22)
¥1,123,760
2019
¥1,469,182
43,473
(48,332)
15,746
(42,816)
(14,348)
(1,525)
¥1,421,378
(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
2018
¥(1,096,677)
1,469,182
372,505
(29,069)
¥ 343,435
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 ................
2018
¥383,418
(39,982)
¥343,435
2019
¥(1,099,416)
1,421,378
321,961
(24,343)
¥ 297,617
2019
¥329,434
(31,816)
¥297,617
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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
2018
2019
¥ 39,579
6,905
(41,635)
20,870
(126)
6,730
¥ 32,323
¥ 38,597
5,946
(43,473)
(15,100)
(131)
6,300
¥ (7,861)
(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 .............................................................................................................................
2018
¥ 120
(74,335)
¥(74,215)
2019
¥ 227
94,984
¥95,212
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 .............................................................................................................................
2018
¥ (528)
(86,388)
¥(86,916)
2019
¥ (300)
8,596
¥8,295
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 ........................................................................................................................
2018
2019
62.7%
16.4%
3.0%
17.9%
100.0%
58.7%
17.8%
2.8%
20.7%
100.0%
Note: The retirement benefit trusts set up for employee pension plans and lump-sum severance indemnity plans account for 35.2% and 36.3% of the total plan assets at
March 31, 2018 and 2019, 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, 2018
Domestic consolidated subsidiaries .......................
Overseas consolidated subsidiaries ........................
Year ended March 31, 2019
Percentages
(0.1)% to 0.8% Domestic consolidated subsidiaries .......................
2.4% to 10.3% Overseas consolidated subsidiaries ........................
Percentages
(0.1)% to 0.8%
2.4% to 9.0%
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 2) Long-term expected rate of return on plan assets
Year ended March 31, 2018
Domestic consolidated subsidiaries .......................
Overseas consolidated subsidiaries ........................
Percentages
Year ended March 31, 2019
0% to 4.0% Domestic consolidated subsidiaries .......................
2.6% to 10.3% Overseas consolidated subsidiaries ........................
Percentages
0% to 4.0%
2.4% to 9.0%
3. Defined contribution plan
Fiscal year ended March 31, 2018
The amount required to be contributed by the consolidated subsidiaries is ¥10,702 million.
Fiscal year ended March 31, 2019
The amount required to be contributed by the consolidated subsidiaries is ¥11,500 million.
206
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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, 2018 and 2019
are as follows:
Year ended March 31
General and administrative expenses ...................................................................................
Millions of yen
2018
¥195
2019
¥29
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, 2018 and
2019 are as follows:
Year ended March 31
Other income .....................................................................................................................
Millions of yen
2018
¥29
2019
¥—
3. Outline of stock options and changes
The Company
(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 the Company 8
Corporate auditors of the Company 3
Executive officers of the Company 2
Directors, corporate auditors and
executive officers of SMBC 69
Directors of the Company 9
Corporate auditors of the Company 3
Executive officers of the Company 2
Directors, corporate auditors and
executive officers of SMBC 71
Directors of the Company 9
Corporate auditors of the Company 3
Executive officers of the Company 2
Directors, corporate auditors and
executive officers of SMBC 71
Directors of the Company 9
Corporate auditors of the Company 3
Executive officers of the Company 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
the Company and SMBC.
From June 29, 2010 to the
closing of the ordinary general
meeting of shareholders of the
Company for the fiscal year
ended March 31, 2011
August 13, 2010 to
August 12, 2040
Exercise period ..................
Requisite service 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
the Company and SMBC.
From June 29, 2011 to the
closing of the ordinary general
meeting of shareholders of the
Company 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
the Company and SMBC.
From June 28, 2012 to the
closing of the ordinary general
meeting of shareholders of the
Company 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
the Company and SMBC.
From June 27, 2013 to the
closing of the ordinary general
meeting of shareholders of the
Company for the fiscal year
ended March 31, 2014
August 14, 2013 to
August 13, 2043
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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 the Company 10
Corporate auditors of the Company 3
Executive officers of the Company 2
Directors, corporate auditors and
executive officers of SMBC 67
Directors of the Company 8
Corporate auditors of the Company 3
Executive officers of the Company 4
Directors, corporate auditors and
executive officers of SMBC 68
Directors of the Company 8
Corporate auditors of the Company 3
Executive officers of the Company 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
the Company and SMBC.
From June 27, 2014 to the
closing of the ordinary general
meeting of shareholders of the
Company 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
the Company and SMBC.
From June 26, 2015 to the
closing of the ordinary general
meeting of shareholders of the
Company 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
the Company and SMBC.
From June 29, 2016 to the
closing of the ordinary general
meeting of shareholders of the
Company 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
1) 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
8,400
—
—
1,200
7,200
64,200
1,200
5,700
—
59,700
58,400
—
—
44,800
13,600
168,500
44,800
39,700
—
173,600
80,400
—
—
15,000
65,400
151,700
15,000
5,700
—
161,000
56,900
—
—
14,200
42,700
32,300
14,200
13,200
—
33,300
64,300
—
—
4,900
59,400
29,900
4,900
2,800
—
32,000
102,700
—
—
11,500
91,200
11,300
11,500
8,400
—
14,400
168,800
—
—
47,500
121,300
5,200
47,500
28,100
—
24,600
* Number of stock options has been converted and stated as number of shares.
2) Price information
Date of resolution
Exercise price ..........................
Average exercise price .............
Fair value at the grant date .....
Yen
July 28, 2010 July 29, 2011 July 30, 2012 July 29, 2013 July 30, 2014 July 31, 2015 July 26, 2016
¥ 1
4,487
4,159
¥ 1
4,212
2,215
¥ 1
4,430
4,904
¥ 1
4,380
2,042
¥ 1
4,302
1,872
¥ 1
4,490
2,811
¥ 1
4,490
3,661
(3) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock
options that will be forfeited in the future.
208
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
PT Bank BTPN Tbk, a consolidated subsidiary of the Company
(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 ..................
March 26, 2015
March 26, 2015
April 29, 2016
Executives 16
Employees 309
Executives 1
Employees 4
Employees 332
Common shares
141,575,000
April 15, 2015
In service at the time of
exercise
No provisions
30 days from May 1, 2017
30 days from November 6, 2017
30 days from May 7, 2018
30 days from November 5, 2018
30 days from May 6, 2019
30 days from December 2, 2019
Common shares
10,500,000
October 10, 2016
In service at the time of
exercise
No provisions
30 days from May 1, 2017
30 days from November 6, 2017
30 days from May 7, 2018
30 days from November 5, 2018
30 days from May 6, 2019
30 days from December 2, 2019
Common shares
56,645,000
September 21, 2016
In service at the time of
exercise
No provisions
30 days from May 28, 2018
30 days from December 17, 2018
30 days from May 28, 2019
30 days from December 19, 2019
30 days from June 1, 2020
30 days from December 17, 2020
* Number of stock options has been converted and stated as number of shares.
(2) Stock options granted and changes
1) Number of stock options*
Date of resolution
Before vested
March 26, 2015
Number of stock options
March 26, 2015
April 29, 2016
Previous fiscal year-end ......
Granted .............................
Forfeited ............................
Vested ...............................
Outstanding ......................
98,540,000
—
15,300,000
—
83,240,000
9,600,000
—
—
—
9,600,000
After vested
Previous fiscal year-end ......
Vested ...............................
Exercised ...........................
Forfeited ............................
Exercisable ........................
—
—
—
—
—
—
—
—
—
—
38,383,500
—
63,000
424,000
37,896,500
—
424,000
424,000
—
—
*1. Number of stock options has been converted and stated as number of shares.
2. Number of shares of the previous fiscal year-end is as of January 1, 2019, the deemed acquisition date.
2) Price information
Date of resolution
Exercise price .......................
Average exercise price .........
Fair value at the grant date....
March 26, 2015
4,000.00
—
1,408.90
IDR
March 26, 2015
4,000.00
—
1,408.90
April 29, 2016
2,617.00
3,711.67
712.81
(3) Method of estimating number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock
options that will be forfeited in the future.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Notes to deferred tax assets and liabilities)
1. Significant components of deferred tax assets and liabilities
March 31, 2018
Deferred tax assets:
Millions of yen March 31, 2019
Deferred tax assets:
Millions of yen
Net operating loss carryforwards ............................ ¥ 372,250
Reserve for possible loan losses and write-off of
loans ....................................................................
Securities ...............................................................
Reserve for losses on interest repayment.................
Net defined benefit liability ...................................
Other ....................................................................
Subtotal .................................................................
212,541
46,007
44,328
32,615
243,455
951,199
Valuation allowance ...............................................
Total deferred tax assets ..............................................
Deferred tax liabilities:
(454,329)
496,870
(658,469)
Net unrealized gains on other securities .................
(17,183)
Depreciation ..........................................................
Retained earnings of subsidiaries ...........................
(24,901)
(223,939)
Other ....................................................................
Total deferred tax liabilities ........................................
(924,494)
Net deferred tax assets (liabilities) .............................. ¥ (427,624)
Net operating loss carryforwards *2 ....................... ¥ 210,814
Reserve for possible loan losses and write-off of
loans ....................................................................
Securities ...............................................................
Reserve for losses on interest repayment.................
Net defined benefit liability ...................................
Other ....................................................................
Subtotal .................................................................
Valuation allowance for net operating loss
carryforwards *2 ...................................................
Valuation allowance for total amount of deductible
temporary differences etc. ....................................
Valuation allowance subtotal *1 .............................
Total deferred tax assets ..............................................
Deferred tax liabilities:
181,930
147,466
45,195
20,546
167,821
773,774
(200,111)
(366,407)
407,367
(166,296)
(551,785)
Net unrealized gains on other securities .................
(44,994)
Depreciation ..........................................................
Retained earnings of subsidiaries ...........................
(33,227)
(115,334)
Other ....................................................................
Total deferred tax liabilities ........................................
(745,341)
Net deferred tax assets (liabilities) .............................. ¥ (337,974)
*1 The change of valuation allowance is due to the decrease of deferred tax assets resulting from excluding SMFL and its consolidated subsidiaries from the scope of consolidation of
the Company and including them in the scope of equity method affiliates and for other reasons.
*2 Net operating loss carryforwards and the amount of its deferred tax assets by expiry date.
March 31, 2019
Net operating loss
carryforwards* ...................
Valuation allowance .............
Deferred tax assets ...............
Within 1 year
More than 1 year
to 5 years
Millions of yen
More than 5 years
to 10 years
More than 10 years
Total
¥ 41,259
(40,810)
448
¥ 105,321
(102,113)
3,207
¥ 23,043
(22,063)
979
¥41,190
(1,308)
39,881
¥ 210,814
(166,296)
44,517
* Net operating loss carryforwards is multiplied by statutory tax rate.
2. Significant components of difference between the statutory tax rate used by the Company and the effective income tax rate
March 31, 2018
Statutory tax rate ........................................................
Valuation allowance ...............................................
Difference between the Company and overseas
consolidated subsidiaries ......................................
Foreign tax ............................................................
Equity in gains of affiliates ....................................
Dividends exempted for income tax purposes.........
Amortization of goodwill ......................................
Other ....................................................................
Effective income tax rate .............................................
Percentages
30.86%
(2.51)
(1.89)
(1.27)
(1.09)
(0.85)
0.70
0.45
24.40%
March 31, 2019
Statutory tax rate ........................................................
Dividends exempted for income tax purposes.........
Equity in gains of affiliates ....................................
Difference between the Company and overseas
consolidated subsidiaries ......................................
Expired loss carryforwards .....................................
Valuation allowance ...............................................
Other ....................................................................
Effective income tax rate .............................................
Percentages
30.62%
(3.57)
(1.67)
(1.62)
4.27
2.39
(0.92)
29.50%
Changes due to application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”
“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.28, February 16, 2018 (“Partial Amended Tax Effect Accounting Standard”)) has
been adopted from the current fiscal year, whereby we have changed notes to deferred tax assets and liabilities.
In notes to deferred tax assets and liabilities, we have added the contents that are described in the notes (No.8, except for valuation allowance and No.9) that are stipulated from
Paragraph 3 to Paragraph 5 of Partial Amended Tax Effect Accounting Standard. We do not describe the contents of the previous fiscal year in accordance with the transitional
treatment stipulated in Paragraph 7 of Partial Amended Tax Effect Accounting Standard.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Notes to asset retirement obligations)
Fiscal year ended March 31, 2018
There is no significant information to be disclosed.
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
(Notes to real estate for rent)
Fiscal year ended March 31, 2018
There is no significant information to be disclosed.
Fiscal year ended March 31, 2019
There is no significant information to be disclosed.
(Notes to segment and other related information)
[Segment information]
1. Summary of reportable segment
The 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 the Company’s Management Committee regularly in order to make decisions about resources to be allocated to the
segment and assess its performance.
The businesses operated by each business unit are as follows;
Wholesale Business Unit:
Retail Business Unit:
International Business Unit:
Global Markets Business Unit: Business to deal with financial market
Head office account:
Business other than businesses above
Business to deal with domestic medium-to-large-sized enterprise
Business to deal with domestic individual and small-to-medium-sized enterprise
Business to deal with international (including Japanese) corporate customers
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).” In case several business units cooperate for transactions, profit and loss, and expenses related to
the transactions are recognized in the business units cooperating for the transactions and those amounts are calculated in accordance with
internal managerial accounting policy.
The Company does not assess assets by business segments.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 3. Information on profit and loss amount by reportable segment
Year ended March 31, 2018
Consolidated gross profit .....
Expenses ..............................
Others. ................................
Consolidated net
business profit ....................
Wholesale
Business
Unit
¥ 772,949
(347,864)
53,576
Retail
Business
Unit
¥ 1,311,727
(1,027,674)
15,516
Millions of yen
International
Business
Unit
¥ 631,950
(280,658)
46,933
Global Markets
Business
Unit
¥356,150
(53,936)
17,575
Head office
account and
others
¥ (91,725)
(106,065)
(94,607)
Total
¥ 2,981,050
(1,816,197)
38,992
¥ 478,661
¥ 299,569
¥ 398,225
¥319,789
¥(292,398)
¥ 1,203,845
Notes: 1. Figures shown in the parenthesis represent the loss.
2. “Others” includes equity in profit and loss of affiliates and cooperated profit and loss based on internal managerial accounting.
3. “Head office account and others” includes profit or loss to be eliminated as inter-segment transactions.
Year ended March 31, 2019
Consolidated gross profit .....
Expenses ..............................
Others. ................................
Consolidated net
business profit ....................
Wholesale
Business
Unit
¥ 784,886
(345,133)
45,109
Retail
Business
Unit
¥ 1,281,574
(1,021,383)
14,445
Millions of yen
International
Business
Unit
¥ 689,603
(333,382)
38,911
Global Markets
Business
Unit
¥333,572
(54,239)
19,127
Head office
account and
others
¥(243,457)
39,087
(56,447)
Total
¥ 2,846,178
(1,715,050)
61,145
¥ 484,862
¥ 274,637
¥ 395,131
¥298,460
¥(260,818)
¥ 1,192,273
Notes: 1. Figures shown in the parenthesis represent the loss.
2. “Others” includes equity in profit and loss of affiliates and cooperated profit and loss based on internal managerial accounting.
3. “Head office account and others” includes profit or loss to be eliminated as inter-segment transactions.
4. Income (loss) of Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) for the period from January 1, 2019 to March 31, 2019 was recorded mainly as
“Consolidated gross profit” and “Expenses” under “Wholesale Business Unit” and “International Business Unit,” and those figures were deducted from “Head office
account and others” and recorded as “Others” under “Head office account and others.” Income (loss) of SMFL was recorded as “Equity in gains (losses) of affiliates” in the
consolidated statement of income.
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, 2018
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
¥1,203,845
201,759
(241,491)
¥1,164,113
Note:
Figures shown in the parenthesis represent the loss.
Year ended March 31, 2019
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
¥1,192,273
166,851
(223,825)
¥1,135,300
Note:
Figures shown in the parenthesis represent the loss.
212
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
[Related information]
Fiscal year ended March 31, 2018
1. Information on each service
There is no information to be disclosed since information on each service is similar to the segment information.
2. Geographic information
(1) Ordinary income
Japan
¥4,168,743
The Americas
¥553,871
Millions of yen
Europe and Middle East
¥564,813
Asia and Oceania
¥476,744
Total
¥5,764,172
Notes: 1. Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income from transactions of the Company 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
¥1,645,637
The Americas
¥626,147
Millions of yen
Europe and Middle East
¥1,192,015
Asia and Oceania
¥11,330
Total
¥3,475,131
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, 2019
1. Information on each service
There is no information to be disclosed since information on each service is similar to the segment information.
2. Geographic information
(1) Ordinary income
Japan
¥3,847,287
The Americas
¥734,495
Millions of yen
Europe and Middle East
¥524,807
Asia and Oceania
¥628,721
Total
¥5,735,312
Notes: 1. Consolidated ordinary income is presented as a counterpart of sales of companies in other industries.
2. Ordinary income from transactions of the Company 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
¥880,935
The Americas
¥574,502
Millions of yen
Europe and Middle East
¥23,413
Asia and Oceania
¥25,851
Total
¥1,504,703
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]
The Company does not allocate impairment loss for fixed assets to the reportable segment.
Impairment loss for the fiscal year ended March 31, 2018 is ¥49,900 million.
Impairment loss for the fiscal year ended March 31, 2019 is ¥9,610 million.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements [Information on amortization of goodwill and unamortized balance by reportable segment]
Year ended March 31, 2018
Amortization of goodwill ..............
Unamortized balance .....................
Year ended March 31, 2019
Amortization of goodwill ..............
Unamortized balance .....................
Wholesale
Business
Unit
¥ 681
7,416
Wholesale
Business
Unit
¥309
—
Retail
Business
Unit
¥ 4,019
54,120
Retail
Business
Unit
¥ 4,019
50,100
Millions of yen
International
Business
Unit
¥1,006
4,197
Global Markets
Business
Unit
¥—
—
Millions of yen
International
Business
Unit
¥5,494
—
Global Markets
Business
Unit
¥—
—
Head office
account and
others
¥ 19,517
206,469
Head office
account and
others
¥ 16,095
143,027
Total
¥ 25,225
272,203
Total
¥ 25,919
193,127
[Information on gains on negative goodwill by reportable segment]
Fiscal year ended March 31, 2018
There are no corresponding transactions.
Fiscal year ended March 31, 2019
There are no corresponding transactions.
[Information on related parties]
Fiscal year ended March 31, 2018
There is no significant corresponding information to be disclosed.
Fiscal year ended March 31, 2019
There is no significant corresponding information to be disclosed.
(Business Combination)
Partial sale of the shares of Sumitomo Mitsui Finance and Leasing Company, Limited
The Company sold a portion of shares of Sumitomo Mitsui Finance and Leasing Company, Limited (“SMFL”) to SMFL on November 28,
2018 (the “Sale of the Shares”) based on an agreement concluded on March 30, 2018 between Sumitomo Corporation (“Sumitomo Corp.”),
Sumitomo Mitsui Banking Corporation, SMFL, Sumitomo Mitsui Auto Service Company, Limited and SMFL Capital Co., Ltd. (“FLC”),
concerning the reorganization of the joint leasing partnership of the Company and Sumitomo Corp. (the “Reorganization”). As a result, the
percentage of voting rights in SMFL held by the Company was declined to 50%, and accordingly, the Company excluded SMFL and its
subsidiaries, SMBC Aviation Capital Limited and FLC, etc., from the scope of consolidation and included them in the scope of equity method
affiliates.
1. Objectives of the Sale of the Shares
The Company conducted the Sale of the Shares to establish an operating framework that will allow the flexible and efficient management of the
joint leasing partnership’s overall operations and implementation of its business strategy by adjusting respective ownership percentage of the
Company and Sumitomo Corp. in SMFL to 50%.
The Sale of the Shares is as part of the Reorganization aiming to increase the competitiveness and the sustainable growth by taking further
advantage of the Company’s global client base, and the financial group’s ability to deliver diverse and cutting-edge financial solutions, and
Sumitomo Corp.’s ability to construct value chains and create new business opportunities on a global basis.
2. Outline of the accounting treatment implemented
1) Gains (losses) on sale of shares of subsidiaries
17,014 million yen
2) Accounting treatment
The Company applied the accounting treatment stipulated in “Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No.22) and “Practical Guidelines on Accounting Standards for Capital Consolidation Procedures in Preparing Consolidated
Financial Statements” (JICPA Accounting Practice Committee Statement No.7).
214
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements 3) Period of financial results of SMFL included in the consolidated financial statements of the Company
From April 1, 2018 to December 31, 2018
Income (loss) of SMFL for the period from January 1, 2019 to March 31, 2019 was recorded as equity in gains (losses) of affiliates in
the consolidated statement of income.
4) Outline of the subsidiaries excluded from the scope of consolidation (as of December 31, 2018)
SMFL (Consolidated) (Reportable Segments: Wholesale Business Unit and International Business Unit)
Total assets
Lease receivables and investment assets
Tangible fixed assets
Total liabilities
Borrowed money
Ordinary income
Profit attributable to owners of parent
(Note) Ordinary income is presented as a counterpart of sales of companies in other industries.
6,154,253 million yen
2,157,141 million yen
2,267,524 million yen
5,435,353 million yen
3,101,458 million yen
621,331 million yen
46,724 million yen
PT Bank Tabungan Pensiunan Nasional Tbk became a consolidated subsidiary of Sumitomo Mitsui Banking Corporation
On January 30, 2019, Sumitomo Mitsui Banking Corporation (“SMBC”), a consolidated subsidiary of the Company, acquired the common
stock of PT Bank Tabungan Pensiunan Nasional Tbk (“BTPN”). As a result, BTPN and its one subsidiary became consolidated subsidiaries of
SMBC.
On February 1, 2019, BTPN merged with PT Bank Sumitomo Mitsui Indonesia, and changed its trade name to PT Bank BTPN Tbk.
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
Name:
Business:
PT Bank Tabungan Pensiunan Nasional Tbk
Banking business
(2) Main reasons for the business combination
SMBC acquired BTPN with the aim to operate a full-fledged commercial banking business that serves both the wholesale and retail
segments and develop our franchises to offer broader financial services to our customers in order to promote the Multi-Franchise strategy
in Indonesia.
(3) Date of the business combination
January 30, 2019
(4) Legal form of the business combination
Stock acquisition
(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: 40.58%
Ratio of voting rights acquired additionally by SMBC on the date of business combination: 57.92%
Ratio of voting rights after the acquisition: 98.50%
(7) Grounds for deciding on the acquirer
SMBC acquired a majority of the voting rights of BTPN, resulting in BTPN becoming a consolidated subsidiary of SMBC.
2. Period of the acquired company’s financial result included in the consolidated financial statements of the Company
From January 1, 2019 to March 31, 2019
Income (loss) of the acquired company for the period from April 1, 2018 to December 31, 2018 was recorded as equity in gains (losses) of
affiliates in the consolidated statement of income.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
3. Acquisition cost and consideration of the acquired company
Fair value at the business combination of the common shares of BTPN held by SMBC
immediately prior to the business combination
Consideration (cash) for the common share of BTPN additionally acquired by SMBC on
the date of business combination
Acquisition cost of the acquired company
78,025 million yen
111,365 million yen
189,390 million yen
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)
189,390 million yen
187,105 million yen
2,285 million yen
5. Major acquisition-related costs
Advisory fees, etc. 776 million yen
6. Amount of goodwill, reason for recognizing goodwill, amortization method and the period
1) Amount of goodwill
4,707 million yen
2) Reason for recognizing goodwill
The Company 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
The amount of goodwill is fully amortized in the fiscal year in which it arises as the amount has no material impact.
7. Amounts of assets acquired and liabilities assumed on the date of the business combination
1) Assets
Total assets:
Loans and bills disounted
2) Liabilities
Total liabilities:
Deposits
837,523 million yen
522,918 million yen
643,346 million yen
538,529 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:
Core deposits:
50,653 million yen (13 years)
9,706 million yen (20 years)
12,845 million yen (18years)
28,102 million yen (9 years)
9. Approximate amounts and their calculation method of impact on the consolidated statements of income for the fiscal year ended
March 31, 2019, 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.
216
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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
2018
¥7,366.21
520.67
520.27
2019
¥7,715.91
519.95
519.59
Millions of yen except number of shares
2018
2019
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) .................
¥ 734,368
—
¥ 734,368
1,410,442
¥ 726,681
—
¥ 726,681
1,397,599
Earnings per share (diluted):
Adjustment for profit attributable to owners of parent .........................................
Adjustment of dilutive shares issued by consolidated subsidiaries and equity
method 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:
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) ..........................................................................................
¥
(10)
¥
(21)
(10)
1,052
1,052
—
(21)
923
923
—
Millions of yen except number of shares
2018
¥11,612,892
1,222,427
2,823
1,219,604
¥10,390,464
2019
¥11,451,611
683,290
4,750
678,540
¥10,768,320
1,410,558
1,395,600
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
(Significant Subsequent Events)
Fiscal year ended March 31, 2019
Repurchase and cancellation of own shares
The board of directors of the Company resolved on May 15, 2019 to repurchase its own shares under Article 8 of its Articles of Incorporation
and pursuant to Paragraph 1 of Article 459 of the Companies Act and cancel the repurchased shares pursuant to Article 178 of the Companies
Act.
(1) Reason for the repurchase of own shares
The Company will proceed with a flexible repurchase of its own shares in order to enhance shareholder returns and improve capital
efficiency.
(2) Outline of the repurchase
1) Type of shares to be repurchased: Common stock
2) Aggregate number of shares to be repurchased:
Up to 32,000,000 shares (Equivalent to 2.3% of the number of shares issued (excluding treasury stock))
3) Aggregate amount to be repurchased: Up to JPY 100,000,000,000
4) Repurchase period: From May 16, 2019 to August 30, 2019
5) Repurchase method:
Market purchases based on a discretionary dealing contract regarding repurchase of its own shares
(3) Outline of the cancellation
1) Type of shares to be cancelled: Common stock
2) Number of shares to be cancelled: All of the shares repurchased as stated in (2) above
3) Scheduled cancellation date: September 20, 2019
218
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements [Consolidated Supplementary Financial Schedules]
[Schedule of bonds]
Millions of yen
Company
The
Company
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) ................................
Straight bonds, payable in Hong Kong
Date of
issuance
Mar.2016 ~
Dec.2018
Jun. 2016 ~
Aug. 2018
Sep. 2016 ~
Jul. 2018
At the beginning of
the fiscal year
2,601,531
($24,485,000 thousand)
511,154
(€3,910,000 thousand)
179,956
(A$2,204,000 thousand)
At the end of
the fiscal year
3,219,528
($29,004,761 thousand)
555,064
(€4,456,556 thousand)
183,344
(A$2,331,738 thousand)
4,242
(HK$300,000 thousand)
370,669
386,312
—
370,809
387,654
599,794
185,903
($1,749,682 thousand)
100,000
[50,000]
2,016,383
($18,977,726 thousand)
[708,687]
69,593
($655,000 thousand)
260,709
(€1,994,259 thousand)
—
63,673
(A$779,834 thousand)
[27,761]
32,008
(HK$2,364,000 thousand)
25,642
(THB7,500,000 thousand)
[—]
383,567
[21,500]
598,974
191,741
($1,727,400 thousand)
50,000
[50,000]
1,591,494
($14,337,789 thousand)
[814,740]
72,705
($655,000 thousand)
429,901
(€3,451,637 thousand)
36,257
(£250,017 thousand)
41,134
(A$523,137 thousand)
[17,298]
33,426
(HK$2,364,000 thousand)
33,155
(THB9,500,000 thousand)
[12,215]
362,786
[73,000]
2,000
159,296
($1,499,272 thousand)
97,815
(€748,230thousand)
—
166,395
($1,499,060 thousand)
93,250
(€748,695thousand)
Percentages
Interest
rate (Note 1) Collateral
Date of
maturity
Mar. 2021 ~
Feb. 2048
Jan. 2022 ~
Feb. 2033
Mar. 2022 ~
Jul. 2028
Apr. 26, 2028
Sep. 2024 ~
May. 2030
Sep. 2024~
Mar. 2028
None
None
None
None
None
None
None
Perpetual
None
Apr. 2, 2024
None
Apr. 19, 2019
None
Jun. 2019~
Mar. 2030
None May. 30,2045
Apr. 2020 ~
Jul. 2023
None
2.058 ~
4.306
0.141 ~
1.716
3.0405 ~
4.13
3.54
0.469 ~
1.328
0.3~
0.61
1.29~
2.88
4.436
0.254
1.88 ~
4.13
4.3
0.192 ~
2.75
1.193
None
Sep. 7, 2020
2.9 ~
3.88
2.09 ~
2.92
2 ~
2.66
1.43 ~
2.21
—
4.85
4
None
None
None
None
—
Sep. 2019 ~
Mar. 2025
Apr. 2020 ~
Apr. 2025
Nov. 2019 ~
Nov. 2021
Jul. 2019 ~
Dec.2026
—
None
Mar. 1, 2022
None
Nov. 9, 2020
SMBC
dollars (Note 3) ................................ Apr. 26, 2018
Subordinated bonds, payable in Yen ...
Subordinated bonds, payable in Yen ...
Perpetual subordinated bonds, payable
in Yen ..............................................
Subordinated bonds, payable in U.S.
Sep. 2014 ~
Sep. 2016
Sep. 2014 ~
Mar. 2018
Jul. 2015 ~
Dec. 2017
dollars (Note 3) ................................ Apr.2, 2014
Apr. 2013 ~
Apr. 2014
(Note 4) ...........................................
Straight bonds, payable in Yen
Straight bonds, payable in U.S. dollars
(Notes 3 and 4) ................................
Jan. 2012 ~
Dec. 2018
Subordinated bonds, payable in U.S.
dollars (Note 3) ................................ May. 28, 2015
Straight bonds, payable in Euro
(Notes 3 ) .........................................
Jul. 2013 ~
Jul. 2018
Straight bonds, payable in Pound
(Notes 3) ..........................................
Sep. 2018
Straight bonds, payable in Australian
dollars (Notes 3 and 4) .....................
Straight bonds, payable in Hong Kong
dollars (Note 3) ................................
Mar. 2014 ~
Dec. 2018
Mar. 2015 ~
Apr. 2015
Straight bonds, payable in Thai Baht
(Notes 3 and 4) ................................
Subordinated bonds, payable in Yen
(Note 4) ...........................................
Nov. 2016 ~
Nov. 2018
Feb. 2009 ~
Dec. 2011
Subordinated bonds, payable in
Euroyen ...........................................
Perpetual subordinated bonds, payable
Jun. 16, 2008
in U.S. dollars (Note 3) .................... Mar.1, 2012
Subordinated bonds, payable in Euro
(Note 3) ........................................... Nov. 9, 2010
(*1)
Consolidated subsidiaries, straight
bonds, payable in Yen
(Notes 2 and 4) ................................
Feb. 2011 ~
Mar. 2019
804,339
[141,273]
706,988
[108,921]
0.0052 ~
20
None
Apr. 2019 ~
Mar. 2049
(*2)
Consolidated subsidiaries, specified
(*3)
bonds, payable in Yen
(Note 2) ........................................... Mar. 24, 2017
Consolidated subsidiaries, straight
bonds, payable in U.S. dollars
(Notes 2,3 and 4) .............................
Oct. 2014 ~
Mar. 2019
(*4)
Consolidated subsidiaries, straight
bonds, payable in Euro
(Notes 2 and 3) ................................ Dec. 18, 2018
(*5)
Consolidated subsidiaries, straight
(*6)
(*7)
bonds, payable in Australian dollars
(Notes 2, 3 and 4) ............................
Mar. 2016 ~
Dec. 2018
Consolidated subsidiaries, straight
bonds, payable in Turkish lira
(Notes 2 and 3 and 4) .......................
Consolidated subsidiaries, straight
bonds, payable in U.S. dollars
(Notes 2 and 3) ................................
Jul. 2017 ~
Dec. 2018
Jul. 2016 ~
Jul. 2017
27,901
24,742
($230,387 thousand)
[3,757]
—
48,142
($433,516 thousand)
[3,506]
—
—
—
0.01 ~
4.45
None
Apr. 2019 ~
Nov. 2037
—
1,895
(A$23,220 thousand)
[166]
3,567
(TRY132,290 thousand)
[—]
103,660
($975,629 thousand)
124
(€1,000 thousand)
2,074
(A$26,388 thousand)
[—]
5,164
(TRY259,660 thousand)
[117]
0.1
0.01~
3
0.01 ~
15
None
Dec. 18, 2023
None
None
Jun. 2020~
Aug. 2031
Jul. 2019~
Oct. 2023
—
—
—
—
010_0800801371908.indd 219
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements Company
(*8)
Type of bonds
Date of
issuance
At the beginning of
the fiscal year
At the end of
the fiscal year
Consolidated subsidiaries, straight
bonds, payable in Indonesia rupiah
(Notes 2,3 and 4) .............................
Jul. 2016 ~
Oct. 2017
19,080
(IDR2,298,898,588 thousand)
[19,080]
19,487
(IDR2,498,374,855 thousand)
[2,340]
Millions of yen
(*9)
Consolidated subsidiaries,
subordinated bonds, payable in Yen
(Notes 2 and 4) ................................
Consolidated subsidiaries, short-term
Dec. 1997 ~
Aug. 1999
(*10)
bonds, payable in Yen
(Notes 2 and 4) ................................
Total .............................................................................
Jun. 2017 ~
Mar. 2019
—
25,000
[—]
1,256,600
[1,256,600]
¥10,314,283
25,000
[5,000]
84,500
[84,500]
¥ 9,311,867
Percentages
Interest
rate (Note 1) Collateral
7.50 ~
8.25
4 ~
4.15
0 ~
0.02
—
None
None
None
—
Date of
maturity
Jul. 2019~
Oct. 2020
Aug. 2019 ~
Jan. 2028
Apr. 2019 ~
Jun. 2019
—
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 straight bonds issued in yen by SMBC Nikko, a domestic consolidated subsidiary. Straight bonds issued in yen by SMFL which became an equity
method affiliate in the fiscal 2018 are included in the balance at the beginning of the fiscal year.
(*2) This represents specified bond issued in yen by Otemachi 142 specified purpose enterprise. Otemachi 142 specified purpose enterprise was excluded from the scope of
consolidation of the Company in the fiscal 2018.
(*3) This represents straight bonds issued in U.S. dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*4) This represents straight bonds issued in Euro by SMBC Nikko, a domestic consolidated subsidiary.
(*5) This represents straight bonds issued in Australian dollar by SMBC Nikko, a domestic consolidated subsidiary.
(*6) This represents straight bonds issued in Turkish lira by SMBC Nikko, a domestic consolidated subsidiary.
(*7) This represents straight bonds issued in U.S. dollar by SMBC Aviation Capital Limited. SMBC Aviation Capital Limited became an equity method affiliate of the
Company in the fiscal 2018.
(*8) This represents straight bonds issued in Indonesia rupiah by PT Bank Tabungan Pensiunan Nasional Tbk which became an overseas consolidated subsidiary of the
Company in the fiscal 2018. PT Bank Tabungan Pensiunan Nasional Tbk merged with PT Bank Sumitomo Mitsui Indonesia, and changed its trade name to PT Bank BTPN
Tbk in the fiscal 2018. The balance at the beginning of the fiscal year represents straight bonds issued in Indonesia rupiah by PT Bank Sumitomo Mitsui Indonesia.
(*9) This represents subordinated term bonds issued in yen by SMBC International Finance N.V., an overseas consolidated subsidiary.
(*10) This represents short-term bonds issued in yen by SMBC Nikko, a domestic consolidated subsidiary. Short-term bonds issued in yen by SMFL which became an equity
method affiliate in the fiscal 2018 are included in the balance at the beginning of the fiscal year.
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
¥1,171,639
More than 1 year
to 2 years
¥1,273,387
Millions of yen
More than 2 years
to 3 years
¥1,200,977
More than 3 years
to 4 years
¥1,057,911
More than 4 years
to 5 years
¥707,959
[Schedule of borrowings]
Classification
Borrowed money ..........................................
Other borrowings ....................................
Lease obligations ..........................................
Millions of yen
At the beginning of
the fiscal year
¥10,829,248
10,829,248
89,940
At the end of
the fiscal year
¥10,656,897
10,656,897
30,379
Percentages
Average
interest rate
0.59
0.59
3.18
Repayment Term
—
Jan. 2019 ~ Perpetual
Apr. 2019 ~ 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
¥8,430,682
7,570
More than 1
year to 2 years
¥337,803
6,139
Millions of yen
More than 2
years to 3 years
¥201,000
4,811
More than 3
years to 4 years
¥322,613
3,779
More than 4
years to 5 years
¥225,578
3,103
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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements Reference: Commercial paper issued for funding purpose as a normal course of business is as follows:
Commercial paper ........................................
¥2,384,787
At the beginning of
the fiscal year
At the end of
the fiscal year
¥2,291,813
Millions of yen
Percentages
Average
interest rate
1.85
Repayment Term
Apr. 2019 ~ Mar. 2020
[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.
[Others]
Quarterly consolidated financial information in the fiscal year ended March 31, 2019 is as follows:
Ordinary income ..........................................
Income before income taxes ..........................
Profit attributable to owners of parent ..........
Earnings per share ........................................
First quarter
consolidated
total period
¥1,426,372
330,624
227,084
161.78
Millions of yen (except Earnings per share)
Third quarter
Second quarter
consolidated
consolidated
total period
total period
¥2,952,805
675,155
472,648
337.70
¥4,391,116
923,814
637,882
456.20
Fiscal year ended March
31, 2019
¥5,735,312
1,123,579
726,681
519.95
Earnings per share ........................................
First quarter
consolidated
accounting period
¥161.78
Second quarter
consolidated
accounting period
¥175.97
Third quarter
consolidated
accounting period
¥118.40
Fourth quarter
consolidated
accounting period
¥63.63
Yen
010_0800801371908.indd 221
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2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements (Non-consolidated financial statements)
1. Non-consolidated balance sheets
March 31
Assets:
Current assets
Millions of yen
2018
2019
Millions of U�S�
dollars
2019
Cash and due from banks �������������������������������������������������������������������������
Prepaid expenses��������������������������������������������������������������������������������������
Accrued income ����������������������������������������������������������������������������������������
Accrued income tax refunds ���������������������������������������������������������������������
Other current assets ����������������������������������������������������������������������������������
Total current assets �����������������������������������������������������������������������������������
¥ 251,680
340
31,638
67,414
45,169
396,243
¥ 434,005
365
42,124
118,877
37,124
632,497
Fixed assets
Tangible fixed assets
Buildings ����������������������������������������������������������������������������������������������
Equipment��������������������������������������������������������������������������������������������
Construction in progress ���������������������������������������������������������������������
Total tangible fixed assets �������������������������������������������������������������������
Intangible fixed assets
Software �����������������������������������������������������������������������������������������������
Total intangible fixed assets�����������������������������������������������������������������
Investments and other assets
89
7
13,718
13,815
296
296
Investments in subsidiaries and affiliates ��������������������������������������������
Long-term loans receivable from subsidiaries and affiliates ���������������
Long-term prepaid expenses ��������������������������������������������������������������
Deferred tax assets ������������������������������������������������������������������������������
Other investments and other assets ����������������������������������������������������
Total investments and other assets �����������������������������������������������������
Total fixed assets���������������������������������������������������������������������������������������
Total assets ����������������������������������������������������������������������������������������������������
6,156,181
5,537,800
315
278
0
11,694,576
11,708,687
¥12,104,930
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 ��������������������������������������������������������������������������������
¥ 1,228,030
11,440
34,081
6
75
693
400
626
1,275,354
Fixed liabilities
Bonds ��������������������������������������������������������������������������������������������������������
Long-term borrowings ������������������������������������������������������������������������������
Total fixed liabilities �����������������������������������������������������������������������������������
Total liabilities ������������������������������������������������������������������������������������������������
5,105,279
199,221
5,304,500
6,579,855
85
5
13,718
13,809
276
276
6,085,818
6,258,343
226
414
0
12,344,803
12,358,889
¥12,991,386
¥ 1,228,030
8,924
42,571
9
35
722
389
649
1,281,332
5,790,820
234,223
6,025,043
7,306,375
Net assets:
Stockholders’ equity
Capital stock ���������������������������������������������������������������������������������������������
Capital surplus
2,338,743
2,339,443
Capital reserve �������������������������������������������������������������������������������������
Other capital surplus����������������������������������������������������������������������������
Total capital surplus �����������������������������������������������������������������������������
1,560,221
24,286
1,584,508
1,560,921
—
1,560,921
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
1,581,073
1,611,493
(12,493)
5,522,252
2,823
5,525,075
¥12,104,930
30,420
1,767,989
1,798,409
(16,302)
5,682,471
2,539
5,685,011
¥12,991,386
$ 3,910
3
380
1,071
334
5,698
1
0
124
124
2
2
54,827
56,381
2
4
0
111,214
111,341
$117,040
$ 11,063
80
384
0
0
7
4
6
11,544
52,170
2,110
54,280
65,823
21,076
14,062
—
14,062
274
15,928
16,202
(147)
51,193
23
51,216
$117,040
222
010_0800801371908.indd 222
2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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 ������������������������������������������������������������������������������������������������������
Extraordinary gains:
Gains on sales of stocks of subsidiaries and affiliates ������������������������������������
Total extraordinary gains ���������������������������������������������������������������������������������
Extraordinary losses:
Losses on sales of stocks of subsidiaries and affiliates����������������������������������
Total extraordinary losses ��������������������������������������������������������������������������������
Income before income taxes ������������������������������������������������������������������������������
Income taxes-current ��������������������������������������������������������������������������������������
Income taxes-deferred ������������������������������������������������������������������������������������
Income taxes ��������������������������������������������������������������������������������������������������������
Net income �����������������������������������������������������������������������������������������������������������
Millions of yen
2018
2019
Millions of U�S�
dollars
2019
¥257,001
10,226
99,093
366,321
23,195
106,052
4,285
133,533
232,787
35
1
186
223
4,298
313
7,193
197
12,002
221,008
—
—
10
10
220,998
(44,393)
36,090
(8,302)
¥229,300
¥371,805
5,665
145,072
522,543
24,332
143,809
6,449
174,591
347,952
32
1
178
212
4,298
254
2,407
—
6,960
341,203
106,273
106,273
1,414
1,414
446,062
(27,998)
(136)
(28,134)
¥474,196
$3,350
51
1,307
4,708
219
1,296
58
1,573
3,135
0
0
2
2
39
2
22
—
63
3,074
957
957
13
13
4,019
(252)
(1)
(253)
$4,272
Per share data:
Earnings per share �����������������������������������������������������������������������������������������������
Earnings per share (diluted) ����������������������������������������������������������������������������������
Yen
2018
2019
U�S� dollars
2019
¥162�57
162�45
¥339.29
339.07
$3.06
3.05
010_0800801371908.indd 223
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2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
3. Non-consolidated statements of changes in net assets
Year ended March 31, 2018
Balance at the beginning of the fiscal year ��� ¥2,337,895
Capital
stock
Capital
reserve
¥1,559,374
Other capital
surplus
¥24,327
Total capital
surplus
¥1,583,701
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥1,570,369
Total retained
earnings
¥1,600,789
Millions of yen
Stockholders’ equity
Capital surplus
Retained earnings
Changes in the fiscal year:
Issuance of new stock �������������������
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Net changes in items other than
847
847
847
(218,596)
229,300
(218,596)
229,300
(41)
(41)
stockholders’ equity in the fiscal year �����
Net changes in the fiscal year ��������������
847
Balance at the end of the fiscal year ���� ¥2,338,743
847
¥1,560,221
(41)
¥24,286
806
¥1,584,508
—
¥30,420
10,704
¥1,581,073
10,704
¥1,611,493
Year ended March 31, 2018
Balance at the beginning of the fiscal year ���
Changes in the fiscal year:
Issuance of new stock �������������������
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
¥(12,913)
Total
¥5,509,473
Stock
acquisition
rights
¥3,206
Total
net assets
¥5,512,680
1,695
(218,596)
229,300
(142)
521
(142)
562
1,695
(218,596)
229,300
(142)
521
420
¥(12,493)
12,778
¥5,522,252
(382)
(382)
¥2,823
(382)
12,395
¥5,525,075
224
010_0800801371908.indd 224
2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
Year ended March 31, 2019
Balance at the beginning of the fiscal year ��� ¥2,338,743
Capital
stock
Capital
reserve
¥1,560,221
Other capital
surplus
¥ 24,286
Total capital
surplus
¥1,584,508
Other retained earnings
Voluntary
reserve
¥30,420
Retained earnings
brought forward
¥1,581,073
Total retained
earnings
¥1,611,493
Millions of yen
Stockholders’ equity
Capital surplus
Retained earnings
Changes in the fiscal year:
Issuance of new stock �������������������
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Cancellation of treasury stock �������
Transfer from retained earnings to
capital surplus �����������������������������
Net changes in items other than
699
699
699
(245,576)
474,196
(245,576)
474,196
(68)
(65,922)
(68)
(65,922)
41,704
41,704
(41,704)
(41,704)
stockholders’ equity in the fiscal year �������
Net changes in the fiscal year ��������������
699
Balance at the end of the fiscal year ���� ¥2,339,443
699
¥1,560,921
(24,286)
(23,587)
— ¥1,560,921
¥
—
¥30,420
186,916
¥1,767,989
186,916
¥1,798,409
Year ended March 31, 2019
Balance at the beginning of the fiscal year ���
Changes in the fiscal year:
Issuance of new stock �������������������
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Cancellation of treasury stock �������
Transfer from retained earnings to
capital surplus �����������������������������
Net changes in items other than
Millions of yen
Stockholders’ equity
Treasury
stock
Total
¥(12,493) ¥5,522,252
Stock
acquisition
rights
¥2,823
Total
net assets
¥5,525,075
(70,094)
363
65,922
1,398
(245,576)
474,196
(70,094)
294
—
—
1,398
(245,576)
474,196
(70,094)
294
—
—
stockholders’ equity in the fiscal year �������
Net changes in the fiscal year ��������������
Balance at the end of the fiscal year ����
(3,809)
160,219
¥(16,302) ¥5,682,471
(283)
(283)
¥2,539
(283)
159,935
¥5,685,011
010_0800801371908.indd 225
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2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes to Consolidated Financial Statements
Millions of U� S� dollars
Stockholders’ equity
Capital surplus
Retained earnings
Capital
stock
$21,070
Capital
reserve
$14,056
Other capital
surplus
$ 219
Total capital
surplus
$14,275
6
6
6
(1)
(594)
376
(1)
(594)
376
Other retained earnings
Voluntary
reserve
Retained earnings
brought forward
$14,244
$274
Total retained
earnings
$14,518
(2,212)
4,272
(2,212)
4,272
(376)
(376)
6
$21,076
6
$14,062
(219)
$ —
(212)
$14,062
—
$274
1,684
$15,928
1,684
$16,202
Millions of U� S� dollars
Stockholders’ equity
Treasury
stock
$(113)
Total
$49,750
Stock
acquisition
rights
$25
Total
net assets
$49,775
(631)
3
594
13
(2,212)
4,272
(631)
3
—
—
13
(2,212)
4,272
(631)
3
—
—
Year ended March 31, 2019
Balance at the beginning of the fiscal year ���
Changes in the fiscal year:
Issuance of new stock �������������������
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Cancellation of treasury stock �������
Transfer from retained earnings to
capital surplus �����������������������������
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, 2019
Balance at the beginning of the fiscal year ���
Changes in the fiscal year:
Issuance of new stock �������������������
Cash dividends ������������������������������
Net income �������������������������������������
Purchase of treasury stock ������������
Disposal of treasury stock ��������������
Cancellation of treasury stock �������
Transfer from retained earnings to
capital surplus �����������������������������
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 ����
(34)
$(147)
1,443
$51,193
(3)
(3)
$23
(3)
1,441
$51,216
226
010_0800801371908.indd 226
2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Notes 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.
(“the Company”) and subsidiaries, which comprise the consolidated balance sheets as at March 31, 2019 and 2018,
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
the Company and subsidiaries as at March 31, 2019 and 2018, 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, 2019 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 26, 2019
Tokyo, Japan
010_0800801371908.indd 227
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2019/08/16 18:54:06
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Supplemental Information
Consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation 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
2018
2019
*8
*8
*8
*1, *2, *8, *16
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*10, *11, *12
¥ 52,122,407
1,881,879
1,675,693
3,562,107
4,550,592
2,408,549
0
25,217,287
75,853,934
2,164,196
252,507
3,923,004
1,410,800
594,576
302,996
416,592
2,984
19,404
74,247
311,810
259,587
12,727
21
39,474
377,768
28,789
*8
*8
*8
*1, *2, *8, *16
*3, *4, *5, *6, *7,
*8, *9
*7
*8
*10, *11, *12
¥ 55,747,048
2,665,744
5,082,709
1,440,159
4,582,886
2,452,825
0
23,469,621
79,792,401
1,715,759
247,835
3,571,248
1,409,802
573,292
308,990
421,156
2,597
22,561
81,203
375,389
274,116
12,003
11
89,259
324,672
23,399
Millions of
U�S� dollars
2019
$ 502,226
24,016
45,790
12,974
41,287
22,098
0
211,438
718,850
15,457
2,233
32,173
12,701
5,165
2,784
3,794
23
203
732
3,382
2,470
108
0
804
2,925
211
7,373,185
(387,022)
¥182,727,495
8,121,131
(332,343)
¥190,690,293
73,163
(2,994)
$1,717,931
228
010_0800801371908.indd 228
2019/08/16 18:54:07
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019SMBCSupplemental Information (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 �������������������������������������������������
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 �����������������
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
2018
2019
Millions of
U�S� dollars
2019
$1,109,827
102,122
5,160
78,769
6,127
20,647
16,384
144,045
10,783
26,624
12,187
26,389
309
11
40
6
4
72
4,027
273
73,163
1,636,969
15,955
17,715
33,726
(1,892)
65,504
12,851
(426)
329
220
(49)
*8
*8
*8
*8, *13
*14
*8, *15
*10
*8
*10
¥123,190,830
11,335,486
572,778
8,743,386
680,051
2,291,813
1,818,610
15,988,948
1,196,960
2,955,282
1,352,773
2,929,172
34,283
1,249
4,457
669
468
7,936
446,993
30,259
8,121,131
181,703,543
1,770,996
1,966,353
3,743,614
(210,003)
7,270,960
1,426,493
(47,281)
36,531
24,371
(5,446)
1,434,667
2,210
278,910
8,986,749
¥190,690,293
12,925
20
2,513
80,962
$1,717,931
*8
*8
*8
*8, *13
*14
*10
*8
*10
¥117,227,296
11,455,284
740,928
5,256,519
3,324,893
2,385,705
1,907,416
13,973,112
906,429
3,255,697
1,328,271
3,983,839
32,826
1,333
6,552
671
966
17,765
427,853
30,539
7,373,185
173,637,092
1,770,996
1,970,412
3,451,151
(210,003)
6,982,557
1,509,249
(66,918)
37,042
12,710
60,463
1,552,547
—
555,298
9,090,403
¥182,727,495
010_0800801371908.indd 229
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2019/08/16 18:54:07
SMBC Group Annual Report 2019SMBCSupplemental Information
Consolidated Statements of Income and
Consolidated Statements of Comprehensive Income (Unaudited)
Sumitomo Mitsui Banking Corporation and Subsidiaries
(Consolidated Statements of Income)
Year ended March 31
Ordinary income �����������������������������������������������������
Interest income ��������������������������������������������������
Interest on loans and discounts �������������������
Interest and dividends on securities ������������
Interest on call loans and bills bought ���������
Interest on receivables under resale
agreements�������������������������������������������������
Interest on receivables under securities
borrowing transactions�������������������������������
Interest on deposits with banks �������������������
Interest on lease transactions ����������������������
Other interest income �����������������������������������
Trust fees �����������������������������������������������������������
Fees and commissions �������������������������������������
Trading income ��������������������������������������������������
Other operating income ������������������������������������
Lease-related income �����������������������������������
Installment-related income ���������������������������
Other ������������������������������������������������������������
Other income �����������������������������������������������������
Gains on reversal of reserve for possible
loan losses �������������������������������������������������
Recoveries of written-off claims �������������������
Other ������������������������������������������������������������
Ordinary expenses �������������������������������������������������
Interest expenses ����������������������������������������������
Interest on deposits �������������������������������������
Interest on negotiable certificates
of deposit ���������������������������������������������������
Interest on call money and bills sold ������������
Interest on payables under repurchase
agreements�������������������������������������������������
Interest on payables under securities
lending transactions �����������������������������������
Interest on commercial paper ����������������������
Interest on borrowed money ������������������������
Interest on bonds �����������������������������������������
Other interest expenses �������������������������������
Fees and commissions payments ���������������������
Trading losses ���������������������������������������������������
Other operating expenses ���������������������������������
Lease-related expenses �������������������������������
Installment-related expenses �����������������������
Other ������������������������������������������������������������
General and administrative expenses ���������������
Other expenses �������������������������������������������������
Ordinary profit ��������������������������������������������������������
Millions of yen
2018
2019
¥3,117,087
1,901,507
1,290,981
331,893
19,464
34,278
2,588
74,009
7,699
140,592
3,769
632,125
85,312
238,304
37,239
23,078
177,985
256,067
43,984
164
211,918
2,184,353
748,234
282,966
86,817
8,686
48,851
10,394
18,393
133,290
88,810
70,022
167,832
4,127
93,120
18,988
14,515
59,617
1,098,224
72,813
932,733
*1
*2
*3
¥3,369,898
2,240,944
1,481,622
354,451
16,561
36,101
2,512
101,030
6,378
242,285
4,541
613,741
80,112
225,361
44,732
8,600
172,028
205,196
35,622
647
168,926
2,475,397
1,138,789
463,791
136,178
14,586
122,755
959
45,356
197,488
87,594
70,078
162,563
4,430
79,991
26,296
—
53,694
1,009,410
80,212
894,501
*1
*2
*3
Millions of
U�S� dollars
2019
$30,359
20,189
13,348
3,193
149
325
23
910
57
2,183
41
5,529
722
2,030
403
77
1,550
1,849
321
6
1,522
22,301
10,259
4,178
1,227
131
1,106
9
409
1,779
789
631
1,465
40
721
237
—
484
9,094
723
8,059
230
010_0800801371908.indd 230
2019/08/16 18:54:07
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019SMBCSupplemental Information
(Continued)
(Consolidated Statements of Income)
Year ended March 31
Extraordinary gains �������������������������������������������������
Gains on disposal of fixed assets ���������������������
Other extraordinary gains ����������������������������������
Extraordinary losses �����������������������������������������������
Losses on disposal of fixed assets �������������������
Losses on impairment of fixed assets ���������������
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 �������������������
(Consolidated Statements of Comprehensive Income)
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 �����������������������������������������
Millions of yen
2018
2019
*5
¥ 798
798
—
46,568
2,165
44,402
886,964
212,275
(8,370)
203,904
683,059
55,477
¥627,582
*4
*5
¥ 2,788
502
2,285
8,833
4,260
4,573
888,456
165,371
54,107
219,479
668,976
51,483
¥617,493
Millions of yen
2018
*1
¥683,059
99,442
2019
*1
¥668,976
(120,740)
113,345
(31,163)
1
(43,565)
49,110
11,714
782,502
738,503
43,999
(78,282)
27,672
—
12,682
(67,113)
(15,698)
548,236
500,124
48,111
Millions of
U�S� dollars
2019
$ 25
5
21
80
38
41
8,004
1,490
487
1,977
6,027
464
$5,563
Millions of
U�S� dollars
2019
$6,027
(1,088)
(705)
249
—
114
(605)
(141)
4,939
4,506
433
010_0800801371908.indd 231
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2019/08/16 18:54:07
SMBC Group Annual Report 2019SMBCSupplemental Information
Non-consolidated Balance Sheets (Unaudited)
Sumitomo Mitsui Banking Corporation
Millions of yen
2018
March 31
Assets:
Cash and due from banks ������������������������������������������������������������������������������������ ¥ 49,030,209
Call loans ��������������������������������������������������������������������������������������������������������������
1,417,562
Receivables under resale agreements �����������������������������������������������������������������
499,738
Receivables under securities borrowing transactions ������������������������������������������
3,140,151
Monetary claims bought ���������������������������������������������������������������������������������������
1,239,394
Trading assets ������������������������������������������������������������������������������������������������������
1,723,878
Securities ��������������������������������������������������������������������������������������������������������������
25,916,718
Loans and bills discounted ����������������������������������������������������������������������������������
73,896,163
Foreign exchanges �����������������������������������������������������������������������������������������������
2,143,021
Other assets ���������������������������������������������������������������������������������������������������������
3,020,300
Tangible fixed assets ��������������������������������������������������������������������������������������������
798,476
Intangible fixed assets ������������������������������������������������������������������������������������������
231,429
Prepaid pension cost �������������������������������������������������������������������������������������������
279,360
Customers’ liabilities for acceptances and guarantees ���������������������������������������
7,921,169
Reserve for possible loan losses ��������������������������������������������������������������������������
(319,868)
Reserve for possible losses on investments ��������������������������������������������������������
(14,559)
Total assets ���������������������������������������������������������������������������������������������������������� ¥170,923,146
Liabilities and net assets:
Liabilities:
Deposits ��������������������������������������������������������������������������������������������������������������� ¥110,243,226
Negotiable certificates of deposit ������������������������������������������������������������������������
11,264,807
Call money ������������������������������������������������������������������������������������������������������������
928,117
Payables under repurchase agreements ��������������������������������������������������������������
4,383,418
Payables under securities lending transactions ���������������������������������������������������
3,073,423
Commercial paper ������������������������������������������������������������������������������������������������
1,522,354
Trading liabilities ���������������������������������������������������������������������������������������������������
1,422,824
Borrowed money ��������������������������������������������������������������������������������������������������
14,023,257
Foreign exchanges �����������������������������������������������������������������������������������������������
915,154
Bonds �������������������������������������������������������������������������������������������������������������������
3,211,548
Due to trust account ���������������������������������������������������������������������������������������������
1,276,907
Other liabilities ������������������������������������������������������������������������������������������������������
2,391,909
Reserve for employee bonuses ����������������������������������������������������������������������������
14,163
Reserve for executive bonuses ����������������������������������������������������������������������������
978
Reserve for point service program �����������������������������������������������������������������������
966
Reserve for reimbursement of deposits ���������������������������������������������������������������
17,307
Deferred tax liabilities �������������������������������������������������������������������������������������������
359,803
Deferred tax liabilities for land revaluation �����������������������������������������������������������
30,539
Acceptances and guarantees �������������������������������������������������������������������������������
7,921,169
Total liabilities ������������������������������������������������������������������������������������������������������
163,001,878
Net assets:
Capital stock ��������������������������������������������������������������������������������������������������������
1,770,996
Capital surplus �����������������������������������������������������������������������������������������������������
1,776,830
Retained earnings ������������������������������������������������������������������������������������������������
3,044,175
Treasury stock ������������������������������������������������������������������������������������������������������
(210,003)
Total stockholders’ equity �����������������������������������������������������������������������������������
6,381,999
Net unrealized gains (losses) on other securities �������������������������������������������������
1,519,691
Net deferred gains (losses) on hedges �����������������������������������������������������������������
(6,286)
Land revaluation excess ���������������������������������������������������������������������������������������
25,863
Total valuation and translation adjustments ������������������������������������������������������
1,539,268
Total net assets ����������������������������������������������������������������������������������������������������
7,921,268
Total liabilities and net assets ����������������������������������������������������������������������������� ¥170,923,146
2019
¥ 54,205,583
2,134,392
3,364,070
1,222,284
1,470,872
1,534,100
24,336,638
76,401,807
1,627,105
2,895,757
802,501
236,352
321,031
9,078,706
(275,185)
(7,363)
¥179,348,654
¥116,091,103
11,581,605
796,761
7,364,577
418,912
1,634,811
1,348,931
15,567,626
1,213,861
2,910,794
1,292,699
1,659,172
13,285
937
468
7,425
374,529
30,259
9,078,706
171,386,468
1,770,996
1,774,554
3,196,504
(210,003)
6,532,053
1,427,008
(22,444)
25,568
1,430,131
7,962,185
¥179,348,654
Millions of
U�S� dollars
2019
$ 488,339
19,229
30,307
11,012
13,251
13,821
219,249
688,305
14,659
26,088
7,230
2,129
2,892
81,790
(2,479)
(66)
$1,615,754
$1,045,866
104,339
7,178
66,348
3,774
14,728
12,153
140,249
10,936
26,223
11,646
14,948
120
8
4
67
3,374
273
81,790
1,544,022
15,955
15,987
28,797
(1,892)
58,847
12,856
(202)
230
12,884
71,731
$1,615,754
232
010_0800801371908.indd 232
2019/08/16 18:54:07
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019SMBCSupplemental Information
Non-consolidated Statements of Income (Unaudited)
Sumitomo Mitsui Banking Corporation
Year ended March 31
Millions of yen
2018
2019
Ordinary income ���������������������������������������������������������������������������������������������������
¥2,540,450
¥2,805,840
Millions of
U�S� dollars
2019
$25,278
Interest income ������������������������������������������������������������������������������������������������
1,647,643
Interest on loans and discounts �����������������������������������������������������������������
1,101,467
Interest and dividends on securities ����������������������������������������������������������
349,947
Trust fees ���������������������������������������������������������������������������������������������������������
Fees and commissions �����������������������������������������������������������������������������������
Trading income ������������������������������������������������������������������������������������������������
Other operating income ����������������������������������������������������������������������������������
Other Income���������������������������������������������������������������������������������������������������
2,038
512,149
59,398
101,955
217,265
Ordinary expenses �����������������������������������������������������������������������������������������������
1,785,184
Interest expenses ��������������������������������������������������������������������������������������������
Interest on deposits �����������������������������������������������������������������������������������
Fees and commissions payments �������������������������������������������������������������������
Trading losses �������������������������������������������������������������������������������������������������
Other operating expenses �������������������������������������������������������������������������������
General and administrative expenses �������������������������������������������������������������
Other expenses �����������������������������������������������������������������������������������������������
Ordinary profit ������������������������������������������������������������������������������������������������������
Extraordinary gains �����������������������������������������������������������������������������������������������
Extraordinary losses ���������������������������������������������������������������������������������������������
Income before income taxes ��������������������������������������������������������������������������������
Income taxes - current �����������������������������������������������������������������������������������������
690,606
229,362
182,319
—
22,334
835,500
54,422
755,266
797
28,641
727,422
168,605
Income taxes - deferred ���������������������������������������������������������������������������������������
(18,210)
1,970,831
1,298,725
345,566
2,250
524,566
46,507
109,674
152,009
2,156,192
1,026,727
381,304
182,365
3,305
45,846
802,961
94,986
649,647
380
6,355
643,672
136,885
29,420
17,755
11,700
3,113
20
4,726
419
988
1,369
19,425
9,250
3,435
1,643
30
413
7,234
856
5,853
3
57
5,799
1,233
265
Net income �����������������������������������������������������������������������������������������������������������
¥ 577,028
¥ 477,367
$ 4,301
Per share data:
Earnings per share ��������������������������������������������������������������������������������������
¥5,430�93
¥4,492.93
Earnings per share (diluted) ������������������������������������������������������������������������
—
—
$40.48
—
Yen
2018
2019
U�S� dollars
2019
010_0800801371908.indd 233
233
2019/08/16 18:54:07
SMBC Group Annual Report 2019SMBCSupplemental Information
Income Analysis (Consolidated)
Sumitomo Mitsui Financial Group, Inc� and Subsidiaries
Operating Income, Classified by Domestic and Overseas Operations
Millions of yen
Year ended March 31
2019
Domestic
operations
Overseas
operations Elimination
Total
Interest income ����������������������������������������������������� ¥1,178,337 ¥1,409,909
Interest expenses ��������������������������������������������������
749,988
659,921
Net interest income ���������������������������������������������������
Trust fees �������������������������������������������������������������������
—
230,997
28,199
202,798
37,423
5,220
32,202
286,957
149,435
137,522
355,524
822,812
4,656
Fees and commissions ����������������������������������������� 1,033,005
Fees and commissions payments ������������������������
160,129
872,876
Net fees and commissions ����������������������������������������
Trading income������������������������������������������������������
163,227
Trading losses �������������������������������������������������������
4,058
159,169
Net trading income ����������������������������������������������������
Other operating income ���������������������������������������� 1,291,973
Other operating expenses������������������������������������� 1,172,406
119,566
Net other operating income���������������������������������������
¥ (99,342) ¥2,488,904
1,157,482
1,331,421
4,656
1,240,917
181,019
1,059,898
194,676
3,305
191,371
1,578,159
1,319,328
258,830
51,970
(151,312)
—
(23,084)
(7,308)
(15,776)
(5,974)
(5,974)
—
(771)
(2,512)
1,740
Domestic
operations
¥1,251,484
296,895
954,589
3,884
1,050,071
140,231
909,840
220,127
4,183
215,944
1,460,912
1,327,062
133,849
2018
Overseas
operations Elimination
Total
¥986,827
450,827
535,999
—
211,755
39,791
171,964
37,511
7,153
30,357
403,890
263,573
140,317
¥ (72,523) ¥2,165,788
775,560
1,390,228
3,884
1,244,063
177,418
1,066,645
246,338
36
246,301
1,863,345
1,589,355
273,990
27,837
(100,360)
—
(17,763)
(2,604)
(15,159)
(11,299)
(11,299)
—
(1,457)
(1,280)
(176)
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. 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 ���������������������������������������������� ¥ 84,031,845
49,778,260
17,019,375
108,697
3,940,030
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 ������������
5,324,298
1,961,674
1,374,202
Interest-bearing liabilities ������������������������������������������ ¥128,086,199
97,629,923
5,526,249
580,180
5,795,961
2,658,313
101,122
9,637,102
966,046
4,151,350
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
2019
Interest
¥1,178,337
765,630
261,921
358
(3,090)
17,746
20,898
29,773
¥ 355,524
58,851
429
189
53,877
1,272
11
65,994
60
87,123
Average rate
1.40%
1.54
1.54
0.33
(0.08)
0.33
1.07
2.17
0.28%
0.06
0.01
0.03
0.93
0.05
0.01
0.68
0.01
2.10
Average balance
¥ 92,274,420
56,680,119
18,983,741
81,299
93,971
8,896,919
1,484,755
1,870,300
¥135,808,445
99,591,183
5,919,870
845,376
1,742,218
10,299,770
137,316
10,437,455
1,169,237
4,714,648
2018
Interest
¥1,251,484
822,397
280,161
412
31
14,619
14,150
51,754
¥ 296,895
44,051
497
301
16,292
11,316
16
70,790
54
98,252
Average rate
1�36%
1�45
1�48
0�51
0�03
0�16
0�95
2�77
0�22%
0�04
0�01
0�04
0�94
0�11
0�01
0�68
0�00
2�08
Notes: 1. Domestic operations comprise the operations of the Company, 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 (2019, ¥44,359,932 million; 2018, ¥41,874,204
million).
234
011_0800804261908.indd 234
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
¥44,546,369
26,222,907
5,236,149
2,026,876
1,857,211
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
Lease receivables and investment assets ������������
12,108
4,830,531
420,967
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 ��������������������������������������������������������������������
¥38,000,522
23,044,643
6,017,305
807,510
4,186,351
—
2,433,961
1,033,629
—
193,460
2019
Interest
¥1,409,909
929,632
115,493
16,192
39,967
37
99,636
17,800
¥ 749,988
422,464
135,749
14,080
82,275
—
45,344
32,478
—
7,258
Millions of yen
Average rate
3.17%
3.55
2.21
0.80
2.15
0.31
2.06
4.23
1.97%
1.83
2.26
1.74
1.97
—
1.86
3.14
—
3.75
Average balance
¥42,485,121
24,442,168
4,275,389
1,740,864
2,377,014
—
5,070,548
466,191
¥34,920,175
20,416,044
6,152,649
786,372
4,112,837
—
2,005,997
970,117
—
167,887
2018
Interest
¥986,827
683,341
77,124
19,050
35,477
—
71,232
19,187
¥450,827
248,973
86,312
8,169
43,247
—
18,376
19,530
—
5,313
Average rate
2�32%
2�80
1�80
1�09
1�49
—
1�40
4�12
1�29%
1�22
1�40
1�04
1�05
—
0�92
2�01
—
3�16
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 (2019, ¥3,210,358 million; 2018, ¥3,089,333
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥125,654,947
75,410,118
22,035,388
2,135,574
4,891,163
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 ������������
5,336,406
5,619,591
1,795,167
Interest-bearing liabilities ������������������������������������������ ¥168,829,462
119,491,850
11,543,554
1,387,690
9,076,234
2,658,313
2,535,084
10,296,695
966,046
9,584,336
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 ��������������������������������������������������������������������
2019
Interest
¥2,488,904
1,666,283
364,685
16,551
20,457
17,784
103,135
47,573
¥1,157,482
463,989
136,178
14,270
119,733
1,272
45,356
75,883
60
226,536
Average rate
1.98%
2.21
1.65
0.78
0.42
0.33
1.84
2.65
0.69%
0.39
1.18
1.03
1.32
0.05
1.79
0.74
0.01
2.36
Average balance
¥131,788,216
80,478,319
23,016,994
1,822,164
1,297,130
8,896,919
5,694,884
2,336,490
¥171,823,617
119,140,090
12,072,519
1,631,748
4,681,200
10,299,770
2,143,314
10,859,024
1,169,237
8,618,579
2018
Interest
¥2,165,788
1,469,232
342,013
19,462
24,566
14,619
75,619
70,941
¥ 775,560
283,229
86,810
8,471
48,597
11,316
18,393
54,654
54
186,095
Average rate
1�64%
1�83
1�49
1�07
1�89
0�16
1�33
3�04
0�45%
0�24
0�72
0�52
1�04
0�11
0�86
0�50
0�00
2�16
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 (2019, ¥47,559,830 million; 2018, ¥44,957,810
million).
011_0800804261908.indd 235
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2019/08/16 19:09:26
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Income Analysis (Consolidated)
Fees and Commissions
Domestic
Year ended March 31
operations
Fees and commissions ���������������������������������������������� ¥1,033,005
15,736
116,871
122,233
11,423
4,544
79,110
316,877
122,475
Deposits and loans �����������������������������������������������
Remittances and transfers ������������������������������������
Securities-related business �����������������������������������
Agency ������������������������������������������������������������������
Safe deposits ��������������������������������������������������������
Guarantees ������������������������������������������������������������
Credit card business ���������������������������������������������
Investment trusts ��������������������������������������������������
Millions of yen
2019
Overseas
operations Elimination
Total
¥230,997
131,375
22,740
36,278
—
2
11,461
0
5,286
¥(23,084) ¥1,240,917
140,570
139,574
151,532
11,423
4,547
85,599
316,878
127,761
(6,541)
(36)
(6,980)
—
—
(4,971)
—
—
Domestic
operations
¥1,050,071
22,291
119,472
122,104
16,559
5,223
81,074
290,782
147,724
2018
Overseas
operations Elimination
Total
¥211,755
115,568
20,469
36,172
—
2
12,235
1
6,694
¥(17,763) ¥1,244,063
133,075
139,903
156,248
16,559
5,225
88,834
290,783
154,418
(4,783)
(38)
(2,029)
—
—
(4,475)
—
—
Fees and commissions payments ����������������������������� ¥ 160,129
31,501
Remittances and transfers ������������������������������������
¥ 28,199
10,630
¥ (7,308) ¥ 181,019
42,127
(4)
¥ 140,231
30,206
¥ 39,791
9,616
¥ (2,604) ¥ 177,418
39,820
(2)
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. 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
2019
Domestic
operations
¥163,227
83,367
Overseas
operations Elimination
¥(5,974)
(718)
¥37,423
—
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
—
79,515
345
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
4,058
—
2,956
1,102
—
—
37,423
—
5,220
718
348
4,143
10
—
(5,245)
(10)
(5,974)
(718)
—
(5,245)
(10)
Millions of yen
2018
Domestic
operations
¥220,127
191,693
Overseas
operations Elimination
¥(11,299)
(4,638)
¥37,511
—
6,004
22,347
82
4,183
—
—
4,183
—
—
37,511
—
7,153
4,638
281
2,114
119
(281)
(6,297)
(82)
(11,299)
(4,638)
(281)
(6,297)
(82)
Total
¥246,338
187,054
5,722
53,561
—
36
—
—
—
36
Total
¥194,676
82,648
—
111,693
334
3,305
—
3,305
—
—
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. Inter-segment transactions are reported in the “Elimination” column.
236
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
2019
2018
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 ������������������������������������������������������������������������������������������������������
¥ 74,819,074
17,885,194
7,317,911
100,022,180
4,962,651
¥104,984,831
¥ 14,237,044
7,875,029
190,785
22,302,858
6,202,835
¥ 28,505,693
¥133,490,525
¥ 70,073,538
18,171,661
7,338,619
95,583,818
5,408,020
¥100,991,839
¥ 13,298,126
7,469,541
126,047
20,893,715
5,812,264
¥ 26,705,979
¥127,697,819
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
4. Fixed-term deposits represents Time deposits
Balance of Loan Portfolio, Classified by Industry
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate, goods rental and leasing ���������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 6,715,306
272,306
730,187
5,341,650
4,299,232
2,282,725
8,727,788
4,247,592
754,500
18,099,796
¥51,471,087
¥ 286,310
1,821,717
21,381,483
3,018,591
¥26,508,102
¥77,979,190
13.05%
0.53
1.42
10.38
8.35
4.43
16.96
8.25
1.47
35.16
100.00%
1.08%
6.87
80.66
11.39
100.00%
—
¥ 6,178,840
133,866
755,081
4,963,271
4,197,459
2,138,843
7,700,984
4,180,396
914,763
18,416,729
¥49,580,236
¥ 296,236
1,591,536
19,036,593
2,441,330
¥23,365,696
¥72,945,934
12�46%
0�27
1�52
10�01
8�47
4�31
15�53
8�43
1�85
37�15
100�00%
1�27%
6�81
81�47
10�45
100�00%
—
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. Japan offshore banking accounts are included in overseas operations’ accounts.
011_0800804261908.indd 237
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
2019
¥318,233
150,533
41
¥468,808
¥139,981
2019
¥ 12,806
456,802
13,444
193,427
¥676,481
¥118,980
2018
¥378,469
156,914
704
¥536,088
¥190,945
2018
¥ 27,709
406,066
12,822
210,616
¥657,215
¥140,488
1. Bankrupt loans: Loans on which accrued interest income is not recognized, and to borrowers that are undergoing bankruptcy, corporate reorganization
and rehabilitation proceedings or borrowers receiving a disposition to suspend transactions with a clearing house.
2. Non-accrual loans: Loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are
deferred in order to support the borrowers’ recovery from financial difficulties.
3. Past due loans (3 months or more): Loans on which the principal or interest is past due for 3 months or more, excluding loans in categories 1. and 2.
4. Restructured loans: Loans to borrowers on which terms and conditions have been amended in favor of the borrowers in order to support the borrowers’
recovery from financial difficulties and facilitate collection of loans, excluding loans in categories 1. through 3.
NPLs Based on the Financial Reconstruction Act
March 31
Bankrupt and quasi-bankrupt assets ��������������������������������������������������������������
Doubtful assets �����������������������������������������������������������������������������������������������
Substandard loans ������������������������������������������������������������������������������������������
Total of NPLs ���������������������������������������������������������������������������������������������������
Normal assets �������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Amount of direct reduction ������������������������������������������������������������������������������
Notes: Definition of problem asset categories
2019
¥ 89,659
398,295
207,199
695,153
90,694,649
¥91,389,803
¥ 139,981
Millions of yen
2018
¥ 97,941
350,884
223,480
672,306
85,211,809
¥85,884,115
¥ 190,945
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
238
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Securities
Year-End Balance
March 31
Domestic operations:
Assets and Liabilities (Consolidated)
Millions of yen
2019
2018
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,514,573
99,164
2,582,014
3,618,083
5,711,745
¥18,525,580
¥
—
—
68,226
—
5,365,181
¥ 5,433,407
¥
—
—
—
376,373
2,643
¥ 379,016
¥24,338,005
¥ 9,575,499
47,032
2,508,618
4,111,234
4,692,531
¥20,934,916
¥
—
—
75,495
—
4,645,121
¥ 4,720,616
¥
—
—
—
57,175
—
¥ 57,175
¥25,712,709
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. “Others” include foreign bonds and foreign stocks.
Trading Assets and Liabilities
2019
2018
Millions of yen
March 31
Trading assets ����������������������������������������������������������� ¥4,334,415 ¥1,014,471
365,398
—
—
Trading securities �������������������������������������������������� 2,346,123
Derivatives of trading securities ����������������������������
74,204
Securities related to trading transactions �������������
—
Derivatives of securities related to
Domestic
operations
Overseas
operations Elimination
Total
¥(20,108) ¥5,328,778
— 2,711,521
74,204
—
—
—
Domestic
operations
¥4,674,817
2,896,497
74,802
—
Overseas
operations Elimination
Total
¥938,646
228,922
—
—
¥(27,872) ¥5,585,591
— 3,125,419
74,802
—
—
—
trading transactions ��������������������������������������������
28,120
Trading-related financial derivatives ��������������������� 1,841,968
Other trading assets����������������������������������������������
43,997
0
649,072
—
—
(20,108)
—
28,121
2,470,932
43,997
13,834
1,648,189
41,493
59
709,664
—
—
(27,872)
—
13,894
2,329,981
41,493
Trading liabilities �������������������������������������������������������� ¥3,685,269 ¥ 554,132
119,540
—
Trading securities sold for short sales ������������������ 1,872,773
Derivatives of trading securities ����������������������������
92,370
Securities related to trading transactions
¥(20,108) ¥4,219,293
— 1,992,314
92,370
—
¥3,619,541
2,042,937
94,962
¥810,441
97,043
—
¥(27,872) ¥4,402,110
— 2,139,980
94,962
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
29,030
Trading-related financial derivatives ��������������������� 1,691,095
Other trading liabilities ������������������������������������������
—
2
434,588
—
—
(20,108)
—
29,032
2,105,576
—
14,035
1,467,606
—
147
713,250
—
—
(27,872)
—
14,182
2,152,983
—
Notes: 1. Domestic operations comprise the operations of the Company, its domestic consolidated banking subsidiaries (excluding overseas branches) and other
domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated
subsidiaries.
3. Inter-segment transactions are reported in the “Elimination” column.
011_0800804261908.indd 239
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2019/08/16 19:09:26
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Capital (Non-consolidated)
Sumitomo Mitsui Financial Group, Inc�
Changes in Number of Shares Issued and Capital Stock
July 26, 2017* ������������������������������������������
August 3, 2018** ��������������������������������������
August 20, 2018*** ����������������������������������
Number of shares issued
Capital stock
Capital reserve
Changes
387,765
326,330
(15,368,300)
Balances
1,414,443,390
1,414,769,720
1,399,401,420
Changes
847
699
—
Balances
2,338,743
2,339,443
2,339,443
Changes
847
699
—
Balances
1,560,221
1,560,921
1,560,921
Millions of yen
Remarks:
* Allotment to third parties (in-kind contribtions of monetary compensation claims):
Common stock: 387,765 shares
¥4,372
Issue price:
¥2,186
Capitalization:
** Allotment to third parties (in-kind contribtions of monetary compensation claims):
Common stock: 326,330 shares
¥4,287
Issue price:
¥2,144
Capitalization:
*** The decrease of 15,368,300 shares is due to cancellation of treasury stock.
Number of Shares Issued
March 31, 2019
Common stock ���������������������������������������������������������������������������������������������������������������������������������������������������������������
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of shares issued
1,399,401,420
1,399,401,420
240
011_0800804261908.indd 240
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 Capital (Non-consolidated)
Stock Exchange Listings
Tokyo Stock Exchange (First Section)
Nagoya Stock Exchange (First Section)
New York Stock Exchange*
* The Company listed its ADRs on the New York Stock Exchange.
Number of Common Shares, Classified by Type of Shareholders
March 31, 2019
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
340
57
6,697
1,178
374
264,799
273,452
—
Number of
units
4,774
4,134,151
995,174
1,232,156
5,964,312
5,990
1,638,658
13,975,215
1,879,920
Percentage of
total
0�03%
29�58
7�12
8�82
42�68
0�04
11�73
100�00%
—
Notes: 1. Of 3,800,918 shares in treasury stock, 38,009 units are included in “Individuals and others” and the remaining 18 shares are included in “Fractional shares.”
2. “Other institutions” and “Fractional shares” includes 29 units and 48 shares, held at Japan Securities Depository Center, Incorporated.
Principal Shareholders
March 31, 2019
The Master Trust Bank of Japan, Ltd� (Trust Account) ��������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account) �������������������������������������������������������������������������������������
NATSCUMCO* ���������������������������������������������������������������������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 9) ����������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 5) ����������������������������������������������������������������������������������
SSBTC CLIENT OMNIBUS ACCOUNT**�����������������������������������������������������������������������������������������������������
JP MORGAN CHASE BANK 385151*** �������������������������������������������������������������������������������������������������������
JPMorgan Securities Japan Co�, Ltd� ���������������������������������������������������������������������������������������������������������
Japan Trustee Services Bank, Ltd� (Trust Account 7) ����������������������������������������������������������������������������������
STATE STREET BANK WEST CLIENT - TREATY 505234*** �����������������������������������������������������������������������
Total �������������������������������������������������������������������������������������������������������������������������������������������������������������
Number of
shares
82,697,100
82,028,200
40,320,314
38,808,100
27,285,700
27,109,403
24,345,470
22,885,621
22,298,600
20,483,327
388,261,835
Percentage of
shares outstanding
5�92%
5�87
2�88
2�78
1�95
1�94
1�74
1�63
1�59
1�46
27�82%
* Standing agent: Sumitomo Mitsui Banking Corporation
** Standing agent: The Hongkong and Shanghai Banking Corporation Limited, Tokyo Branch, Custody Services Department
*** Standing agent: Mizuho Bank, Ltd. Settlement Service Department
Notes: 1. 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 the Company as of March 15, 2017. But, these ten are not
included in the above Principal Shareholders because the Company was unable to confirm the number of shares owned by them at the end of the fiscal
year ended March 31, 2019.
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 shares held: 90,686,690 shares (including joint ownership)
Shareholding ratio:
6.41%
2. Mizuho Securities Co., Ltd. has submitted a Report of Possession of Large Volume regarding its shareholding as of September 25, 2018. It stated that
Mizuho Securities Co., Ltd. and two other shareholders held the following common shares in the Company as of September 14, 2018. But, these three are
not included in the above Principal Shareholders because the Company was unable to confirm the number of shares owned by them at the end of the
fiscal year ended March 31, 2019.
The Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: Mizuho Securities Co., Ltd. (and two other joint holders)
Number of shares held: 70,765,251 shares (including joint ownership)
Shareholding ratio:
5.06%
3. Sumitomo Mitsui Trust Bank, Limited has submitted a Change Report of Possession of Large Volume regarding its shareholding as of December 20, 2018.
It stated that Sumitomo Mitsui Trust Asset Management Co., Ltd. and another shareholder held the following common shares in the Company as of
December 14, 2018. But, these two are not included in the above Principal Shareholders because the Company was unable to confirm the number of
shares owned by them at the end of the fiscal year ended March 31, 2019.
The Change Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: Sumitomo Mitsui Trust Asset Management Co., Ltd. (and another joint holder)
Number of shares held: 71,835,000 shares (including joint ownership)
Shareholding ratio:
5.13%
4. Mitsubishi UFJ Financial Group, Inc. has submitted a Change Report of Possession of Large Volume regarding its shareholding as of February 4, 2019. It
stated that Mitsubishi UFJ Trust and Banking Corporation and two other shareholders held the following common shares in the Company as of January
28, 2019. But, these three are not included in the above Principal Shareholders because the Company was unable to confirm the number of shares owned
by them at the end of the fiscal year ended March 31, 2019.
The Change Report of Possession of Large Volume is detailed as follows:
Principal Shareholder: Mitsubishi UFJ Trust and Banking Corporation(and two other joint holders)
Number of shares held: 55,938,703 shares (including joint ownership)
Shareholding ratio:
4.00%
011_0800804261908.indd 241
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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
2019
66,900 shares
Common stock
¥2,216 per share
¥1,108 per share
From August 13, 2010 to August 12, 2040
2019
187,200 shares
Common stock
¥1,873 per share
¥937 per share
From August 16, 2011 to August 15, 2041
2019
226,400 shares
Common stock
¥2,043 per share
¥1,022 per share
From August 15, 2012 to August 14, 2042
2019
76,000 shares
Common stock
¥4,160 per share
¥2,080 per share
From August 14, 2013 to August 13, 2043
2019
91,400 shares
Common stock
¥3,662 per share
¥1,831 per share
From August 15, 2014 to August 14, 2044
2019
105,600 shares
Common stock
¥4,905 per share
¥2,453 per share
From August 18, 2015 to August 17, 2045
2019
145,900 shares
Common stock
¥2,812 per share
¥1,406 per share
From August 15, 2016 to August 14, 2046
242
011_0800804261908.indd 242
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 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), we have 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: 173
Please refer to “Principal Subsidiaries and Affiliates” on page 140 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 us 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 of Sumitomo Mitsui Financial Group, an external audit was performed by KPMG AZSA LLC
pursuant to the Technical Practical Guidelines 4465 “Practical Guidelines on Agreed-Upon Procedures for the Capital Ratio Calculation
Framework.”
The aforementioned external audit was not meant to provide a statement of opinions or conclusions on the capital ratio itself or our internal
control framework for calculating the capital ratio, but to present us a report on the results of the procedure performed within the scope agreed
upon between the external auditor and us. It constitutes neither part of the audit of consolidated financial statements nor part of the audit of
our internal control over financial reporting.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 ■ CC1: Composition of regulatory capital
Basel III
Template No.
Items
(Millions of yen, except percentages)
a
b
As of March
31, 2019
As of March
31, 2018
c
Reference to
Template
CC2
Common Equity Tier 1 capital: instruments and reserves (1)
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: national specific regulatory adjustments (earnings to be distributed) (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Accumulated other comprehensive income and other disclosed reserves
5
Common share capital issued by subsidiaries and held by third parties (amount allowed in group
CET1)
8,921,854
8,510,089
3,078,490
5,992,247
16,302
132,582
—
2,539
1,713,884
3,096,958
5,552,573
12,493
126,950
—
2,823
1,753,424
2,181
332
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
10,640,460
10,266,670
Common Equity Tier 1 capital: regulatory adjustments (2)
8+9
Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing
rights)
8
9
10
of which: goodwill (including those equivalent)
of which: other intangibles 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 Securitisation gain on sale
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, net of eligible short positions, where the bank does not own
more than 10% of the issued share capital (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
of which: significant investments in the common stock of financials
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
19
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
of which: significant investments in the common stock of financials
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
27
657,131
711,731
247,659
409,472
292,318
419,413
2,208
1,432
(52,610)
81,582
60,286
3,940
228,913
4,491
—
(67,433)
66,256
60,215
2,646
266,468
7,981
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
985,942
1,049,297
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
9,654,517
9,217,372
244
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31, 2019
As of March
31, 2018
c
Reference to
Template
CC2
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
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in
group AT1)
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)
—
—
—
—
598,974
599,794
—
—
62,752
224,359
436,500
650,343
436,500
650,343
—
—
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
39
40
42
Investments in the capital of banking, financial and insurance entities that are outside the scope
of regulatory consolidation, net of eligible short positions, where the bank does not own more
than 10% of the issued common share capital of the entity (amount above the 10% threshold)
Significant investments in the Additional Tier 1 capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (net of eligible short positions)
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 (4)
(D)
1,098,227
1,474,497
—
—
—
—
—
—
25,516
81,640
—
—
25,516
81,640
1,072,710
1,392,857
(E)
(F)
(G)
10,727,228
10,610,229
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the 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 Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group T2)
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2:
instruments and provisions
47+49
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
51 Tier 2 capital: instruments and provisions
(H)
—
—
—
—
997,723
993,367
—
—
15,087
49,810
488,092
625,381
—
—
488,092
625,381
62,357
62,357
—
1,563,260
75,328
75,328
—
1,743,888
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments (5)
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
54
54a
55
Investments in the capital and other TLAC liabilities of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible short positions, where the
bank does not own more than 10% of the issued common share capital of the entity (amount
above the 10% threshold)
Investments in the other TLAC liabilities of banking, financial and insurance entities that are
outside the scope of regulatory consolidation, where the bank does not own more than 10% of
the issued common share capital of the entity: amount previously designated for the 5%
threshold but that no longer meets the conditions
Significant investments in the capital and other TLAC liabilities of banking, financial and
insurance entities that are outside the scope of regulatory consolidation (net of eligible short
positions)
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
59 Total capital (TC = T1 + T2) ((G) + (J))
Risk weighted assets (6)
60 Total risk-weighted assets (RWA)
Capital ratios (consolidated) and buffers (7)
(Millions of yen, except percentages)
a
b
As of March
31, 2019
As of March
31, 2018
c
Reference to
Template
CC2
0
—
—
0
—
—
—
50,000
50,000
50,000
50,000
1,513,260
1,693,888
(I)
(J)
(K)
12,240,489
12,304,117
(L)
58,942,791
63,540,277
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))
64 CET1 specific buffer requirement
65
66
67
68 CET1 available after meeting the minimum capital requirements
of which: capital conservation buffer requirement
of which: countercyclical buffer requirement
of which: G-SIB/D-SIB additional requirement
Regulatory adjustments (8)
72
73
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
Significant investments in the common stock of other financials 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 (9)
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) (if the amount is negative, report as “nil”)
16.37%
18.19%
20.76%
3.60%
2.50%
0.10%
1.00%
11.87%
14.50%
16.69%
19.36%
2.65%
1.87%
0.03%
0.75%
10.00%
816,189
699,361
921,378
617,191
—
—
2,605
3,997
72,970
62,357
—
75,328
85,252
—
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
265,937
288,292
Capital instruments subject to transitional arrangements (10)
82 Current cap on AT1 instruments subject to transitional arrangements
83
Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
84 Current cap on T2 instruments subject to transitional arrangements
85
Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
487,757
650,343
—
79,809
610,284
813,713
—
—
Items
Required capital ((L) ✕ 8%)
246
(Millions of yen)
As of March 31, 2019
4,715,423
As of March 31, 2018
5,083,222
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Overview of RWA (OV1)
OV1: Overview of RWA
Basel III
Template
No.
1 Credit risk (CR) (excluding counterparty credit risk)
2 Of which: Standardised Approach (SA)
3 Of which: internal ratings-based (IRB) approach
Of which: significant investments in commercial entities
Of which: lease residual value
Other assets
4 Counterparty credit risk (CCR)
5 Of which: standardised approach for counterparty credit risk (SA-CCR)
Of which: current exposure method (CEM)
6 Of which: Expected Positive Exposure (EPE)
Of which: Credit Valuation Adjustment (CVA)
Of which: Central Counterparty (CCP)
Others
7 Equity positions in banking book under market-based approach
8 Equity investments in funds – look-through approach
9 Equity investments in funds – mandate-based approach
Equity investments in funds – simple approach (subject to 250% risk weight)
Equity investments in funds – simple approach (subject to 400% risk weight)
10 Equity investments in funds – fall-back approach
Equity investment in funds (SA)
Equity investment in funds (IRB)
11 Settlement risk
12 Securitisation exposures in banking book
13
Of which: securitisation IRB approach (SEC-IRBA) or internal assessment approach
(IAA)
14 Of which: securitisation external ratings-based approach (SEC-ERBA)
15 Of which: securitisation standardised approach (SEC-SA)
Of which: IRB ratings-based approach (RBA)
Of which: IRB Supervisory Formula Approach (SFA)
Of which: Standardised Approach (SA)
Of which: Risk weight (RW) 1250% is applied
16 Market risk
17 Of which: standardised approach (SA)
18 Of which: internal model approaches (IMA)
19 Operational risk
20 Of which: Basic Indicator Approach
21 Of which: Standardised Approach
22 Of which: Advanced Measurement Approach
23 Amounts below the thresholds for deduction (subject to 250% risk weight)
RWA subject to transitional arrangements
24 Floor adjustment
25 Total (after applying scaling factors)
(Millions of yen)
a
b
c
d
RWA
As of
As of
March
March
31, 2018
31, 2019
39,966,325 44,008,267
4,773,898
2,843,844
33,898,986 35,686,496
—
467,926
3,079,946
3,918,579
—
1,051,112
—
2,252,318
172,536
442,610
1,134,141
—
52,206
3,171,288
4,111,505
—
1,094,827
—
2,376,345
177,913
462,418
699,163
2,107,834
—
20,577
317,353
41,684
As of
March
31, 2018
3,691,956
381,911
3,026,214
—
37,434
246,395
318,144
—
88,124
—
180,185
13,802
36,031
96,175
Minimum capital
requirements
As of
March
31, 2019
3,360,021
227,507
2,874,634
—
4,176
253,703
333,623
—
91,618
—
190,107
14,233
37,664
59,289
168,626
—
1,669
26,834
3,334
140,870
3,125,588
—
817,315
—
1,136,269
970,149
158,514
—
47,692
184,229
12,334
573,058
2,697,316
1,135,003
1,562,313
3,549,141
700,718
—
2,848,423
1,552,824
—
—
58,942,791 63,540,277
7,605
2,323,156
752,059
1,571,096
3,617,535
776,185
—
2,841,349
2,309,872
—
—
—
90,901
77,611
12,681
—
608
185,852
60,164
125,687
289,402
62,094
—
227,307
195,867
—
—
4,715,423
11,269
265,049
—
69,249
4,044
15,622
986
48,595
215,785
90,800
124,985
283,931
56,057
—
227,873
131,661
—
—
5,083,222
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Credit Quality of Assets
1. Overview of Criteria for Accounting Provisions and Write-Offs
(1) Policies and Methods of Provisions and Write-Offs
For “Policies and Methods of Provisions and Write-Offs,” please refer to pages 112 to 116 (Risk Management - 3. Credit Risk
Management Methods - (1) Credit Risk Assessment and Quantification, (4) Self-Assessment, Write-Offs and Provisions, Non-Performing
Loans Disclosure).
(2) Extent of the Number of Delinquency Days of “Past Due Loans of Three Months or More” that are Allowed Not to Classify Their Loan
Category as “Doubtful Assets” or Below (or Not to Judge as Loans to Parties Classified as Potentially Bankrupt Borrowers or Below) and
Reasons Thereof
At SMBC, as a core bank of SMBC Group, the delinquency period of past due loans of three months or more that are allowed not to
classify loans as doubtful assets or below (or not to judge as loans to parties classified as potentially bankrupt borrowers or below) is
generally less than six months, and they are loans to parties that are expected to improve business conditions. If there are any past due
loans of six months or more, they shall be in principle classified as loans to potentially bankrupt borrowers or below.
(3) Definition of Loans Whose Loan Terms and Conditions were Restructured
At SMBC, as a core bank of SMBC Group, loans whose loan terms and conditions were restructured are defined as loans with interest rate
reduction, deferred payment of interest, deferred repayment of principal amount, abandonment of loans, or other arrangements that are
advantageous for the obligors, for the purpose of business rehabilitation or support for the obligors. Obligors with loans whose loan
terms and conditions were restructured may not be classified as doubtful assets or below depending on the outlook for business
conditions, financial statements and loan terms and conditions. If the borrower category deteriorates due to restructuring of loan terms
and conditions, provisions will increase.
(4) Key Differences in Parameters of Credit Risks Used to Calculate Provisions and Capital Ratio, Respectively
SMBC, as a core bank of SMBC Group, uses Probability of Default and loan-loss ratio as parameters for calculation of provisions.
Probability of Default is calculated based on the actual performance in the past of the deterioration rate for one year from each borrower
category to potentially bankrupt borrowers or below (regarding the deterioration rate to potentially bankrupt borrowers, the
deterioration transition rates equivalent to three accumulated years from potentially bankrupt borrowers to effectively bankrupt
borrowers or below are included). For the PD used to calculate the capital ratio, deterioration to substandard borrowers or below is
defined as default, and assuming a long-term average value of the default rate, conservative estimation for some portfolios is conducted,
which is the major difference from the Probability of Default used to calculate provisions.
Loan-loss ratio is calculated using the loan-loss amount including direct write-offs and indirect write-offs incurred during the year for
each borrower category to the amount of initial existing exposure by borrower category.
For details of parameters used to calculate the capital ratio, please refer to pages 254 to 255 “3. Overview of Internal Rating System (2)
Parameter Estimation and Its Validation System.”
2. Credit Quality of Assets (CR1)
CR1: Credit quality of assets
As of March 31, 2019
As of March 31, 2018
(Millions of yen)
Item
No.
On-balance sheet assets
1
2
Loans
Securities (of which: debt securities)
Other on-balance sheet assets
(of which: debt-based assets)
Subtotal (1+2+3)
Off-balance sheet assets
3
4
a
b
Gross carrying
values of:
Defaulted
exposures
Non-
defaulted
exposures
c
d
Allowances
Net values
(a+b–c)
a
b
Gross carrying
values of:
Defaulted
exposures
Non-
defaulted
exposures
c
d
Allowances
Net values
(a+b–c)
679,145
4,343
76,937,799
17,806,238
436,374
77,180,570
— 17,810,581
712,660
5,522
72,812,660
18,988,606
482,264
73,043,056
— 18,994,128
5,765
63,680,487
21,406
63,664,846
5,799
59,162,065
62,432
59,105,432
689,254 158,424,525
457,781 158,655,999
723,981 150,963,333
544,697 151,142,617
Acceptances and guarantees, etc.
Commitments, etc.
Subtotal (5+6)
12,667
7,026
19,693
9,847,197
20,746,667
30,593,864
73,339
60,659
133,998
9,786,525
20,693,034
30,479,559
7,939
13,508
21,447
8,701,550
18,854,794
27,556,345
87,594
67,096
154,691
8,621,895
18,801,206
27,423,101
Total (4+7)
708,948 189,018,390
591,779 189,135,558
745,428 178,519,678
699,388 178,565,718
5
6
7
Total
8
248
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
3. Changes in stock of defaulted loans and securities (of which: debt securities) (CR2)
(Millions of yen)
CR2: Changes in stock of defaulted loans and securities (of which: debt securities)
Item
No.
1
2
3
4
5
6
Stock of loans and securities (of which: debt securities) that were placed
in defaulted status as of March 31, 2018
Changes in loans and securities (of
which: debt securities) by factors
during the current interim period
Amounts defaulted
Amounts returned to non-defaulted
status
Amounts written off
Other changes
Stock of loans and securities (of which: debt securities) that were placed
in defaulted status as of March 31, 2019 (1+2-3-4+5)
Amount
723,981
161,433
49,433
111,269
(35,457)
689,254
Note: The major factor for other changes is due to decreases in stock by collection and sale of receivables that were placed in defaulted status at the end of the previous fiscal year.
4. Term-End Balance of Exposures by Category and Their Breakdown by Major Type of Assets
(1) Exposure Balance by Type of Assets, Geographic Region and Industry
(Millions of yen)
As of March 31, 2019
As of March 31, 2018
Category
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
Overseas operations and offshore
banking accounts
Sovereigns
Financial institutions
C&I companies
Others
Total
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
Bonds
Others
Total
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
Bonds
Others
Total
113,695,547
13,028,014
7,819,862
134,543,424
105,435,792
14,838,466
10,784,910
131,059,169
9,095,207
295,529
1,959,265
11,350,002
8,622,976
311,691
2,817,598
11,752,266
516,118
1,162,654
13,035
43,884
10,848
540,001
383,489
156,515
1,363,053
1,154,497
6,310,609
174,252
615,181
7,100,043
5,936,126
5,764,959
54,249,795
249,713
1,012,399
317,123
188,531
6,331,796
55,450,726
5,789,870
47,550,467
4,251
49,254
181,049
259,965
933,232
33,127
420,868
321,144
1,524,896
992,859
7,110,035
832,307
378,959
6,882,143
48,862,659
9,365,923
1,251,563
136,385
10,753,873
8,066,088
1,208,487
343,144
9,617,719
4,517,647
2,435,177
20,277,453
397,536
21,102
9,568,998
124,502
1,065
4,310,441
5,039,686
2,457,346
34,156,894
4,506,592
2,678,992
20,746,690
404,287
65,751
11,420,496
1,074,615
20,961
3,970,193
5,985,494
2,765,705
36,137,379
48,427,182
4,784,721
1,564,532
54,776,436
46,481,209
4,155,824
2,879,224
53,516,258
9,093,815
5,449,564
27,931,363
5,952,438
162,122,729
3,338,992
1,095,238
276,791
73,700
17,812,736
6,442
380,646
—
1,177,443
9,384,395
12,439,250
6,925,449
28,208,154
7,203,581
189,319,860
11,236,616
5,331,988
24,798,102
5,114,503
151,917,001
1,830,040
728,389
180,533
1,416,859
18,994,290
—
428,845
—
2,450,379
13,664,135
13,066,656
6,489,222
24,978,636
8,981,742
184,575,428
Notes: 1. The above amounts are exposures after Credit Risk Mitigation (CRM).
2. The above amounts do not include “securitisation exposures” and “credit RWA under Article 145 of the Notification.”
3. “Domestic operations” comprises the operations of us, its domestic consolidated banking subsidiaries (excluding overseas branches) and other domestic consolidated
subsidiaries. “Overseas operations” comprises the operations of the overseas branches of domestic consolidated banking subsidiaries and overseas consolidated subsidiaries.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
(2) Exposure Balance by Type of Assets and Residual Term
(Millions of yen)
Category
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
As of March 31, 2019
As of March 31, 2018
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
32,620,590
18,175,523
17,740,873
6,460,343
22,894,533
64,230,864
162,122,729
Bonds
Others
Total
3,313,354
5,908,243
1,514,641
1,687,774
5,388,722
—
17,812,736
23,855
—
—
—
—
9,360,540
9,384,395
35,957,800
24,083,766
19,255,515
8,148,118
28,283,255
73,591,404
189,319,860
Loans,
commitments and
other off-balance
sheet exposures
except derivatives
41,938,248
17,161,498
13,094,941
5,084,112
21,489,662
53,148,538
151,917,001
Bonds
Others
Total
6,650,406
5,587,944
1,086,147
451,333
5,218,459
—
18,994,290
475,934
443,433
434,360
205,309
308,768
11,796,328
13,664,135
49,064,590
23,192,875
14,615,449
5,740,755
27,016,890
64,944,867
184,575,428
Notes: 1. The above amounts are exposures after CRM.
2. The above amounts do not include “securitisation exposures” and “credit RWA under Article 145 of the Notification.”
3. “No fixed maturity” includes exposures not classified by residual term.
5. Amounts of Reserves and Write-offs Corresponding to the Term-End Balance of Obligors’ Exposures Related to Loans Prescribed
in the Provisions of Article 4, Paragraph 2 (Bankrupt and Quasi-Bankrupt Assets), Paragraph 3 (Doubtful Assets) or Paragraph 4
(Substandard Loans) of the Ordinance for Enforcement of the Act on Emergency Measures for the Revitalization of Financial
Functions, as well as Breakdown by Each of the Following Categories
(1) By Geographic Region
Domestic operations (excluding offshore
banking accounts)
Overseas operations and offshore banking
accounts
Asia
North America
Other regions
Total
(2) By Industry
Domestic operations (excluding offshore
banking accounts)
Manufacturing
Agriculture, forestry, fishery and mining
Construction
Transport, information, communications
and utilities
Wholesale and retail
Financial and insurance
Real estate, goods rental and leasing
Services
Other industries
Overseas operations and offshore banking
accounts
Financial institutions
C&I companies
Others
Total
Term-end
balance
Fiscal 2018
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2017
Term-end
Reserves
Write-offs for
the year
800.4
176.7
24.3
53.1
99.3
977.1
235.2
86.1
16.0
20.3
49.8
321.3
90.1
12.2
9.8
3.0
(0.6)
102.3
859.8
191.1
15.8
38.1
137.2
1,050.9
285.9
85.4
11.3
6.8
67.3
371.3
41.0
14.5
4.3
2.1
8.1
55.5
Term-end
balance
Fiscal 2018
Term-end
Reserves
Write-offs for
the year
Term-end
balance
(Billions of yen)
Fiscal 2017
Term-end
Reserves
Write-offs for
the year
800.4
109.5
6.3
17.5
40.8
93.4
8.4
52.1
78.7
393.7
176.7
2.2
92.2
82.3
977.1
235.2
25.7
6.2
5.2
18.0
39.6
2.9
5.6
28.3
103.7
86.1
0.3
54.4
31.4
321.3
90.1
(0.3)
(1.5)
0.3
0.5
1.9
(0.1)
5.8
1.1
82.4
12.2
0.0
0.5
11.7
102.3
859.8
285.9
88.0
9.5
16.8
57.7
110.7
3.6
68.7
92.1
412.7
191.1
2.5
91.5
97.1
1,050.9
37.5
7.7
6.2
27.5
49.7
3.0
12.1
39.7
102.5
85.4
0.4
52.6
32.4
371.3
41.0
(0.3)
1.5
(0.1)
(8.3)
3.0
(0.3)
(0.5)
2.1
43.9
14.5
0.0
8.9
5.6
55.5
Notes: 1. Term-end Reserves include partial direct write-offs (direct reduction).
2. “Domestic operations” comprises the operations of SMBC Group (excluding overseas branches) and domestic consolidated subsidiaries. “Overseas operations” comprises the
operations of SMBC Group’s overseas branches and overseas consolidated subsidiaries, and the term-end balances are calculated based on the obligor’s domicile country.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 6. Term-End Balance of Exposures by Past Due Periods
Less than 1 month
1 month or more to less
than 2 months
Fiscal 2018
2 months or more to less
than 3 months
3 months or more
Total
180.3
62.7
26.4
59.1
328.5
Notes: 1. Bankrupt and Quasi-Bankrupt Assets prescribed in Article 4, Paragraph 2 of the Ordinance for Enforcement of the Act on Emergency Measures for the Revitalization of
Financial Functions and doubtful assets prescribed in Paragraph 3 of the said Article are excluded.
Items that are not accompanied by deterioration of business conditions/cash flows are excluded.
2.
(Billions of yen)
Less than 1 month
1 month or more to less
than 2 months
Fiscal 2017
2 months or more to less
than 3 months
3 months or more
Total
169.0
55.8
19.9
53.6
298.3
Notes: 1. Bankrupt and Quasi-Bankrupt Assets prescribed in Article 4, Paragraph 2 of the Ordinance for Enforcement of the Act on Emergency Measures for the Revitalization of
Financial Functions and doubtful assets prescribed in Paragraph 3 of the said Article are excluded.
Items that are not accompanied by deterioration of business conditions/cash flows are excluded.
2.
3. Divergence from the 2018 Annual Report is due to the inclusion of doubtful assets or below by certain group companies.
(Billions of yen)
7. Term-End Balance of Exposures of Obligors Whose Loan Conditions were Restructured for Business Rehabilitation or Support;
of Which Amounts of Increased Reserves for Such Exposures and Other Amounts due to the Restructuring of the Loan
Conditions
Term-end balance
Fiscal 2018
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
Of which: other
amounts
Term-end balance
Fiscal 2017
Of which: amounts of increased
Reserves for such exposures
due to the restructuring of the
loan conditions
(Billions of yen)
Of which: other
amounts
223.2
223.2
0.0
247.9
247.9
0.0
Note: Bankrupt and Quasi-Bankrupt Assets prescribed in Article 4, Paragraph 2 of the Ordinance for Enforcement of the Act on Emergency Measures for the Revitalization of Financial
Functions, doubtful assets prescribed in Paragraph 3 of the said Article, and loans past due three months or more prescribed in Paragraph 4 of the said Article are excluded.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Internal Ratings-Based (IRB) Approach
1. Background on Determining the Scope of Application of Internal Ratings-Based (IRB) Approach
When the criteria of materiality defined by us according to business characteristics and business conditions, etc. are met, in principle, the
IRB approach is adopted by the unit of our asset class or by the unit of the affiliated group companies. In addition, for the asset class or
group companies that meet the quantitative criteria specified by the authorities, the IRB approach is in principle adopted regardless of
whether the criteria of materiality are met.
For adopting the IRB approach, the Advanced Internal Ratings-Based (AIRB) approach is in principle adopted. However, for group
companies which were judged unnecessary or inappropriate to adopt the AIRB approach in light of the scale, business contents, etc., the
Foundation Internal Ratings-Based (FIRB) approach is adopted.
2. Scope
We 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, SMBC Trust Bank Ltd.
(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, SMBC Bank EU AG and PT Bank BTPN Tbk.
SMBC Finance Service Co., Ltd. has 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 standardised approach.
3. Overview of Internal Rating System
(1) Rating Procedures
(A) Corporate Exposures
• “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 pages 112 to 113). 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 following page 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 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
Virtually Bankrupt Borrowers
Bankrupt Borrowers
J5
J6
J7
J7R
J8
J9
J10
• “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, 2019.
• 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 five categories
(hereinafter the “slotting criteria”) of the Notification because it does not satisfy the requirements for PD application specified in
the Notification.
(B) Retail Exposures
• “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 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 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.
• “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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
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.
• “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 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 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 “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.
(C) Equity Exposures
When acquiring equities subject to the PD/LGD approach, issuers are assigned obligor grades using the same rules as those of
general credits to C&I companies, sovereigns and financial institutions. The obligors are monitored (for details, please refer to page
114) 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.
(2) Parameter Estimation and Its Validation System
A. PD
This is defined as the probability that obligors could default over one year. PD is estimated as the expected value in the long term
regardless of the business cycle using the default rate for each fiscal year based on the historical data for five consecutive fiscal years or
more. In principle, the default rate for each fiscal year is measured by the initial number of target obligors as the numerator and the
number of defaults occurred during the fiscal year as the denominator.
For assets, ratings, and portfolios applicable to LDP (LDP: Low Default Portfolio), conservative PD is estimated by creating virtual
rating transition data based on Monte Carlo simulation and by using the floor value proposed under Basel regulation.
The actual default rates in the past three periods are lower than PD estimate values applied for the respective periods, because the
long-term average value including the recession period is estimated, and also because the possibility of estimation errors is taken into
account.
Validation consists of two systems: “backtesting” to retrospectively compare and validate the parameter estimated value and the
actual value for the respective applicable period, and “pretesting” to validate before applying the parameter for the purpose of
complementing the “backtesting.” The overview for each is as follows.
(a) Backtesting
This is to compare the parameter estimated value with the actual value at least once a year, and to validate that the degree of
divergence is within the statistically assumed range.
In case of hitting the predetermined excess criteria as a result of validation, reviews shall be taken including revising the
estimation method or rating system.
(b) Pretesting
This is to compare and validate the estimated value to be applied and the historical value. In the case of hitting the predetermined
excess criteria, the estimated value shall be conservatively corrected.
The purpose is to prevent underestimation by making adjustments, if necessary.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
B. LGD
This is defined as the ratio of loss amounts after default to the amount of receivable at the time of default. LGD is estimated as a long-
term average value calculated based on historical data over seven consecutive fiscal years (for retail, five fiscal years) or more. However,
in the case where a high positive correlation with the default rate is observed, LGD shall be in principle the value taking into account
the possibility that the loss rate of the recession period will exceed the long-term average value, and it is estimated mainly by one of
the following methods.
• By taking into account the influence of the recession period on the interest rate to customers constituting the discount rate for
calculating the economic loss to be used for estimation
• By taking into account the influence of the recession period by modeling the relationship between the loss ratio and economic and
financial indicators, etc.
For the purpose of estimating LGD using economic loss based on Basel requirement, discount rate is estimated with using recovery
cost. The averaged period from the time of default and the termination of recovery is used as discount period.
As for validation, backtesting and pretesting are conducted as in the A. PD.
C. EAD
This is defined as the amount of exposure at the time of default. EAD is estimated as a long-term average value calculated based on
the historical data over seven consecutive fiscal years (for retail, five fiscal years) or more. For estimation, the possibility that the
default balance may exceed the latest balance is assumed and taken into account, and is estimated by one of the following methods.
• By estimating the conversion factor that is the ratio of actually drawn amount to the amount associated with undrawn commitments
one year before the time of default
• By estimating the conversion factor that is the ratio of the average outstandings of the default borrowers to the average outstandings
of the non-default borrowers of the whole limit-type credit subject to the estimation
• By estimating an increased amount by comparing the initial outstandings with ones at the time of default and taking the average
for each segment
As for validation, backtesting and pretesting are conducted as in the A. PD.
4. Percentage of EAD by Asset Class by Type of Approach for Calculating Credit RWA to Total EAD
As of March 31, 2019
As of March 31, 2018
IRB approach
Corporate exposures (Advanced Internal Ratings-Based (AIRB) approach)
Corporate exposures (Foundation Internal Ratings-Based (FIRB) approach)
Retail exposures
Equity exposures
Purchased receivables (AIRB approach)
Purchased receivables (FIRB approach)
Other assets, etc.
SA
Total
94.82 %
81.24 %
0.27 %
8.15 %
2.19 %
1.00 %
0.00 %
1.94 %
5.17 %
100.00 %
94.17 %
78.73 %
1.27 %
8.78 %
2.43 %
1.00 %
0.04 %
1.89 %
5.82 %
100.00 %
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 5. CR Exposures by Portfolio and PD (CR6)
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2019
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF (Credit
Conversion
Factor) and
pre CRM
c
d
e
f
g
h
i
j
k
l
Average
CCF
(%)
EAD
post
CCF and
post
CRM
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
EL
Eligible
provisions
Sovereign exposures (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
69,453,467
431,406
20,692
0
157,002
56,447
4,668
14
70,123,699
78,330
38,263
3,601
—
52,286
18,344
1,048
—
191,874
Sovereign exposures (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
—
—
—
—
—
—
—
—
Bank exposures (AIRB approach)
3,216,252
733,785
85,671
3,290
552,906
84,714
—
2,706
4,679,326
Bank exposures (FIRB approach)
15,684
—
—
—
—
246
—
—
15,930
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
—
—
—
—
—
—
—
—
624,391
319,461
27,324
—
80,578
64,543
—
—
1,116,298
—
—
—
—
—
—
—
—
—
Corporate exposures (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
25,503,136 12,003,437
7,974,982
12,341,508
1,692,490
4,543,025
128,805
977,494
2,751,808
4,393,656
202,744
1,177,025
223,729
320,598
8,299
225,062
49,481,506 24,986,298
256
89.51 72,190,343
457,064
46.67
14,852
47.36
—
0
120,951
68.32
21,362
46.62
1,126
82.16
14
—
70.26 72,805,716
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
71.62
85.48
83.33
—
64.89
44.96
—
—
73.84
3,837,811
965,080
100,131
3,290
533,872
100,751
—
2,706
5,543,644
—
—
—
—
—
—
—
—
—
15,684
—
—
—
—
246
—
—
15,930
54.96 36,348,114
53.90 15,185,261
5,015,580
52.14
1,029,655
50.68
3,590,654
51.35
1,005,471
53.34
390,917
60.72
185,511
100.00
54.07 62,751,168
0.00
0.16
0.30
0.53
1.45
3.98
12.08
100.00
0.00
—
—
—
—
—
—
—
—
—
0.03
0.16
0.28
0.53
1.08
2.92
—
100.00
0.26
0.03
—
—
—
—
2.56
—
—
0.06
0.05
0.17
0.32
0.53
1.21
3.15
13.42
100.00
0.60
0.4
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.6
—
—
—
—
—
—
—
—
—
0.7
0.2
0.0
0.0
0.1
0.6
—
0.0
1.7
0.0
—
—
—
—
0.0
—
—
0.1
7.0
6.3
3.1
1.3
3.7
1.3
0.4
0.3
23.7
34.38
32.49
33.57
35.00
33.68
34.66
21.74
34.07
34.37
—
—
—
—
—
—
—
—
—
33.72
29.35
30.12
34.45
34.64
34.41
—
97.40
33.02
45.00
—
—
—
—
45.00
—
—
45.00
34.46
29.18
29.70
28.81
27.06
30.07
29.24
50.33
32.23
4.0
2.2
2.2
1.0
2.7
1.9
2.0
2.2
4.0
—
—
—
—
—
—
—
—
—
2.2
1.1
1.2
1.3
0.6
1.0
—
1.2
1.8
5.0
—
—
—
—
5.0
—
—
5.0
164,668
126,865
5,626
0
93,573
25,003
1,088
7
416,833
—
—
—
—
—
—
—
—
—
600,581
212,981
31,985
1,917
318,811
99,100
—
1,356
1,266,735
5,524
—
—
—
—
454
—
—
5,978
6,458,543
2.5
4,190,022
2.5
1,943,358
2.7
478,683
2.4
2,197,645
2.9
1,083,456
3.7
519,952
2.2
52,915
2.1
2.5 16,924,578
0.22
27.75
37.88
42.85
77.36
117.04
96.65
53.13
0.57
—
—
—
—
—
—
—
—
—
15.64
22.06
31.94
58.28
59.71
98.36
—
50.13
22.85
35.22
—
—
—
—
184.32
—
—
37.53
17.76
27.59
38.74
46.48
61.20
107.75
133.00
28.52
26.97
184
252
14
0
590
294
30
5
1,372
—
—
—
—
—
—
—
—
—
493
476
86
6
1,991
1,006
—
2,636
6,696
2
—
—
—
—
2
—
—
4
7,287
7,548
4,698
1,573
11,674
9,262
14,964
93,381
150,390
1,624
—
7,173
8
154,809
012_0800885851907.indd 256
2019/08/16 19:25:54
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2019
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Corporate exposures (FIRB approach)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
40
—
23
63
—
—
—
—
—
40
—
23
63
—
—
—
—
—
0.0
—
0.0
0.0
—
—
—
—
—
2.56
—
100.00
38.23
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
—
—
—
—
45.00
—
45.00
45.00
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
26.10
30.46
32.39
31.01
36.05
29.74
32.54
46.22
32.41
623,457
1,260,956
1,243,431
652,713
1,809,801
630,107
187,175
175,730
6,583,375
Mid-sized corporations and SMEs exposures (FIRB approach)
—
—
—
—
2
5
—
—
7
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
576,250
1,268,741
1,268,465
704,287
2,248,740
917,344
285,084
253,076
7,521,991
17,679
81,430
39,812
8,429
130,381
102,701
5,205
432
386,072
0.08
0.17
0.31
0.55
1.44
2.65
16.88
100.00
3.95
49.86
61.51
63.81
54.88
62.49
51.63
49.26
100.00
58.65
1.2
5.1
7.0
5.0
23.9
14.3
4.7
4.0
65.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2
5
—
—
7
Specialized lending (SL)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
Equity exposures
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1,760,726
1,756,561
1,570,972
90,408
985,045
192,398
63,221
52,882
6,472,217
3,575,798
196,091
12,741
2,953
5,516
7,994
1,604
393
3,803,094
96,795
570,251
520,039
—
172,972
29,676
25,192
7,851
1,422,778
46.62
52.00
58.28
—
57.43
94.19
65.36
100.00
55.97
1,764,239
1,884,080
1,274,658
90,408
876,489
118,276
76,788
50,193
6,135,134
—
—
—
—
—
—
—
—
—
— 3,575,798
196,091
—
12,741
—
2,953
—
5,516
—
7,994
—
1,604
—
393
—
— 3,803,094
—
—
—
—
1.57
3.05
—
—
2.63
0.04
0.16
0.36
0.53
1.09
3.38
13.54
100.00
1.35
0.04
0.17
0.27
0.53
1.36
2.56
10.30
100.00
0.07
—
—
—
—
0.0
0.0
—
—
0.0
0.2
0.4
0.2
0.0
0.2
0.0
0.0
0.0
1.2
1.3
0.4
0.1
0.0
0.0
0.0
0.0
0.0
2.2
—
—
—
—
45.00
45.00
—
—
45.00
24.56
25.19
24.65
29.56
30.64
30.42
32.54
55.48
26.18
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
—
—
—
—
—
5.0
—
5.0
5.0
2.8
3.4
3.9
3.3
3.1
3.9
2.1
1.6
3.3
—
—
—
—
1.0
1.0
—
—
1.0
3.5
4.1
3.9
4.5
3.7
3.1
4.1
3.2
3.8
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
—
—
—
—
—
75
—
—
75
95,427
354,913
518,308
302,696
1,267,982
451,548
249,004
27,097
3,266,979
—
—
—
—
2
7
—
—
10
214,308
559,205
509,668
56,914
620,869
112,731
130,656
26,667
2,231,023
3,643,225
262,251
20,772
5,730
15,471
30,530
8,953
4,428
3,991,363
—
—
—
—
—
189.84
—
0.00
120.34
15.30
28.14
41.68
46.37
70.06
71.66
133.03
15.41
49.62
—
—
—
—
110.24
134.96
—
—
128.11
12.14
29.68
39.98
62.95
70.83
95.31
170.15
53.13
36.36
101.88
133.73
163.02
194.02
280.47
381.88
557.87
1,125.00
104.95
—
—
—
—
—
0
—
10
10
133
678
1,293
1,125
9,810
4,972
12,347
81,238
111,599
—
—
—
—
0
0
—
—
0
180
799
1,158
141
2,973
1,172
3,427
27,851
37,706
—
—
—
—
—
—
—
—
—
129
108,991
0
42,089
—
257
012_0800885851907.indd 257
2019/08/16 19:25:54
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2019
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Purchased receivables (corporates) (the amount equivalent to default risks) (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
990,373
410,217
83,101
14,517
60,153
3,812
589
4,866
1,567,631
50,697
115,696
39,940
50,469
75,444
19,821
1,709
270
354,049
99.99
77.19
100.00
100.00
95.20
100.00
100.00
100.00
91.52
1,030,611
496,474
121,873
64,907
131,083
23,503
2,296
5,080
1,875,834
0.05
0.17
0.34
0.61
1.45
2.62
32.23
100.00
0.56
4.0
7.7
5.1
7.5
13.8
3.7
0.3
0.1
42.5
35.41
33.53
42.27
59.59
48.30
60.36
57.66
80.78
37.56
Purchased receivables (corporates) (the amount equivalent to dilution risks) (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
600,177
232,666
127,296
15,517
36,218
3,576
—
1,928
1,017,381
14,455
34,959
18
—
—
—
—
—
49,434
46.62
46.62
46.62
—
—
—
—
—
46.62
606,917
248,910
127,305
15,517
36,218
3,576
—
1,928
1,040,374
0.06
0.17
0.32
0.53
1.21
3.97
—
100.00
0.36
0.0
0.0
0.0
0.0
0.0
0.0
—
0.0
0.1
33.83
30.38
31.05
35.00
32.48
21.32
—
47.03
32.62
Purchased receivables (corporates) (the amount equivalent to default risks) (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
—
—
—
—
—
—
46
46
54
676
1,377
4,512
3,374
146
—
—
10,142
100.00
100.00
100.00
100.00
100.00
100.00
—
—
100.00
54
676
1,377
4,512
3,374
146
—
44
10,186
0.05
0.22
0.39
0.65
1.23
3.05
—
100.00
1.24
0.0
0.0
0.0
0.0
0.0
0.0
—
0.0
0.0
45.00
45.00
45.00
45.00
45.00
45.00
—
45.00
45.00
Purchased receivables (corporates) (the amount equivalent to dilution risks) (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
20
2
7
14
—
—
—
46
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
20
2
7
14
—
—
—
46
—
0.18
0.39
0.67
0.95
—
—
—
0.52
Purchased receivables (retail) (the amount equivalent to default risks)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
3,058
5,605
3,688
1,248
130
—
—
0
13,730
—
—
—
—
18
2
—
—
21
—
—
—
—
100.00
100.00
—
—
100.00
3,058
5,604
3,687
1,247
148
2
—
0
13,750
0.08
0.21
0.33
0.64
1.11
3.05
—
100.00
0.27
—
0.0
0.0
0.0
0.0
—
—
—
0.0
0.0
0.0
0.4
0.0
0.0
0.0
—
0.0
0.4
—
45.00
45.00
45.00
45.00
—
—
—
45.00
65.00
65.00
42.79
64.42
62.96
65.00
—
81.53
58.97
1.1
1.1
1.0
1.0
1.2
1.1
1.0
1.0
1.1
1.0
1.0
1.0
1.1
1.0
1.0
—
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
—
1.0
1.0
—
1.0
1.0
1.0
1.0
—
—
—
1.0
—
—
—
—
—
—
—
—
—
118,019
108,517
48,413
50,205
116,078
28,692
4,410
661
474,998
68,151
51,105
37,973
6,758
21,609
3,507
—
265
189,371
6
209
540
2,326
2,171
127
—
—
5,381
—
5
1
4
13
—
—
—
25
412
1,521
940
665
99
1
—
0
3,641
11.45
21.85
39.72
77.34
88.55
122.07
192.02
13.01
25.32
11.22
20.53
29.82
43.55
59.66
98.07
—
13.75
18.20
11.21
31.01
39.19
51.56
64.35
86.82
—
0.00
52.83
—
28.16
45.37
61.05
91.71
—
—
—
55.07
13.49
27.13
25.50
53.36
66.56
90.91
—
13.75
26.48
234
300
178
240
889
373
424
4,104
6,746
135
136
127
28
139
51
—
906
1,526
0
0
2
13
18
2
—
19
57
—
0
0
0
0
—
—
—
0
1
7
5
5
1
0
—
0
21
3,137
735
44
0
25
258
012_0800885851907.indd 258
2019/08/16 19:25:55
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2019
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Purchased receivables (retail) (the amount equivalent to dilution risks) (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
49
—
—
—
—
—
—
—
49
—
—
—
—
—
—
—
—
—
Qualifying revolving retail exposures (QRRE)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
63,222
270,442
306,429
234,914
542,536
827,903
34,314
75,609
2,355,373
Residential mortgage exposures
—
—
7,487,736
978,326
1,074,533
—
32,676
98,771
9,672,044
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
183,004
110,524
287,713
373,026
53,874
165,197
4,214
5,547
1,183,102
—
—
10,596
1,780
3,202
—
1,418
70
17,068
—
—
—
—
—
—
—
—
—
6.55
6.35
10.90
57.54
16.42
6.84
9.59
100.00
33.43
—
—
100.00
100.00
100.00
—
100.00
100.00
100.00
49
—
—
—
—
—
—
—
49
246,227
380,966
594,142
607,941
596,411
993,100
38,529
81,157
3,538,476
66,289
2,101
7,499,041
980,108
1,012,811
—
29,918
98,841
9,689,113
Other retail exposures
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
Total (all portfolios)
2
102,833
349,497
50,000
945,786
31,508
16,960
55,898
1,552,487
—
—
342
1,284
502,021
147,294
5,212
967
657,123
158,276,630 30,374,265
—
—
83.62
89.80
95.74
100.00
100.00
100.00
100.00
2
102,833
349,839
51,285
1,447,808
178,802
22,172
56,865
2,209,611
58.40 176,015,577
0.03
—
—
—
—
—
—
—
0.03
0.08
0.19
0.40
0.51
1.67
4.73
49.54
100.00
4.62
0.05
0.17
0.29
0.59
1.00
—
22.72
100.00
1.48
0.08
0.17
0.40
0.69
1.41
3.50
22.83
100.00
4.10
0.65
0.0
—
—
—
—
—
—
—
0.0
3,519.3
1,842.0
3,858.6
3,267.9
610.3
1,630.0
76.2
139.3
14,944.0
6.9
0.2
462.7
54.7
77.8
—
2.7
7.7
612.8
0.0
2.5
10.8
2.1
2,472.7
142.0
39.5
90.4
2,760.4
18,455.9
45.00
—
—
—
—
—
—
—
45.00
69.57
70.17
64.60
74.25
77.81
75.52
72.88
77.62
72.88
41.36
66.14
27.66
29.57
35.89
—
30.54
30.76
28.86
69.57
35.25
36.46
35.91
50.84
46.14
51.29
56.30
47.25
35.07
5.0
—
—
—
—
—
—
—
5.0
12
—
—
—
—
—
—
—
12
8,556
27,348
72,601
102,965
261,390
864,699
65,835
75,999
1,479,397
16,196
902
1,100,798
256,704
466,838
—
50,806
24,618
1,916,865
0
13,133
80,426
15,825
830,910
117,377
24,427
90,458
1,172,559
— 33,345,832
25.88
—
—
—
—
—
—
—
25.88
3.47
7.17
12.21
16.93
43.82
87.07
170.87
93.64
41.80
24.43
42.92
14.67
26.19
46.09
—
169.81
24.90
19.78
14.63
12.77
22.98
30.85
57.39
65.64
110.16
159.07
53.06
18.94
0
—
—
—
—
—
—
—
0
137
507
1,559
2,321
7,789
35,450
13,891
62,996
124,653
14
2
6,064
1,739
3,809
—
2,054
30,408
44,093
0
61
514
128
10,603
2,873
2,593
32,017
48,792
533,673
0
89,065
28,735
28,150
464,718
012_0800885851907.indd 259
259
2019/08/16 19:25:55
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2018
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF (Credit
Conversion
Factor) and
pre CRM
c
d
e
f
g
h
i
j
k
l
Average
CCF
(%)
EAD
post
CCF and
post
CRM
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
EL
Eligible
provisions
Sovereign exposures (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
68,167,222
317,319
55,549
54
109,383
58,134
5,023
5,691
68,718,379
125,318
35,948
17,544
—
60,078
28,997
13,152
—
281,038
Sovereign exposures (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
10,630
—
—
—
—
168
—
—
10,798
Bank exposures (AIRB approach)
2,624,230
702,915
124,531
3,204
542,118
68,625
—
2,661
4,068,287
Bank exposures (FIRB approach)
2,637
—
—
—
—
1,773
—
—
4,411
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
—
—
—
—
—
—
—
—
—
581,505
167,241
12,565
—
34,427
80,669
83
—
876,492
243
10
—
—
—
315
—
—
568
76.91 70,969,920
319,948
47.75
59,366
47.94
—
54
58,440
66.65
22,313
47.31
2,298
52.84
5,691
—
65.00 71,438,035
—
—
—
—
—
—
—
—
—
77.15
83.68
69.61
—
74.90
33.45
20.00
—
74.17
100.00
100.00
—
—
—
100.00
—
—
100.00
10,630
—
—
—
—
168
—
—
10,798
3,146,406
834,879
117,658
3,204
493,919
91,369
—
2,661
4,690,099
2,881
10
—
—
—
2,089
—
—
4,980
Corporate exposures (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
22,196,795 10,658,246
6,450,034
10,819,575
2,055,308
4,553,570
68,336
938,711
2,115,541
4,150,918
271,399
1,310,290
395,537
494,124
16,194
197,593
44,661,581 22,030,599
54.59 32,012,176
53.60 13,061,831
5,150,552
54.63
965,362
54.33
3,385,408
52.85
1,122,868
63.23
596,149
55.88
100.00
192,826
54.30 56,487,175
260
0.00
0.17
0.33
0.55
2.01
4.05
15.43
100.00
0.01
0.00
—
—
—
—
2.58
—
—
0.04
0.03
0.17
0.34
0.55
1.08
3.24
—
100.00
0.29
0.03
0.18
—
—
—
2.58
—
—
1.10
0.05
0.17
0.34
0.55
1.46
3.09
13.95
100.00
0.75
0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
0.0
—
—
—
—
0.0
—
—
0.0
0.6
0.2
0.0
0.0
0.1
0.6
0.0
0.0
1.7
0.0
0.0
—
—
—
0.0
—
—
0.1
6.8
6.0
3.1
1.4
3.8
1.5
0.5
0.3
23.7
34.07
33.89
32.71
35.00
32.36
31.38
23.46
52.99
34.07
45.00
—
—
—
—
45.00
—
—
45.00
33.42
30.31
32.08
35.16
34.91
33.59
—
98.44
33.03
45.00
45.00
—
—
—
45.00
—
—
45.00
35.48
29.39
28.78
29.96
27.21
32.62
32.63
48.77
32.83
3.7
2.6
1.7
1.0
2.9
2.7
1.7
1.0
3.7
4.0
—
—
—
—
4.2
—
—
4.0
1.8
1.1
1.4
1.6
1.0
1.2
—
1.0
1.5
4.9
5.0
—
—
—
4.0
—
—
4.5
213,320
103,974
20,409
23
49,689
24,865
2,590
2,974
417,847
—
—
—
—
—
243
—
—
243
411,117
196,553
45,858
2,058
334,179
89,728
0
1,299
1,080,795
1,088
8
—
—
—
3,666
—
—
4,763
5,766,807
2.5
3,638,855
2.4
1,933,386
2.5
477,409
2.5
2,232,607
3.0
1,277,847
3.6
916,897
2.3
2.1
54,227
2.5 16,298,039
0.30
32.49
34.37
42.70
85.02
111.43
112.67
52.25
0.58
0.00
—
—
—
—
144.51
—
—
2.25
13.06
23.54
38.97
64.22
67.65
98.20
—
48.83
23.04
37.77
85.48
—
—
—
175.49
—
—
95.64
18.01
27.85
37.53
49.45
65.94
113.80
153.80
28.12
28.85
219
188
62
0
391
283
85
3,016
4,246
—
—
—
—
—
1
—
—
1
406
431
132
6
1,862
979
0
2,620
6,439
0
0
—
—
—
24
—
—
24
6,488
6,655
5,006
1,591
13,227
10,699
25,753
94,047
163,471
5,658
2
7,994
42
196,675
012_0800885851907.indd 260
2019/08/16 19:25:55
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2018
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Corporate exposures (FIRB approach)
1.6
1.3
0.8
0.5
0.9
1.4
0.1
0.0
7.0
28,934
6,838
1,770
2,129
817
3,066
59
—
43,614
0.06
0.17
0.28
0.55
1.38
2.58
13.94
100.00
2.53
96.05
99.36
99.77
100.00
100.00
91.77
100.00
—
96.69
777,916
347,029
98,751
66,698
83,269
262,382
74,717
24,759
1,735,525
805,710
353,824
100,517
68,827
84,087
265,196
74,777
24,759
1,777,700
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
45.44
45.19
45.79
45.00
45.00
45.09
60.25
45.00
45.94
Mid-sized corporations and small-medium enterprises (SMEs) exposures (AIRB approach)
26.07
30.73
32.74
31.35
37.29
29.41
35.31
47.01
33.05
498,998
1,330,684
1,205,066
838,231
1,767,292
676,208
207,014
205,651
6,729,149
Mid-sized corporations and SMEs exposures (FIRB approach)
4,643
4,575
12,750
12,696
9,337
9,265
9,832
9,706
29,817
28,852
6,208
6,091
2,397
2,345
551
544
75,538
74,078
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
486,380
1,326,614
1,236,338
887,394
2,122,881
1,015,395
339,793
262,978
7,677,777
14,611
96,538
21,826
13,866
124,359
131,837
2,744
1,227
407,011
0.08
0.17
0.30
0.55
1.49
2.66
17.26
100.00
4.41
53.22
60.69
55.93
49.25
68.45
55.37
49.96
100.00
60.47
100.00
100.00
100.00
100.00
99.92
100.00
100.00
100.00
99.95
68
54
72
125
965
116
52
6
1,460
1.1
4.8
6.5
5.6
24.9
16.1
6.0
4.0
69.3
Specialized lending (SL)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
Equity exposures
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
1,744,348
1,551,583
1,715,293
160,319
796,408
192,784
74,703
52,575
6,288,017
3,872,128
210,449
22,503
4,671
8,256
10,538
19,848
188
4,148,585
159,449
496,168
574,376
—
203,735
42,326
244
1,148
1,477,449
47.79
53.75
57.85
—
55.78
79.70
47.79
100.00
55.76
1,777,731
1,624,615
1,444,767
160,319
751,006
118,808
60,921
42,740
5,980,911
—
—
—
—
—
—
—
—
—
— 3,872,128
210,449
—
22,503
—
4,671
—
8,256
—
10,538
—
19,848
—
188
—
— 4,148,585
0.08
0.17
0.27
0.55
1.61
2.58
21.46
100.00
2.40
0.04
0.17
0.35
0.55
1.36
3.49
16.19
100.00
1.28
0.04
0.17
0.28
0.55
1.22
2.58
10.44
100.00
0.11
0.1
0.4
0.4
0.4
1.6
0.3
0.2
0.0
3.7
0.2
0.3
0.3
0.0
0.1
0.0
0.0
0.0
1.2
1.4
0.5
0.2
0.1
0.1
0.0
0.0
0.0
2.5
45.00
45.00
45.00
45.00
45.00
45.00
45.00
45.00
45.00
23.81
23.23
26.58
28.68
29.48
30.36
33.49
56.86
25.63
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
90.00
2.7
3.4
2.4
2.7
2.9
3.3
2.5
2.0
2.9
2.7
3.4
3.7
3.5
3.1
4.0
2.1
1.6
3.3
2.9
2.9
2.6
2.6
2.9
2.5
2.5
1.7
2.8
3.4
4.1
3.8
3.7
3.8
3.6
3.1
4.0
3.8
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
205,774
194,414
55,231
52,840
92,376
404,402
205,493
—
1,210,531
71,166
385,239
497,080
405,845
1,294,555
480,886
304,012
29,434
3,468,220
1,361
5,557
4,547
6,646
28,738
6,697
4,836
—
58,385
212,294
455,224
622,533
89,793
562,793
118,367
109,117
22,331
2,192,457
3,911,909
288,416
36,736
9,575
22,777
40,108
112,310
2,125
4,423,959
25.53
54.94
54.94
76.77
109.85
152.49
274.80
0.00
68.09
14.26
28.95
41.24
48.41
73.25
71.11
146.85
14.31
51.54
29.31
43.58
48.70
67.59
96.38
107.87
201.72
0.00
77.29
11.94
28.02
43.08
56.00
74.93
99.62
179.11
52.25
36.65
101.02
137.04
163.24
204.96
275.86
380.60
565.83
1,125.00
106.63
250
287
128
170
522
3,086
5,867
11,141
21,455
107
721
1,221
1,469
10,244
5,306
15,119
96,695
130,885
1
10
11
24
216
72
231
248
816
180
642
1,344
252
2,833
1,203
3,444
24,306
34,208
—
—
—
—
—
—
—
—
—
12,461
124,114
684
34,435
—
261
012_0800885851907.indd 261
2019/08/16 19:25:55
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2018
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Purchased receivables (corporates) (the amount equivalent to default risks) (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
983,853
332,316
99,760
14,747
76,713
5,636
23,528
4,016
1,540,572
44,762
44,072
68,714
29,991
102,062
19,652
2,825
260
312,341
99.99
87.58
98.42
100.00
91.26
100.00
100.00
100.00
95.04
1,017,578
363,873
163,014
43,153
164,126
23,899
25,367
4,201
1,805,215
0.05
0.17
0.36
0.59
1.51
3.03
13.36
100.00
0.71
3.6
3.6
8.3
3.9
16.5
3.8
0.4
0.1
40.6
35.16
32.90
44.23
56.24
48.61
58.36
37.66
80.11
37.70
Purchased receivables (corporates) (the amount equivalent to dilution risks) (AIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
593,602
238,937
84,015
11,266
73,619
1,736
7,098
151
1,010,428
116,625
64,726
24,921
10,463
34,149
31,479
2,437
112
284,914
99.99
97.43
100.00
100.00
89.66
100.00
100.00
100.00
98.17
710,216
302,005
108,937
21,729
104,238
33,215
9,536
264
1,290,143
0.06
0.17
0.29
0.55
1.45
2.65
11.14
100.00
0.40
0.4
0.3
0.1
0.1
0.4
0.2
0.0
0.0
1.8
39.42
37.45
38.61
49.44
42.29
62.92
42.66
47.75
39.92
Purchased receivables (corporates) (the amount equivalent to default risks) (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
51,118
4,898
2,393
3,621
3,511
11,815
2,987
200
80,548
234
790
1,671
2,330
5,015
215
—
—
10,258
100.00
70.27
100.00
100.00
100.00
100.00
—
—
97.70
50,507
5,376
4,020
5,895
8,265
11,887
2,987
194
89,135
0.05
0.18
0.31
0.58
1.05
2.58
26.33
100.00
1.64
0.3
0.0
0.0
0.1
0.4
0.2
0.0
0.0
1.3
45.00
45.00
45.00
45.00
45.00
45.00
45.00
45.00
45.00
Purchased receivables (corporates) (the amount equivalent to dilution risks) (FIRB approach)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
41,923
2,825
136
402
4,576
3,989
1,039
—
54,891
3,763
3,291
2,201
272
488
240
—
—
10,258
93.75
100.00
100.00
100.00
100.00
100.00
—
—
97.70
45,451
6,116
2,338
674
5,065
4,229
1,039
—
64,915
0.04
0.18
0.32
0.58
0.96
2.61
26.33
—
0.73
Purchased receivables (retail) (the amount equivalent to default risks)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
4,726
3,221
9,606
604
2,009
12
1
21
20,201
—
—
—
—
18
2
—
—
21
—
—
—
—
100.00
100.00
—
—
100.00
4,718
3,220
9,562
604
1,994
14
1
19
20,134
0.06
0.19
0.30
0.63
1.21
3.14
26.56
100.00
0.42
0.0
0.0
0.0
0.0
0.0
0.0
0.0
—
0.2
1.3
0.3
1.7
0.1
0.7
0.0
0.0
0.0
4.3
84.74
58.64
45.00
76.35
88.82
79.06
45.00
—
80.08
60.89
65.00
49.87
63.69
54.81
65.00
52.04
27.86
55.76
1.3
1.3
1.5
1.0
1.2
1.0
1.0
1.0
1.3
1.0
1.4
1.0
1.1
1.0
1.0
1.0
1.0
1.1
1.8
1.8
1.8
2.9
2.3
2.4
4.8
1.1
2.1
1.4
1.4
1.0
1.7
1.1
1.6
1.0
—
1.4
—
—
—
—
—
—
—
—
—
104,854
85,306
72,557
30,631
150,419
29,578
36,947
525
510,821
95,949
79,808
37,823
13,128
85,067
47,786
16,239
33
375,839
19,755
5,247
1,890
5,495
9,463
23,956
8,956
0
74,764
9,896
2,773
884
863
6,995
9,145
2,432
—
32,992
1,539
1,047
3,190
316
1,735
27
2
53
7,912
10.30
23.44
44.50
70.98
91.64
123.76
145.64
12.50
28.29
13.50
26.42
34.72
60.41
81.60
143.86
170.29
12.50
29.13
39.11
97.59
47.02
93.21
114.49
201.51
299.75
0.00
83.87
21.77
45.35
37.83
128.00
138.10
216.23
234.08
—
50.82
32.62
32.51
33.36
52.44
87.04
197.60
150.79
272.39
39.29
213
219
246
145
1,152
393
1,411
3,366
7,147
196
202
122
59
647
545
471
126
2,371
51
9
5
15
52
184
354
87
760
16
6
3
2
41
86
123
—
280
3
4
15
2
14
0
0
5
45
4,550
2,702
810
337
48
262
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR6: IRB - CR
exposures by
portfolio and PD
range
Item
No.
PD scale
(Millions of yen, %, the number of data in thousands, years)
As of March 31, 2018
a
On-balance
sheet gross
exposures
b
Off-balance
sheet
exposures pre
CCF and pre
CRM
c
Average
CCF
(%)
d
EAD
post
CCF and
post
CRM
e
f
g
h
i
j
Average
PD
(%)
Number
of
obligors
Average
LGD
(%)
Average
maturity
Credit
RWA
amounts
RWA
density
(%)
k
EL
l
Eligible
provisions
Purchased receivables (retail) (the amount equivalent to dilution risks) (AIRB approach)
0
—
0
—
1
18
—
—
21
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
100.00
—
100.00
—
100.00
100.00
—
—
100.00
405
1,991
53
96
17
132
—
—
2,697
405
1,991
53
96
15
113
—
—
2,676
0.07
0.18
0.27
0.55
0.87
2.66
—
—
0.30
0.0
0.0
0.0
0.0
0.0
0.0
—
—
0.0
86.89
99.89
47.55
100.00
94.21
69.82
—
—
95.38
Qualifying revolving retail exposures (QRRE)
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
60,794
258,257
297,081
232,333
560,936
836,700
33,790
71,709
2,351,604
Residential mortgage exposures
—
—
7,682,449
1,004,639
1,167,124
—
48,445
108,824
10,011,483
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
172,036
109,606
297,923
369,070
59,252
184,263
4,017
4,905
1,201,076
—
—
12,935
2,074
3,603
—
1,615
168
20,397
Other retail exposures
1 0.00 to <0.15
2 0.15 to <0.25
3 0.25 to <0.50
4 0.50 to <0.75
5 0.75 to <2.50
6 2.50 to <10.00
7 10.00 to <100.00
8 100.00 (Default)
9 Subtotal
Total (all portfolios)
21,127
97,719
372,939
138,075
1,176,450
54,834
19,876
65,578
1,946,602
2,422
—
4,325
1,895
508,853
154,610
4,623
1,115
677,847
154,406,453 27,635,372
7.02
7.24
7.81
60.47
20.80
13.74
16.85
100.00
33.80
232,831
367,864
595,005
601,404
620,189
1,020,964
37,807
76,614
3,552,680
75,902
—
2,108
—
7,696,120
100.00
1,006,714
100.00
1,096,658
100.00
—
—
45,383
100.00
100.00
108,992
100.00 10,031,880
23,525
98.96
97,719
—
377,233
99.27
139,970
100.00
1,685,196
99.97
209,444
100.00
24,500
100.00
66,693
100.00
99.97
2,624,284
59.40 170,824,061
0.08
0.19
0.43
0.51
1.55
4.72
47.55
100.00
4.47
0.04
0.17
0.29
0.60
1.03
—
22.95
100.00
1.59
0.07
0.17
0.38
0.61
1.51
3.55
22.80
100.00
4.10
0.77
6,746.5
3,479.5
7,740.5
6,058.6
1,259.5
3,274.2
141.5
192.6
28,893.2
7.7
0.2
471.8
55.5
82.9
—
3.9
8.4
630.7
—
—
—
—
—
—
—
—
—
29,682.4
69.25
70.37
61.18
74.06
78.17
75.22
73.21
78.16
72.33
40.70
63.26
28.43
30.44
36.86
—
31.87
30.95
29.70
61.85
35.69
39.45
45.02
50.78
47.71
50.46
52.98
48.19
35.65
3.7
3.2
4.5
4.3
2.3
3.5
—
—
3.4
251
2,154
42
263
30
324
—
—
3,066
8,053
26,482
71,847
102,236
256,303
876,927
66,147
72,691
1,480,691
16,848
921
1,164,045
274,505
530,081
—
81,296
26,811
2,094,510
2,745
12,639
89,699
51,448
988,941
142,107
26,596
93,642
1,407,820
— 35,143,661
61.97
108.16
78.02
272.82
175.83
245.12
—
—
113.66
3.45
7.19
12.07
16.99
41.32
85.89
174.95
94.87
41.67
22.19
43.67
15.12
27.26
48.33
—
179.13
24.59
20.87
11.67
12.93
23.77
36.75
58.68
67.84
108.55
140.40
53.64
20.57
0
3
0
0
0
2
—
—
7
128
491
1,559
2,308
7,487
35,818
13,100
59,884
120,779
14
2
6,419
1,869
4,373
—
3,296
33,736
49,711
10
59
560
400
13,139
3,496
2,832
35,337
55,837
598,491
8
89,131
33,682
33,076
546,416
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
6. Effect on Credit RWA of Credit Derivatives Used as CRM Techniques (CR7)
CR7: IRB – Effect on credit RWA of credit derivatives used as CRM
techniques
Item
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Portfolio
Sovereign exposures - FIRB
Sovereign exposures - AIRB
Bank exposures - FIRB
Bank exposures - AIRB
Corporate exposures (excluding SL) - FIRB
Corporate exposures (excluding SL) - AIRB
SL - FIRB
SL- AIRB
Retail - QRRE
Retail - Residential mortgage exposures
Retail - Other retail exposures
Equity - FIRB
Equity - AIRB
Purchased receivables - FIRB
Purchased receivables - AIRB
Total
(Millions of yen)
As of March 31, 2019
As of March 31, 2018
a
Pre-credit
derivatives
credit RWA
—
324,283
5,978
1,232,599
85
20,216,917
561,130
2,325,087
1,479,397
1,916,865
1,172,559
—
4,690,527
5,407
668,024
34,598,865
b
Actual credit
RWA
—
324,283
5,978
1,232,599
85
20,216,202
561,130
2,325,087
1,479,397
1,916,865
1,172,559
—
4,690,527
5,407
668,024
34,598,150
a
Pre-credit
derivatives
credit RWA
243
315,559
4,763
1,046,365
1,268,916
19,797,293
552,198
2,289,154
1,480,691
2,094,510
1,407,820
171,058
5,387,041
107,757
897,638
36,821,014
b
Actual credit
RWA
243
315,559
4,763
1,046,365
1,268,916
19,796,917
552,198
2,289,154
1,480,691
2,094,510
1,407,820
171,058
5,387,041
107,757
897,638
36,820,637
7. RWA flow statements of credit risk exposures under IRB approach (CR8)
CR8: RWA flow statements of credit risk exposures under IRB approach
Item
No.
1
2
3
4
5
6
7
8
9
RWA as of March 31, 2018
Breakdown of
variations in the
credit risk-
weighted assets
Asset size
Asset quality
Model updates
Methodology and policy
Acquisitions and disposals
Foreign exchange movements
Other
RWA as of March 31, 2019
(One hundred billions of yen)
RWA amounts
368
7
(17)
—
(1)
(13)
2
—
345
264
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
8. Backtesting of Probability of Default (PD) per Portfolio (CR9)
CR9: IRB - Backtesting of PD per portfolio
a
b
c
External rating equivalent
d
e
f
Number of obligors
Portfolio
PD Range
S&P Moody’s
Fitch
R&I
JCR
Weighted
average PD
(EAD
weighted)
Arithmetic
average PD
(by
obligors)
As of
March
31, 2018
As of
March
31, 2017
A~A-
A2~A3
AAA~A+ Aaa~A1 AAA~A+ AAA~A- AAA~A-
BBB+~BBB- BBB+~BBB-
A~A-
to BB+
to BB+
to BB+
BBB+~BB Baa1~Ba2 BBB+~BB to BB+
BB-~B Ba3~B2 BB-~B to BB+
to BB+
to B-
to B3
to B-
Corporates
Qualifying
re v o l v i n g
retail
Residential
mortgage
Other retail
0.00 to < 0.05
0.05 to < 0.10
0.10 to < 0.50
0.50 to < 2.50
2.50 to < 100.00
0.00 to < 0.05
0.05 to < 0.10
0.10 to < 0.50
0.50 to < 2.50
2.50 to < 100.00
0.00 to < 0.05
0.05 to < 0.10
0.10 to < 0.50
0.50 to < 2.50
2.50 to < 100.00
0.00 to < 0.05
0.05 to < 0.10
0.10 to < 0.50
0.50 to < 2.50
2.50 to < 100.00
0.03%
0.08%
0.25%
1.39%
7.38%
—
1,729
4,506
13,415
26,519
15,315
—
0.00%
0.08%
0.20%
1.05%
5.68%
—
0.08%
0.27%
1.02%
7.04%
—
—
0.29%
0.85%
1,729
4,506
13,415
26,516
15,312
—
0.08% 4,812,835 4,624,194
0.23% 2,108,335 2,015,548
0.62% 7,361,578 7,226,945
7.67% 1,610,273 1,582,522
—
—
—
—
677,408
0.29% 672,122
176,003
0.89% 171,058
3,589
23.75% 25.14%
3,860
838
0.03%
838
1,909
0.08%
1,909
0.33%
25,278
23,464
1.59% 1,910,495 1,912,099
4.46% 2,554,313 2,552,239
0.03%
0.08%
0.34%
1.36%
3.87%
—
—
(%, the number of data)
g
Number
of
defaulted
obligors
in the
year
h
Of which:
number
of new
defaulted
obligors
in the
year
i
Average
historical
annual
default
rate (5
years)
2
1
10
72
937
—
3,932
3,501
25,139
80,656
—
—
696
643
292
0
0
37
9,819
23,103
0
0
0
3
3
—
1,464
481
3,914
3,333
—
—
10
5
0
0
0
1
2,011
3,186
0.02%
0.03%
0.06%
0.21%
4.71%
—
0.07%
0.14%
0.32%
4.59%
—
—
0.12%
0.45%
10.81%
0.00%
0.00%
0.13%
0.52%
1.89%
Notes: 1.
IRB model presented in this table covers all models used within the scope of regulatory consolidation.
2. Applicable portfolios of each IRB model take into account the portfolio classification under Basel Capital Accord. “Corporates” include “Sovereign,” “Financial entities,”
“Specialized lending,” “Equity (PD/LGD method)” and “Purchased receivables (corporates),” and “Residential mortgage” and “Other retail” include “Purchased receivables
(retail).” Therefore, the same classifications are used in this table.
3. A maximum of ten categories of obligor rating in the internal rating system are consolidated into five categories as PD categories.
4. For the external ratings associated with, external ratings equivalent to the PD of non-Japanese companies mainly are listed in the columns of S&P, Moody’s, and Fitch, and
external ratings equivalent to the PD of Japanese companies mainly are listed in the columns of R&I and JCR.
5. The number of obligors of “Qualifying revolving retail,” “Residential mortgage” and “Other retail” states the number of receivables.
6. The proportion of credit risk-weighted assets subject to the IRB approach is that “Corporates” accounts for 84.53 percent, “Qualifying revolving retail” accounts for 4.15
percent, “Residential mortgage” accounts for 5.81 percent, and “Other retail” accounts for 3.97 percent.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
9. SL (Slotting Criteria Approach) and Equity Exposures (Market-Based Approach, etc.) (CR10)
(Millions of yen, except percentages)
CR10: IRB - SL (slotting
criteria approach)
and equity
exposures (market-
based approach,
etc.)
a
b
c
As of March 31, 2019
d
e
SL (slotting criteria approach)
Other than high-volatility commercial real estate (HVCRE)
g
h
f
i
j
k
l
On-balance
sheet amount
Off-balance
sheet amount
RW
PF
Exposure amount (EAD)
CF
OF
IPRE
Credit RWA
amount
Expected
losses
Total
7,686
28,595
50% 36,282
—
17,399
18,062
70% 22,398
3,437
4,899
710
70%
5,257
45,993
—
90% 45,993
2,179
24
3,317
81,500
—
—
—
47,368
115%
2,179
250%
—
3,317
—
— 115,428
HVCRE
—
—
—
24
—
3,461
—
—
—
—
—
—
—
—
Remaining
maturity
Less than
2.5 years
Equal to or
more than
2.5 years
Less than
2.5 years
Equal to or
more than
2.5 years
Regulatory
categories
Strong
Good
Satisfactory
Weak
Default
Total
Less than
2.5 years
Equal to or
more than
2.5 years
Less than
2.5 years
Equal to or
more than
2.5 years
Strong
Good
Satisfactory
Weak
Default
Total
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
5,483
3,097
70%
2,820
2,900
95%
122,748
42,273
120%
153,511
—
—
343,084
901
—
—
85,719
140%
250%
—
—
Equity exposures (market-based approach, etc.)
Equity exposures subject to market-based approach
Categories
On-balance
sheet amount
Off-balance
sheet amount
RW
—
300%
8,520
59,500
68,021
400%
141%
—
31,926
57,835
191,666
281,428
Simple risk weight
method –listed shares
Simple risk weight
method –unlisted shares
Internal models approach
Total
Equity exposures subject to 100% risk weight
Equity exposures subject
to 100% risk weight
pursuant to the provisions
of Article 166, Paragraph 1
of the Notification No. 19
issued by the Japan
Financial Service Agency
in 2006
—
— 36,282
18,141
—
— 25,835
18,084
103
—
5,257
3,679
21
— 45,993
41,394
367
—
2,179
—
24
3,317
—
— 118,890
2,506
61
—
83,868
61
1
1,658
2,214
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
6,927
4,849
4,172
3,964
27
16
144,101
172,922
576
153,931
—
—
384,971
215,504
—
—
469,285
4,310
—
—
5,234
Exposure
amount
(EAD)
Credit
RWA
amount
31,926
95,779
61,808
247,232
251,166
344,901
356,151
699,163
58,520
36,546
95%
75,837
72,045
303
—
100%
—
—
266
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR10: IRB - SL (slotting
criteria approach)
and equity
exposures (market-
based approach,
etc.)
a
b
c
(Millions of yen, except percentages)
As of March 31, 2018
d
e
SL (slotting criteria approach)
Other than high-volatility commercial real estate (HVCRE)
g
h
f
i
j
k
l
On-balance
sheet amount
Off-balance
sheet amount
RW
PF
Exposure amount (EAD)
CF
OF
IPRE
Credit RWA
amount
Expected
losses
Total
19,945
401
50% 13,732
—
14,996
13,228
70% 12,418
3,627
10,834
27,550
70% 36,175
35,767
585
90% 34,536
35,415
47
4,874
121,882
1,360
350
—
43,475
115% 13,270
262
250%
—
3,282
— 113,677
HVCRE
—
—
—
47
—
3,674
Remaining
maturity
Less than
2.5 years
Equal to or
more than
2.5 years
Less than
2.5 years
Equal to or
more than
2.5 years
Regulatory
categories
Strong
Good
Satisfactory
Weak
Default
Total
Less than
2.5 years
Equal to or
more than
2.5 years
Less than
2.5 years
Equal to or
more than
2.5 years
Strong
Good
Satisfactory
Weak
Default
Total
Regulatory
categories
Remaining
maturity
On-balance
sheet amount
Off-balance
sheet amount
RW
6,752
4,028
70%
5,507
17,688
95%
80,441
14,202
120%
168,459
1,787
—
294,070
10,768
3,851
—
67,310
140%
250%
—
—
Equity exposures (market-based approach, etc.)
Equity exposures subject to market-based approach
Categories
On-balance
sheet amount
Off-balance
sheet amount
RW
—
—
—
—
6,404
20,137
10,068
5,287
21,333
14,933
—
85
2,209
38,384
26,869
153
1,511
36,047
32,442
288
— 22,795
—
—
—
1,592
— 39,800
36,065
309
4,874
157,153
41,475
774
—
126,563
1,009
24
2,437
3,999
Exposure
amount
(EAD)
Credit
RWA
amount
Expected
losses
8,677
6,074
13,960
13,262
34
55
87,512
105,014
350
173,606
4,676
—
327,569
243,048
11,690
—
416,270
4,860
374
—
5,832
Exposure
amount
(EAD)
Credit
RWA
amount
25,093
75,280
121,924
487,697
205,900
571,163
352,918 1,134,141
31,122
16,770
95%
39,136
37,179
156
—
300%
8,715
20,949
29,664
400%
277%
—
25,093
117,759
184,951
327,804
Simple risk weight
method –listed shares
Simple risk weight
method –unlisted shares
Internal models approach
Total
Equity exposures subject to 100% risk weight
Equity exposures subject
to 100% risk weight
pursuant to the provisions
of Article 166, Paragraph 1
of the Notification No. 19
issued by the Japan
Financial Service Agency
in 2006
—
—
100%
—
—
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
10. Credit Risk-Weighted Assets under Article 145 of the Notification
Exposures under Article 145 of the Notification include investments 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 it is difficult to calculate the credit risk-weighted asset amount of individual
underlying assets, the credit risk-weighted average of individual underlying assets is calculated, where risk weight of 250%/ 400% is
applied if the result of such calculation proved to be 250%/400% or less, while 1,250% is applied otherwise.
Calculation method
Exposure under Article 145 of the Notification
Calculation method
Look-through approach
Mandate-based approach
Simple approach (subject to 250% risk weight)
Simple approach (subject to 400% risk weight)
Fall-back approach
(Millions of yen)
As of March 31, 2018
1,317,837
(Millions of yen)
As of March 31, 2019
1,337,269
—
8,231
79,338
3,334
268
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Standardised Approach
1. Scope
The following consolidated subsidiaries have adopted the standardised approach for exposures as of March 31, 2019 (i.e. consolidated
subsidiaries not listed in the “Internal Ratings-Based (IRB) Approach: 1. Scope” on page 252).
(1) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the AIRB Approach
SMBC Consumer Finance Co., Ltd.
(2) Consolidated Subsidiaries Planning to Adopt Phased Rollout of the FIRB Approach
Currently, there are no subsidiaries applicable.
(3) 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 standardised 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. CR Exposure and Credit Risk Mitigation (CRM) Effects (CR4)
CR4: SA – CR exposure and CRM effects
a
b
As of March 31, 2019
c
d
Exposures pre-CCF and pre-CRM Exposures post-CCF and post-CRM
Off-balance
sheet amount
—
On-balance
sheet amount
29,321
Off-balance
sheet amount
—
On-balance
sheet amount
29,321
Item
No.
1
2
3
4
5
6
7
8
9
10
11
Asset classes
Cash
Government of Japan and Bank of
Japan (BOJ)
Foreign central governments and
foreign central banks
Bank for International Settlements,
etc.
Local governments of Japan
Foreign non-central government
public sector entities (PSEs)
Multilateral development banks
(MDBs)
Japan Finance Organization for
Municipalities (JFM)
Government- affiliated agencies of
Japan
The three local public corporations
Banks entities and financial
instruments business operators
engaged in Type I Financial
Instruments Business
12 Corporates
13
14
15
SMEs and retail
Residential mortgage loans
Real estate acquisition activities
Past due loans (three months or
more),etc. (excluding residential
mortgage loans)
Past due loans (three months or
more) (residential mortgage loans)
Bills in the course of collection
Guaranteed by credit guarantee
associations, etc.
Guaranteed by Regional Economy
Vitalization Corporation of Japan
(REVIC), etc.
Investments, etc. (excluding
significant investments)
Total
16
17
18
19
20
21
22
012_0800885851907.indd 269
(Millions of yen, except percentages)
e
f
Credit RWA
amount
RWA density
0
0
0.00%
0.00%
11,203
0.86%
—
0
—
0.00%
1,193
20.00%
0
—
0.00%
—
2,463
10.00%
—
—
208,559
20.56%
—
—
—
—
—
—
—
—
—
—
100,975
749,729
—
—
805,109
1,636,864
40,116
—
101.36%
75.00%
35.00%
—
2,732,090
1,295,182
—
1,065
5,966
3,862
—
24,632
—
1,014,364
693,915
1,432,756
114,618
—
—
—
—
—
—
—
—
—
—
—
244,629
999,406
—
—
2,732,090
1,295,182
—
1,065
5,966
3,862
—
24,632
—
1,014,364
693,306
1,432,756
114,618
—
100,681
676
100,482
676
138,293
136.70%
40
—
—
—
—
—
—
—
—
—
40
—
—
—
—
—
—
—
—
—
40
—
—
—
—
100.00%
—
—
—
—
7,448,496
1,244,712
7,447,687
851,382
2,843,844
34.26%
269
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR4: SA – CR exposure and CRM effects
a
b
As of March 31, 2018
c
d
Exposures pre-CCF and pre-CRM Exposures post-CCF and post-CRM
Off-balance
sheet amount
—
On-balance
sheet amount
16,048
On-balance
sheet amount
16,048
Off-balance
sheet amount
—
2,470,922
1,150,561
—
1,570
31,310
5,454
—
17,675
6,977
—
—
—
—
—
—
—
—
—
2,470,922
1,150,561
—
1,570
31,310
5,454
—
17,675
6,977
—
—
—
—
—
—
—
—
—
(Millions of yen, except percentages)
e
f
Credit RWA
amount
RWA density
0
0
9
—
0
1,337
0
—
0.00%
0.00%
0.00%
—
0.00%
4.27%
0.00%
—
1,767
10.00%
0
0.01%
510,984
4,797
510,984
2,398
134,872
26.27%
3,043,686
1,048,482
88,014
—
225,151
1,006,652
—
—
3,043,686
1,048,482
88,014
—
102,874
769,972
—
—
3,138,389
1,363,841
30,805
—
99.74%
75.00%
35.00%
—
76,914
869
76,914
869
102,814
132.18%
59
—
—
—
—
—
—
—
—
—
59
—
—
—
—
—
—
—
—
—
59
—
—
—
—
100.00%
—
—
—
—
8,468,662
1,237,470
8,468,662
876,114
4,773,898
51.08%
Item
No.
1
2
3
4
5
6
7
8
9
10
11
Asset classes
Cash
Government of Japan and Bank of
Japan (BOJ)
Foreign central governments and
foreign central banks
Bank for International Settlements,
etc.
Local governments of Japan
Foreign non-central government
public sector entities (PSEs)
Multilateral development banks
(MDBs)
Japan Finance Organization for
Municipalities (JFM)
Government- affiliated agencies of
Japan
The three local public corporations
Banks entities and financial
instruments business operators
engaged in Type I Financial
Instruments Business
12 Corporates
13
14
15
SMEs and retail
Residential mortgage loans
Real estate acquisition activities
Past due loans (three months or
more),etc. (excluding residential
mortgage loans)
Past due loans (three months or
more) (residential mortgage loans)
Bills in the course of collection
Guaranteed by credit guarantee
associations, etc.
Guaranteed by Regional Economy
Vitalization Corporation of Japan
(REVIC), etc.
Investments, etc. (excluding
significant investments)
Total
16
17
18
19
20
21
22
270
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
4. CR Exposures by Asset Classes and Risk Weights (CR5)
As of March 31, 2019
a
b
c
d
f
CR exposure amounts (post-CCF and CRM)
g
h
e
(Millions of yen)
i
j
k
0%
10% 20% 35% 50% 75% 100% 150% 250% 1250% Total
CR5: SA – CR exposures by asset
classes and risk weights
Item
No.
Risk weight
Asset classes
1 Cash
2 Government of Japan and BOJ
3
4
Foreign central governments and
foreign central banks
Bank for International
Settlements, etc.
5 Local governments of Japan
6
Foreign non-central government
PSEs
7 MDBs
8 JFM
9
10
11
Government- affiliated agencies
of Japan
The three local public
corporations
Banks and financial instruments
business operators engaged in
Type I Financial Instruments
Business
12 Corporates
13 SMEs and retail
14 Residential mortgage loans
15 Real estate acquisition activities
Past due loans (three months or
more), etc. (excluding residential
mortgage loans)
Past due loans (three months or
more) (residential mortgage
loans)
17
16
18 Bills in the course of collection
19
20
21
Guaranteed by credit guarantee
associations, etc.
Guaranteed by REVIC of Japan,
etc.
Investments, etc. (excluding
significant investments)
29,321
2,732,090
1,272,774
—
1,065
—
3,862
—
—
—
—
8,318
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
24,632
—
—
—
—
—
—
5,966
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
22,407
—
—
—
—
—
—
—
— 999,989
—
11,626
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,749
—
5,587
—
—
— 114,618
—
—
—
— 2,182,486
—
—
—
—
— 780,375
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,347
—
14,194
80,616
—
—
—
—
—
—
—
—
—
—
40
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
29,321
— 2,732,090
— 1,295,182
—
—
—
—
—
—
—
—
1,065
5,966
3,862
—
24,632
—
— 1,014,364
— 794,282
— 2,182,486
— 114,618
—
—
— 101,159
—
—
—
—
—
40
—
—
—
—
— 8,299,070
22 Total
4,047,432
24,632 1,011,542
114,618
40,382 2,182,486
797,359
80,616
012_0800885851907.indd 271
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CR5: SA – CR exposures by asset
classes and risk weights
Item
No.
Asset classes
Risk weight
As of March 31, 2018
a
b
c
d
f
CR exposure amounts (post-CCF and CRM)
g
h
e
(Millions of yen)
i
j
k
0%
10% 20% 35% 50% 75% 100% 150% 250% 1250% Total
1 Cash
2 Government of Japan and BOJ
3
4
Foreign central governments and
foreign central banks
Bank for International
Settlements, etc.
5 Local governments of Japan
6
Foreign non-central government
PSEs
7 MDBs
8 JFM
16,048
2,470,922
1,150,511
—
1,570
24,621
5,454
—
—
—
—
—
—
—
—
—
9
10
11
Government- affiliated agencies
of Japan
The three local public
corporations
Banks and financial instruments
business operators engaged in
Type I Financial Instruments
Business
12 Corporates
13 SMEs and retail
14 Residential mortgage loans
15 Real estate acquisition activities
Past due loans (three months or
more), etc. (excluding residential
mortgage loans)
Past due loans (three months or
more) (residential mortgage
loans)
16
17
18 Bills in the course of collection
19
20
21
Guaranteed by credit guarantee
associations, etc.
Guaranteed by REVIC of Japan,
etc.
Investments, etc. (excluding
significant investments)
—
17,675
6,973
—
3,886
—
—
—
57
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
49
—
—
6,688
—
—
—
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,095
5,356
—
—
—
—
—
88,014
—
—
— 1,818,455
—
—
—
—
— 3,137,317
—
—
—
91
—
—
—
—
—
—
13,654
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
63,979
59
—
—
—
—
—
—
—
—
—
—
— 488,165
—
22,122
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
16,048
— 2,470,922
— 1,150,561
—
—
—
—
—
—
—
—
1,570
31,310
5,454
—
17,675
6,977
— 513,382
— 3,146,560
— 1,818,455
88,014
—
—
—
—
77,783
—
—
—
—
—
59
—
—
—
—
— 9,344,777
22 Total
3,680,047
17,675
500,355
88,014
35,777 1,818,455 3,140,472
63,979
Note: As the sum of the respective risk weight of the original obligor and the original obligee are applied for the risk weight for loan participation transactions by a bank adopting the
SA, the credit RWA amount calculated by summing up the exposure amount multiplied by the corresponding risk weights in the above table does not match with the credit
RWA amount shown in column e of CR4 (SA-CR exposure and CRM effects).
272
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■ Credit Risk Mitigation (CRM) Techniques
1. Overview of Risk Characteristics, Risk Management Policy, Risk Management Procedures and Risk Management System
In calculating credit risk-weighted asset amounts, We take 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 under 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 93 to 98). Further, exposures
to these obligors are monitored on a group basis, taking into account risk concentration in their parent companies in cases that expo-
sures to the obligors are guaranteed by the parent companies for risk mitigation.
In addition, 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.
As credit risk mitigation techniques, eligible real estate collateral and guarantees have shown a certain effect.
2. Credit Risk Mitigation Techniques (CR3)
CR3: CRM techniques
Item
No.
a
b
As of March 31, 2019
c
Exposures
unsecured
Exposures
secured
Exposures
secured by
collateral
(Millions of yen)
d
Exposures
secured by
financial
guarantees
e
Exposures
secured by credit
derivatives
1
2
3
4
5
Loans
Securities
(of which: Debt securities)
Other on-balance sheet assets
(of which: debt-based assets)
Total (1+2+3)
Of which: defaulted
49,092,490
28,088,080
13,092,100
9,260,609
16,890,132
920,449
258,021
51,641
63,331,991
332,855
6,071
275,620
129,314,614
536,741
29,341,384
152,513
13,356,193
81,179
9,587,871
6,482
—
600
—
600
—
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CR3: CRM techniques
Item
No.
a
b
As of March 31, 2018
c
Exposures
unsecured
Exposures
secured
Exposures
secured by
collateral
(Millions of yen)
d
Exposures
secured by
financial
guarantees
e
Exposures
secured by credit
derivatives
1
2
3
4
5
Loans
Securities
(of which: Debt securities)
Other on-balance sheet assets
(of which: debt-based assets)
Total (1+2+3)
Of which: defaulted
45,660,454
27,382,601
13,034,567
8,743,128
5,312
18,024,738
969,389
258,935
63,312
58,895,107
210,324
5,620
154,070
122,580,301
512,629
28,562,315
251,536
13,299,124
91,471
8,960,511
5,594
—
—
5,312
—
274
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Counterparty Credit Risk
1. Overview of Risk Characteristics
Counterparty credit risk is actualized when counterparties become default in a condition where derivative transactions, etc. have a positive
value, and risks fluctuate according to the credit quality of counterparties and related market indicators.
2. Risk Management Policy and Procedures
(1) Risk Management Policy
For counterparty credit risks, credit limits are set according to the frameworks of credit management in each SMBC Group company. For
transactions with CCP, credit risks are managed after validating the financial base and the default management process, etc.
(2) 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.
(3) 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.
3. Amount of Counter Party Credit Risk (CCR) Exposure by Approach (CCR1)
CCR1: Amount of CCR exposure by
approach
Item
No.
1
2
3
4
5
6
SA-CCR
CEM
Expected exposure method (IMM)
Simple approach for CRM
Comprehensive approach for CRM
Exposure fluctuation estimation
model
Total
CCR1: Amount of CCR exposure by
approach
Item
No.
1
2
3
4
5
6
SA-CCR
CEM
Expected exposure method (IMM)
Simple approach for CRM
Comprehensive approach for CRM
Exposure fluctuation estimation
model
Total
As of March 31, 2019
a
Replacement
cost
b
PFE
c
Effective EPE
(EEPE)
—
1,328,818
—
2,558,596
d
Alpha used for
computing
regulatory EAD
1.4
—
—
As of March 31, 2018
a
Replacement
cost
b
PFE
c
Effective EPE
(EEPE)
—
1,490,810
—
2,249,561
d
Alpha used for
computing
regulatory EAD
1.4
—
—
(Millions of yen)
f
RWA
—
1,094,827
—
—
462,418
e
EAD post-
CRM
—
3,887,415
—
—
4,676,937
—
—
1,557,246
(Millions of yen)
e
EAD post-
CRM
—
3,740,371
—
5,658,971
3,178,754
f
RWA
—
1,051,112
—
312,840
129,770
—
—
1,493,723
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4. CVA Capital Charge (CCR2)
CCR2: CVA risk capital charge
As of March 31, 2019
As of March 31, 2018
(Millions of yen)
a
EAD post-
CRM
Total portfolios subject to the advanced CVA capital charge
—
(i) VaR component (including the 3×multiplier)
(ii) Stressed VaR component (including the 3×multiplier)
Total portfolios subject to the standardised CVA capital charge
Total subject to the CVA capital charge
3,455,139
3,455,139
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
2,376,345
2,376,345
a
EAD post-
CRM
—
3,353,374
3,353,374
b
RWA
(Amount
calculated by
dividing CVA
capital charge
by 8%)
—
—
—
2,252,318
2,252,318
Item
No.
1
2
3
4
5
5. CCR Exposures by Regulatory Portfolio and Risk Weights (CCR3)
As of March 31, 2019
a
b
c
d
e
Credit equivalent amounts (post-CRM)
f
(Millions of yen)
g
h
i
0%
10%
20%
50%
75%
100% 150% Others
Total
CCR3: CCR exposures by regulatory portfolio
and risk weights
Item
No.
Risk weight
1
3
2
Regulatory porfolio
Government of Japan and BOJ
Foreign central governments and
foreign central banks
Bank for International Settlements,
etc.
Local governments of Japan
Foreign non-central government
PSEs
6 MDBs
7
4
5
JFM
Government- affiliated agencies of
Japan
The three local public corporations
Banks and financial instruments
business operators engaged in Type
I Financial Instruments Business
8
9
10
81,773
—
—
62
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 604,407
1,093
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
—
—
—
—
—
—
—
—
—
—
—
10
—
—
—
—
—
—
—
—
—
81,773
10
—
62
—
—
—
—
—
— 605,501
— 366,869
66,984
—
38,851
—
— 1,160,053
11 Corporates
12
SMEs and retail
13 Other than the above
14
Total
—
—
—
81,836
—
—
—
—
—
—
— 604,407
—
—
—
1,093
— 366,869
—
38,851
405,721
66,984
—
66,984
276
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As of March 31, 2018
a
b
c
d
e
Credit equivalent amounts (post-CRM)
f
(Millions of yen)
g
h
i
0%
10%
20%
50%
75%
100% 150% Others
Total
CCR3: CCR exposures by regulatory portfolio
and risk weights
Item
No.
Risk weight
1
2
3
Regulatory porfolio
Government of Japan and BOJ
Foreign central governments and
foreign central banks
Bank for International Settlements,
etc.
Local governments of Japan
Foreign non-central government
PSEs
6 MDBs
7
5
4
JFM
Government- affiliated agencies of
Japan
The three local public corporations
Banks and financial instruments
business operators engaged in Type
I Financial Instruments Business
8
9
10
163,953
—
—
6,979
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
974,127
— 403,048
1,953
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
383
11 Corporates
SMEs and retail
12
13 Other than the above
14
Total
4,083,144
—
—
5,228,204
7,868
—
—
—
—
—
— 410,916
—
— 171,452
—
—
171,452
1,953
— 245,565
—
21,264
267,214
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 163,953
—
—
—
—
—
—
—
—
—
—
6,979
—
—
—
—
—
— 1,379,513
— 4,336,577
— 171,452
—
21,264
— 6,079,742
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6. IRB Approach – CCR Exposures by Portfolio and PD Scale (CCR4)
(Millions of yen, %, the number of data in thousands, years)
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2019
Item
No.
PD scale
Sovereign exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Sovereign exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Bank exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Bank exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
obligors
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
87,145
19,471
—
—
364
2,159
—
—
109,141
—
—
—
—
—
—
—
—
—
4,105,450
914,345
498
—
51,747
169,601
—
—
5,241,643
—
—
—
—
—
—
—
—
—
0.01
0.16
—
—
0.86
2.56
—
—
0.09
—
—
—
—
—
—
—
—
—
0.03
0.16
0.29
—
0.85
3.96
—
—
0.19
—
—
—
—
—
—
—
—
—
0.8
0.0
—
—
0.0
0.0
—
—
0.8
—
—
—
—
—
—
—
—
—
15.2
4.6
0.0
—
0.0
0.1
—
—
20.2
—
—
—
—
—
—
—
—
—
27.06
23.14
—
—
35.00
1.01
—
—
25.87
—
—
—
—
—
—
—
—
—
16.34
17.65
31.92
—
3.97
0.56
—
—
15.94
—
—
—
—
—
—
—
—
—
2.9
0.0
—
—
3.5
1.0
—
—
2.4
—
—
—
—
—
—
—
—
—
1.0
0.9
1.6
—
0.0
0.0
—
—
0.9
—
—
—
—
—
—
—
—
—
6,370
1,911
—
—
285
62
—
—
8,629
—
—
—
—
—
—
—
—
—
237,771
150,782
184
—
3,402
3,009
—
—
395,151
—
—
—
—
—
—
—
—
—
7.31
9.81
—
—
78.35
2.87
—
—
7.90
—
—
—
—
—
—
—
—
—
5.79
16.49
36.91
—
6.57
1.77
—
—
7.53
—
—
—
—
—
—
—
—
—
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CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2019
(Millions of yen, %, the number of data in thousands, years)
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
obligors
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
Item
No.
PD scale
Corporate exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Corporate exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
957,186
427,536
96,278
12,922
34,043
13,397
4,401
173
1,545,940
—
—
—
—
—
—
—
—
—
Mid-sized corporations and SMEs exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
8,073
13,019
7,548
7,631
9,493
1,859
354
366
48,347
Mid-sized corporations and SMEs exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
—
—
—
—
—
—
—
—
—
0.05
0.16
0.30
0.53
1.53
2.72
14.56
100.00
0.21
—
—
—
—
—
—
—
—
—
0.08
0.17
0.27
0.53
1.37
2.56
13.77
100.00
1.41
—
—
—
—
—
—
—
—
—
46.6
22.8
7.9
3.5
4.2
0.6
0.4
0.0
86.4
—
—
—
—
—
—
—
—
—
3.2
6.0
2.9
2.4
4.9
0.5
0.1
0.0
20.5
—
—
—
—
—
—
—
—
—
29.65
30.47
34.45
34.99
32.19
34.21
32.31
41.51
30.32
—
—
—
—
—
—
—
—
—
33.45
35.00
34.00
34.42
34.84
35.00
35.00
46.91
34.55
—
—
—
—
—
—
—
—
—
2.3
3.4
2.4
3.0
3.2
2.6
2.1
4.0
2.7
—
—
—
—
—
—
—
—
—
2.8
3.1
3.3
3.4
3.5
4.3
4.3
4.5
3.3
—
—
—
—
—
—
—
—
—
142,052
150,001
43,218
7,949
28,198
14,987
6,321
23
392,753
—
—
—
—
—
—
—
—
—
1,672
4,261
3,015
4,313
7,143
1,692
507
50
22,656
—
—
—
—
—
—
—
—
—
14.84
35.08
44.88
61.51
82.83
111.86
143.61
13.75
25.40
—
—
—
—
—
—
—
—
—
20.71
32.73
39.94
56.52
75.24
91.01
143.15
13.75
46.86
—
—
—
—
—
—
—
—
—
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CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2019
(Millions of yen, %, the number of data in thousands, years)
PD scale
Item
No.
SL
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Equity exposures
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Other retail exposures
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Total (sum of portfolios)
1
2
3
4
5
6
7
8
9
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
counterparties
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
96,708
215,673
89,110
339
49,437
3,713
1,392
2,852
459,226
0.04
0.16
0.36
0.53
1.18
3.98
14.27
100.00
0.98
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
7,404,300
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.25
0.2
0.4
0.6
0.0
0.1
0.0
0.0
0.0
1.5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
129.6
18.68
22.33
22.00
30.00
25.26
46.18
42.94
65.94
22.35
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19.61
4.8
4.8
4.8
4.4
4.6
4.9
4.9
4.8
4.8
—
—
—
—
—
—
—
—
—
1.6
13,306
64,682
37,065
212
34,188
6,440
3,240
1,515
160,652
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
979,843
13.75
29.99
41.59
62.68
69.15
173.43
232.79
53.13
34.98
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13.23
280
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CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2018
(Millions of yen, %, the number of data in thousands, years)
Item
No.
PD scale
Sovereign exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Sovereign exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Bank exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Bank exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
obligors
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
156,313
31,027
—
0
118
51
—
—
187,511
—
—
—
—
—
—
—
—
—
3,160,226
741,034
972
—
61,064
121,139
—
—
4,084,436
737
—
—
—
—
—
—
—
737
0.00
0.16
—
0.55
1.69
2.60
—
—
0.02
—
—
—
—
—
—
—
—
—
0.03
0.16
0.34
—
0.96
4.11
—
—
0.19
0.09
—
—
—
—
—
—
—
0.09
0.5
0.0
—
0.0
0.0
0.0
—
—
0.5
—
—
—
—
—
—
—
—
—
13.9
4.3
0.0
—
0.0
0.1
—
—
18.4
0.0
—
—
—
—
—
—
—
0.0
22.69
23.76
—
35.00
35.00
34.93
—
—
22.88
—
—
—
—
—
—
—
—
—
18.87
16.49
34.97
—
5.01
0.38
—
—
17.69
45.00
—
—
—
—
—
—
—
45.00
1.2
0.6
—
1.0
3.1
1.0
—
—
1.1
—
—
—
—
—
—
—
—
—
1.0
0.9
1.5
—
0.0
0.0
—
—
1.0
1.2
—
—
—
—
—
—
—
1.2
150
4,405
—
0
107
42
—
—
4,706
—
—
—
—
—
—
—
—
—
210,607
121,970
432
—
6,088
1,372
—
—
340,471
193
—
—
—
—
—
—
—
193
0.09
14.20
—
42.70
91.45
81.22
—
—
2.50
—
—
—
—
—
—
—
—
—
6.66
16.45
44.45
—
9.97
1.13
—
—
8.33
26.18
—
—
—
—
—
—
—
26.18
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2018
(Millions of yen, %, the number of data in thousands, years)
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
obligors
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
Item
No.
PD scale
Corporate exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Corporate exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
1,125,009
378,409
91,512
16,474
86,968
32,765
10,342
419
1,741,901
—
—
—
—
—
941
—
—
941
Mid-sized corporations and SMEs exposures (AIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
8,050
14,954
10,642
8,806
8,880
5,630
694
228
57,887
Mid-sized corporations and SMEs exposures (FIRB approach)
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
—
—
—
—
—
—
—
—
—
0.04
0.16
0.29
0.55
2.04
2.99
11.68
100.00
0.34
—
—
—
—
—
2.58
—
—
2.58
0.08
0.17
0.29
0.55
1.33
2.58
12.28
100.00
1.19
—
—
—
—
—
—
—
—
—
47.0
23.8
9.3
3.0
3.9
1.5
1.8
0.0
90.7
—
—
—
—
—
0.0
—
—
0.0
2.9
5.2
3.5
3.5
6.3
0.9
0.3
0.2
23.1
—
—
—
—
—
—
—
—
—
38.35
29.78
31.24
34.24
16.18
32.10
33.42
48.38
34.83
—
—
—
—
—
45.00
—
—
45.00
35.00
34.16
34.28
35.00
34.39
34.99
35.00
50.40
34.61
—
—
—
—
—
—
—
—
—
2.2
3.4
3.3
2.4
1.3
4.0
1.5
3.2
2.5
—
—
—
—
—
3.7
—
—
3.7
2.5
2.9
3.0
3.1
2.9
4.2
3.0
4.1
3.0
—
—
—
—
—
—
—
—
—
171,663
130,581
40,672
9,392
35,695
37,083
14,559
52
439,701
—
—
—
—
—
1,603
—
—
1,603
1,559
4,533
4,293
4,821
6,231
5,203
951
28
27,623
—
—
—
—
—
—
—
—
—
15.25
34.50
44.44
57.01
41.04
113.17
140.77
12.50
25.24
—
—
—
—
—
170.30
—
—
170.30
19.37
30.31
40.34
54.74
70.16
92.41
137.08
12.50
47.71
—
—
—
—
—
—
—
—
—
282
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
CCR4: IRB - CCR exposures by portfolio
and PD scale
As of March 31, 2018
(Millions of yen, %, the number of data in thousands, years)
PD scale
Item
No.
SL
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Equity exposures
1
2
3
4
5
6
7
8
9
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Other retail exposures
0.00 to <0.15
0.15 to <0.25
0.25 to <0.50
0.50 to <0.75
0.75 to <2.50
2.50 to <10.00
10.00 to <100.00
100.00 (Default)
Subtotal
Total (sum of portfolios)
1
2
3
4
5
6
7
8
9
a
b
c
EAD post-
CRM
Average PD
(%)
Number of
counterparties
d
Average
LGD
(%)
e
f
g
Average
maturity
Credit RWA
RWA density
(%)
99,975
202,540
72,588
168
43,064
4,203
469
1,928
424,938
0.04
0.16
0.36
0.55
1.46
4.13
17.00
100.00
0.81
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,498,356
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.27
0.2
0.4
0.3
0.0
0.1
0.0
0.0
0.0
1.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
134.0
20.90
23.82
25.28
34.24
27.14
39.91
35.17
68.76
24.10
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
23.01
4.8
4.9
4.8
2.7
4.4
4.9
4.3
4.8
4.8
—
—
—
—
—
—
—
—
—
1.6
15,582
65,072
34,680
97
32,318
6,372
924
1,007
156,055
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
970,354
15.58
32.12
47.77
58.01
75.04
151.60
197.03
52.25
36.72
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14.93
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
7. Composition of Collateral for CCR Exposure (CCR5)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2019
(Millions of yen)
Item
No.
1
2
3
4
5
6
7
8
9
Cash (domestic currency)
Cash (other currencies)
Domestic sovereign debt
Other sovereign debt
Government agency debt
Corporate bonds
Equity securities
Other collateral
Total
a
b
c
d
e
f
Collateral used in derivative transactions
Fair value of collateral received Fair value of posted collateral
Segregated Unsegregated
Segregated Unsegregated
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
16,008
110
154
3,399
5
2,496
3,376
5,349
30,900
53,826
174,936
239
—
—
—
—
—
229,001
—
—
—
—
—
—
—
—
—
216,069
252,900
39,088
—
—
—
—
—
508,057
6,219,697
3,641,626
5,901,864
2,037,550
1,183,595
63,059
1,386,785
55,026
20,489,205
8,270,506
2,056,347
7,019,774
3,681,176
—
25,982
356,931
—
21,410,718
(Millions of yen)
CCR5: Composition of collateral for CCR
exposure
As of March 31, 2018
Item
No.
1
2
3
4
5
6
7
8
9
Cash (domestic currency)
Cash (other currencies)
Domestic sovereign debt
Other sovereign debt
Government agency debt
Corporate bonds
Equity securities
Other collateral
Total
a
b
c
d
e
f
Collateral used in derivative transactions
Fair value of collateral received Fair value of posted collateral
Segregated Unsegregated
Segregated Unsegregated
Collateral used in securities
financing transactions (SFTs)
Fair value of
Fair value of
posted
collateral
collateral
received
20,250
521
277
4,217
50
11,574
5,674
—
42,567
191,880
162,951
796
3,498
—
—
—
—
359,126
—
—
—
—
—
—
—
—
—
116,006
368,536
27,963
4,544
—
—
—
—
517,052
7,050,517
2,747,648
6,492,040
1,185,978
264,077
48,602
605,426
35,732
18,430,024
7,905,030
1,436,126
7,481,005
2,669,201
—
70,898
40,877
—
19,603,140
8. Credit Derivative Transaction Exposures (CCR6)
CCR6: Credit derivative transaction exposures
Item
No.
Notionals
1
2
3
4
5
6
Single-name credit default swaps
Index credit default swaps
Total return swaps
Credit options
Other credit derivatives
Total notionals
Fair values
7
8
Positive fair value (asset)
Negative fair value (liability)
(Millions of yen)
As of March 31, 2019
As of March 31, 2018
a
Protection
bought
b
Protection sold
a
Protection
bought
b
Protection sold
375,808
147,640
—
—
—
523,448
1,137
8,013
472,253
119,000
—
—
—
591,253
9,593
4,008
444,503
66,000
—
—
—
510,503
387
8,034
719,100
120,834
—
—
—
839,934
12,996
2,660
284
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
9. RWA flow statements of CCR exposures under the Expected exposure method (IMM) (CCR7)
Not applicable.
10. Exposures to Central Counterparties (CCR8)
CCR8: Exposures to central counterparties (CCP)
Item
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Exposures to qualifying central counterparties (QCCPs) (total)
Exposures for trades at QCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC derivatives
(ii) Exchange-traded derivatives
(iii) SFTs
(iv) Netting sets where cross-product netting has been
approved
Segregated initial margin
Non-segregated initial margin
Pre-funded default fund contributions
Unfunded default fund contributions
Exposures to non-QCCPs (total)
Exposures for trades at non-QCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC derivatives
(ii) Exchange-traded derivatives
(iii) SFTs
(iv) Netting sets where cross-product netting has been
approved
Segregated initial margin
Non-segregated initial margin
Pre-funded default fund contributions
Unfunded default fund contributions
(Millions of yen)
As of March 31, 2019
As of March 31, 2018
a
EAD to CCP
(post-CRM)
b
RWA
a
EAD to CCP
(post-CRM)
b
RWA
167,548
125,935
3,320,224
66,407
2,574,667
2,826,512
469,547
24,163
—
—
172,119
164,959
—
14,781
3,617
11,163
—
—
—
2,771
—
—
56,532
9,391
483
—
3,444
97,696
—
10,365
9,810
3,617
6,192
—
—
554
—
—
1,335,139
1,215,202
24,324
—
—
134,883
136,695
—
183,077
4,428
178,616
32
—
—
10,843
—
—
51,493
26,702
24,304
486
—
2,697
71,744
—
46,601
44,374
4,428
39,913
32
—
2,227
—
—
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Securitisation Transactions
1. Overview of Risk Characteristics
Securitisation 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 securitisa-
tion exposure due to a timing mismatch between the securitisation conduit’s receipt of the cash flows related to the underlying assets and
payment of the securitisation 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.
2. Overview of Risk Management Policy and Procedures
Definition of securitisation 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 securitisation exposures to
measuring, evaluating and reporting risks.
Securitisation 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 securitisation 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 resecuritisation transactions.
Its policy is to conduct securitisation transactions by verifying effectiveness in mitigating credit risk through the use of the asset transfer
type or synthetic type securitisation transactions covering domestic and foreign exposures and using them as underlying exposures if
securitisation transactions are used as an approach for credit risk mitigation.
The Group takes one of the following positions for securitisation 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)
286
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 3. Name of Securitisation Conduit and Whether or Not It Possesses Securitisation Exposure Related to Securitisation Transactions,
as well as Names of Subsidiaries and Affiliated Companies of us Which Hold Securitisation Exposures Related to Securitisation
Transactions Conducted by us and we Engage in the Management of the Company or Provides Advice
In order to undertake securitisation transactions related to third-party assets, the Group mainly uses a special purpose company (SPC) as a
securitisation conduit.
• Manhattan Asset Funding Company LLC
• Chelsea Capital Corporation
• Forest Corporation
• Spur Funding Corporation
• Deccan Funding GK
• Taeguk Funding Designated Activity Company
Excluding consolidated subsidiaries, subsidiaries or affiliated companies holding securitisation exposures related to the security transactions
conducted by the Holding Company Group are as follows:
• THE MINATO BANK, LTD.
4. Name of Securitisation Conduit that Provides Non-Contractual Credit Enhancement, etc. and Impacts on Capital by Such Non-
Contractual Credit Enhancement, etc. for Each Securitisation Conduit
Not applicable.
5. Accounting Policy on Securitisation Transactions
The recognition of the generation and extinguishment of financial assets and financial liabilities associated with securitisation transactions
and the valuation and accounting treatment thereof are mainly governed by the “Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10).
6. Names of Qualifying External Ratings Agencies
In order to apply the rating-based approach under the IRB approach or standardised 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.
7. Securitisation Exposures in the Banking Book (SEC1)
SEC1: Securitisation exposures in the
banking book
As of March 31, 2019
(Millions of yen)
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
c
b
a
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
427,251
427,251
—
—
—
— 427,251
511,257
— 511,257
750,681
— 750,681
—
— 427,251
—
—
11,997
— 499,260
—
—
—
—
—
—
11,997
— 499,260
—
—
— 129,918
302,137
318,625
—
— 129,918
— 302,137
— 318,625
—
—
50,367
94,728
145,095
685,450
— 685,450 1,051,904
170,304 1,222,208
50,367
—
—
—
—
94,728
—
—
—
—
145,095
22,776
—
—
— 657,173
5,500
—
—
—
—
22,776
—
—
— 657,173
5,500
—
—
—
884,242
608
73,985
93,067
—
— 884,242
608
—
95,387
21,401
241,970
148,903
—
—
012_0800885851907.indd 287
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
SEC1: Securitisation exposures in the
banking book
As of March 31, 2018
(Millions of yen)
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
412,410
412,410
—
—
—
— 412,410
533,449
— 533,449
655,834
— 655,834
—
— 412,410
39,497
—
—
— 493,951
—
—
—
—
—
—
39,497
—
— 493,951
—
—
31,574
296,940
327,319
—
—
31,574
— 296,940
— 327,319
—
—
17,722
101,189
118,911
771,531
— 771,531
886,361
230,748 1,117,110
17,722
—
—
—
—
101,189
—
—
—
—
20,296
118,911
—
—
— 745,635
5,600
—
—
—
20,296
—
—
—
— 745,635
5,600
—
—
—
685,765
1,100
132,870
66,626
—
220,973
—
9,775
—
—
906,738
1,100
142,645
66,626
—
8. Securitisation Exposures in the Trading Book (SEC2)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2019
(Millions of yen)
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,717
—
740
7,977
—
250
—
—
250
—
—
—
—
—
—
—
—
—
—
—
—
—
8,717
—
740
7,977
—
250
—
—
250
—
—
(Millions of yen)
SEC2: Securitisation exposures in the trading
book
As of March 31, 2018
Item
No.
Type of underlying asset
1
2
3
4
5
6
7
8
9
10
11
Retail (total)
- of which
Residential mortgage
Credit card
Other retail exposures
Re-securitisation
Wholesale (total)
- of which
Loans to corporates
Commercial mortgage
Lease and receivables
Other wholesale
Re-securitisation
288
a
c
b
Bank acts as originator
d
f
e
Bank acts as sponsor
Traditional Synthetic Subtotal Traditional Synthetic Subtotal Traditional Synthetic Subtotal
g
i
h
Bank acts as investor
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 10,624
— 10,624
—
—
—
—
—
—
—
—
—
—
—
6,611
4,013
—
3,855
17
—
3,838
—
—
—
—
—
—
—
—
—
—
—
—
—
6,611
4,013
—
3,855
17
—
3,838
—
—
012_0800885851907.indd 288
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
9. Securitisation Exposures in the Banking Book and Associated Regulatory Capital Requirements
(Bank Acting as Originator or as Sponsor) (SEC3)
SEC3: Securitisation exposures in the
banking book and associated
capital regulatory requirements
(bank acting as originator or
sponsor) (1/2)
Item
No.
(Millions of yen)
As of March 31, 2019
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
967,718
427,887
238,108
134,950
389
873,000
427,887
238,108
134,950
379
873,000
427,887
238,108
134,950
379
1,642,136 1,547,407 1,547,407
126,919
126,919
—
—
—
—
126,919
—
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
609,637
28,497
—
—
591,525
28,497
—
—
591,525
28,497
—
—
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
48,771
2,279
—
—
47,322
2,279
—
—
47,322
2,279
—
—
369,183
286,265
150,440
132,619
—
844,890
93,619
—
—
401,816
18,723
—
—
32,145
1,497
—
—
503,816
141,622
87,668
2,331
379
702,517
33,300
—
—
189,708
9,773
—
—
15,176
781
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885851907.indd 289
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
SEC3: Securitisation exposures in the
banking book and associated
regulatory capital requirements
(bank acting as originator or
sponsor) (2/2)
Item
No.
(Millions of yen)
As of March 31, 2019
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior
Non-senior
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
94,718
—
—
—
10
94,728
—
—
—
18,112
—
—
—
Capital requirement values (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
1,448
—
—
—
94,718
—
—
—
10
94,728
—
—
—
18,112
—
—
—
1,448
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
94,718
—
—
—
10
94,728
—
—
—
18,112
—
—
—
1,448
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
290
012_0800885851907.indd 290
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
SEC3: Securitisation exposures in the
banking book and associated
capital regulatory requirements
(bank acting as originator or
sponsor) (1/2)
Item
No.
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
IRB RBA (including IAA)
IRB SFA
Securitisation exposures subject to SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
(Millions of yen)
As of March 31, 2018
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
1,805,620 1,707,334 1,707,334
2,387
2,144
—
23,246
2,387
2,144
—
23,246
3,333
2,426
184
24,737
73,071
73,071
73,071
1,738,493 1,638,794 1,638,794
—
—
—
922,711
—
—
—
23,147
784,622
2,387
2,144
—
99
73,071
849,640
—
—
789,154
—
24,737
23,246
23,246
23,147
99
Credit RWA amounts (by regulatory approach)
10
11
12
13
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
5,115
100,661
—
5,115
92,354
—
5,115
92,354
—
5,115
32,226
—
—
60,128
—
309,222
290,585
290,585
289,345
1,239
Capital charge after cap (by regulatory approach)
14
15
16
17
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
433
8,536
—
433
7,831
—
433
7,831
—
433
2,732
—
—
5,098
—
26,222
24,641
24,641
24,536
105
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885851907.indd 291
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
(Millions of yen)
As of March 31, 2018
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior
Non-senior
SEC3: Securitisation exposures in the
banking book and associated
regulatory capital requirements
(bank acting as originator or
sponsor) (2/2)
Item
No.
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
Credit RWA amounts (by regulatory approach)
10
11
12
13
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
98,285
946
281
184
1,490
—
99,698
—
98,285
946
281
184
1,490
—
99,698
—
1,490
1,490
—
8,306
—
—
8,306
—
18,637
18,637
Capital requirement values (by regulatory approach)
14
15
16
17
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
—
704
—
—
704
—
1,580
1,580
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
98,285
946
281
184
1,490
—
99,698
—
1,490
—
8,306
—
18,637
—
704
—
1,580
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
292
012_0800885851907.indd 292
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
10. Securitisation Exposures in the Banking Book Associated Capital Requirements
(Bank Acting as Investor) (SEC4)
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (1/2)
Item
No.
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
As of March 31, 2019
(Millions of yen)
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
1,534,395 1,470,068 1,470,068
261,957
261,957
32,713
32,713
37,237
37,237
608
608
261,957
32,713
143,215
608
468,565 1,001,503
—
261,957
28,205
4,507
21,586
15,651
608
—
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
1,576,141 1,405,836 1,405,836
396,140
396,140
—
—
608
608
396,140
—
608
436,086
314,595
—
—
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
360,511
130,017
—
7,605
236,940
130,017
—
7,605
236,940
130,017
—
7,605
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
28,840
10,401
—
608
18,955
10,401
—
608
18,955
10,401
—
608
74,334
94,532
—
—
5,946
7,562
—
—
969,750
81,544
—
608
162,606
35,485
—
7,605
13,008
2,838
—
608
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
012_0800885851907.indd 293
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
Item
No.
As of March 31, 2019
(Millions of yen)
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior
Non-senior
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
Credit RWA amounts (by regulatory approach)
10
11
12
13
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
64,327
—
—
105,977
—
170,304
—
—
—
123,570
—
—
—
Capital charge after cap (by regulatory approach)
14
15
16
17
SEC-IRBA or IAA
SEC-ERBA
SEC-SA
1250% RW
9,885
—
—
—
64,327
—
—
105,977
—
170,304
—
—
—
123,570
—
—
—
9,885
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
64,327
—
—
105,977
—
170,304
—
—
—
123,570
—
—
—
9,885
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
294
012_0800885851907.indd 294
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (1/2)
Item
No.
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
As of March 31, 2018
(Millions of yen)
a
b
c
d
e
f
g
h
Total
Traditional
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior Non-senior
1,721,862 1,510,845 1,510,845
301
28,573
600
1,875
301
28,573
600
21,606
301
28,573
600
1,875
345,204
345,204
345,204
1,400,220 1,189,203 1,189,203
5,912
5,912
5,912
635,543
—
20,291
—
—
875,301
301
8,282
600
1,875
264,534
385,988
5,312
80,670
803,215
600
21,606
1,875
1,875
—
1,875
Credit RWA amounts (by regulatory approach)
10
11
12
13
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
42,577
83,567
6,084
42,577
82,324
6,084
42,577
82,324
6,084
28,948
27,683
3,984
13,628
54,641
2,100
270,086
23,449
23,449
—
23,449
Capital charge after cap (by regulatory approach)
14
15
16
17
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
3,610
7,086
486
3,610
6,981
486
3,610
6,981
486
2,454
2,347
318
1,155
4,633
168
22,873
1,958
1,958
—
1,958
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
As of March 31, 2018
(Millions of yen)
i
j
k
l
m
n
o
Synthetic
securitisation
(subtotal)
Securitisation
Retail
underlying
Wholesale
Re-
securitisation
Senior
Non-senior
SEC4: Securitisation exposures in the
banking book and associated
capital requirements (bank acting
as investor) (2/2)
Item
No.
Exposure values (by RW bands)
1
2
3
4
5
≤20% RW
>20% to 50% RW
>50% to 100% RW
>100% to <1250% RW
1250% RW
Exposure values (by regulatory approach)
6
7
8
9
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
Credit RWA amounts (by regulatory approach)
10
11
12
13
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
211,017
—
—
—
19,730
—
211,017
—
211,017
—
—
—
19,730
—
211,017
—
19,730
19,730
—
1,242
—
—
1,242
—
—
—
—
—
—
—
—
—
—
—
—
—
211,017
—
—
—
19,730
—
211,017
—
19,730
—
1,242
—
246,636
246,636
—
246,636
Capital charge after cap (by regulatory approach)
14
15
16
17
IRB RBA (including IAA)
IRB SFA
SA
1250% RW pursuant to Article 247,
Paragraph 1 of the Notification or
Article 225, Paragraph 1 of the Bank
Holding Company Equity Capital
Adequacy Notification
—
105
—
—
105
—
20,914
20,914
—
—
—
—
—
105
—
20,914
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
296
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Equity Exposures
1. Overview of 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 SMBC group, taking into account the financial and business situations of the
subsidiaries and affiliates.
2. Valuation of Securities and Other Significant Accounting Policies
Stocks of non-consolidated subsidiaries and affiliates not accounted for by the equity method 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 market prices at the end of the fiscal year under
review (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.”
012_0800885851907.indd 297
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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, SMBC Bank EU AG, 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, SMBC
Bank EU AG, 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. Market Risk under standardised approach (MR1)
MR1: Market risk under standardised approach
Item
No.
1
2
3
4
5
6
7
8
9
Interest rate risk (general and specific)
Equity risk (general and specific)
Foreign exchange risk
Commodity risk
Options
Simplified approach
Delta-plus method
Scenario approach
Specific risk related to securitisation exposures
Total
3. RWA flow statements of market risk exposures under an IMA (MR2)
MR2: RWA flow statements of market risk
exposures under an IMA
Item
No.
1a
1b
1c
2
3
4
5
6
7
8a
8b
8c
RWA as of March 31, 2018
Ratio of 1a / 1c
RWA at end of March 31, 2018
Movement in risk
levels
Model updates/
changes
Methodology and
policy
Acquisitions and
disposals
Foreign exchange
movements
Other
RWA at end of March 31, 2019
Ratio of 8c / 8a
RWA as of March 31, 2019
Breakdown
of variations
in the
market risk-
weighted
assets
a
VaR
634
2.8
220
(60)
0
—
—
5
(3)
161
2.8
465
b
Stressed VaR
927
3.6
253
101
0
—
—
6
—
361
3.0
1,105
(Millions of yen)
As of March 31, 2019
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
371,760
177,934
17,049
627
As of March 31, 2018
RWA
(Amounts calculated by dividing
risk equivalent amounts by 8%)
467,888
166,758
20,640
0
—
178,326
—
3,180
748,878
—
298,703
—
181,012
1,135,003
(Billions of yen)
As of March 31, 2019
c
IRC
d
CRM
e
Other
f
Total RWA
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,562
3.3
473
40
0
—
—
12
(3)
522
3.0
1,571
298
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
4. IMA values for trading portfolios (MR3)
MR3: IMA values for trading portfolios
Item
No.
(Millions of yen)
Fiscal 2018
Fiscal 2017
VaR (holding period of 10 business days, one-sided confidence level of 99%)
1 Maximum value
2
Average value
3 Minimum value
Period end
4
Stressed VaR (holding period of 10 business days, one-sided confidence level of 99%)
5 Maximum value
Average value
6
7 Minimum value
Period end
8
Incremental risk value (one-sided confidence level of 99.9%)
9 Maximum value
Average value
10
11 Minimum value
Period end
12
Comprehensive risk value (one-sided confidence level of 99.9%)
13 Maximum value
14
Average value
15 Minimum value
Period end
16
Floor (modified standardized measurement method)
17
30,565
14,441
9,587
12,930
44,514
27,643
17,644
28,908
—
—
—
—
—
—
—
—
—
24,051
17,066
9,356
17,606
45,773
25,283
13,672
20,254
—
—
—
—
—
—
—
—
—
Note: The VaR and the stressed VaR are calculated using the historical simulation method. Specifically, they are calculated on a daily basis, assuming a one-sided confidence level of
99.0% and a one-day holding period, based on profit and loss simulation on a scenario-specific basis generated from historical data (the full valuation method, in principle), and
they are adjusted to a 10-day holding period using the square root of time method. Under this method, the VaR and the stressed VaR use observation periods of four years
immediately preceding, and 12 months including the stress period, respectively.
5. Backtesting results by the internal models approach (MR4)
The status of backtesting of trading for Fiscal 2018 and 2017 is as follows. “Daily gain/loss” represents the actual gain/loss incurred, and
“Daily VaR” represents the daily VaR calculated using the risk measurement model with a one-day holding period. In the past 250 business
days, the number of times loss exceeded VaR was 0, and the VaR model (one-sided confidence level of 99.0%) is considered to have sufficient
accuracy.
Daily gain/loss
Daily VaR
Daily gain/loss
Daily VaR
(
M
i
l
l
i
o
n
s
o
f
Y
e
n
)
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
-10,000
-12,000
-14,000
(
M
i
l
l
i
o
n
s
o
f
Y
e
n
)
4,000
2,000
0
-2,000
-4,000
-6,000
-8,000
-10,000
-12,000
-14,000
March 2018
March 2019
March 2017
March 2018
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ Interest Rate Risk in the Banking Book
1. Overview of Risk Management Policy and Procedures
Interest rate risk in the banking book is the risk to the present value of a bank’s assets and liabilities and/or the future earnings (interest
income) from the rate-sensitive instruments when interest rates change. SMBC Group recognizes interest rate risk as a significant risk and
manages it in an integrated manner, together with other market risks (equity position risk, etc.) (For details, please refer to pages 116 to
117).
Interest rate risk management is conducted using basis point value (BPV) as a measure of the risk, which denotes the change of present value
given a basis point rise in the interest rate. Appropriate limits on BPVs are set for each significant subsidiary including SMBC according to
its capital and business plan, and BPVs are monitored daily for risk management. BPVs are managed not only by changing the balance and
term structures of assets and liabilities, but also by using hedging instruments such as interest rate swaps and futures.
2. Calculation Method of Interest Rate Risk
Interest rate risk in the banking book is measured based on the future cash flows of the bank’s assets and liabilities. Especially, the method of
recognizing the dates for maturity of demand deposits (current accounts and ordinary deposit accounts that can be withdrawn at any time)
and the method of estimating the time of cancellation prior to maturity of time deposits and mortgage loans affect the risk significantly. Key
assumptions for measuring interest rate risk of such instruments are as follows.
Method of recognizing the maturity of demand deposits
The amount of the bank’s core deposits is identified as the amount of demand deposits expected to be left with the bank after 5 years (with
50% of the lowest balance during the past 5 years as the upper limit). The maturity of the core deposits is regarded to be 5 years (2.5 years
on average). The maturity of the bank’s demand deposits are recognized with 5 years as the maximum term (the average is 0.7 year).
Method of estimating the time of cancellation prior to maturity of time deposits and mortgage loans
Cash flows of mortgage loans tend to be different from the initial scheduled ones, as customers may exercise their prepayment options to
redeem early in a bonus month or as time passes. Similarly, fixed-term deposits may be canceled prior to maturity. For such instruments,
interest rate risk is managed by using statistical models to estimate cash flows for each instrument, considering the seasonality, elapsed years,
interest rate levels at the effective time, etc. These models are validated and reviewed regularly.
300
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 3. Interest Rate Risk
Table IRRBB1 shows changes in economic value of equity (ΔEVE) and net interest income (ΔNII) in the banking book, simulated based on
a set of prescribed interest rate shock scenarios.
As stipulated under the Pillar 2 of Basel Framework (Supervisory Review Process), in order to identify banks that may have taken too large
interest rate risk, the Japan FSA applies “materiality test” as comparing the bank’s ΔEVE with 15% of its Tier 1 capital, under a set of
prescribed interest rate shock scenarios. The measurement result of SMBC Group’s ΔEVE shows that the economic value of equity declines
when interest rates rise and the maximum change amount is under the prescribed parallel shock up scenario. SMBC Groups’ ΔEVE is not
larger than 15% of our Tier 1 capital.
As for ΔNII, net interest income declines under the prescribed parallel shock down scenario and increased under the parallel shock up
scenario. Due to the assumption of zero floor on the interest rate of customer’s deposits in JPY, which limits reduction of the funding cost
when interest rate down, the change amount is larger under the parallel shock down scenario.
The measurement scope, the definition of each figure and the calculation assumption are as follows.
Scope
The consolidated subsidiaries of SMBC
• ΔEVE is calculated by simple aggregation of the decrease in economic value for all currencies.
• ΔNII is calculated by simple aggregation of the change amount of interest income for each currency in which the total amount of interest
rate-sensitive assets and liabilities is 5% or more of the total.
Definition of Each Figure and Calculation Assumption
• ΔEVE
Decrease in economic value (EVE, Economic Value on Equity) against interest rate shock (excluding the credit spread).
• ΔNII
Decrease in 1 year interest income (NII, Net Interest Income) under each the interest rate shock. It is calculated under the constant balance
sheet, which means that the balance sheet does not change through a year. In each simulation, we do not allow negative interest rate for
domestic yen deposits and loans in any scenario.
(Millions of yen)
IRRBB1: Interest rate risk
Item
No.
Parallel up
Parallel down
Steepener
Flattener
Short rate up
Short rate down
1
2
3
4
5
6
7 Maximum
8
Tier 1 capital
a
b
c
d
⊿EVE
⊿NII
As of March
31, 2019
As of March 31,
2018
As of March
31, 2019
As of March 31,
2018
724,747
1,172
343,900
18,257
151,087
1,143
724,747
450,833
0
234,602
14,509
69,880
236
450,833
e
As of March 31, 2019
(252,302)
405,058
(283,158)
433,621
405,058
433,621
f
As of March 31, 2018
10,727,228
10,610,229
Note: Interest rate shocks of deposits with central banks is considered to be the same with the standardized interest rate shocks when calculating ⊿NII.
012_0800885851907.indd 301
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information ■ Operational Risk
1. Operational Risk Equivalent Amount Calculation Methodology
Sumitomo Mitsui Financial Group 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 Finance
Service Co., Ltd., SMBC Guarantee Co., Ltd., SMBC Operation Service Co., Ltd., SMBC Green 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 119 to 121.
3. Usage of Insurance to Mitigate Risk
Sumitomo Mitsui Financial Group had not taken measures to mitigate operational risk through insurance coverage for exposures.
302
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information ■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
a
Consolidated balance sheet as
in published financial
statements
As of March 31,
2019
As of March 31,
2018
b
(Millions of yen)
c
Reference to Template CC1
Reference to appended table
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
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 or losses on other securities
Net deferred gains or 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
57,411,276
2,465,744
6,429,365
4,097,473
4,594,578
5,328,778
390
24,338,005
77,979,190
1,719,402
247,835
7,307,305
1,504,703
769,231
329,434
40,245
9,564,993
(468,808)
203,659,146
122,325,038
11,165,486
1,307,778
11,462,559
1,812,820
2,291,813
4,219,293
10,656,897
1,165,141
84,500
9,227,367
1,352,773
4,873,630
70,351
3,091
31,816
1,374
23,948
7,936
147,594
2,847
378,220
30,259
9,564,993
192,207,534
2,339,443
739,047
5,992,247
(16,302)
9,054,436
1,688,852
(54,650)
36,547
50,379
(7,244)
1,713,884
4,750
678,540
11,451,611
203,659,146
53,732,582
1,881,879
827,892
8,337,700
4,730,770
5,585,591
1,482
25,712,709
72,945,934
2,166,190
2,329,431
8,005,807
3,475,131
865,584
383,418
27,609
8,575,499
(536,088)
199,049,128
116,477,534
11,220,284
1,190,928
5,509,721
7,186,861
2,384,787
4,402,110
10,829,248
865,640
1,256,600
9,057,683
1,328,271
6,348,202
84,046
3,861
39,982
2,026
22,244
17,765
144,763
2,397
455,234
30,539
8,575,499
187,436,236
2,338,743
758,215
5,552,573
(12,493)
8,637,039
1,688,842
(68,543)
37,097
36,906
59,121
1,753,424
2,823
1,219,604
11,612,892
199,049,128
7-a
3-b,7-b
7-c
7-d
3-a
4
5-a
7-e
9-a
9-b
7-f
5-b
5-c
1-a
1-b
1-c
1-d
6
(a)
2,8-a
8-b
303
2019/08/16 19:25:58
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
012_0800885851907.indd 303
Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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, 2019
2,339,443
739,047
5,992,247
(16,302)
9,054,436
As of March
31, 2018
2,338,743
758,215
5,552,573
(12,493)
8,637,039
(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, 2019
As of March
31, 2018
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
9,054,436
8,637,039
3,078,490
5,992,247
16,302
—
3,096,958
5,552,573
12,493
—
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 fixed 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 intangibles 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, 2019
As of March
31, 2018
4,750
2,539
2,823
2,823
As of March
31, 2019
As of March
31, 2018
2,539
—
—
2,823
—
—
As of March
31, 2019
769,231
24,338,005
61,282
As of March
31, 2018
865,584
25,712,709
27,520
173,381
181,373
As of March
31, 2019
As of March
31, 2018
247,659
409,472
—
—
—
292,318
419,413
—
—
—
—
—
As of March
31, 2019
As of March
31, 2018
329,434
383,418
Income taxes related to above
100,520
116,950
304
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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 intangible fixed assets
Tax effects on net defined benefit asset
(2) Composition of capital
As of March
31, 2019
As of March
31, 2018
228,913
266,468
As of March
31, 2019
As of March
31, 2018
40,245
378,220
30,259
173,381
100,520
27,609
455,234
30,539
181,373
116,950
(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, 2019
As of March
31, 2018
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
2,208
1,432
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)
2,605
3,997
—
—
—
—
2,605
3,997
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, 2019
As of March
31, 2018
(54,650)
(68,543)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
This item does not agree with the amount reported
on the consolidated balance sheet due to offsetting of
assets and liabilities.
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Net deferred gains or losses on hedges
(52,610)
(67,433)
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
(Millions of yen)
Remarks
Ref. No.
As of March
31, 2019
As of March
31, 2018
5,328,778
5,585,591
24,338,005
77,979,190
7,307,305
25,712,709
72,945,934
8,005,807
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including derivatives
4,219,293
4,402,110
4,873,630
6,348,202
Including trading account securities sold and
derivatives for trading liabilities
Including derivatives
Consolidated balance sheet items
Trading assets
Securities
Loans and bills discounted
Other assets
Trading liabilities
Other liabilities
012_0800885851907.indd 305
7-a
7-b
7-c
7-d
7-e
7-f
305
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
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 and other TLAC liabilities
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible
short positions, where the bank does not own more than 10% of the
issued share capital (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital and other TLAC liabilities
Non-significant investments in the capital and other TLAC
liabilities of other financials that are below the thresholds for
deductions (before risk weighting)
Significant investments in the capital of banking, financial and
insurance entities that are outside the scope of regulatory consolidation
(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 and other TLAC liabilities
Significant investments in the common stock of other
financials that are below the thresholds for deductions
(before risk weighting)
4,491
4,491
—
0
—
—
—
—
7,981
7,981
—
0
—
—
—
—
816,189
699,361
—
—
—
—
—
—
816,189
699,361
996,894
748,831
—
—
25,516
50,000
—
—
81,640
50,000
921,378
617,191
8. Non-controlling interests
(1) Consolidated balance sheet
Consolidated balance sheet items
Stock acquisition rights
Non-controlling interests
(2) Composition of capital
As of March
31, 2019
As of March
31, 2018
4,750
678,540
2,823
1,219,604
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Amount allowed in group CET1
Qualifying Additional Tier 1 instruments plus related capital surplus
issued by special purpose vehicles and other equivalent entities
Amount allowed in group AT1
Qualifying Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities
Amount allowed in group T2
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
2,181
—
332
—
62,752
224,359
—
—
15,087
49,810
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
(Millions of yen)
(Millions of yen)
Remarks
Remarks
As of March
31, 2019
10,656,897
9,227,367
As of March
31, 2018
10,829,248
9,057,683
As of March
31, 2019
As of March
31, 2018
598,974
599,794
997,723
993,367
306
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
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
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information ■ Linkages between Regulatory Exposure Amounts and Carrying Values in Consolidated Financial Statements
Differences between Regulatory Exposure Amounts and Carrying Values in Consolidated Financial Statements and
Explanations of the Factors
1. Differences between Accounting and Regulatory Scopes of Consolidation and Mapping of Consolidated Financial Statement
Categories with Regulatory Risk Categories (LI1)
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
(Millions of yen)
As of March 31, 2019
a
b
c
Carrying
values as
reported in
published
Consolidated
financial
statement
Carrying
values
under scope
of regulatory
consolidation
CR
(excluding
amounts
relevant to
d and e)
d
e
Carrying values of items:
f
g
CCR
Securitisation
(excluding
amounts
relevant to f)
Market risk
Items not
subject to
capital
requirements
or subject to
deduction
from capital
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
57,411,276
2,465,744
—
—
— 6,429,365
— 4,097,473
—
—
—
—
— 1,762,647
2,831,930
57,411,276
2,465,744
6,429,365
4,097,473
4,594,578
5,328,778
390
24,338,005
77,979,190
1,719,402
247,835
7,307,305
1,504,703
769,231
329,434
40,245
9,564,993
(468,808)
57,411,276
2,465,744
6,429,365
4,097,473
4,594,578
5,328,778
390
24,338,005
77,979,190
1,719,402
247,835
7,307,305
1,504,703
769,231
329,434
40,245
9,564,993
(468,808)
390
23,726,859
77,114,769
1,719,402
247,835
3,824,944
1,504,703
173,381
100,520
15,503
9,415,628
(468,808)
203,659,146 203,659,146 180,084,082
— 2,573,258
—
—
—
—
—
2,279,073
—
—
—
—
—
—
15,379,171
—
—
—
—
—
—
—
—
—
—
4,883
— 5,328,778
—
—
—
86,798
—
524,347
50,000
—
814,420
—
—
—
—
—
—
— 1,201,406
1,880
—
—
—
595,849
—
—
228,913
—
—
24,742
—
—
—
—
149,365
—
—
—
2,192,594
5,328,778
3,252,662
122,325,038 122,325,038
11,165,486
1,307,778
11,462,559
1,812,820
2,291,813
4,219,293
10,656,897
1,165,141
84,500
9,227,367
1,352,773
4,873,630
70,351
3,091
31,816
1,374
23,948
7,936
147,594
2,847
378,220
30,259
9,564,993
192,207,534 192,207,534
11,165,486
1,307,778
11,462,559
1,812,820
2,291,813
4,219,293
10,656,897
1,165,141
84,500
9,227,367
1,352,773
4,873,630
70,351
3,091
31,816
1,374
23,948
7,936
147,594
2,847
378,220
30,259
9,564,993
—
3,245
—
—
—
—
— 8,390,797
719,063
—
—
—
— 2,226,979
—
—
—
—
—
—
—
—
—
—
— 1,572,866
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
12,909,706
3,245
—
—
—
—
—
—
— 4,219,293
—
—
—
—
—
1,172
—
—
—
—
—
—
—
—
—
—
—
1,172
— 122,321,793
— 11,165,486
— 1,307,778
— 3,071,762
— 1,093,756
— 2,291,813
28,131
— 10,656,897
— 1,165,141
—
84,500
— 9,227,367
— 1,352,773
— 3,299,590
70,351
—
3,091
—
31,816
—
1,374
—
23,948
—
7,936
—
147,594
—
2,847
—
378,220
—
30,259
—
— 9,564,993
4,219,293 177,329,228
012_0800885851907.indd 307
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
LI1: Differences between accounting and
regulatory scopes of consolidation and
mapping of consolidated financial statement
categories with regulatory risk categories
(Millions of yen)
As of March 31, 2018
a
b
c
Carrying
values as
reported in
published
Consolidated
financial
statement
Carrying
values
under scope
of regulatory
consolidation
CR
(excluding
amounts
relevant to
d and e)
e
d
Carrying values of items:
f
g
CCR
Securitisation
(excluding
amounts
relevant to f)
Market risk
—
53,732,582
—
1,881,879
—
827,892
— 8,337,700
—
—
—
—
— 1,794,900
2,935,869
53,732,582
1,881,879
827,892
8,337,700
4,730,770
5,585,591
1,482
25,712,709
72,945,934
2,166,190
2,329,431
8,005,807
3,475,131
865,584
383,418
27,609
8,575,499
(536,088)
53,732,582
1,881,879
827,892
8,337,700
4,730,770
5,585,591
1,482
25,712,709
72,945,934
2,166,190
2,329,431
8,005,807
3,475,131
865,584
383,418
27,609
8,575,499
(536,088)
1,482
25,111,327
72,358,267
2,166,190
2,329,431
4,729,195
3,475,131
181,373
116,950
8,048
8,354,354
(536,088)
199,049,128 199,049,128 176,845,998
— 2,418,678
—
—
—
—
—
2,394,436
—
—
—
—
—
—
13,978,706
—
—
—
—
—
— 5,585,591
—
—
—
492,221
—
537,666
—
—
—
—
—
19,687
—
—
—
—
—
—
—
—
—
221,144
—
—
5,585,591
3,065,621
Items not
subject to
capital
requirements
or subject to
deduction
from capital
—
—
—
—
—
7,838
—
109,160
50,000
—
—
862,487
—
684,211
266,468
19,561
—
—
1,999,727
116,477,534 116,477,534
11,220,284
1,190,928
5,509,721
7,186,861
2,384,787
4,402,110
10,829,248
865,640
1,256,600
9,057,683
1,328,271
6,348,202
84,046
3,861
39,982
2,026
22,244
17,765
144,763
2,397
455,234
30,539
8,575,499
187,436,236 187,436,236
11,220,284
1,190,928
5,509,721
7,186,861
2,384,787
4,402,110
10,829,248
865,640
1,256,600
9,057,683
1,328,271
6,348,202
84,046
3,861
39,982
2,026
22,244
17,765
144,763
2,397
455,234
30,539
8,575,499
—
3,540
—
—
—
—
— 2,238,633
— 5,547,010
—
—
— 2,262,129
—
—
—
—
—
—
—
—
—
—
— 1,912,702
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
11,960,475
3,540
—
—
—
—
—
—
— 4,402,110
—
—
—
—
—
2,252
—
—
—
—
—
—
—
—
—
—
—
2,252
— 116,473,993
— 11,220,284
— 1,190,928
— 3,271,087
— 1,639,851
— 2,384,787
17,362
— 10,829,248
—
865,640
— 1,256,600
— 9,057,683
— 1,328,271
— 4,433,248
84,046
—
3,861
—
39,982
—
2,026
—
22,244
—
17,765
—
144,763
—
2,397
—
455,234
—
—
30,539
— 8,575,499
4,402,110 173,347,349
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
Notes: 1. Transactions in the trading book including derivative transactions extend over multiple risk categories, since they are subject to both market risks and counterparty credit
risks.
2. Account titles including monetary claims boughts are subject to securitisation products if they have a characteristic of securitisation products, otherwise they are subject to
CR, therefore, they extend over multiple risk categories.
3. Foreign exchange risk and commodities risk in the banking book are not included in column f “Market risk,” since it is difficult to link them with account titles.
308
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
2. Main Sources of Differences between Regulatory Exposure Amounts and Carrying Values in Consolidated Financial Statements
(LI2)
LI2: Main sources of differences between
regulatory exposure amounts and
carrying values in consolidated
financial statements amounts
Item
No.
1
2
3
4
5
6
7
8
9
Asset carrying value amount under
scope of regulatory consolidation
Liabilities carrying value amount
under scope of regulatory
consolidation
Total net amount under regulatory
scope of consolidation
Off-balance sheet amounts
Differences due to consideration of
provisions and write-offs
Differences due to derivative
transactions
Differences due to SFTs
Other differences
Regulatory exposure amounts
LI2: Main sources of differences between
regulatory exposure amounts and
carrying values in consolidated
financial statements amounts
Item
No.
1
2
3
4
5
6
7
8
9
Asset carrying value amount under
scope of regulatory consolidation
Liabilities carrying value amount
under scope of regulatory
consolidation
Total net amount under regulatory
scope of consolidation
Off-balance sheet amounts
Differences due to consideration of
provisions and write-offs
Differences due to derivative
transactions
Differences due to SFTs
Other differences
Regulatory exposure amounts
As of March 31, 2019
(Millions of yen)
a
Total
b
c
d
e
Items subject to:
CR (excluding
amounts relevant
to c and d)
CCR
Securitisation
(excluding
amounts relevant
to e)
Market risk
201,466,551
180,084,082
15,379,171
3,252,662
5,328,778
14,878,306
3,245
12,909,706
1,172
4,219,293
186,588,245
180,080,837
13,606,383
9,252,378 (Note 1)
555,230
555,230 (Note 2)
2,469,464
3,875,495
—
6,862,613
(638,447)
864,648
207,838,675
—
6,529,139 (Note 3)
—
859,587
190,748,034
(638,447)
3,558
12,239,210
3,251,489
478,509
—
10,443
—
1,503
3,741,945
1,109,485
—
—
—
—
—
1,109,485
(Millions of yen)
As of March 31, 2018
a
Total
b
c
d
e
Items subject to:
CR (excluding
amounts relevant
to c and d)
CCR
Securitisation
(excluding
amounts relevant
to e)
Market risk
197,049,401
176,845,998
13,978,706
3,065,621
5,585,591
14,088,886
3,540
11,960,475
2,252
4,402,110
182,960,514
176,842,457
14,498,018
8,819,294 (Note 1)
650,474
650,474 (Note 2)
2,018,231
5,144,715
—
6,408,367
2,021,735
378,881
206,917,991
—
6,249,473 (Note 3)
—
194,769
186,506,996
2,021,735
184,111
15,618,266
3,063,369
534,008
—
11,869
—
—
3,609,247
1,183,480
—
—
—
—
—
1,183,480
Notes: 1. This mainly comprises exposures due to commitment lines.
2. This mainly comprises assets subject to the IRB approach added with specific reserve and partial direct write-offs.
3. This mainly comprises the aggregation of the addition of derivative liabilities and regulatory add-on amounts, and the deduction of regulatory netting effect.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
Countercyclical buffer requirement by country or region
■ Countercyclical buffer requirement by country or region
CCyB1: Countercyclical buffer (CCyB) requirement by country or region
As of March 31, 2019
(Millions of yen, except percentages)
Geographical
breakdown
Hong Kong
Sweden
UK
Subtotal
Total
a
Applicable CCyB ratio in
effect
2.50%
2.00%
1.00%
b
RWAs used in the
computation of CCyB ratio
1,186,840
16,840
1,862,990
3,066,670
46,957,843
c
d
Bank-specific CCyB ratio
CCyB amount
0.10%
48,637
Note: While credit risk-weighted asset shall be calculated on an ultimate risk basis where feasible, some assets including funds and other assets or portion of assets subject to
standardized approach, are calculated on an obligor basis or on a country of undertaking basis.
310
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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)
GSIB1: G-SIB indicators
Basel III
Template
No.
1
2
3
4
5
6
7
8
9
10
11
12
Cross-jurisdictional
activity
Size
Mutual relevance
Substitutability/
financial institution
infrastructure
Complexity
Cross-jurisdictional claims
Cross-jurisdictional liabilities
Total exposures
Intra-financial system assets
Intra-financial system liabilities
Securities outstanding
Assets under custody
Annual total amount of payments settled through settlement
systems
Annual total amount of underwritten transactions in debt and
equity markets
Total amount of notional amount of OTC derivatives and long
settlement transactions with other financial institutions
Level 3 assets
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
(Millions of yen)
As of March 31,
2019
As of March 31,
2018
52,187,827
35,256,002
220,856,829
32,216,204
18,722,769
28,193,246
11,466,654
48,875,306
33,413,137
213,232,120
30,134,718
19,890,105
30,224,944
13,064,236
3,431,377,752
3,311,542,881
9,149,209
9,439,668
778,148,994
716,218,388
1,003,465
879,267
10,131,349
10,321,538
Note: Terms in this form shall, unless otherwise prescribed separately, be used in accordance with the terminology used in the Notification as well as the Bank Holding Company Equity
Capital Adequacy Notification.
a. Basel III Template No. (hereinafter referred to as “Item No.” in this form) 3 “Total exposures” shall state the total amount of the
following.
(1) The amount of on-balance sheet assets (total assets reported in the non-consolidated balance sheet or the consolidated balance
sheet, less the amount of customers’ liabilities for acceptance and guarantees, less the amounts reported with respect to (2)
and (3) reported in the non-consolidated balance sheet or the consolidated balance sheet)
(2) The amount of derivative transactions, etc. (referring to forward contract, swap, option, and other derivatives and long
settlement transactions; hereinafter the same in (2) and (4)) (the amount of exposure calculated in respect of derivative
transactions, etc. (the amount of replacement cost calculated by using current exposure method (which shall be zero if such
amount turned out to be a negative value), added by the add-on amount, as well as the notional amount of the credit
derivative that provides protection), added by the consideration of the margin deposited in cash in connection with derivative
transactions, etc.)
(3) The amount of SFTs (amount of cash receivables in SFTs added by the amount of exposure at the counterparty of transaction
calculated for each unit of SFTs (which shall be zero if such amount turned out to be a negative value))
(4) The amount of off-balance sheet transactions (excluding derivative transactions, etc., and SFTs) (the amount of credit risk
exposure at the counterparty of transaction, added by the amount of exposure arising from the underlying asset, as well as the
amount of securitisation exposure)
b. Item No.4 “Mutual relevance - Intra-financial system assets” shall state the total amount of the following balances concerning
the credit granted to financial institutions, etc. (including financial instruments business operators prescribed under Article 2,
Paragraph 9 of the Financial Instruments and Exchange Act, insurance companies, central counterparty, pension funds and
other business operators of the similar kind; hereinafter the same in b. and c.).
(1) Funds deposited with or lent to other financial institutions and undrawn committed lines extended to other financial
institutions
(2) Holdings of securities issued by other financial institutions (referring to secured bonds, general unsecured bonds,
subordinated bonds, short-term bonds, negotiable certificates of deposit and stock; hereinafter the same in Item No. 6)
(3) Net positive current exposure of SFTs with other financial institutions (which can take into account the effect of legally
binding netting contracts, but cannot have a negative value)
(4) The add-on amount calculated based on the amount measured at fair value and by using the current exposure method as
adopted for the derivative instruments transactions and long settlement transactions with other financial institutions, without
involving financial instruments markets as defined under Article 2, Paragraph 14 of the Financial Instruments and Exchange
Act, and foreign financial instruments markets as defined under Article 2, Paragraph 8, Item 3(b) of the same Act (which can
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
take into account the effect of legally valid bilateral netting contracts, but cannot have a negative value; hereinafter
collectively referred to as “financial instruments markets, etc.” in Item No. 10 and c.)
c. Item No. 5 “Mutual relevance - Intra-financial system liabilities” shall state the total amount of the following balances.
(1) Deposits due to, and loans obtained from other financial institutions (including undrawn committed lines)
(2) Net negative current exposure of SFTs with other financial institutions (which can take into account the effect of legally valid
bilateral netting contracts, but cannot exceed zero)
(3) The add-on amount calculated based on the amount measured at fair value and by using the current exposure method as
adopted for the derivative instruments transactions and long settlement transactions with other financial institutions, without
involving financial instruments markets, etc. (which can take into account the effect of legally valid bilateral netting contracts,
but cannot exceed zero)
d. Item No. 8 “Substitutability/financial infrastructure – the annual total amount of payments through settlement systems” shall
state the annual total amount of payments settled through the BOJ-NET, the Japanese Banks’ Payment Clearing Network and
other similar settlement systems but excluding intra-group payments in the most recently ended fiscal year.
e. Item No.9 “Substitutability/financial infrastructure – the annual total amount of underwritten transactions in debt and equity
markets” shall state the annual total amount of transactions underwritten in debt and equity markets in the most recently ended
fiscal year (referring to securities underwriting as prescribed in Article 2, Paragraph 8, Item 6 of the Financial Instruments and
Exchange Act).
f. Financial institutions mentioned in Item No.10 “Complexity – total amount of notional amount of OTC derivatives and long
settlement transactions with other financial institutions” refer to financial institutions, etc. as defined in b. above.
g. Item No.12 “Complexity – Held-for-trading (HFT) securities and available-for-sale (AFS) securities” shall state the total amount
of balances of Held-for-trading (HFT) securities and available-for-sale (AFS) securities (excluding HFT and AFS securities that
are considered to have high liquidity).
h. In each item in this form, if there is no specific applicable amount in the submitting financial institution, the item in question
shall not be deleted but just be marked with [ - ].
i. In this form, all amounts shall be stated in the designated unit herein, and any fraction less than such unit shall be rounded
down.
j. This form shall be prepared only by a bank subject to the uniform international standards (excluding the bank that is a
consolidated subsidiary of a bank as well as the bank that is a consolidated subsidiary not of a bank but of a banking holding
company, and consolidated subsidiary of a regulated foreign entity), or a holding company subject to the uniform international
standards that states in Item No. 3 an equivalent to an amount in excess of 200 billion euros at the exchange rate as at the end of
its most recently ended fiscal year, or that is designated by the Commissioner of the Financial Services Agency of Japan as an
equivalent to a bank or a holding company subject to the uniform international standards.
312
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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)
Items
(In million yen, %)
As of March 31,
2019
As of March 31,
2018
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)
179,349,049
203,659,146
177,220,554
199,049,128
—
—
—
—
24,310,096
21,828,574
999,843
178,349,206
1,135,509
176,085,044
Exposures related to derivative transactions (2)
4
5
6
7
8
9
10
11
Replacement cost associated with derivatives transactions, etc. (with
the 1.4 alpha factor applied)
Replacement cost associated with derivatives transactions, etc.
Add-on amount for potential future exposure associated with
derivatives transactions, etc. (with the 1.4 alpha factor applied)
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 collateral, provided
where deducted from the consolidated balance sheet pursuant to the
operative accounting framework
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)
2,702,937
2,170,604
4,302,269
3,809,594
622,875
244,794
—
—
97,391
244,794
591,253
541,447
549,981
509,474
7,580,496
6,020,706
10,526,838
—
731,057
9,165,592
—
144,762
(c)
11,257,895
9,310,354
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
61,366,247
60,490,251
39,015,093
40,188,216
(d)
22,351,153
20,302,034
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)
10,727,228
219,538,751
4.88%
10,610,229
211,718,140
5.01%
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information TLAC information
■ TLAC: TLAC composition for G-SIBs (at resolution group level)
Sumitomo Mitsui Financial Group, Inc. and Subsidiaries
Basel III
Template
No.
Items
(Millions of yen, except percentages)
As of March
31, 2019
Preferred resolution strategy (1)
The SPE (Single Point of Entry) resolution strategy is considered to be the preferred resolution strategy for Sumitomo Mitsui Financial
Group, Inc. (SMFG) and its subsidiaries.
More concretely, at the time of a stress, following the relevant authority’s determination that one or more of the material sub-groups, i.e.
Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities Inc., have reached the point of non-viability, losses incurred to them
would be passed to SMFG, the ultimate holding company. While this could lead to a resolution of SMFG, the material sub-groups are
expected to continue their business as usual under the Specified Bridge Financial Institution, etc. incorporated by the Deposit Insurance
Corporation of Japan (DICJ) to which SMFG transfers its business.
Regulatory capital elements of TLAC and adjustments (2)
1
2
3
4
5
6
7
8
9
10
11
Common Equity Tier 1 capital (CET1)
Additional Tier 1capital (AT1) before TLAC adjustments
AT1 ineligible as TLAC as issued out of subsidiaries to third parties
Other adjustments
AT1 instruments eligible under the TLAC framework ((B) - (C) - (D))
Tier 2 capital (T2) before TLAC adjustments
Amortised portion of T2 instruments where remaining maturity > 1 year
T2 capital ineligible as TLAC as issued out of subsidiaries to third parties
Other adjustments
T2 instruments eligible under the TLAC framework ((F) - (G) - (H) - (I))
TLAC arising from regulatory capital ((A) + (E) + (J))
Non-regulatory capital elements of TLAC (3)
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
(I)
(J)
(K)
External TLAC instruments issued directly by the bank and subordinated to excluded liabilities
(L)
External TLAC instruments issued directly by the bank which are not subordinated to excluded liabilities but
meet all other TLAC term sheet requirements
9,654,517
1,072,710
—
—
1,072,710
1,513,260
(298,938)
—
176,746
1,635,453
12,362,681
4,147,402
of which: amount eligible as TLAC after application of the caps
External TLAC instruments issued by funding vehicles prior to 1 January 2022
Eligible ex ante commitments to recapitalise a G-SIB in resolution
TLAC arising from non-regulatory capital instruments before adjustments ((L) + (M))
18
19
Non-regulatory capital elements of TLAC: adjustments (4)
TLAC before deductions ((K) + (N))
Deductions of exposures between MPE resolution groups that correspond to items eligible for TLAC (not
applicable to SPE G-SIBs)
Deduction of investments in own other TLAC liabilities
Other adjustment to TLAC
TLAC after deductions ((O) - (P) - (Q) - (R))
20
21
22
Risk-weighted assets and leverage exposure measure for TLAC purposes (5)
23
24
Total risk-weighted assets (RWA)
Total exposures
TLAC ratios and buffers (6)
25
25a
26
27
28
29
30
31
TLAC before deduction of CET1 specific buffer requirement (as a percentage of RWA) ((S) / (T))
TLAC (as a percentage of RWA)
TLAC (as a percentage of total exposures) ((S) / (U))
CET1 available after meeting the minimum capital requirements
CET1 specific buffer requirement
of which: capital conservation buffer requirement
of which: countercyclical buffer requirement
of which: G-SIB/D-SIB additional requirement
(M)
(N)
(O)
(P)
(Q)
(R)
(S)
(T)
(U)
1,473,569
5,620,972
17,983,653
—
232
—
17,983,421
58,942,791
219,538,751
30.50%
26.90%
8.19%
11.87%
3.60%
2.50%
0.10%
1.00%
12
13
14
15
16
17
314
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ TLAC2: - Material subgroup entity - creditor ranking at legal entity level
Sumitomo Mitsui Banking Corporation
Basel III
Template
No.
Items
Is the resolution entity the creditor/investor?
Description of creditor ranking
Total capital and liabilities net of credit risk
mitigation
1
(most junior)
Yes
No
Common
share capital
Creditor ranking
2
3
No
Yes
Additional Tier 1
instruments *1
Yes
No
Tier 2 instruments *2
(Millions of yen)
Sum of
1 to 4
4
(most senior)
Yes
No
Other internal
TLAC liabilities
(A)
3,545,551
— 1,100,000
173,000
1,003,250
855,912
4,155,093
— 10,832,806
Subset of row 3 that are excluded liabilities
(B)
Total capital and liabilities less excluded liabilities
(A) - (B)
Subset of row 5 that are eligible as TLAC
1 year ≤ residual maturity < 2 years
2 years ≤ residual maturity < 5 years
5 years ≤ residual maturity < 10 years
10 years ≤ residual maturity
(excluding perpetual securities)
Perpetual securities
—
—
—
—
—
—
—
—
—
3,545,551
3,545,551
—
—
—
— 1,100,000
173,000
1,003,250
855,912
4,155,093
— 10,832,806
— 1,100,000
—
—
—
—
—
—
173,000
—
—
—
1,003,250
—
—
950,250
782,912
243,412
339,500
175,000
4,155,093
277,500
2,006,690
1,747,190
— 10,759,806
—
520,912
— 2,346,190
— 2,872,440
—
—
—
—
53,000
—
123,713
—
176,713
3,545,551
— 1,100,000
173,000
—
25,000
—
— 4,843,551
1
2
3
4
5
6
7
8
9
10
11
*1
*2
Including eligible Tier 1 capital instruments subject to transitional arrangements
Including eligible Tier 2 capital instruments subject to transitional arrangements
SMBC Nikko Securities Inc.
Items
Creditor ranking
1
(most junior)
2
Is the resolution entity the creditor/investor?
Yes
No
Yes
No
Description of creditor ranking
Total capital and liabilities net of credit risk mitigation
Subset of row 3 that are excluded liabilities
Total capital and liabilities less excluded liabilities (A) - (B)
(A)
(B)
Subset of row 5 that are eligible as TLAC
1 year ≤ residual maturity < 2 years
2 years ≤ residual maturity < 5 years
5 years ≤ residual maturity < 10 years
10 years ≤ residual maturity (excluding perpetual securities)
Perpetual securities
Common
share capital
467,714
—
467,714
467,714
—
—
—
—
467,714
—
—
—
—
—
—
—
—
—
Subordinated debts
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3
(most senior)
Yes
No
Other internal
TLAC liabilities
Basel III
Template
No.
1
2
3
4
5
6
7
8
9
10
11
(Millions of yen)
Sum of
1 to 4
—
—
—
—
—
—
—
—
—
467,714
—
467,714
467,714
—
—
—
—
467,714
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
■ TLAC3: Creditor ranking of external TLAC, etc.
Sumitomo Mitsui Financial Group, Inc.
Basel III
Template
No.
Items
1
Description of creditor ranking
2
3
4
5
6
7
8
9
10
Total capital and liabilities net of credit risk mitigation
Subset of row 2 that are excluded liabilities *2
Total capital and liabilities less excluded liabilities (A) - (B)
Subset of row 4 that are eligible as TLAC
1 year ≤ residual maturity < 2 years
2 years ≤ residual maturity < 5 years
5 years ≤ residual maturity < 10 years
10 years ≤ residual maturity (excluding perpetual securities)
Perpetual securities
1
(most junior)
Creditor ranking
2
3
4
(most senior)
Sum of
1 to 4
(Millions of yen)
(A)
(B)
Common
share
capital
3,900,364
—
3,900,364
3,900,364
—
—
—
—
3,900,364
Additional
Tier 1
instruments *1
866,700
—
866,700
866,700
—
—
—
—
866,700
Tier 2
instruments
3,524
Unsecured
senior
bonds
1,003,250
5,436,425 11,206,739
—
3,524
1,003,250
5,432,901 11,203,215
9,925,407
1,003,250
4,155,093
277,500
277,500
—
2,006,690
— 2,006,690
2,686,340
1,736,090
187,813
134,813
— 4,767,064
950,250
53,000
—
*1
*2
Including eligible Tier 1 capital instruments subject to transitional arrangements
Excluding those owed to group companies and conservatively estimated in light of quantitative materiality
316
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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 ratio regulation under the Basel III, has
been introduced in Japan. In addition to the application of uniform international standards, Sumitomo Mitsui Financial Group 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 on the following page, the LCR has remained stable with no significant fluctuation since the introduction of the liquidity ratio
regulation on March 31, 2015.
2. Assessment of Consolidated LCR
The LCR Notification stipulates the minimum requirement of the LCR for 2018 at 90%, and 100% from 2019 onwards. The LCR of
Sumitomo Mitsui Financial Group (consolidated) exceeds the minimum requirements of the LCR for 2018 and for 2019 onwards, having no
cause for concern. In terms of the future LCR forecasts, Sumitomo Mitsui Financial Group does not expect significant deviations from the
disclosed ratios. In addition, the actual LCR does not differ significantly from the initial forecast.
3. Composition of High-Quality Liquid Assets
Regarding the high-quality liquid assets allowed to be included in the calculation, there are no significant changes in locations and
properties of currency denominations, categories and so on. In addition, in respect of major currencies (those of which the aggregate amount
of liabilities denominated in a certain currency accounts for 5% or more of Sumitomo Mitsui Financial Group’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
Sumitomo Mitsui Financial Group 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 LCR Notification. Meanwhile, Sumitomo Mitsui Financial Group records “cash
outflows related to small-sized consolidated subsidiaries,” etc. under “cash outflows based on other contracts” prescribed in Article 59 of the
LCR Notification.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
TOTAL
UNWEIGHTED
VALUE
49,498,576
15,325,748
34,172,828
66,295,145
—
64,652,351
TOTAL
WEIGHTED
VALUE
3,879,143
461,274
3,417,869
33,455,976
—
TOTAL
UNWEIGHTED
VALUE
48,794,815
15,003,032
33,791,783
65,629,634
—
64,751,939
TOTAL
WEIGHTED
VALUE
3,830,025
450,301
3,379,723
32,732,987
—
60,854,642
28,015,473
60,876,108
27,979,462
5,440,503
5,440,503
182,782
4,753,526
4,753,526
126,439
22,305,930
7,427,282
22,843,783
7,746,448
1,375,135
396,429
20,534,367
9,288,555
70,546,945
TOTAL
UNWEIGHTED
VALUE
6,597,847
3,512,576
3,473,255
13,583,678
1,550,224
363,907
20,929,652
9,424,062
71,990,380
TOTAL
UNWEIGHTED
VALUE
6,363,219
2,964,241
3,758,014
13,085,474
1,375,135
396,429
5,655,719
7,125,156
1,399,443
53,469,782
TOTAL
WEIGHTED
VALUE
371,129
2,352,718
1,580,470
4,304,317
64,652,351
49,165,466
131.4%
58
1,550,224
363,907
5,832,317
6,929,262
1,392,420
52,757,580
TOTAL
WEIGHTED
VALUE
518,043
1,993,696
1,609,866
4,121,604
64,751,939
48,635,976
133.1%
62
Notes: 1. The data after the introduction of the liquidity ratio regulation on March 31, 2015 is available on Sumitomo Mitsui Financial Group’s website.
(https://www.smfg.co.jp/english/investor/financial/basel_3.html)
2. The average values are calculated based on daily data in accordance with Notification No. 7 issued by the Japanese Financial Services Agency in 2015. Some data, such as
attribute information of customers and data on consolidated subsidiaries, is updated on the monthly or quarterly basis.
■ 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
(In million yen)
52,343,400
12,308,950
9,477,525
201,949
905,001
1,724,476
64,652,351
53,500,409
11,251,530
8,547,966
135,926
890,848
1,676,791
64,751,939
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
318
012_0800885851907.indd 318
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information
Financial Highlights
Sumitomo Mitsui Banking Corporation
Consolidated
Year ended March 31
For the Year:
2019
2018
Ordinary income ����������������������������������������������������������� ¥ 3,369,898
Ordinary profit ��������������������������������������������������������������
894,501
Profit attributable to owners of parent �������������������������
617,493
Comprehensive income �����������������������������������������������
548,236
¥ 3,117,087
932,733
627,582
782,502
At Year-End:
Millions of yen
2017
¥ 3,014,455
829,419
543,199
687,157
2016
2015
¥ 3,059,022
930,332
680,162
143,086
¥ 3,199,409
1,198,955
736,904
1,937,374
Total net assets ������������������������������������������������������������ ¥ 8,986,749
Total assets ������������������������������������������������������������������
190,690,293
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
20.32%
17.57%
(BIS guidelines) ����������������������������������������������������������
Number of employees ��������������������������������������������������
15.17%
58,527
¥ 9,090,403
182,727,495
¥ 8,908,192
180,946,664
¥ 9,446,193
180,408,672
¥ 10,036,003
177,559,197
21�14%
18�22%
15�29%
40,058
17�77%
14�61%
12�89%
45,963
18�19%
14�58%
13�04%
54,192
17�93%
13�91%
12�61%
50,249
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:
2019
2018
Ordinary income ����������������������������������������������������������� ¥ 2,805,840
2,250
1,395,586
811,533
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
2017
¥ 2,551,931
2,111
1,663,654
816,942
2016
2015
¥ 2,277,812
2,589
1,534,271
805,483
¥ 2,370,998
1,872
1,634,284
791,211
¥ 2,540,450
2,038
1,427,924
810,752
58.2%
584,053
56�8%
617,171
49�1%
809,052
52�5%
728,787
48�4%
843,073
reserve for possible loan losses) �����������������������������
Ordinary profit ��������������������������������������������������������������
Net income �������������������������������������������������������������������
584,053
649,647
477,367
At Year-End:
Total net assets ������������������������������������������������������������ ¥ 7,962,185
Total assets ������������������������������������������������������������������
179,348,654
Deposits �����������������������������������������������������������������������
116,091,103
Loans and bills discounted ������������������������������������������
76,401,807
Securities ���������������������������������������������������������������������
24,336,638
Trust assets and liabilities ��������������������������������������������
3,842,641
Loans and bills discounted ��������������������������������������
477,094
Securities �����������������������������������������������������������������
1,330,384
Capital stock ����������������������������������������������������������������
1,770,996
Number of shares issued (in thousands)
Common stock ����������������������������������������������������
Preferred stock ����������������������������������������������������
Dividend payout ratio ���������������������������������������������������
Total capital ratio (BIS guidelines) ��������������������������������
Tier 1 capital ratio (BIS guidelines) �������������������������������
Common equity Tier 1 capital ratio
(BIS guidelines) ��������������������������������������������������������
Number of employees ��������������������������������������������������
106,248
70
73.09%
20.28%
17.37%
14.85%
28,482
617,171
755,266
577,028
¥ 7,921,268
170,923,146
110,243,226
73,896,163
25,916,718
4,756,748
398,772
2,358,665
1,770,996
846,711
864,022
681,767
¥ 7,417,182
162,281,729
105,590,771
75,585,256
24,342,369
6,881,408
635,206
4,156,409
1,770,996
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
106,248
70
55�22%
21�11%
18�11%
15�07%
29,192
106,248
70
32�61%
18�61%
15�05%
13�15%
29,283
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
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_0800804261908.indd 319
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2019/08/16 19:12:17
SMBCSMBC Group Annual Report 2019 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
2019
Domestic
operations
Overseas
operations Elimination
Total
¥939,515 ¥1,367,558
728,751
638,806
—
222,658
29,424
193,234
37,423
6,158
31,264
117,384
49,851
67,532
475,074
464,441
4,541
404,067
137,556
266,510
48,476
4,058
44,417
108,325
30,699
77,626
¥(66,129) ¥2,240,944
1,138,789
1,102,155
4,541
613,741
162,563
451,177
80,112
4,430
75,682
225,361
79,991
145,370
(65,036)
(1,093)
—
(12,985)
(4,417)
(8,568)
(5,786)
(5,786)
—
(348)
(559)
210
Domestic
operations
¥1,001,201
358,652
642,548
3,769
440,754
129,219
311,534
55,015
4,183
50,831
152,073
61,614
90,458
2018
Overseas
operations Elimination
Total
¥951,447
437,038
514,409
—
202,675
40,966
161,709
37,511
7,158
30,353
87,209
31,882
55,327
¥(51,141) ¥1,901,507
748,234
1,153,273
3,769
632,125
167,832
464,293
85,312
4,127
81,184
238,304
93,120
145,183
(47,456)
(3,685)
—
(11,303)
(2,353)
(8,950)
(7,213)
(7,213)
—
(979)
(376)
(603)
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. 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 ���������������������������������������������� ¥ 78,953,194
52,262,908
16,699,025
108,697
2,570,984
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
1,996,660
1,051,668
Interest-bearing liabilities ������������������������������������������ ¥126,163,093
97,987,896
5,778,619
95,135
2,849,200
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 ��������������������������������������������������������������������
714,190
101,122
14,370,683
—
3,247,123
Millions of yen
2019
Interest
¥939,515
587,504
251,600
368
(1,450)
2,474
19,850
¥475,074
58,866
429
505
42,895
959
11
202,805
—
84,543
Average rate
1.19%
1.12
1.51
0.34
(0.06)
0.12
1.89
0.38%
0.06
0.01
0.53
1.51
0.13
0.01
1.41
—
2.60
Average balance
¥ 86,218,582
58,949,435
18,836,786
79,414
0
2018
Interest
¥1,001,201
649,872
270,731
414
(0)
3,416,319
990,820
2,588
13,465
¥130,787,112
99,987,013
6,594,336
241,184
524,433
5,787,108
137,316
12,961,893
—
3,617,420
¥ 358,652
44,072
504
517
6,802
10,394
16
161,957
—
85,993
Average rate
1�16%
1�10
1�44
0�52
(0�54)
0�08
1�36
0�27%
0�04
0�01
0�21
1�30
0�18
0�01
1�25
—
2�38
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 (2019, ¥43,355,834 million; 2018, ¥40,923,785
million).
320
013_0800804261908.indd 320
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SMBCSMBC Group Annual Report 2019 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
¥44,163,082
26,444,159
4,954,867
2,026,876
1,857,211
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
12,108
4,739,001
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 ��������������������������������������������������������������������
¥37,414,455
23,024,688
6,017,305
807,510
4,186,351
—
2,433,961
581,343
—
72,064
2019
Interest
¥1,367,558
915,868
103,943
16,192
39,967
37
98,262
¥728,751
422,005
135,749
14,080
82,275
—
45,344
16,433
—
3,051
Millions of yen
Average rate
3.10%
3.46
2.10
0.80
2.15
0.31
2.07
1.95%
1.83
2.26
1.74
1.97
—
1.86
2.83
—
4.23
Average balance
¥42,296,617
24,924,401
3,977,921
1,740,864
2,377,014
—
4,986,887
¥34,314,197
20,405,863
6,152,649
786,372
4,112,837
—
2,005,997
466,803
—
59,619
2018
Interest
¥951,447
677,546
64,907
19,050
35,477
—
70,303
¥437,038
248,653
86,312
8,169
43,247
—
18,376
7,831
—
2,817
Average rate
2�25%
2�72
1�63
1�09
1�49
—
1�41
1�27%
1�22
1�40
1�04
1�05
—
0�92
1�68
—
4�73
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 (2019, ¥3,207,665 million; 2018, ¥3,087,837
million).
Total of Domestic and Overseas Operations
Millions of yen
Average balance
Year ended March 31
Interest-earning assets ���������������������������������������������� ¥121,424,996
78,277,107
21,653,892
2,135,574
4,319,462
Loans and bills discounted �����������������������������������
Securities ��������������������������������������������������������������
Call loans and bills bought ������������������������������������
Receivables under resale agreements ������������������
Receivables under securities
2019
Interest
¥2,240,944
1,481,622
354,451
16,561
36,101
borrowing transactions ���������������������������������������
Deposits with banks ����������������������������������������������
2,008,768
4,639,992
2,512
101,030
Interest-bearing liabilities ������������������������������������������ ¥161,886,733
119,861,906
11,795,924
902,646
6,926,818
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 ��������������������������������������������������������������������
714,190
2,535,084
14,522,350
—
3,319,188
¥1,138,789
463,791
136,178
14,586
122,755
959
45,356
197,488
—
87,594
Average rate
1.85%
1.89
1.64
0.78
0.84
0.13
2.18
0.70%
0.39
1.15
1.62
1.77
0.13
1.79
1.36
—
2.64
Average balance
¥126,901,633
83,223,826
22,814,707
1,820,279
2,280,570
2018
Interest
¥1,901,507
1,290,981
331,893
19,464
34,278
3,416,319
5,121,331
2,588
74,009
¥163,483,617
119,532,087
12,746,985
1,027,556
4,540,826
5,787,108
2,143,314
12,778,946
—
3,677,039
¥ 748,234
282,966
86,817
8,686
48,851
10,394
18,393
133,290
—
88,810
Average rate
1�50%
1�55
1�45
1�07
1�50
0�08
1�45
0�46%
0�24
0�68
0�85
1�08
0�18
0�86
1�04
—
2�42
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 (2019, ¥46,553,893 million; 2018, ¥44,006,805
million).
013_0800804261908.indd 321
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SMBCSMBC Group Annual Report 2019 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
¥404,067
15,736
116,871
12,362
9,986
4,544
32,447
—
22,337
2019
Overseas
operations Elimination
¥(12,985)
(6,138)
(29)
(784)
—
—
(2,096)
—
—
¥222,658
131,375
22,740
33,086
107
2
11,461
—
34
Total
¥613,741
140,973
139,582
44,664
10,094
4,547
41,812
—
22,371
Domestic
operations
¥440,754
22,299
119,472
12,932
15,444
5,223
35,331
2,006
35,334
2018
Overseas
operations Elimination
¥(11,303)
(4,458)
(29)
(2)
—
—
(1,161)
—
—
¥202,675
115,568
20,469
33,757
—
2
12,235
—
30
Total
¥632,125
133,409
139,913
46,688
15,444
5,225
46,405
2,006
35,365
Fees and commissions payments �����������������������������
Remittances and transfers ������������������������������������
¥137,556
31,501
¥ 29,424
10,630
¥ (4,417)
(4)
¥162,563
42,127
¥129,219
30,206
¥ 40,966
9,616
¥ (2,353)
(2)
¥167,832
39,820
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. 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
2019
Domestic
operations
¥48,476
530
Overseas
operations Elimination
¥(5,786)
(530)
¥37,423
—
trading transactions ��������������������������������������������
Gains on trading-related financial derivatives �������
Others �������������������������������������������������������������������
—
47,919
25
—
37,423
—
—
(5,245)
(10)
Millions of yen
2018
Domestic
operations
¥55,015
611
Overseas
operations Elimination
¥(7,213)
(611)
¥37,511
—
6,004
48,376
22
—
37,511
—
(281)
(6,297)
(22)
Total
¥80,112
—
—
80,097
14
Total
¥85,312
—
5,722
79,589
—
Trading losses������������������������������������������������������������
Losses on trading securities ���������������������������������
Losses on securities related to
trading transactions ��������������������������������������������
Losses on trading-related financial derivatives �����
Others �������������������������������������������������������������������
¥ 4,058
—
¥ 6,158
1,655
¥(5,786)
(530)
¥ 4,430
1,125
¥ 4,183
—
¥ 7,158
4,643
¥(7,213)
(611)
¥ 4,127
4,031
2,956
1,102
—
348
4,143
10
—
(5,245)
(10)
3,305
—
—
—
4,183
—
281
2,114
119
(281)
(6,297)
(22)
—
—
96
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. Inter-segment transactions are reported in the “Elimination” column.
322
013_0800804261908.indd 322
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SMBCSMBC Group Annual Report 2019 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
2019
2018
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 ������������������������������������������������������������������������������������������������������
¥ 75,716,972
17,908,442
7,324,007
100,949,421
5,132,651
¥106,082,073
¥ 14,256,217
7,898,851
86,339
22,241,408
6,202,835
¥ 28,444,244
¥134,526,317
¥ 70,786,037
18,198,759
7,357,074
96,341,871
5,643,020
¥101,984,892
¥ 13,349,167
7,496,203
40,053
20,885,424
5,812,264
¥ 26,697,689
¥128,682,581
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
4. Fixed-term deposits represents Time deposits
Balance of Loan Portfolio, Classified by Industry
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate, goods rental and leasing ���������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 6,715,306
272,306
730,187
5,341,650
4,299,125
5,488,335
8,727,653
4,247,592
754,500
16,808,918
¥53,385,577
¥ 286,310
1,825,955
21,381,483
2,913,075
¥26,406,824
¥79,792,401
12.58%
0.51
1.37
10.01
8.05
10.28
16.35
7.96
1.41
31.48
100.00%
1.08%
6.92
80.97
11.03
100.00%
—
¥ 6,172,929
132,783
753,873
4,952,098
4,192,897
5,448,476
8,250,016
4,165,416
914,763
17,143,345
¥52,126,599
¥ 296,236
1,596,924
19,490,365
2,343,808
¥23,727,335
¥75,853,934
11�84%
0�25
1�45
9�50
8�04
10�45
15�83
7�99
1�76
32�89
100�00%
1�25%
6�73
82�14
9�88
100�00%
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. Japan offshore banking accounts are included in overseas operations’ accounts.
013_0800804261908.indd 323
323
2019/08/16 19:12:17
SMBCSMBC Group Annual Report 2019 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
2019
¥ 12,801
409,516
6,447
115,668
¥544,433
¥ 99,554
Millions of yen
2018
¥ 25,728
356,353
5,297
138,261
¥525,640
¥110,497
1. Bankrupt loans: Loans on which accrued interest income is not recognized, and to borrowers that are undergoing bankruptcy, corporate reorganization
and rehabilitation proceedings or borrowers receiving a disposition to suspend transactions with a clearing house.
2. Non-accrual loans: Loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are
deferred in order to support the borrowers’ recovery from financial difficulties.
3. Past due loans (3 months or more): Loans on which the principal or interest is past due for 3 months or more, excluding loans in categories 1. and 2.
4. Restructured loans: Loans to borrowers on which terms and conditions have been amended in favor of the borrowers in order to support the borrowers’
recovery from financial difficulties and facilitate collection of loans, excluding loans in categories 1. through 3.
Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,514,573
99,164
2,582,014
3,434,663
5,417,732
¥18,048,148
¥
—
—
68,226
—
5,353,247
¥ 5,421,473
¥23,469,621
¥ 9,575,499
47,032
2,541,760
3,840,989
4,516,750
¥20,522,031
¥
—
—
75,495
—
4,619,760
¥ 4,695,255
¥25,217,287
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. “Others” include foreign bonds and foreign stocks.
Trading Assets and Liabilities
2019
2018
Millions of yen
March 31
Trading assets ����������������������������������������������������������� ¥1,428,638 ¥1,044,294
369,842
—
—
Trading securities ��������������������������������������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions �������������
Derivatives of securities related to
11,708
363
—
Domestic
operations
Overseas
operations Elimination
Total
¥(20,108) ¥2,452,825
381,551
363
—
—
—
—
Domestic
operations
¥1,497,775
220,584
182
—
Overseas
operations Elimination
Total
¥938,646
228,922
—
—
¥(27,872) ¥2,408,549
449,506
182
—
—
—
—
trading transactions ��������������������������������������������
28,120
Trading-related financial derivatives ��������������������� 1,344,447
Other trading assets����������������������������������������������
43,997
0
674,451
—
—
(20,108)
—
28,121
1,998,791
43,997
13,834
1,224,180
38,994
59
709,664
—
—
(27,872)
—
13,894
1,905,971
38,994
Trading liabilities �������������������������������������������������������� ¥1,258,988 ¥ 579,730
119,540
—
Trading securities sold for short sales ������������������
Derivatives of trading securities ����������������������������
Securities related to trading transactions
5,546
547
¥(20,108) ¥1,818,610
125,086
547
—
—
¥1,124,847
49,422
335
¥810,441
97,043
—
¥(27,872) ¥1,907,416
146,466
335
—
—
sold for short sales ���������������������������������������������
—
—
—
—
—
—
—
—
Derivatives of securities related to
trading transactions ��������������������������������������������
29,030
Trading-related financial derivatives ��������������������� 1,223,864
Other trading liabilities ������������������������������������������
—
2
460,187
—
—
(20,108)
—
29,032
1,663,943
—
14,035
1,061,053
—
147
713,250
—
—
(27,872)
—
14,182
1,746,431
—
Notes: 1. Domestic operations comprise the operations of SMBC (excluding overseas branches) and its domestic consolidated subsidiaries.
2. Overseas operations comprise the operations of SMBC’s overseas branches and its overseas consolidated subsidiaries.
3. Inter-segment transactions are reported in the “Elimination” column.
324
013_0800804261908.indd 324
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SMBCSMBC Group Annual Report 2019 Income Analysis (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Gross Banking Profit, Classified by Domestic and International Operations
Millions of yen
Year ended March 31
Interest income �������������������������������������������
Domestic
operations
¥680,105
2019
International
operations
¥1,306,346
Interest expenses ���������������������������������������
42,009
1,000,338
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����������������������������
Gross banking profit ���������������������������������������
Gross banking profit rate (%) �������������������������
638,096
2,191
325,593
132,234
193,359
556
—
556
23,802
8,490
15,312
¥849,516
306,008
58
198,973
50,131
148,841
45,951
3,305
42,646
85,871
37,356
48,515
¥ 546,070
Total
¥1,970,831
[15,620]
1,026,727
[15,620]
944,104
2,250
524,566
182,365
342,201
46,507
3,305
43,202
109,674
45,846
63,828
¥1,395,586
Domestic
operations
¥746,837
2018
International
operations
¥917,340
39,548
667,593
707,288
2,001
336,037
135,292
200,745
632
—
632
24,956
5,691
19,265
¥929,933
249,747
37
176,111
47,027
129,084
58,765
—
58,765
77,925
17,569
60,355
¥497,990
Total
¥1,647,643
[16,535]
690,606
[16,535]
957,036
2,038
512,149
182,319
329,829
59,398
—
59,398
101,955
22,334
79,620
¥1,427,924
1.22%
1.10%
1.20%
1�29%
1�08%
1�25%
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. Difference between sums of domestic and international
operations and some figures in the total column due to indication on a net basis of interest from interest rate swaps and similar instruments, is included in
figures in brackets [ ].
3. As net figures are shown for financial derivatives, figures in the total column of other operating income and other operating expenses are less than sums of
domestic operations and international operations, respectively (¥925 million for the year ended March 31, 2018).
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 ����������������������������������� ¥ 69,584,790
[2,777,146]
48,779,204
12,664,232
62,829
2,570,984
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
1,515,257
—
10,725
Interest-bearing liabilities ������������������������������� ¥107,848,148
90,417,718
6,041,635
36,302
897,869
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
175,193
8,555,317
—
434,144
Millions of yen
2019
Interest
¥680,105
[15,620]
453,649
174,918
3
(1,450)
400
—
15
¥ 42,009
7,115
429
(27)
(1,364)
22
27,706
—
7,105
Average rate
0.97%
0.93
1.38
0.00
(0.05)
0.02
—
0.14
0.03%
0.00
0.00
(0.07)
(0.15)
0.01
0.32
—
1.63
Average balance
¥ 71,547,412
[3,581,209]
49,225,499
14,915,999
13,157
0
2,875,506
—
11,993
¥106,977,341
85,721,254
6,733,487
112,490
26,866
4,641,577
7,790,072
—
665,912
2018
Interest
¥746,837
[16,535]
476,702
217,089
8
(0)
546
—
16
¥ 39,548
7,931
487
(84)
0
480
19,933
—
9,486
Average rate
1�04%
0�96
1�45
0�06
(0�55)
0�01
—
0�13
0�03%
0�00
0�00
(0�07)
0�00
0�01
0�25
—
1�42
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2019, ¥42,195,891 million; 2018, ¥39,179,583
million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international operations
and related interest expenses. Difference between sums of domestic and international operations and some figures in the “Total of Domestic and
International Operations” due to indication on a net basis of interest from interest rate swaps and similar instruments, is included in figures in brackets [ ].
013_0800804261908.indd 325
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2019/08/16 19:12:17
SMBCSMBC Group Annual Report 2019 Income Analysis (Non-consolidated)
International Operations
Year ended March 31
Average balance
Interest-earning assets ����������������������������������� ¥49,223,041
26,790,832
9,794,923
1,593,638
582,477
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
2019
Interest
¥1,306,346
845,075
170,648
(3,491)
16,891
Millions of yen
Average rate
2.65%
3.15
1.74
(0.21)
2.90
Average balance
¥46,049,661
25,972,547
8,163,052
1,401,904
731,619
2018
Interest
¥917,340
624,764
132,857
(2,076)
15,216
Average rate
1�99%
2�40
1�62
(0�14)
2�07
borrowing transactions �����������������������������
Deposits with banks �����������������������������������
122,858
6,386,681
358
108,377
Interest-bearing liabilities ������������������������������� ¥48,831,825
[2,777,146]
22,245,705
5,781,018
1,044,194
5,174,319
Deposits������������������������������������������������������
Negotiable certificates of deposit ���������������
Call money ��������������������������������������������������
Payables under repurchase agreements ����
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Bonds ���������������������������������������������������������
284,133
5,747,523
2,841,907
¥1,000,338
[15,620]
374,188
133,339
15,445
111,561
911
176,571
78,045
0.29
1.69
2.04%
1.68
2.30
1.47
2.15
0.32
3.07
2.74
110,750
5,910,956
322
70,381
¥45,749,102
[3,581,209]
21,008,293
5,642,513
1,039,930
3,326,086
¥667,593
[16,535]
221,430
83,747
8,200
40,441
887,029
5,012,948
2,964,361
9,139
142,519
76,751
0�29
1�19
1�45%
1�05
1�48
0�78
1�21
1�03
2�84
2�58
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2019, ¥134,841 million; 2018, ¥139,390
million).
2. Figures in brackets [ ] indicate the average balances of interdepartmental lending and borrowing activities between domestic and international operations
and related interest expenses. Difference between sums of domestic and international operations and some figures in the “Total of Domestic and
International Operations” due to indication on a net basis of interest from interest rate swaps and similar instruments, is included in figures in brackets [ ].
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 ����������������������������������� ¥116,030,685
75,570,036
22,459,156
1,656,467
3,153,462
Loans and bills discounted �������������������������
Securities ����������������������������������������������������
Call loans ����������������������������������������������������
Receivables under resale agreements ��������
Receivables under securities
borrowing transactions �����������������������������
Bills bought �������������������������������������������������
Deposits with banks �����������������������������������
1,638,115
—
6,397,407
Interest-bearing liabilities ������������������������������� ¥153,902,827
Deposits������������������������������������������������������ 112,663,423
Negotiable certificates of deposit ���������������
11,822,654
Call money ��������������������������������������������������
1,080,496
Payables under repurchase agreements ����
6,072,188
Payables under securities
lending transactions ���������������������������������
Borrowed money ����������������������������������������
Short-term bonds ���������������������������������������
Bonds ���������������������������������������������������������
459,327
14,302,840
—
3,276,052
2019
Interest
¥1,970,831
1,298,725
345,566
(3,487)
15,441
759
—
108,392
¥1,026,727
381,304
133,768
15,418
110,197
933
204,277
—
85,150
Millions of yen
Average rate
1.69%
1.71
1.53
(0.21)
0.48
Average balance
¥114,015,864
75,198,046
23,079,051
1,415,062
731,620
2018
Interest
¥1,647,643
1,101,467
349,947
(2,067)
15,216
Average rate
1�44%
1�46
1�51
(0�14)
2�07
0.04
—
1.69
0.66%
0.33
1.13
1.42
1.81
0.20
1.42
—
2.59
2,986,256
—
5,922,949
868
—
70,398
¥149,145,234
106,729,547
12,376,001
1,152,420
3,352,952
¥ 690,606
229,362
84,235
8,115
40,441
5,528,607
12,803,020
—
3,630,273
9,619
162,453
—
86,238
0�02
—
1�18
0�46%
0�21
0�68
0�70
1�20
0�17
1�26
—
2�37
Notes: 1. “Interest-earning assets” are shown after deduction of the average balance of noninterest-earning deposits (2019, ¥42,330,733 million; 2018, ¥39,318,973
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.
326
013_0800804261908.indd 326
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SMBCSMBC Group Annual Report 2019 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)
¥(20,093)
(4,289)
(31,523)
2
(1,450)
(258)
—
(1)
¥ 324
369
(49)
58
(1,323)
(462)
2,098
—
(3,301)
Volume-related
increase
(decrease)
¥66,823
20,246
27,943
(420)
(3,101)
35
6,047
¥47,582
13,741
2,104
33
29,738
(4,086)
4,789
21,969
(3,170)
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)
¥ 29,583
5,474
(9,399)
(508)
11,859
(392)
—
6,019
¥ 22,684
13,398
(3,766)
(506)
43,000
(8,820)
4,789
20,184
—
(8,414)
2019
Rate-related
increase
(decrease)
¥(46,638)
(18,762)
(10,648)
(8)
0
112
—
0
¥ 2,136
(1,185)
(9)
(1)
(40)
4
5,673
—
920
2019
Rate-related
increase
(decrease)
¥322,182
200,064
9,848
(994)
4,777
0
31,947
¥285,163
139,016
47,487
7,212
41,381
(4,141)
17,423
12,081
4,463
2019
Rate-related
increase
(decrease)
¥293,604
191,783
5,019
(911)
(11,633)
282
—
31,974
¥313,435
138,543
53,299
7,809
26,755
134
17,423
21,639
—
7,327
Income Analysis (Non-consolidated)
Millions of yen
Net
increase
(decrease)
¥(66,731)
(23,052)
(42,171)
(5)
(1,450)
(145)
—
(1)
¥ 2,460
(816)
(58)
56
(1,364)
(457)
7,772
—
(2,380)
Volume-related
increase
(decrease)
¥21,352
5,993
7,239
4
(0)
91
—
2
¥ 3,765
541
(20)
(60)
(0)
164
7,666
—
(5,344)
2018
Rate-related
increase
(decrease)
¥(222,635)
(34,922)
(177,549)
(4)
(0)
(357)
—
7
Net
increase
(decrease)
¥(201,283)
(28,929)
(170,309)
(0)
(0)
(266)
—
9
¥ (8,157)
(1,535)
(635)
(17)
(0)
¥ (4,391)
(994)
(655)
(78)
(0)
(0)
(6,293)
—
887
163
1,372
—
(4,457)
Millions of yen
Volume-related
increase
(decrease)
¥73,001
40,457
13,267
(673)
2,659
2018
Rate-related
increase
(decrease)
¥138,439
68,916
18,693
(1,214)
3,001
Net
increase
(decrease)
¥211,441
109,374
31,961
(1,887)
5,661
Net
increase
(decrease)
¥389,006
220,311
37,791
(1,414)
1,675
36
37,995
¥332,745
152,758
49,591
7,245
71,120
(8,228)
22,213
34,051
1,293
(6)
2,565
¥54,280
14,527
(4,038)
317
10,488
1,297
(1,575)
51,521
(5,842)
Millions of yen
Net
increase
(decrease)
¥323,188
197,258
(4,380)
(1,420)
225
(109)
—
37,993
¥336,120
151,942
49,532
7,302
69,755
(8,685)
22,213
41,824
—
(1,087)
Volume-related
increase
(decrease)
¥ 88,844
34,743
21,069
(672)
2,659
139
—
2,581
¥ 58,134
11,958
(2,539)
1,025
10,276
2,189
(1,575)
61,009
—
(13,880)
(20)
28,664
(27)
31,230
¥142,171
72,944
24,381
1,044
19,962
4,737
1,019
(4,709)
6,258
2018
Rate-related
increase
(decrease)
¥ (76,975)
45,701
(159,417)
(1,214)
3,001
(432)
—
28,658
¥ 135,637
74,518
22,226
258
20,175
4,008
1,019
(12,824)
—
9,839
¥196,452
87,471
20,343
1,361
30,451
6,035
(556)
46,811
416
Net
increase
(decrease)
¥ 11,869
80,444
(138,347)
(1,887)
5,661
(293)
—
31,239
¥ 193,771
86,477
19,687
1,283
30,451
6,198
(556)
48,184
—
(4,041)
Note: Increase (decrease) attributed to both volume-related and rate-related is prorated according to proportion of change in each factor.
013_0800804261908.indd 327
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SMBCSMBC Group Annual Report 2019
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
¥325,593
12,730
95,877
10,038
7,577
4,544
14,232
2019
International
operations
¥198,973
111,661
41,454
1,790
—
—
19,064
Total
¥524,566
124,391
137,332
11,829
7,577
4,544
33,296
Domestic
operations
¥336,037
12,444
93,992
10,848
9,218
4,817
15,025
2018
International
operations
¥176,111
96,517
39,593
1,322
—
—
19,266
Total
¥512,149
108,961
133,585
12,171
9,218
4,817
34,292
Fees and commissions payments ������������������
Remittances and transfers �������������������������
¥132,234
26,039
¥ 50,131
12,122
¥182,365
38,161
¥135,292
24,819
¥ 47,027
12,472
¥182,319
37,292
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
¥556
530
2019
International
operations
¥45,951
—
Total
¥46,507
530
Domestic
operations
¥632
610
2018
International
operations
¥58,765
—
Total
¥59,398
610
—
—
25
¥ —
—
—
—
—
—
—
45,951
—
¥ 3,305
—
45,951
25
¥ 3,305
—
3,305
3,305
—
—
—
—
—
—
22
¥ —
—
—
—
—
5,722
5,722
53,042
—
¥ —
—
—
—
—
53,042
22
¥ —
—
—
—
—
Note: Figures represent net income and loss 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
¥15,312
6,388
(2,783)
—
2019
International
operations
¥48,515
(3,511)
(2,488)
57,576
Total
¥63,828
2,877
(5,272)
57,576
Domestic
operations
¥19,265
7,503
(1,154)
—
2018
International
operations
¥60,355
4,185
925
57,057
Total
¥79,620
11,688
(228)
57,057
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 �����������������������������������������������������������������������������������������������������������������
2019
¥290,697
(5,231)
45,131
103,972
59,018
7,414
4,540
5,252
6,061
6,923
14,376
48,117
30,723
194,536
¥811,533
Millions of yen
2018
¥291,592
(1,526)
45,896
101,753
60,697
7,124
5,083
5,252
5,509
7,229
14,689
48,843
30,804
187,801
¥810,752
328
013_0800804261908.indd 328
2019/08/16 19:12:18
SMBCSMBC Group Annual Report 2019 Deposits (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Deposits and Negotiable Certificates of Deposit
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
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 ������������������������������������������������������������������������������������������������������
¥ 74,533,808
17,778,577
1,277,119
93,589,505
5,389,733
¥ 98,979,238
¥ 10,527,786
6,586,866
5,386,945
22,501,598
6,191,872
¥ 28,693,470
¥127,672,708
Notes: 1. Liquid deposits = Current deposits + Ordinary deposits + Savings deposits + Deposits at notice
2. Fixed-term deposits = Time deposits + Installment savings
75.3% ¥ 69,675,968
18,079,255
18.0
1,138,105
1.3
88,893,330
94.6
5,895,907
5.4
100.0% ¥ 94,789,237
36.7% ¥ 9,157,135
6,576,308
22.9
5,616,451
18.8
21,349,896
78.4
5,368,900
21.6
100.0% ¥ 26,718,796
¥121,508,034
—
73�5%
19�1
1�2
93�8
6�2
100�0%
34�3%
24�6
21�0
79�9
20�1
100�0%
—
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2019
2018
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 ������������������������������������������������������������������������������������������������������
¥ 71,466,888
18,019,348
931,481
90,417,718
6,041,635
¥ 96,459,354
¥ 10,181,064
6,659,091
5,405,548
22,245,705
5,781,018
¥ 28,026,724
¥124,486,078
¥ 66,542,423
18,334,773
844,057
85,721,254
6,733,487
¥ 92,454,742
¥ 9,642,739
6,283,475
5,082,077
21,008,293
5,642,513
¥ 26,650,806
¥119,105,548
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 �����������������������������������������������������������������������������������������������������������������
2019
¥47,106,526
50,152,636
¥97,259,162
48.4%
51.6
100.0%
2018
¥45,321,720
47,557,379
¥92,879,099
48�8%
51�2
100�0%
Millions of yen
Note: The figures above exclude negotiable certificates of deposit and Japan offshore banking accounts.
013_0800804261908.indd 329
329
2019/08/16 19:12:18
SMBCSMBC Group Annual Report 2019 Deposits (Non-consolidated)
Balance of Investment Trusts, Classified by Type of Customer
March 31
Individual ���������������������������������������������������������������������������������������������������������
Corporate ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
2019
¥1,752,186
389,246
¥2,141,432
2018
¥1,831,496
385,883
¥2,217,379
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 ����������������������������������������������������������������������������������������������������������
2019
¥11,297,105
6,425,547
7,800
4,863,757
4,063,914
3,283,324
4,620
775,970
5,130,177
4,625,278
4,194
500,704
1,561,296
1,384,263
2,810
174,223
1,133,375
979,728
33,945
119,702
1,179,573
477,844
564,626
137,102
¥24,365,443
17,175,987
617,995
6,571,460
Millions of yen
2018
¥11,376,644
6,420,030
5,155
4,951,457
4,329,652
3,497,572
6,480
825,599
5,040,694
4,768,276
1,460
270,957
1,499,400
1,289,327
10,454
199,618
1,110,494
1,010,198
2,610
97,686
1,298,642
496,746
572,332
229,562
¥24,655,527
17,482,152
598,492
6,574,883
330
013_0800804261908.indd 330
2019/08/16 19:12:18
SMBCSMBC Group Annual Report 2019 Loans (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Loans and Bills Discounted
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 778,382
38,876,438
10,045,587
51,559
¥49,751,966
¥ 1,219,916
25,218,669
211,254
—
¥26,649,840
¥76,401,807
¥ 394,395
38,852,395
9,898,871
68,805
¥49,214,467
¥ 1,177,844
23,335,028
168,822
—
¥24,681,695
¥73,896,163
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2019
2018
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
International operations:
Loans on notes ��������������������������������������������������������������������������������������������
Loans on deeds �������������������������������������������������������������������������������������������
Overdrafts ����������������������������������������������������������������������������������������������������
Bills discounted �������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 365,950
38,850,821
9,517,142
45,290
¥48,779,204
¥ 1,377,375
25,198,453
215,003
—
¥26,790,832
¥75,570,036
¥ 437,013
38,735,608
9,990,889
61,988
¥49,225,499
¥ 1,264,012
24,491,784
216,740
10
¥25,972,547
¥75,198,046
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 �����������������������������������������������������������������������������������������������������������������
2019
¥20,985,244
55,416,563
¥76,401,807
27.5%
72.5
100.0%
2018
¥20,920,584
52,975,578
¥73,896,163
28�3%
71�7
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 �����������������������������������������������������������������������������������������������������������������
2019
¥ 1,710,219
1,130,011
—
6,984,177
1,548,178
11,372,585
19,848,704
45,180,516
¥76,401,807
2018
¥ 1,665,388
1,177,980
—
7,033,067
1,197,769
11,074,206
19,588,275
43,233,680
¥73,896,163
013_0800804261908.indd 331
331
2019/08/16 19:12:18
SMBCSMBC Group Annual Report 2019 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.
2019
¥13,664,684
13,468,749
10,555,003
2,913,746
11,884,345
9,119,424
2,764,921
6,036,444
4,883,153
1,153,291
21,090,740
19,289,929
1,800,810
10,256,841
10,256,841
—
¥76,401,807
Millions of yen
2018
¥12,059,922
12,836,241
10,377,892
2,458,348
12,120,427
9,010,749
3,109,678
5,531,818
4,331,834
1,199,983
21,280,057
19,561,190
1,718,867
10,067,694
10,067,694
—
¥73,896,163
Balance of Loan Portfolio, Classified by Industry
March 31
Domestic operations:
Millions of yen
2019
2018
Manufacturing����������������������������������������������������������������������������������������������
Agriculture, forestry, fisheries and mining ���������������������������������������������������
Construction ������������������������������������������������������������������������������������������������
Transportation, communications and public enterprises ����������������������������
Wholesale and retail ������������������������������������������������������������������������������������
Finance and insurance ��������������������������������������������������������������������������������
Real estate ���������������������������������������������������������������������������������������������������
Goods rental and leasing �����������������������������������������������������������������������������
Services �������������������������������������������������������������������������������������������������������
Municipalities �����������������������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Overseas operations:
Public sector ������������������������������������������������������������������������������������������������
Financial institutions ������������������������������������������������������������������������������������
Commerce and industry ������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Subtotal �������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
¥ 6,621,443
267,135
729,545
5,226,335
4,283,282
7,131,892
7,053,528
1,598,278
4,168,190
754,500
16,133,209
¥53,967,341
¥ 176,684
1,668,433
18,979,331
1,610,015
¥22,434,465
¥76,401,807
12.3%
0.5
1.3
9.7
7.9
13.2
13.1
3.0
7.7
1.4
29.9
100.0%
0.8%
7.4
84.6
7.2
100.0%
—
¥ 6,072,608
132,783
741,835
4,861,154
4,178,942
7,352,639
6,684,889
1,499,241
4,090,964
914,763
16,678,320
¥53,208,143
¥ 195,113
1,621,969
17,418,127
1,452,810
¥20,688,019
¥73,896,163
11�4%
0�3
1�4
9�1
7�9
13�8
12�6
2�8
7�7
1�7
31�3
100�0%
1�0%
7�8
84�2
7�0
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) �������������������������������������������������������������������������������������������������������������
2019
¥53,967,341
32,994,754
61.1%
2018
¥53,208,143
33,700,117
63�3%
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 or less, 100 employees or fewer; retailers: ¥50 million or less,
50 employees or fewer; and service industry companies: ¥50 million or less, 100 employees or fewer.)
332
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SMBCSMBC Group Annual Report 2019 Loans (Non-consolidated)
Consumer Loans Outstanding
March 31
Consumer loans ����������������������������������������������������������������������������������������������
Housing loans ����������������������������������������������������������������������������������������������
Residential purpose ���������������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
2019
¥13,000,685
12,118,257
9,660,356
882,427
2018
¥13,498,645
12,566,778
9,998,693
931,866
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, 2019
General reserve for possible loan losses������������������
Balance at beginning
of the fiscal year
¥226,555
Increase during
the fiscal year
¥171,358
Decrease during the fiscal year
Objectives
¥ —
Others
¥226,555*
Balance at end
of the fiscal year
¥171,358
Millions of yen
Specific reserve for possible loan losses �����������������
For nonresident loans �������������������������������������������
Loan loss reserve for specific overseas countries ���
Total ��������������������������������������������������������������������������
[(2,987)]
96,858
[(1,138)]
34,833
[(1,138)]
581
¥323,995
[(4,126)]
* Reversal by reversal method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
Year ended March 31, 2018
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
¥255,838
[3,118]
128,460
[1,303]
35,882
[1,249]
1,005
¥385,304
[4,421]
* Reversal by reversal method
Note: Figures in brackets [ ] indicate foreign exchange translation adjustments.
103,826
21,053
75,804*
103,826
40,756
7,192
27,641*
40,756
0
¥275,185
—
¥21,053
581*
¥302,941
0
¥275,185
Millions of yen
Increase during
the fiscal year
¥223,567
Decrease during the fiscal year
Objectives
¥ —
Others
¥255,838*
Balance at end
of the fiscal year
¥223,567
95,720
33,694
23,216
105,244*
95,720
12,232
23,650*
33,694
581
¥319,868
—
¥23,216
1,005*
¥362,087
581
¥319,868
Write-Off of Loans
Year ended March 31
Write-off of loans ���������������������������������������������������������������������������������������������
2019
¥9,245
2018
¥7,364
Millions of yen
Note: Write-off of loans include amount of direct reduction.
Specific Overseas Loans
March 31
Argentina ���������������������������������������������������������������������������������������������������������
Egypt ���������������������������������������������������������������������������������������������������������������
Azerbaijan ��������������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
Ratio of the total amounts to total assets �������������������������������������������������������
Number of countries ����������������������������������������������������������������������������������������
Millions of yen
2019
¥15
—
—
¥15
0.00%
1
2018
¥ 22
4,711
4,652
¥9,386
0�01%
3
013_0800804261908.indd 333
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2019/08/16 19:12:18
SMBCSMBC Group Annual Report 2019 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
2019
¥ 11,612
386,396
5,525
58,230
¥461,765
¥ 82,342
Millions of yen
2018
¥ 24,444
328,954
4,460
67,521
¥425,380
¥ 92,343
1. Bankrupt loans: Loans on which accrued interest income is not recognized, and to borrowers that are undergoing bankruptcy, corporate reorganization
and rehabilitation proceedings or borrowers receiving a disposition to suspend transactions with a clearing house.
2. Non-accrual loans: Loans on which accrued interest income is not recognized, excluding “Bankrupt loans” and loans on which interest payments are
deferred in order to support the borrowers’ recovery from financial difficulties.
3. Past due loans (3 months or more): Loans on which the principal or interest is past due for 3 months or more, excluding loans in categories 1. and 2.
4. Restructured loans: Loans to borrowers on which terms and conditions have been amended in favor of the borrowers in order to support the borrowers’
recovery from financial difficulties and facilitate collection of loans, excluding loans 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 ������������������������������������������������������������������������������
2019
¥ 75,341
337,375
63,756
476,472
88,460,445
¥88,936,918
¥ 89,256
Notes: Definition of NPLs categories
Millions of yen
2018
¥ 80,942
283,393
71,981
436,317
85,468,271
¥85,904,588
¥ 99,662
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
334
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SMBCSMBC Group Annual Report 2019 Loans (Non-consolidated)
Classification based on Self-Assessment, and the Financial Reconstruction Act, and Write-Offs/Reserves
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. (a)
Fully reserved
¥75.3
¥64.7
¥10.6
Direct
write-offs
(Note 1)
¥15.6
(Note 2)
100%
(Note 3)
March 31, 2019
Category of
borrowers under
self-assessment
Bankrupt Borrowers
Effectively Bankrupt
Borrowers
Potentially
Bankrupt
Borrowers
Borrowers
Requiring
Caution
Doubtful assets (2)
¥337.4
Substandard loans (3)
¥63.8
(Claims to substandard borrowers)
Normal Borrowers
Normal assets
¥88,460.4
NPL ratio (5) / (4)
0.54%
Total
(4)
¥88,936.9
(A) = (1) + (2) + (3)
¥476.5
( 5 )
Portion of claims secured by
collateral or guarantees, etc. (b)
¥205.2
Necessary
amount
reserved
¥132.2
Portion of substandard loans
secured by collateral or
guarantees, etc. (c)
¥33.2
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
(D) Specific reserve + General reserve
for substandard loans
Portion secured by collateral or
guarantees, etc.
(B) = ( a ) + (b) + (c)
¥303.1
Unsecured portion
(C) = ( A ) – (B )
Specific
reserve
General
reserve
¥87.9
(Note 2)
66.47%
(Note 3)
General reserve
for substandard
loans ¥12.0
¥171.7
(Note 5)
¥0.0
¥275.2
¥115.5
¥173.3
13.77%
(Note 3)
42.39%
(Note 3)
4.64%
10.86%
[
]
(Note 4)
0.11%
(Note 4)
Reserve ratio
(D) / (C)
66.62%
(Note 6)
Coverage ratio { ( B) + (D) } / (A)
87.86%
Notes: 1. Includes amount of direct reduction totaling ¥89.3 billion.
2. Includes reserves for assets that are not subject to disclosure under the Financial Reconstruction Act. (Bankrupt/Effectively Bankrupt Borrowers: ¥5.0
billion; Potentially Bankrupt Borrowers: ¥2.6 billion)
3. Reserve ratios for claims on Bankrupt/Effectively Bankrupt Borrowers, Potentially Bankrupt Borrowers, Substandard Borrowers, and Borrowers Requiring
Caution (including Substandard Borrowers): 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 ¥0.3 billion.
6. The proportion of the reserve to the claims, excluding the portion secured by collateral or guarantees, etc.
Results of off-balancing of NPLs
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
March 31, 2017
➀
¥118�4
347�4
¥465�8
Fiscal 2017
New occurrences Off-balanced
¥ (69�4)
(142�0)
¥(211�4)
¥ 31�9
78�0
¥109�9
March 31, 2018
➁
¥ 80�9
283�4
¥364�3
Fiscal 2018
New occurrences Off-balanced
¥ (36�7)
(137�7)
¥(174�4)
¥ 31�1
191�7
¥222�8
March 31, 2019
➂
¥ 75�3
337�4
¥412�7
Billions of yen
Bankrupt and quasi-bankrupt assets ���
Doubtful assets ������������������������������������
Total ������������������������������������������������������
Increase/
Decrease
➁ – ➀
¥ (37�5)
(64�0)
¥(101�5)
Increase/
Decrease
➂ – ➁
¥ (5�6)
54�0
¥48�4
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 2018. Amount of ¥30.6 billion in fiscal 2018, recognized as “new occurrences” in the first half of the term, was included in the amounts off-balanced
in the second half.
013_0800804261908.indd 335
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2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019
Securities (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Balance of Securities
Year-End Balance
March 31
Domestic operations:
Millions of yen
2019
2018
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,252,329
99,164
2,602,228
3,814,443
765,571
/
/
¥13,533,737
¥
—
—
—
—
10,802,901
7,134,782
3,668,118
¥10,802,901
¥24,336,638
¥ 9,313,092
47,032
2,563,569
4,238,818
1,018,723
/
/
¥17,181,235
¥
—
—
—
—
8,735,482
5,342,481
3,393,001
¥ 8,735,482
¥25,916,718
Average Balance
Year ended March 31
Domestic operations:
Millions of yen
2019
2018
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 �����������������������������������������������������������������������������������������������������������������
¥ 6,971,707
53,283
2,517,314
2,195,195
926,730
/
/
¥12,664,232
¥
—
—
—
—
9,794,923
6,355,459
3,439,463
¥ 9,794,923
¥22,459,156
¥ 8,904,513
80,701
2,523,831
2,414,764
992,188
/
/
¥14,915,999
¥
—
—
—
—
8,163,052
5,164,854
2,998,198
¥ 8,163,052
¥23,079,051
Note: The average balance of foreign-currency-denominated transactions by domestic branches in international operations is calculated by the monthly current
method.
336
013_0800804261908.indd 336
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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 — ten years
Japanese government bonds ����������������������������������������������������������������������
Japanese local government bonds �������������������������������������������������������������
Japanese corporate bonds �������������������������������������������������������������������������
Others ����������������������������������������������������������������������������������������������������������
Foreign bonds ������������������������������������������������������������������������������������������
Foreign stocks �����������������������������������������������������������������������������������������
More than ten 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 �����������������������������������������������������������������������������������������
Securities (Non-consolidated)
Millions of yen
2019
¥1,236,610
—
206,765
1,715,067
1,713,538
818
3,983,873
10,097
550,063
1,306,488
1,259,089
451
116,667
990
602,804
921,128
869,053
2,348
—
5,110
571,678
1,312,373
1,241,178
11,126
530,926
82,956
312,742
939,119
869,989
4,070
384,252
8
358,173
1,416,986
1,181,933
105,365
—
—
—
3,814,443
3,957,307
—
3,543,937
¥6,252,329
99,164
2,602,228
3,814,443
11,568,472
7,134,782
3,668,118
2018
¥3,373,256
17
187,331
1,560,459
1,543,149
—
4,451,753
4,677
593,116
751,964
714,367
2,251
818,615
17,063
681,269
428,767
397,387
—
51,985
4,081
346,164
325,851
250,470
8,882
296,787
21,173
432,659
1,759,954
1,676,773
6,918
320,694
18
323,028
1,033,261
760,333
119,447
—
—
—
4,238,818
3,893,946
—
3,255,502
¥9,313,092
47,032
2,563,569
4,238,818
9,754,206
5,342,481
3,393,001
013_0800804261908.indd 337
337
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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 ����������������������������������������������������������������
2019
0.35%
8.18
0.26
6.01
Percentage
2018
0�43%
9�84
0�32
7�52
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
2019
2018
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) ��������������������������������������������������������������������������������������������������������
0.97%
0.60
0.37
2.65%
2.45
0.20
1.69%
1.19
0.50
1�04%
0�62
0�42
1�99%
1�86
0�13
1�44%
1�00
0�44
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
2019
2018
¥ 49,751,966
98,979,238
¥ 49,214,467
94,789,237
50.26%
50.56
51�91%
53�24
¥ 26,649,840
28,693,470
¥ 24,681,695
26,718,796
92.87%
95.59
92�37%
97�45
¥ 76,401,807
127,672,708
¥ 73,896,163
121,508,034
59.84%
60.70
60�81%
63�13
338
013_0800804261908.indd 338
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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
2019
2018
¥ 13,533,737
98,979,238
¥ 17,181,235
94,789,237
13.67%
13.12
18�12%
16�13
¥ 10,802,901
28,693,470
¥ 8,735,482
26,718,796
37.64%
34.94
32�69%
30�62
¥ 24,336,638
127,672,708
¥ 25,916,718
121,508,034
19.06%
18.04
21�32%
19�37
013_0800804261908.indd 339
339
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 Capital (Non-consolidated)
Sumitomo Mitsui Banking Corporation
Changes in Number of Shares Issued and Capital Stock
Number of shares issued
Changes
Balances
106,318,401
February 16, 2010* ����������������������������������� 20,016,015
Remarks:
* Allotment to third parties:
Common stock:
Issue price:
Capitalization:
20,016,015 shares
¥48,365
¥24,182.5
Number of Shares Issued
Millions of yen
Capital stock
Capital reserve
Changes
484,037
Balances
1,770,996
Changes
484,037
Balances
1,771,043
March 31, 2019
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, 2019
Sumitomo Mitsui Financial Group, Inc� ����������������������������������������������������������
Number of shares
106,248,400
b. Preferred Stock (1st series Type 6)
March 31, 2019
Sumitomo Mitsui Banking Corporation �����������������������������������������������������������
Number of shares
70,001
Percentage of
shares outstanding
100�00%
Percentage of
shares outstanding
100�00%
340
013_0800804261908.indd 340
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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) �������������������������������������������������������
2019
28,482
36-9
13-6
¥8,203
2018
29,192
36-4
13-1
¥8,105
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 �����������������������������������������������������������������������������������������������������������������
2019
511
382
1
19
23
4
940
2018
507
455
1
18
22
4
1,007
Notes: 1. “Main offices and branches” includes the International Business Operations Dept. (2019, 2 branches; 2018, 2 branches), specialized deposit account
branches (2019, 47 branches; 2018, 46 branches) and ATM administration branches (2019, 18 branches; 2018, 17 branches).
2. “Subbranches” includes Corporate Business Office, etc.
Number of Automated Service Centers
March 31
Automated service centers������������������������������������������������������������������������������
2019
50,378
2018
49,518
Domestic Exchange Transactions
Year ended March 31
Exchange for remittance:
Destined for various parts of the country:
Millions of yen
2019
2018
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
437,415
¥ 535,257,829
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
318,485
¥ 932,517,945
Collection:
Destined for various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
1,771
¥ 4,451,331
Received from various parts of the country:
Number of accounts (thousands) ������������������������������������������������������������
Amount ����������������������������������������������������������������������������������������������������
Total �����������������������������������������������������������������������������������������������������������������
649
¥ 2,333,608
¥1,474,560,716
416,752
¥ 528,632,417
312,105
¥ 916,130,917
1,897
¥ 4,638,705
690
¥ 1,827,751
¥1,451,229,791
013_0800804261908.indd 341
341
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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
2019
$2,171,749
1,352,488
$1,094,203
42,055
$4,660,496
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 �����������������������������������������������������������������������������������������������������������������
2019
¥ 111,466
57,386
—
50,416
67,462
¥ 286,732
940,913
7,851,060
¥9,078,706
2018
$ 2,243,809
1,536,739
$ 1,056,842
38,355
$ 4,875,747
2018
¥ 145,511
86,690
—
40,986
32,529
¥ 305,717
752,407
6,863,044
¥7,921,169
342
013_0800804261908.indd 342
2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019 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 ����������������������������������������������������������������������������������������������
2019
¥ 477,094
477,094
1,330,384
38,517
1,265,810
—
26,056
28,278
50,000
538,047
14,893
523,154
999
—
1,291,710
126,080
126,080
46
46
¥3,842,641
¥1,270,266
952,323
35,015
50,000
291,991
1,243,045
¥3,842,641
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
2018
¥ 398,772
398,772
2,358,665
65,099
2,255,684
—
37,881
33,040
15,000
593,135
13,481
579,653
1,107
—
1,275,695
81,222
81,222
108
108
¥4,756,748
¥1,376,554
1,038,705
—
15,000
346,176
1,980,311
¥4,756,748
013_0800804261908.indd 343
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2019/08/16 19:12:19
SMBCSMBC Group Annual Report 2019
Basel III Information
Capital Ratio Information (Consolidated)
Sumitomo Mitsui Banking Corporation and Subsidiaries
■ CC1: Composition of regulatory capital
Basel III
Template No.
Items
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
Common Equity Tier 1 capital: instruments and reserves (1)
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: national specific regulatory adjustments (earnings to be distributed) (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Accumulated other comprehensive income and other disclosed reserves
5
Common share capital issued by subsidiaries and held by third parties (amount allowed in group
CET1)
7,120,831
6,856,015
3,527,346
3,743,614
—
150,128
—
—
1,434,667
3,531,406
3,451,151
—
126,541
—
—
1,552,547
2,181
333
(a)
6 Common Equity Tier 1 capital: instruments and reserves
(A)
8,557,681
8,408,896
Common Equity Tier 1 capital: regulatory adjustments (2)
8+9
Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing
rights)
8
9
10
of which: goodwill (including those equivalent)
of which: other intangibles 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 Securitisation gain on sale
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, net of eligible short positions, where the bank does not own
more than 10% of the issued share capital (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
of which: significant investments in the common stock of financials
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
19
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
of which: significant investments in the common stock of financials
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
27
281,339
239,397
26,214
255,125
31,588
207,809
2,208
1,213
(45,242)
—
60,286
3,940
225,610
3
—
(65,809)
—
60,215
2,646
262,547
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
528,146
500,211
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
8,029,535
7,908,684
344
014_0800885851907.indd 344
2019/08/16 19:33:47
SMBCSMBC Group Annual Report 2019
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
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
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in
group AT1)
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional
Tier 1 capital: instruments
—
—
—
—
1,100,000
1,100,000
—
—
23,795
30,026
173,000
466,652
of which: instruments issued by banks and their special purpose vehicles
of which: instruments issued by subsidiaries (excluding banks’ special purpose vehicles)
33
35
36 Additional Tier 1 capital: instruments
(D)
173,000
—
1,296,795
466,652
—
1,596,678
Additional Tier 1 capital: regulatory adjustments
37 Investments in own Additional Tier 1 instruments
38 Reciprocal cross-holdings in Additional Tier 1 instruments
39
40
42
Investments in the capital of banking, financial and insurance entities that are outside the scope
of regulatory consolidation, net of eligible short positions, where the bank does not own more
than 10% of the issued common share capital of the entity (amount above the 10% threshold)
Significant investments in the Additional Tier 1 capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (net of eligible short positions)
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 (4)
—
—
—
—
—
—
25,516
81,640
—
—
25,516
81,640
1,271,279
1,515,038
(E)
(F)
(G)
9,300,814
9,423,723
46
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the 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 Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group T2)
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2:
instruments and provisions
47+49
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
51 Tier 2 capital: instruments and provisions
(H)
—
—
—
—
1,003,250
994,937
—
—
5,921
3,488
488,222
625,890
488,222
—
7,664
7,477
187
1,505,059
625,890
—
33,097
6,210
26,886
1,657,414
014_0800885851907.indd 345
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2019/08/16 19:33:48
SMBCSMBC Group Annual Report 2019Basel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments (5)
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
54
55
Investments in the capital and other TLAC liabilities of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible short positions, where the
bank does not own more than 10% of the issued common share capital of the entity (amount
above the 10% threshold)
Significant investments in the capital and other TLAC liabilities of banking, financial and
insurance entities that are outside the scope of regulatory consolidation (net of eligible short
positions)
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
59 Total capital (TC = T1 + T2) ((G) + (J))
Risk weighted assets (6)
60 Total risk-weighted assets (RWA)
Capital ratio (consolidated) (7)
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
—
—
—
—
—
—
50,000
150,000
50,000
150,000
1,455,059
1,507,414
(I)
(J)
(K)
10,755,873
10,931,137
(L)
52,910,688
51,707,483
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 (8)
72
73
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
Significant investments in the common stock of other financials 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 (9)
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) (if the amount is negative, report as “nil”)
15.17%
17.57%
20.32%
15.29%
18.22%
21.14%
289,593
331,209
567,146
596,582
—
220
7,477
29,069
187
—
1,617
6,210
22,963
26,886
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
243,795
259,290
Capital instruments subject to transitional arrangements (10)
82 Current cap on AT1 instruments subject to transitional arrangements
83
Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
84 Current cap on T2 instruments subject to transitional arrangements
85
Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
371,357
495,143
—
—
610,358
813,811
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2019
4,232,855
As of March 31,2018
4,136,598
346
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SMBCSMBC Group Annual Report 2019Basel III Information
■ CC2: Reconciliation of regulatory capital to balance sheet
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
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
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 or losses on other securities
Net deferred gains or 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
a
b
(Millions of yen)
c
Consolidated balance sheet as
in published financial
statements
As of March 31,
2019
As of March 31,
2018
Reference to Template CC1
Reference to appended table
55,747,048
2,665,744
5,082,709
1,440,159
4,582,886
2,452,825
0
23,469,621
79,792,401
1,715,759
247,835
3,571,248
1,409,802
375,389
324,672
23,399
8,121,131
(332,343)
190,690,293
123,190,830
11,335,486
572,778
8,743,386
680,051
2,291,813
1,818,610
15,988,948
1,196,960
2,955,282
1,352,773
2,929,172
34,283
1,249
4,457
669
468
7,936
446,993
30,259
8,121,131
181,703,543
1,770,996
1,966,353
3,743,614
(210,003)
7,270,960
1,426,493
(47,281)
36,531
24,371
(5,446)
1,434,667
2,210
278,910
8,986,749
190,690,293
52,122,407
1,881,879
1,675,693
3,562,107
4,550,592
2,408,549
0
25,217,287
75,853,934
2,164,196
252,507
3,923,004
1,410,800
311,810
377,768
28,789
7,373,185
(387,022)
182,727,495
117,227,296
11,455,284
740,928
5,256,519
3,324,893
2,385,705
1,907,416
13,973,112
906,429
3,255,697
1,328,271
3,983,839
32,826
1,333
6,552
671
966
17,765
427,853
30,539
7,373,185
173,637,092
1,770,996
1,970,412
3,451,151
(210,003)
6,982,557
1,509,249
(66,918)
37,042
12,710
60,463
1,552,547
—
555,298
9,090,403
182,727,495
(a)
6-a
2-b,6-b
6-c
6-d
2-a
3
4-a
6-e
8
6-f
4-b
4-c
1-a
1-b
1-c
1-d
5
7-a
7-b
Note: The regulatory scope of consolidation is the same as the accounting scope of consolidation.
014_0800885851907.indd 347
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SMBCSMBC Group Annual Report 2019Basel 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, 2019
As of March
31, 2018
1,770,996
1,770,996
1,966,353
1,970,412
3,743,614
3,451,151
(210,003)
(210,003)
7,270,960
6,982,557
(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, 2019
As of March
31, 2018
Remarks
Basel III Template
No.
Directly issued qualifying common share capital plus related capital
surplus and retained earnings
of which: capital and capital surplus
of which: retained earnings
of which: treasury stock (–)
of which: other than the above
7,270,960
6,982,557
3,527,346
3,743,614
—
—
3,531,406
3,451,151
—
—
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 fixed 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 intangibles 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, 2019
375,389
23,469,621
14,211
As of March
31, 2018
311,810
25,217,287
18,861
108,261
91,273
As of March
31, 2019
As of March
31, 2018
26,214
255,125
—
—
—
31,588
207,809
—
—
—
—
—
As of March
31, 2019
As of March
31, 2018
324,672
377,768
99,062
115,220
As of March
31, 2019
As of March
31, 2018
225,610
262,547
(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
348
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SMBCSMBC Group Annual Report 2019Basel 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 intangible fixed assets
Tax effects on net defined benefit asset
(2) Composition of capital
As of March
31, 2019
As of March
31, 2018
23,399
446,993
30,259
108,261
99,062
28,789
427,853
30,539
91,273
115,220
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
4-c
(Millions of yen)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
Remarks
Basel III Template
No.
Deferred tax assets that rely on future profitability excluding those
arising from temporary differences (net of related tax liability)
2,208
1,213
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)
220
—
—
220
1,617
—
—
1,617
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, 2019
As of March
31, 2018
(47,281)
(66,918)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
Net deferred gains or losses on hedges
(45,242)
(65,809)
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
Other assets
Trading liabilities
Other liabilities
As of March
31, 2019
As of March
31, 2018
2,452,825
2,408,549
23,469,621
79,792,401
3,571,248
25,217,287
75,853,934
3,923,004
1,818,610
1,907,416
2,929,172
3,983,839
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
(Millions of yen)
Remarks
Ref. No.
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including derivatives
Including trading account securities sold and
derivatives for trading liabilities
Including derivatives
6-a
6-b
6-c
6-d
6-e
6-f
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SMBCSMBC Group Annual Report 2019Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
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 and other TLAC liabilities
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible
short positions, where the bank does not own more than 10% of the
issued share capital (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital and other TLAC liabilities
Non-significant investments in the capital and other TLAC
liabilities of other financials that are below the thresholds for
deductions (before risk weighting)
Significant investments in the capital of banking, financial and
insurance entities that are outside the scope of regulatory consolidation
(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 and other TLAC liabilities
Significant investments in the common stock of other
financials that are below the thresholds for deductions
(before risk weighting)
3
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
289,593
331,209
—
—
—
—
—
—
289,593
331,209
642,662
828,222
—
—
25,516
50,000
—
—
81,640
150,000
567,146
596,582
7. Non-controlling interests
(1) Consolidated balance sheet
Consolidated balance sheet items
Stock acquisition rights
Non-controlling interests
(2) Composition of capital
As of March
31, 2019
As of March
31, 2018
2,210
278,910
—
555,298
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
(Millions of yen)
(Millions of yen)
Remarks
Remarks
Amount allowed in group CET1
Qualifying Additional Tier 1 instruments plus related capital surplus
issued by special purpose vehicles and other equivalent entities
Amount allowed in group AT1
Qualifying Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities
Amount allowed in group T2
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
2,181
—
333
—
23,795
30,026
—
—
5,921
3,488
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
After reflecting amounts eligible for inclusion
(Non-Controlling Interest after adjustments)
(Millions of yen)
(Millions of yen)
Remarks
Remarks
As of March
31, 2019
15,988,948
As of March
31, 2018
13,973,112
As of March
31, 2019
As of March
31, 2018
1,100,000
1,100,000
1,003,250
994,937
16
37
52
17
38
53
18
39
54
72
19
23
40
55
73
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
350
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SMBCSMBC Group Annual Report 2019Basel 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)
Items
(In million yen, %)
As of March 31,
2019
As of March 31,
2018
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)
172,497,155
190,690,293
166,530,561
182,727,495
—
—
—
—
18,193,137
16,196,934
534,678
171,962,477
584,798
165,945,762
Exposures related to derivative transactions (2)
4
5
6
7
8
9
10
11
Replacement cost associated with derivatives transactions, etc. (with
the 1.4 alpha factor applied)
Replacement cost associated with derivatives transactions, etc.
Add-on amount for potential future exposure associated with
derivatives transactions, etc. (with the 1.4 alpha factor applied)
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 collateral, provided
where deducted from the consolidated balance sheet pursuant to the
operative accounting framework
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)
2,329,551
1,878,627
3,413,858
2,921,033
499,696
244,794
—
—
97,391
244,794
—
—
86,781
86,781
6,145,714
4,799,660
6,522,869
—
562,301
5,237,801
—
125,211
(c)
7,085,171
5,363,012
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
55,580,884
54,953,486
35,362,496
36,521,778
(d)
20,218,388
18,431,707
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)
9,300,814
205,411,750
4.52%
9,423,723
194,540,143
4.84%
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SMBCSMBC Group Annual Report 2019Basel 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 ratio 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 on the following page, the LCR has remained stable with no significant fluctuation since the introduction of the liquidity ratio
regulation on March 31, 2015.
2. Assessment of Consolidated LCR
The LCR Notification stipulates the minimum requirement of the LCR for 2018 at 90%, and 100% from 2019 onwards. The LCR of SMBC
(consolidated) exceeds the minimum requirements of the LCR for 2018 and for 2019 onwards, having no cause for concern. In terms of the
future LCR forecasts, SMBC does not expect significant deviations from the disclosed ratios. In addition, the actual LCR does not differ
significantly from the initial forecast.
3. Composition of High-Quality Liquid Assets
Regarding the high-quality liquid assets allowed to be included in the calculation, there are no significant changes in locations and
properties of currency denominations, categories and so on. In addition, in respect of major currencies (those of which the aggregate amount
of liabilities denominated in a certain currency accounts for 5% 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 LCR 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 LCR Notification.
352
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SMBCSMBC Group Annual Report 2019Basel 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
TOTAL
UNWEIGHTED
VALUE
49,498,644
15,325,816
34,172,828
65,960,285
—
63,295,852
TOTAL
WEIGHTED
VALUE
3,879,145
461,276
3,417,869
33,120,999
—
TOTAL
UNWEIGHTED
VALUE
48,794,925
15,003,093
33,791,832
65,164,271
—
63,573,365
TOTAL
WEIGHTED
VALUE
3,830,031
450,303
3,379,728
32,262,249
—
60,421,380
27,582,094
60,566,560
27,664,538
5,538,905
5,538,905
143,251
4,597,711
4,597,711
115,021
22,270,514
7,206,152
22,910,054
7,594,563
1,101,703
396,429
20,772,382
6,607,593
65,772,699
TOTAL
UNWEIGHTED
VALUE
3,334,466
3,284,080
2,507,259
9,125,806
1,317,653
363,907
21,228,494
6,356,380
66,268,915
TOTAL
UNWEIGHTED
VALUE
2,886,957
2,604,514
2,618,680
8,110,151
1,101,703
396,429
5,708,020
5,124,925
1,310,014
50,784,486
TOTAL
WEIGHTED
VALUE
367,764
2,294,153
1,113,161
3,775,079
63,295,852
47,009,407
134.6%
58
1,317,653
363,907
5,913,003
4,746,425
1,238,241
49,786,531
TOTAL
WEIGHTED
VALUE
511,103
1,813,909
1,085,408
3,410,420
63,573,365
46,376,110
137.0%
62
Notes: 1. The data after the introduction of the liquidity ratio regulation on March 31, 2015 is available on Sumitomo Mitsui Financial Group’s website.
(https://www.smfg.co.jp/english/investor/financial/basel_3.html)
2. The average values are calculated based on daily data in accordance with Notification No. 7 issued by the Japanese Financial Services Agency in 2015. Some data, such as
attribute information of customers and data on consolidated subsidiaries, is updated on the monthly or quarterly basis.
■ 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
(In million yen)
51,493,412
11,802,440
9,453,776
79,243
869,375
1,400,047
63,295,852
52,667,872
10,905,493
8,529,560
61,560
862,568
1,451,805
63,573,365
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
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2019/08/16 19:33:48
SMBCSMBC Group Annual Report 2019Basel III Information
Capital Ratio Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
■ CC1: Composition of regulatory capital
Basel III
Template No.
Items
Common Equity Tier 1 capital: instruments and reserves (1)
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: national specific regulatory adjustments (earnings to be distributed) (–)
of which: other than the above
1b Stock acquisition rights to common shares
3 Valuation and translation adjustment and other disclosed reserves
6 Common Equity Tier 1 capital: instruments and reserves
(A)
Common Equity Tier 1 capital: regulatory adjustments (2)
8+9
Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing
rights)
8
9
10
of which: goodwill
of which: other intangibles 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 Securitisation gain on sale
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, net of eligible short positions, where the bank does not own
more than 10% of the issued share capital (amount above the 10% threshold)
19+20+21 Amount exceeding the 10% threshold on specified items
of which: significant investments in the common stock of financials
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences (net of related tax liability)
19
20
21
22 Amount exceeding the 15% threshold on specified items
23
24
25
of which: significant investments in the common stock of financials
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
27
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
(a)
6,382,096
6,255,453
3,335,548
3,196,677
—
150,128
—
—
1,430,047
7,812,144
3,337,824
3,044,170
—
126,541
—
—
1,539,402
7,794,855
164,075
160,658
—
164,075
—
160,658
—
—
(20,578)
19,757
60,286
—
222,859
—
—
(5,293)
454
60,215
—
193,931
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
28 Common Equity Tier 1 capital: regulatory adjustments
(B)
446,401
409,966
Common Equity Tier 1 capital (CET1)
29 Common Equity Tier 1 capital (CET1) ((A)-(B))
(C)
7,365,742
7,384,889
354
014_0800885851907.indd 354
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SMBCSMBC Group Annual Report 2019Basel III Information
Basel III
Template No.
Items
Additional Tier 1 capital: instruments (3)
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
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
—
—
—
—
1,100,000
1,100,000
—
—
173,000
466,652
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
39
40
42
Investments in the capital of banking, financial and insurance entities that are outside the scope
of regulatory consolidation, net of eligible short positions, where the bank does not own more
than 10% of the issued common share capital of the entity (amount above the 10% threshold)
Significant investments in the Additional Tier 1 capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation (net of eligible short positions)
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 (4)
(D)
1,273,000
1,566,652
—
—
—
—
—
—
25,516
76,261
—
—
25,516
76,261
1,247,483
1,490,391
(E)
(F)
(G)
8,613,226
8,875,280
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as
equity under applicable accounting standards and the 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
51 Tier 2 capital: instruments and provisions
(H)
—
—
—
—
1,003,250
994,937
—
—
488,222
625,890
—
—
—
1,491,472
—
—
—
1,620,828
014_0800885851907.indd 355
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2019/08/16 19:33:48
SMBCSMBC Group Annual Report 2019Basel III Information
Basel III
Template No.
Items
Tier 2 capital: regulatory adjustments (5)
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
54
55
Investments in the capital and other TLAC liabilities of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible short positions, where the
bank does not own more than 10% of the issued common share capital of the entity (amount
above the 10% threshold)
Significant investments in the capital and other TLAC liabilities of banking, financial and
insurance entities that are outside the scope of regulatory consolidation (net of eligible short
positions)
57 Tier 2 capital: regulatory adjustments
Tier 2 capital (T2)
58 Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
59 Total capital (TC = T1 + T2) ((G) + (J))
Risk weighted assets (6)
60 Total risk-weighted assets (RWA)
Capital ratio (7)
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 (8)
72
73
Non-significant investments in the capital and other TLAC liabilities of other financials that are
below the thresholds for deduction (before risk weighting)
Significant investments in the common stock of other financials 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 (9)
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) (if the amount is negative, report as “nil”)
(Millions of yen, except percentages)
a
b
As of March
31,2019
As of March
31,2018
c
Reference to
Template
CC2
—
—
—
—
—
—
50,000
150,000
50,000
150,000
1,441,472
1,470,828
(I)
(J)
(K)
10,054,699
10,346,108
(L)
49,574,518
49,001,855
14.85%
17.37%
20.28%
15.07%
18.11%
21.11%
281,885
324,525
516,070
572,602
—
—
—
3,671
—
—
—
—
2,694
—
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
248,544
262,631
Capital instruments subject to transitional arrangements (10)
82 Current cap on AT1 instruments subject to transitional arrangements
83
Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
84 Current cap on T2 instruments subject to transitional arrangements
85
Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) (if the
amount is negative, report as “nil”)
371,207
494,943
—
—
605,172
806,896
—
—
Items
Required capital ((L) ✕ 8%)
(Millions of yen)
As of March 31,2019
3,965,961
As of March 31,2018
3,920,148
356
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SMBCSMBC Group Annual Report 2019Basel III Information
■ CC2: Reconciliation of regulatory capital to balance sheet
Sumitomo Mitsui Banking Corporation
a
Balance sheet as
in published financial
statements
b
c
d
(Millions of yen)
Under regulatory scope of consolidation
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 or losses on other securities
Net deferred gains or losses on hedges
Land revaluation excess
Foreign currency translation adjustments
Total valuation and translation adjustments
Non-controlling interests
Total net assets
Total liabilities and net assets
014_0800885851907.indd 357
As of
March 31,
2019
As of
March 31,
2018
As of
March 31,
2019
As of
March 31,
2018
54,205,583
2,134,392
3,364,070
1,222,284
1,470,872
1,534,100
24,336,638
76,401,807
1,627,105
2,895,757
802,501
236,352
321,031
9,078,706
(275,185)
(7,363)
179,348,654
116,091,103
11,581,605
796,761
7,364,577
418,912
1,634,811
1,348,931
15,567,626
1,213,861
2,910,794
1,292,699
1,659,172
13,285
937
468
7,425
374,529
30,259
9,078,706
171,386,468
1,770,996
1,774,554
3,196,504
(210,003)
6,532,053
1,427,008
(22,444)
25,568
—
1,430,131
—
7,962,185
179,348,654
49,030,209
1,417,562
499,738
3,140,151
1,239,394
1,723,878
25,916,718
73,896,163
2,143,021
3,020,300
798,476
231,429
279,360
7,921,169
(319,868)
(14,559)
170,923,146
110,243,226
11,264,807
928,117
4,383,418
3,073,423
1,522,354
1,422,824
14,023,257
915,154
3,211,548
1,276,907
2,391,909
14,163
978
966
17,307
359,803
30,539
7,921,169
163,001,878
1,770,996
1,776,830
3,044,175
(210,003)
6,381,999
1,519,691
(6,286)
25,863
—
1,539,268
—
7,921,268
170,923,146
54,205,583
2,134,392
3,364,070
1,222,284
1,470,872
1,534,100
24,328,778
76,401,807
1,627,105
2,895,757
802,501
236,352
321,031
9,078,706
(275,185)
(7,363)
179,340,794
116,084,925
11,581,605
796,761
7,364,577
418,912
1,634,811
1,348,931
15,392,856
1,213,861
2,910,794
1,292,699
1,657,565
13,285
937
468
7,425
374,529
30,259
9,078,706
171,203,913
1,770,996
1,774,554
3,196,677
(210,003)
6,532,225
1,427,008
(22,542)
25,568
13
1,430,047
174,606
8,136,880
179,340,794
49,030,209
1,417,562
499,738
3,140,151
1,239,394
1,723,878
25,905,947
73,896,163
2,143,021
3,020,300
798,476
231,429
279,360
7,921,169
(319,868)
(14,559)
170,912,376
110,236,473
11,264,807
928,117
4,383,418
3,073,423
1,522,354
1,422,824
13,552,461
915,154
3,211,548
1,276,907
2,386,166
14,163
978
966
17,307
359,803
30,539
7,921,169
162,518,585
1,770,996
1,776,830
3,044,170
(210,003)
6,381,995
1,519,691
(6,383)
25,863
230
1,539,402
472,393
8,393,790
170,912,376
Reference to
Template CC1
Reference to
appended table
6-a
6-b
6-c
6-d
2
3
6-e
7
6-f
4-a
4-b
1-a
1-b
1-c
1-d
5
(a)
357
2019/08/16 19:33:49
SMBCSMBC Group Annual Report 2019Basel 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, 2019
As of March
31, 2018
1,770,996
1,770,996
1,774,554
1,776,830
3,196,677
3,044,170
(210,003)
(210,003)
6,532,225
6,381,995
(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, 2019
As of March
31, 2018
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
6,532,225
6,381,995
3,335,548
3,196,677
—
—
3,337,824
3,044,170
—
—
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 fixed assets
(1) Balance sheet
Balance sheet items
Intangible fixed assets
Income taxes related to above
(2) Composition of capital
Composition of capital disclosure
Goodwill
Other intangibles 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, 2019
As of March
31, 2018
236,352
231,429
72,276
70,771
As of March
31, 2019
As of March
31, 2018
—
164,075
—
—
—
—
160,658
—
—
—
—
—
As of March
31, 2019
As of March
31, 2018
321,031
279,360
98,171
85,428
As of March
31, 2019
As of March
31, 2018
222,859
193,931
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
358
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SMBCSMBC Group Annual Report 2019Basel III Information 4. Deferred tax assets
(1) Balance sheet
Balance sheet items
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Tax effects on intangible fixed assets
Tax effects on prepaid pension cost
(2) Composition of capital
As of March
31, 2019
As of March
31, 2018
374,529
30,259
359,803
30,539
72,276
98,171
70,771
85,428
(Millions of yen)
Remarks
Ref. No.
4-a
4-b
(Millions of yen)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
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, 2019
As of March
31, 2018
(22,542)
(6,383)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
Net deferred gains or losses on hedges
(20,578)
(5,293)
6. Items associated with investments in the capital of financial institutions
(1) Balance sheet
Balance sheet items
Trading assets
Securities
Loans and bills discounted
Other assets
Trading liabilities
Other liabilities
As of March
31, 2019
As of March
31, 2018
1,534,100
1,723,878
24,328,778
76,401,807
2,895,757
25,905,947
73,896,163
3,020,300
1,348,931
1,422,824
1,657,565
2,386,166
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
(Millions of yen)
Remarks
Ref. No.
Including trading account securities and derivatives
for trading assets
Including subordinated loans
Including derivatives
Including trading account securities sold and
derivatives for trading liabilities
Including derivatives
6-a
6-b
6-c
6-d
6-e
6-f
014_0800885851907.indd 359
359
2019/08/16 19:33:49
SMBCSMBC Group Annual Report 2019Basel III Information (2) Composition of capital
(Millions of yen)
Composition of capital disclosure
As of March
31, 2019
As of March
31, 2018
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 and other TLAC liabilities
Investments in the capital of banking, financial and insurance entities
that are outside the scope of regulatory consolidation, net of eligible
short positions, where the bank does not own more than 10% of the
issued share capital (amount above the 10% threshold)
Common Equity Tier 1 capital
Additional Tier 1 capital
Tier 2 capital and other TLAC liabilities
Non-significant investments in the capital and other TLAC
liabilities of other financials that are below the thresholds for
deductions (before risk weighting)
Significant investments in the capital of banking, financial and
insurance entities that are outside the scope of regulatory consolidation
(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 and other TLAC liabilities
Significant investments in the common stock of other
financials that are below the thresholds for deductions
(before risk weighting)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
281,885
324,525
—
—
—
—
—
—
281,885
324,525
591,586
798,863
—
—
25,516
50,000
—
—
76,261
150,000
516,070
572,602
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, 2019
15,392,856
As of March
31, 2018
13,552,461
As of March
31, 2019
As of March
31, 2018
1,100,000
1,100,000
1,003,250
994,937
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
360
014_0800885851907.indd 360
2019/08/16 19:33:49
SMBCSMBC Group Annual Report 2019Basel III Information Leverage Ratio Information (Non-consolidated)
Sumitomo Mitsui Banking Corporation
■ 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)
Items
(In million yen, %)
As of March 31,
2019
1a
1b
1
2
3
1
3
7
On-balance sheet exposures before deducting adjustment items
Total assets reported in the balance sheet
The amount of assets that are deducted from the total assets reported in the balance sheet
(except adjustment items) (-)
The amount of adjustment items pertaining to Tier 1 capital (-)
Total on-balance sheet exposures
(a)
162,689,001
179,340,794
16,651,792
432,209
162,256,791
Exposures related to derivative transactions (2)
4
5
6
7
8
9
10
11
Replacement cost associated with derivatives transactions, etc. (with the 1.4 alpha factor
applied)
Replacement cost associated with derivatives transactions, etc.
Add-on amount for potential future exposure associated with derivatives transactions, etc.
(with the 1.4 alpha factor applied)
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 collateral, provided where deducted from
the balance sheet pursuant to the operative accounting framework
The amount of receivables arising from providing cash margin, provided where deducted
from the 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)
17
18
19
Leverage ratio (5)
20
21
22
6
8
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
The amount of capital (Tier 1 capital)
Total exposures ((a)+(b)+(c)+(d))
Leverage ratio ((e)/(f))
(c)
5,129,185
58,704,798
37,308,724
21,396,073
8,613,226
192,337,226
4.47%
(d)
(e)
(f)
1,314,321
2,017,546
506,786
—
283,480
—
—
3,555,174
4,586,354
—
542,831
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SMBCSMBC Group Annual Report 2019Basel 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 ratio 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 on the following page, the LCR has remained stable with no significant fluctuation since the introduction of the liquidity ratio
regulation on March 31, 2015.
2. Assessment of Non-consolidated LCR
The LCR Notification stipulates the minimum requirement of the LCR for 2018 at 90%, and 100% from 2019 onwards. The LCR of SMBC
(non-consolidated) exceeds the minimum requirements of the LCR for 2018 and for 2019 onwards, having no cause for concern. In terms of
the future LCR forecasts, SMBC does not expect significant deviations from the disclosed ratios. In addition, the actual LCR does not differ
significantly from the initial forecast.
3. Composition of High-Quality Liquid Assets
Regarding the high-quality liquid assets allowed to be included in the calculation, there are no significant changes in locations and
properties of currency denominations, categories and so on. In addition, in respect of major currencies (those of which the aggregate amount
of liabilities denominated in a certain currency accounts for 5% 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 LCR Notification. Meanwhile, SMBC records “due to trust account,” etc. under “cash outflows based on other
contracts” prescribed in Article 60 of the LCR Notification.
362
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SMBCSMBC Group Annual Report 2019Basel 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
TOTAL
UNWEIGHTED
VALUE
46,872,458
14,877,087
31,995,371
63,131,293
—
58,459,328
TOTAL
WEIGHTED
VALUE
3,646,436
446,313
3,200,123
31,983,823
—
TOTAL
UNWEIGHTED
VALUE
46,298,086
14,620,293
31,677,793
62,284,521
—
58,447,129
TOTAL
WEIGHTED
VALUE
3,606,933
438,609
3,168,324
30,988,201
—
57,549,368
26,401,898
57,731,485
26,435,165
5,581,925
5,581,925
130,868
4,553,036
4,553,036
102,228
19,935,467
6,305,396
20,598,934
6,656,688
364,472
396,429
19,174,565
5,412,004
65,548,744
TOTAL
UNWEIGHTED
VALUE
2,304,730
4,081,325
1,795,885
8,181,941
552,987
363,907
19,682,040
5,418,642
65,941,841
TOTAL
UNWEIGHTED
VALUE
2,087,811
3,179,147
1,787,920
7,054,878
364,472
396,429
5,544,495
3,238,611
1,229,351
46,534,486
TOTAL
WEIGHTED
VALUE
360,841
3,190,202
870,716
4,421,759
58,459,328
42,112,727
138.8%
58
552,987
363,907
5,739,794
3,082,426
1,153,035
45,589,512
TOTAL
WEIGHTED
VALUE
502,879
2,468,174
843,848
3,814,901
58,447,129
41,774,610
139.9%
62
Notes: 1. The data after the introduction of the liquidity ratio regulation on March 31, 2015 is available on Sumitomo Mitsui Financial Group’s website.
(https://www.smfg.co.jp/english/investor/financial/basel_3.html)
2. The average values are calculated based on daily data in accordance with Notification No. 7 issued by the Japanese Financial Services Agency in 2015. Some data such as
attribute information of customers, is updated on the monthly or quarterly basis.
■ 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 2019/1/1
To 2019/3/31)
Prior Quarter
(From 2018/10/1
To 2018/12/31)
(In million yen)
47,473,613
10,985,715
8,787,725
79,218
718,726
1,400,047
58,459,328
48,282,051
10,165,078
7,918,967
61,533
732,773
1,451,805
58,447,129
Note: The above amounts are those of high-quality liquid assets in accordance with the liquidity ratio regulation under the Basel III and do not correspond to the financial amounts.
The amounts stated are those after multiplying factors in the liquidity ratio regulation under the Basel III.
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SMBCSMBC Group Annual Report 2019Basel III Information
Glossary
ABL
Abbreviation for Asset Based Lending of having movable assets as col-
lateral such as accounts receivable and/or inventory.
EL
Abbreviation for Expected Loss
Average loss expected to occur over the coming one year.
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.
Full revaluation approach
An approach for PL simulation by repricing the financial instruments un-
der each scenario.
High-quality liquid assets (HQLA)
Liquid assets that can be converted easily and immediately into cash to
meet liquidity needs in a specified stress scenario for the subsequent 30
calendar days.
Historical simulation method
A method of simulating future fluctuations without the use of random
numbers, 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.
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.
LCR Notification
Administrative action and written ordinance for official notification to the
general public of regulations concerning the LCR of financial institutions
in Japan which are decided by the Japanese Financial Services Agency
based on the Basel Agreement.
CDS
Abbreviation for Credit Default Swap
Derivative transactions which transfer the credit risk.
Credit Risk Mitigation (CRM) Techniques
Method of reducing credit risk by guarantees, collateral and purchase of
credit derivatives, etc.
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.
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.
Market-based approach
Method of calculating the risk assets of equity exposures, etc., by using
the simple risk weight method or internal model method.
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
Net cash flows calculated as total expected cash outflows minus total
expected cash inflows in a specified stress scenario for the subsequent
30 calendar days.
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.
364
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information 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.
Small-sized consolidated subsidiaries
Consolidated subsidiaries that have extremely small impact on the level
of the consolidated LCR.
Specialized Lending (SL)
General term used for project finance, object finance, commodity
finance and lending for commercial real estate.
The Standardised 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.
Standardised 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 securitisation 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.
Originator
The term “originator” is used in the case that we are directly or indirectly
involved in the formation of underlying assets for securitisation transac-
tions when we have the securitisation exposure; or the cases of provid-
ing the back-up line for ABCP issued by the securitisation conduit for the
purpose of obtaining exposure from the third party, or providing ABL to
the securitisation conduit (as sponsor).
PD
Abbreviation for Probability of Default
Probability of becoming default by obligor during one year.
Phased rollout
Under the Basel Capital Accord, it is a transition made by certain group
companies planning to apply the Internal Ratings-Based 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.
Resecuritisation transaction
Out of securitisation transactions, it is a transaction with securitisa-
tion exposure for part of or entire underlying assets. However, in the
case that all of underlying assets is the single securitisation exposure
and the transaction’s risk characteristics are substantively unchanged
prior to or after the securitisation, the transaction is excluded from the
resecuritisation 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.
Root-T rule
A method of converting the term of estimating the maximum loss as VaR
into short term or long term using statistical assumption.
Securitisation 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 securitisation 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.
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Basel III Information Compensation
Sumitomo Mitsui Financial Group
■ Compensation Framework of Sumitomo Mitsui Financial Group 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 executive officers of Sumitomo Mitsui Financial Group during the fiscal year
under review (excluding outside directors).
(2) Scope of Employees and Others
Employees and others subject to compensation disclosure are employees of Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group and its major consolidated subsidiaries.
a) Scope of major consolidated subsidiaries
A major consolidated subsidiary is a consolidated subsidiary of Sumitomo Mitsui Financial Group with total assets accounting for
more than 2% of the total consolidated assets of Sumitomo Mitsui Financial Group and has a material influence on the management
of Sumitomo Mitsui Financial Group and its group companies. Specifically, they are Sumitomo Mitsui Banking Corporation, SMBC
Nikko Securities Inc., 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 Sumitomo Mitsui Financial Group or its major
subsidiaries is equal to or more than the base amount. The base amount of Sumitomo Mitsui Financial Group is set at ¥60 million
which is based on the average amount of compensation paid to the officers of Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group 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 for officers serving in Japan, 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 Sumitomo Mitsui Financial Group and its major consolidated
subsidiaries
A person has a material influence on the business management or assets of Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group and its group companies, or losses incurred through such actions have a
significant impact on the financial situation of Sumitomo Mitsui Financial Group and its group companies. Specifically, persons
having such influence are directors, corporate auditors and corporate officers of Sumitomo Mitsui Financial Group and its major
consolidated subsidiaries, both domestic and overseas.
2. Names, Compositions, and Duties of the Main Bodies, Such as the Committee Responsible for Supervising Business Execution
Concerning the Determination of Compensation, Its Payment and Other Related Matters
(1) Establishment and Maintenance of the Compensation Committee
Sumitomo Mitsui Financial Group, 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 Sumitomo Mitsui Financial Group’s directors and corporate executive officers.” The
Compensation Committee is a body independent from the influence of business units, chaired by an outside director, with the majority
of its members being also outside directors, and tasked to determine and deliberate matters related to executive compensation of
Sumitomo Mitsui Financial Group and its group companies. In addition, Sumitomo Mitsui Financial Group Compensation Committee
reviews and discusses executive compensation programmes/practices of group companies of Sumitomo Mitsui Financial Group and the
individual remuneration for Sumitomo Mitsui Financial Group’s other executive officers. Furthermore, group companies of Sumitomo
Mitsui Financial Group respect the details of the deliberations at the Compensation Committee of Sumitomo Mitsui Financial Group
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 Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group 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 Sumitomo
Mitsui Financial Group 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 (Sumitomo Mitsui Financial Group) �����������������������������������������������������������������������
Compensation Committee (SMBC Nikko Securities Inc�) ��������������������������������������������������������������������������������
Number of Meetings Held
(April 1, 2018 to March 31, 2019)
6
2
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.
366
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019 ■ Assessment of Design and Operation of Compensation Structure
Compensation Policies for Officers, Employees and Others
(1) For Officers
Sumitomo Mitsui Financial Group hereby establishes the Executive Compensation Policy (the “Policy”) in order to provide guiding prin-
ciples 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 Sumitomo Mitsui Financial Group shall determine their executive compensations in accordance with this Policy.
I.
Sumitomo Mitsui Financial Group’s executive compensation aims at providing appropriate incentives toward the realization of our
mission and our vision.
Sumitomo Mitsui Financial Group’s executive compensation shall reflect the changing business environment and the short-, medi-
um- and long-term performance 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.
Sumitomo Mitsui Financial Group shall research and review market practices, including the use of third-party surveys, in order to
provide its Executives with a competitive remuneration package.
Sumitomo Mitsui Financial Group’s executive compensation shall discourage excessive risk-taking and foster a prudent risk culture
expected of a financial institution.
II.
III.
IV.
V.
VI. Both external and internal regulations/guidelines on executive compensation shall be observed and respected.
VII. Sumitomo Mitsui Financial Group shall establish appropriate governance and controls of the compensation process, and shall regu-
larly review to update its executive compensation practices according to changing market practices and/or business environment.
I.
Sumitomo Mitsui Financial Group’s executive compensation programme (the “Programme”) shall have three components: base sal-
ary, 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 I (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 Sumitomo Mitsui Financial Group’s medium-term performance, etc., Stock Compensation Plan II (the “Plan
II”), determined based on Sumitomo Mitsui Financial Group’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 Sumitomo Mitsui Financial Group
common stock. The transfer of such stock shall be restricted for appropriately defined periods.
b. Remuneration under Plan I shall be determined based on Sumitomo Mitsui Financial Group’s performance against the Medium-term
Management Plan, performance of Sumitomo Mitsui Financial Group shares, and the results of customer satisfaction surveys, etc.
c. Remunerations under Plan II shall be determined based on the annual performance of Sumitomo Mitsui Financial Group, the
group company, and the business 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.
Sumitomo Mitsui Financial Group, 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 Sumitomo Mitsui Financial Group’s directors and corporate executive officers.
In addition to the above, Sumitomo Mitsui Financial Group Compensation Committee shall review and discuss the below:
• Executive compensation programmes/practices of group companies of Sumitomo Mitsui Financial Group.
• The individual remuneration for Sumitomo Mitsui Financial Group’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, Sumitomo
Mitsui Financial Group 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. Sumitomo Mitsui Financial Group and SMBC
In determining the compensation for the officers of Sumitomo Mitsui Financial Group, the details of individual compensation for
directors and executive officers are determined by the mandatory Compensation Committee, where the majority of the committee
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Compensation
members are the outside directors. The compensation for the officers of SMBC are determined within the scope approved at a
shareholders' meeting.
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 Sumitomo Mitsui
Financial Group shares, and the results of customer satisfaction surveys, etc. Sumitomo Mitsui Financial Group and SMBC
allot restricted stocks via the Plans to Executives to effectively defer part of executive compensation.
Stock Compensation Plan I involves removal of the restriction on transfer, after the expiry of Sumitomo Mitsui Financial
Group’s Medium-term Management Plan. In the event that the finalized amount of compensation falls short of the initially
allocated amount, Sumitomo Mitsui Financial Group will retrieve all or part of the allotted shares at nil cost in the case the
final amount falls below the initial amount.
Stock Compensation Plan II involves step-by-step removal of the restriction on transfer, one third in each year over the three
years following the payment.
Stock Compensation Plan III involves removal of the restriction on transfer, either 30 years after payment or at the time of
retirement from the position of officer.
In addition, Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group 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, local laws, regulations and employment practices, and a compensation structure that could affect the
risk management of the group has not been adopted. While terms of employment presented at the time of recruitment may in-
clude the minimum amount of compensation within a reasonable scope under local practice, the compensation structure is
designed to avoid an excessive result-oriented approach. In addition, expenses for employee retention are recorded for em-
ployees of certain major consolidated subsidiaries.
■ Type, Total Amount Paid, and Payment Method of Compensation for Officers, Employees and Others of Sumitomo
Mitsui Financial Group and Its Group Companies
Compensation, etc. allocated to the applicable fiscal year
Item
No�
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Number of applicable officers, employees and others
Total fixed compensation (3+5+7)
of which: cash compensation
of which in 3: deferred amount
Fixed compensation
of which: amount of stock compensation or stock-linked
compensation
of which in 5: deferred amount
of which: other compensation
of which in 7: deferred amount
Number of applicable officers, employees and others
Total variable compensation (11+13+15)
of which: cash compensation
of which in 11: deferred amount
of which: amount of stock compensation or stock-linked
compensation
of which in 13: deferred amount
of which: amount of other compensation
of which in 15: deferred amount
Number of applicable officers, employees and others
Amount of retirement allowance
of which: deferred amount
Number of applicable officers, employees and others
Amount of other compensation
of which: deferred amount
Variable
compensation
Retirement
allowance
Other compensation
Total compensation, etc� (2+10+18+21)
(Headcount, millions of yen)
(a)
Officers
(b)
Employees and
others
14
864
803
—
42
42
18
—
12
499
239
—
260
260
—
—
—
—
—
—
—
—
1,364
144
6,302
5,700
—
406
406
195
—
141
5,505
4,767
669
737
671
—
—
70
395
—
15
175
—
12,380
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. Stock Compensation Plan III is classified as fixed compensation because the amount allotted depends on the individual’s position. Other stock compensation involves an
amount of issuance prone to performance-linked fluctuations, and is thus classified as variable compensation.
368
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Compensation Special compensation, etc.
Officers
Employees and others
(a)
(b)
Bonus guarantee
Headcount
—
2
Total amount
—
49
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
One-off recruitment payment
Headcount
Total amount
—
31
—
1
Additional retirement allowance
Total amount
Headcount
—
95
—
1
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Deferred compensation, etc.
(a)
(b)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
(c)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment not
linked to
fluctuations of
criteria in the
applicable fiscal
year
(Millions of yen)
(d)
(e)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment linked
to fluctuations of
criteria in the
applicable fiscal
year
Amount of
deferred
compensation,
etc� paid in the
applicable fiscal
year
Officers
Employees
and others
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Total amount
—
978
—
803
2,482
—
4,263
—
559
—
265
1,642
—
2,466
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
624
27
—
651
015_0800885851907.indd 369
369
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Sumitomo Mitsui Financial GroupSMBC Group Annual Report 2019Compensation 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
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 Sumitomo Mitsui Financial Group 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 Sumitomo Mitsui Financial Group 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 for officers serving
in Japan, 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. Names, Compositions, and Duties of the Main Bodies, Such as the Committee Responsible for Supervising Business Execution
Concerning the Determination of Compensation, Its Payment and Other Related Matters
Determination of compensation is stated in “Compensation” of Sumitomo Mitsui Financial Group (please refer to “2. Names, Compositions,
and Duties of the Main Bodies, Such as the Committee Responsible for Supervising Business Execution Concerning the Determination of
Compensation, Its Payment and Other Related Matters” on page 366).
■ 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 367).
■ 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 367 to 368.
370
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SMBCSMBC Group Annual Report 2019 ■ Type, Total Amount Paid, and Payment Method of Compensation for Officers, Employees and Others of SMBC and
Its Group Companies
1. Compensation Allocated in the Applicable Fiscal Year (SMBC consolidated)
Item
No�
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Number of applicable officers, employees and others
Total fixed compensation (3+5+7)
of which: cash compensation
of which in 3: deferred amount
Fixed compensation
of which: amount of stock compensation or stock-linked
compensation
of which in 5: deferred amount
of which: other compensation
of which in 7: deferred amount
Number of applicable officers, employees and others
Total variable compensation (11+13+15)
of which: cash compensation
of which in 11: deferred amount
of which: amount of stock compensation or stock-linked
compensation
of which in 13: deferred amount
of which: amount of other compensation
of which in 15: deferred amount
Number of applicable officers, employees and others
Amount of retirement allowance
of which: deferred amount
Number of applicable officers, employees and others
Amount of other compensation
of which: deferred amount
Variable
compensation
Retirement
allowance
Other compensation
Total compensation, etc� (2+10+18+21)
(Headcount, millions of yen)
(a)
Officers
(b)
Employees and
others
19
963
882
—
58
58
22
—
16
506
223
—
282
282
—
—
1
0
—
—
—
—
1,470
133
5,771
5,199
—
382
382
189
—
130
5,056
4,416
594
639
573
—
—
70
395
—
15
175
—
11,399
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. Stock Compensation Plan III is classified as fixed compensation because the amount allotted depends on the individual’s position. Other stock compensation involves an
amount of issuance prone to performance-linked fluctuations, and is thus classified as variable compensation.
2. Special Compensation, Etc.
(a)
(b)
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
Officers
Employees and others
Bonus guarantee
Headcount
—
2
Total amount
—
49
One-off recruitment payment
Headcount
Total amount
—
31
—
1
Additional retirement allowance
Total amount
Headcount
—
95
—
1
015_0800885851907.indd 371
371
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SMBCSMBC Group Annual Report 2019Compensation
1. Compensation Allocated in the Applicable Fiscal Year (SMBC non-consolidated)
Item
No�
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Number of applicable officers, employees and others
Total fixed compensation (3+5+7)
of which: cash compensation
of which in 3: deferred amount
Fixed compensation
of which: amount of stock compensation or stock-linked
compensation
of which in 5: deferred amount
of which: other compensation
of which in 7: deferred amount
Number of applicable officers, employees and others
Total variable compensation (11+13+15)
of which: cash compensation
of which in 11: deferred amount
of which: amount of stock compensation or stock-linked
compensation
of which in 13: deferred amount
of which: amount of other compensation
of which in 15: deferred amount
Number of applicable officers, employees and others
Amount of retirement allowance
of which: deferred amount
Number of applicable officers, employees and others
Amount of other compensation
of which: deferred amount
Variable
compensation
Retirement
allowance
Other compensation
Total compensation, etc� (2+10+18+21)
(Headcount, millions of yen)
(a)
Officers
(b)
Employees and
others
19
963
882
—
58
58
22
—
16
506
223
—
282
282
—
—
1
0
—
—
—
—
1,470
133
5,771
5,199
—
382
382
189
—
130
5,056
4,416
594
639
573
—
—
70
395
—
15
175
—
11,399
Notes: 1. Compensation amount includes those amounts of major consolidated subsidiaries.
2. Stock Compensation Plan III is classified as fixed compensation because the amount allotted depends on the individual’s position. Other stock compensation involves an
amount of issuance prone to performance-linked fluctuations, and is thus classified as variable compensation.
2. Special Compensation, Etc.
(a)
(b)
(c)
(d)
(e)
(f)
(Headcount, millions of yen)
Officers
Employees and others
Bonus guarantee
Headcount
—
2
Total amount
—
49
One-off recruitment payment
Headcount
Total amount
—
31
—
1
Additional retirement allowance
Total amount
Headcount
—
95
—
1
372
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SMBCSMBC Group Annual Report 2019Compensation
■ Other Information Regarding Compensation Structures of Sumitomo Mitsui Financial Group and its Group
Companies
Amount of Deferred Compensation, Etc. (SMBC consolidated)
Deferred compensation, etc.
(a)
(b)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
(c)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment not
linked to
fluctuations of
criteria in the
applicable fiscal
year
(Millions of yen)
(d)
(e)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment linked
to fluctuations of
criteria in the
applicable fiscal
year
Amount of
deferred
compensation,
etc� paid in the
applicable fiscal
year
Officers
Employees
and others
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Total amount
—
1,209
—
618
2,093
—
3,922
—
650
—
265
1,433
—
2,348
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
31
—
532
25
—
590
Amount of Deferred Compensation, Etc. (SMBC non-consolidated)
Deferred compensation, etc.
(a)
(b)
Balance of
deferred
compensation,
etc�
Of the amount in
(a), balance of
deferred
compensation,
etc� subjected to
adjustment or
prone to
fluctuations
(c)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment not
linked to
fluctuations of
criteria in the
applicable fiscal
year
(Millions of yen)
(d)
(e)
With respect to
post allocation
compensation,
amount of
fluctuation after
adjustment linked
to fluctuations of
criteria in the
applicable fiscal
year
Amount of
deferred
compensation,
etc� paid in the
applicable fiscal
year
Officers
Employees
and others
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Amount of cash compensation
Amount of stock compensation
or stock-linked compensation
Amount of other compensation
Total amount
—
1,209
—
618
2,093
—
3,922
—
650
—
265
1,433
—
2,348
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
31
—
532
25
—
590
015_0800885851907.indd 373
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SMBCSMBC Group Annual Report 2019Compensation 015_0800885851907.indd 374
2019/08/20 15:19:47
Websites
SMBC Group Home Page
https://www.smfg.co.jp/ (Japanese)
https://www.smfg.co.jp/english/ (English)
IR Information
https://www.smfg.co.jp/investor/ (Japanese)
https://www.smfg.co.jp/english/investor/ (English)
Corporate Social Responsibility
https://www.smfg.co.jp/responsibility/ (Japanese)
https://www.smfg.co.jp/english/responsibility/ (English)
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